Citation Nr: 0003390 Decision Date: 02/10/00 Archive Date: 02/15/00 DOCKET NO. 99-25 083 ) DATE ) ) THE ISSUE Eligibility for payment of attorney fees from past-due benefits. ATTORNEY FOR THE BOARD N. L. Rippel, Associate Counsel INTRODUCTION The veteran served on active duty from April 1968 to February 1970. This matter comes before the Board of Veterans' Appeals (BVA or Board) from the Department of Veterans Affairs (VA) Regional Office (RO) in St. Louis, Missouri. FINDINGS OF FACT 1. The Board entered a final decision on the underlying issue in question on May 30, 1997; a notice of disagreement was received by VA after November 18, 1988; and the veteran retained an attorney in November 1997, within one year of the date of the Board's decision. 2. On November 17, 1997, the veteran and his attorney entered into a contingent attorney fee agreement, which provided that 20 percent of past-due benefits were to be paid by the VA to the veteran's attorney. 3. A September 1999 Board decision granted an increase in disability compensation for service-connected chronic subluxation of the left shoulder, post-operative, from 20 to 30 percent, effective from April 1995, that decision was effectuated by the RO later that month, and these determinations resulted in past-due benefits being payable to the veteran. CONCLUSION OF LAW The requirements for payment of attorney fees from past-due benefits by the VA pursuant to the terms of the November 1997, attorney fee agreement, for the receipt of additional compensation for service-connected chronic subluxation of the left shoulder, post-operative, for the period of time between April 10, 1995, and September 9, 1999, have been met. 38 U.S.C.A. § 5904 (West 1991 & Supp. 1999); 38 C.F.R. § 20.609 (1999). REASONS AND BASES FOR FINDINGS AND CONCLUSION A determination of basic eligibility for attorney fees paid by the VA from past-due benefits requires: (1) A final decision promulgated by the Board, (2) a notice of disagreement pertaining to that decision dated on or after November 18, 1988, and (3) the retention of counsel not later than one year after the date of the Board's decision. See 38 U.S.C.A. § 5904(c); 38 C.F.R. § 20.609(c). In this case, the Board issued a decision on May 30, 1997, denying an evaluation in excess of 20 percent for chronic subluxation of the left shoulder, post-operative. Thereafter, on November 17, 1997, the veteran and his attorney entered into an attorney fee agreement to represent the veteran in his claim for VA benefits denied in the May 1997 Board decision. At that time, the veteran was appealing the denial of this claim to the United States Court of Appeals for Veterans Claims (Court). The attorney fee agreement called for the attorney to be paid on a contingent basis 20 percent of any past-due benefits directly by the VA. In April 1998, the Court issued an Order granting a Joint Motion submitted on behalf of the Secretary and the veteran to vacate the Board decision and to remand the case to the Board. In August 1998, the Board issued a decision remanding the case to the RO for development consistent with the Court decision. Following the submission of additional evidence and additional examination of the veteran, the RO continued the denial of an increased evaluation and returned the case to the Board. In a decision issued September 9, 1999, the Board granted an increased evaluation to 30 percent for the left shoulder disability. The RO effectuated the Board's decision in a September 18, 1999, rating action. Thereafter, by letter dated September 28, 1999, the veteran and his attorney were informed that past-due benefits resulting from this award had been computed as $5018.00, and that $1003.60, or twenty percent of the past-due benefits, had been withheld as the maximum attorney fee payable, pending a determination by the Board as to the issue of attorney fees. Based on this evidence, the Board finds that the November 17, 1997, attorney fee agreement satisfied the eligibility requirements under 38 U.S.C.A. § 5904(c) and 38 C.F.R. § 20.609(c). Clearly the record includes a final decision promulgated by the Board, a notice of disagreement pertaining to that decision received in October 1995, thus after November 18, 1988, and documentation reflecting the retention of counsel within one year of the Board's decision. Therefore, all of the statutory criteria for payment of attorney's fees directly by VA out of past-due benefits have been met. See 38 U.S.C.A. § 5904(d). Also, the basic requirements have been met because the total fee (excluding expenses) required in the agreement does not exceed 20 percent of the total amount of past-due benefits awarded, the amount of the fee is contingent on whether the claim is resolved in a manner favorable to the veteran, and, as reflected in the RO's September 1999 letter, the award of past-due benefits resulted in payment to the veteran from which a fee may be deducted. See 38 C.F.R. § 20.609(h)(1). Under the law, the Board may order a reduction in the fee called for in the agreement if the Board finds that the fee is "excessive or unreasonable." Matter of Fee Agreement of Smith, 4 Vet. App. 487, 492 (1993), vacated in part on other grounds sub nom. In re Wick, 40 F.3d 367 (Fed. Cir. 1994); Matter of the Fee Agreement of Vernon, 8 Vet. App. 457, 459 (1996). The Board notes that under 38 C.F.R. § 20.609(f), fees that total no more than 20 percent of any past-due benefits awarded will be presumed to be reasonable. The Board concludes that the fee agreed to in the fee agreement involved in this case is, on its face, neither excessive nor unreasonable. See Matter of Fee Agreement of Smith, 4 Vet. App. at 492. Consequently, the Board concludes that the requirements of 38 U.S.C.A. § 5904(d) and 38 C.F.R. § 20.609(h), for payment of the attorney's fee by VA from past-due benefits relating to the grant of increased compensation from 20 to 30 percent for chronic subluxation of the left shoulder, post-operative, are met concerning the past-due benefits. Past-due benefits is defined in 38 C.F.R. § 20.609(h)(3) as [a] nonrecurring payment resulting from a benefit, or benefits, granted on appeal or awarded on the basis of a claim reopened after a denial by the Board . . . or the lump sum payment which represents the total amount of recurring cash payments which accrued between the effective date of the award, as determined by applicable laws and regulations, and the date of the grant of the benefit by the agency of original jurisdiction, the Board . . ., or an appellate court. In this case, the proper amount of the past-due benefits is the lump sum payment representing the total amount of recurring cash payments, stemming from the issue of increased compensation for chronic subluxation of the left shoulder, post-operative, that accrued between the effective date of the award, i.e., April 10, 1995, and the date of the grant of the benefit by the Board, i.e., September 9, 1999. Thus, the attorney is entitled to payment of 20 percent of the amount of the award for increased compensation from 20 to 30 percent, accrued between those two dates. See 38 C.F.R. § 20.609(h)(3)(i) (1999). Payment of monetary benefits based, as here, on an award of increased compensation may not be made for any period prior to the first day of the calendar month following the month in which the award became effective. See 38 U.S.C.A. § 5111(a) (West 1991); 38 C.F.R. § 3.31 (1999). Hence, the actual payment of monetary benefits was effective from May 1, 1995, as the veteran and his attorney were advised by the previously noted correspondence from the RO. ORDER Eligibility for payment directly by VA to the veteran's attorney is established, and the attorney should be paid 20 percent of the veteran's past-due benefits awarded the veteran for the grant of increased disability compensation for service connected chronic subluxation of the left shoulder, post-operative, from 20 to 30 percent, from the effective date of April 10, 1995, to September 9, 1999. S. L. KENNEDY Member, Board of Veterans' Appeals