Citation Nr: 0005903	
Decision Date: 03/03/00    Archive Date: 03/14/00

DOCKET NO.  00-03 230	)	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 February 1971 to 
November 1972.  

This matter comes before the Board of Veterans' Appeals (BVA 
or Board) from the Department of Veterans Affairs (VA) 
Regional Office (RO) in Lincoln, Nebraska.  


FINDINGS OF FACT

1.  The Board entered a final decision on the underlying 
issues in question on July 21, 1993; a notice of disagreement 
was received by VA after November 18, 1988; and the veteran 
retained an attorney in November 1993, within one year of the 
date of the Board's decision.

2.  On November 5, 1993, 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 series of favorable decisions resulted from the 
original claim, including a November 1996 Board decision 
granting service connection for bilateral bunions, an October 
1997 Board decision granting an increase in disability 
compensation for service-connected fracture of the medial 
lateral malleolus of the right ankle with traumatic 
arthritis, from 20 to 30 percent, effective from February 1, 
1997, and a November 1998 rating decision which granted an 
increase from 0 to 10 percent for bunionettes of each foot, 
effective from July 24, 1989, and these determinations in 
turn 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 1993 
attorney fee agreement, for the receipt of compensation for 
service connected bunionettes of each foot, for the period of 
time between July 24, 1989, to November 6, 1998, as well as 
additional compensation for service-connected fracture of the 
medial lateral malleolus of the right ankle with traumatic 
arthritis, for the period of time between February 1, 1997, 
and October 3, 1997, 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 (NOD) 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 July 21, 1993, 
denying service connection for bilateral bunions, service 
connection for a low back disorder and an evaluation in 
excess of 20 percent for fracture of the medial lateral 
malleolus of the right ankle with traumatic arthritis.  
Thereafter, on November 5, 1993, the veteran and his attorney 
entered into an attorney fee agreement to represent the 
veteran in his claim for VA benefits denied in the July 1993 
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 February 1995, 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 June 1995, the Board issued a decision remanding 
the case to the RO for development consistent with the Court 
Order.  Following the submission of additional evidence and 
additional examination of the veteran, the RO continued the 
denial of the issues on appeal and returned the case to the 
Board.  In a decision issued November 25, 1996, the Board 
granted service connection for bunions and remanded the case 
to the RO on the two remaining issues.  The RO effectuated 
the Board's decision in a March 31, 1997, rating action and 
assigned a noncompensable or zero percent rating for 
bilateral bunionettes.  As such, no attorney fee award 
resulted.  Thereafter, the veteran timely disagreed with the 
assignment of a noncompensable rating.  In an October 3, 
1997, Board decision, the Board granted an increase in 
compensation from 20 to 30 percent for the veteran's right 
ankle disability.  That decision was effectuated by the RO in 
a rating action later that month.  Finally, the RO ultimately 
assigned a 10 percent rating for bunionettes of each foot in 
a November 6, 1998, rating action.  The veteran and his 
attorney were informed as to past-due benefits resulting from 
the awards in letters dated in November 1997, April 1998 and 
February 1999.  

Due to the piece meal manner in which this case has been 
adjudicated, the attorney has not received any fees for his 
services to date.  In separate letters dated in January 2000, 
the veteran and his attorney were been provided a breakdown 
of fees computed as twenty percent of the past-due benefits 
and 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 
1993, attorney fee agreement satisfied the eligibility 
requirements under 38 U.S.C.A. § 5904(c) and 38 C.F.R. § 
20.609(c).  In this case, the Board promulgated a final 
decision that denied the benefit sought on July 1993.  A 
Notice of Disagreement pertaining to that decision was 
received by the RO in January 1990, thus after November 18, 
1988, and the fee agreement was properly and timely executed.  
That agreement provided that 20 percent of past-due benefits 
was to be paid by the VA to the veteran's attorney for 
representation.

The Board further observes that 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 January 2000 letters, 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).

It is noted that while there had been no denial of an 
increased evaluation for bilateral bunions, the appeal of the 
noncompensable rating was timely and was in essence a 
disagreement with the initial rating.  In a recent decision, 
the Court distinguished between an appeal of a decision 
denying a claim for an increased rating from an appeal 
resulting from a veteran's dissatisfaction with an initial 
rating assigned at the time of a grant of service connection.  
Fenderson v. West, 12 Vet. App. 119 (1999).  It is noted that 
Fenderson makes it clear that cases involving such a 
disagreement are in fact part of the initial claim.  See also 
38 C.F.R. § 20.609 (h)(1)(i) (past due benefits will be based 
on the initial disability rating and include any additional 
benefits awarded based on an appeal of the evaluation 
initially assigned).  As such, the Board considers the award 
of past due benefits stemming from the award of compensation 
for bunionettes to be subject to payment of attorney fees.  

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.  However, to the extent that the fee agreement 
indicates that the veteran is liable to the attorney for 20 
percent of any award unless and until such award is paid by 
VA, the agreement is not in accord with VA regulations, as 
fee agreements are required to be wholly contingent.  

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 compensation for bilateral bunionettes and 
increased compensation for fracture of the medial lateral 
malleolus of the right ankle with traumatic arthritis, 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 the award 
of compensation for bilateral bunionettes that accrued 
between the effective date of the award, i.e., July 24, 1989, 
and the date of the grant of the benefit by the RO, i.e., 
November 6, 1998, as well as increased compensation for the 
right ankle disability, that accrued between the effective 
date of that award, February 1, 1997, and the date of the 
grant of the benefit by the Board, October 3, 1997.  Thus, 
the attorney is entitled to payment of 20 percent of the 
amount of the award for these disabilities, accrued between 
the appropriate dates.  See 38 C.F.R. § 20.609(h)(3)(i) 
(1999).  Payment of monetary benefits based, as here, on an 
award of both initial compensation and 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 August 1989 for bilateral 
bunionettes, and from March 1997 for the right ankle 
disability, 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 service connection and resulting 
compensation for bilateral bunionettes for the period of time 
between July 24, 1989, and November 6, 1998, as well as for 
increased disability compensation for service connected 
fracture of the medial lateral malleolus of the right ankle 
with traumatic arthritis, from February 1, 1997, and October 
3, 1997.  



		
	RAYMOND F. FERNER
Acting Member, Board of Veterans' Appeals