BVA9503799 DOCKET NO. 95-00 586 ) DATE ) ) Received from the Department of Veterans Affairs Regional Office in San Juan, Puerto Rico THE ISSUE Eligibility for payment of attorney fees from past-due benefits. ATTORNEY FOR THE BOARD J. Connolly, Associate Counsel INTRODUCTION The veteran had active service from September 1969 to September 1971. This matter came before the Board of Veterans' Appeals (Board) following an April 1994, rating decision of the San Juan, Puerto Rico, Regional Office (RO) of the Department of Veterans Affairs (VA) which granted entitlement to a permanent and total rating for pension purposes. The veteran and his attorney, P.R.M., parties to the fee agreement in question in this case which was signed in August 1992 and was received at the Board in March 1993, were notified of the grant of pension benefits by the RO by letter dated in May 1994. The case was subsequently transferred to the Board, and by a letter dated in September 1994, the veteran and his representative were given notice that the Board, acting on its own motion, intended to review the fee agreement, and the parties were given 30 days from the date of the letter to submit additional evidence or argument directly to the Board on the fee agreement issue. No additional evidence or argument as to the attorney fee issue was forthcoming, and the case is now ready for appellate review. The Board notes that in a letter received in September 1994, the veteran's attorney indicated that the veteran believed he was entitled to "compensation benefits" for his asthmatic and emotional condition. He further indicated that the veteran wanted a personal hearing prior to the final adjudication before the Board. Additionally, the veteran submitted correspondence to include medical records in October 1994. In the correspondence, it was unclear whether the veteran was seeking entitlement to service connection for an upper respiratory disorder or whether the veteran and his attorney did not realize that the veteran had been granted nonservice-connected disability pension benefits by the RO and, thus, the case would not be returned to the Board for appellate review. An undated Optional Form 41 indicated that the veteran was to be sent a letter that he had been granted the full benefits on appeal. It is unclear whether the veteran was sent this letter. Therefore, the Board refers this correspondence to the RO for the veteran to be clearly informed that he has been granted full benefits on appeal by the RO as to the issue of entitlement to a permanent and total rating for pension purposes. In addition, the RO should determine if another issue is being raised by the veteran and take appropriate action as to that issue. CONTENTIONS The attorney contends that he should be paid a reasonable amount in attorney fees per the fee agreement signed in August 1992 in which the attorney and the veteran agreed that the attorney should be entitled to recover 25 percent of benefits paid as a result of favorable action on the veteran's claim. DECISION OF THE BOARD The Board, in accordance with the provisions of 38 U.S.C.A. § 7104 (West 1991), has reviewed and considered all of the evidence and material of record in the veteran's claims file. Based on its review of the relevant evidence in this matter, and for the following reasons and bases, it is the decision of the Board that the evidence is against eligibility for payment of attorney fees from past-due benefits. FINDINGS OF FACT 1. The RO received a claim for entitlement to a permanent and total rating for pension purposes in March 1989. The RO denied entitlement to a permanent and total rating for pension purposes in a March 1990 rating decision. The veteran filed a timely notice of disagreement in March 1991. A statement of the case was sent to the veteran in March 1991, and the veteran submitted a timely substantive appeal in April 1991. 2. In an April 1992 decision, the Board remanded this case to the RO for further development as to the issue of entitlement to a permanent and total rating for pension purposes. 3. According to a VA Form 2-22, Appointment of Attorney or Agent as Claimant's Representative, dated in August 1992 and signed by the veteran, the veteran's representative was P.R.M. as of that date. In August 1992, the veteran entered into an agreement to pay a fee to attorney P.R.M. for representational services before the VA on the issue of entitlement to a permanent and total rating for pension purposes. The fee agreement was originally received at the RO in March 1993. 4. In an April 1994 decision, the RO granted entitlement to a permanent and total rating for pension purposes. 5. There is no prior final Board decision on the issue of entitlement to a permanent and total rating for pension purposes. CONCLUSION OF LAW The criteria for a valid fee agreement between the attorney and the veteran for representational services before the VA have not been met. 38 U.S.C.A. § 5904(c)(1) (West 1991); 38 C.F.R. § 20.609(c) (1993). REASONS AND BASES FOR FINDINGS AND CONCLUSION Fees which could be lawfully charged by attorneys at law and accredited agents for services and proceedings before VA have been limited to $10 since the 1860's. See Walters v. National Ass'n of Radiation Survivors, 473 U.S. 305 (1985). The Veterans Judicial Review Act (VJRA), Pub.L. 100-687, 102 Stat. 4105 (1988), now allows VA claimants and appellants to enter into agreements with attorneys and agents for the payment of fees for services in representing them in proceedings before VA, as long as the fees are neither "unreasonable" nor "excessive." A fee may be charged of the claimant or appellant if the following conditions are met: (1) A final decision must have been promulgated by the Board with respect to the issue, or issues, involved. Fees may neither be charged, allowed, nor paid for services provided before the date on which the Board first makes a final decision on the case. 38 U.S.C.A. § 5904(c)(1) (West 1991): 38 C.F.R. § 20.609(c)(1) (1993). (2) The Notice of Disagreement which preceded the Board decision with respect to the issue, or issues, involved must have been received by the RO on or after November 18, 1988. VJRA § 403, 102 Stat. 4122; 38 C.F.R. § 20.609 (1993). (3) The attorney-at-law or agent must have been retained not later than one year following the date that the decision by the Board with respect to the issue, or issues, involved was promulgated. 38 U.S.C.A. § 5904(c)(1) (West 1991); 38 C.F.R. § 20.609(c)(3) (1993). In the instant case, the veteran served on active duty from September 1969 to September 1971. He filed a claim for entitlement to a permanent and total rating for pension purposes in March 1989. The RO denied entitlement to a permanent and total rating for pension purposes in a March 1990 rating decision. The veteran filed a timely notice of disagreement in March 1991. A statement of the case was sent to the veteran in March 1991, and the veteran submitted a timely substantive appeal in April 1991. In an April 1992 decision, the Board remanded this case to the RO for further development as to the issue of entitlement to a permanent and total rating for pension purposes. According to a VA Form 2-22, Appointment of Attorney or Agent as Claimant's Representative, dated in August 1992 and signed by the veteran, the veteran's representative was P.R.M. as of that date. In August 1992, the veteran entered into an agreement to pay a fee to attorney P.R.M. for representational services before the VA on the issue of entitlement to a permanent and total rating for pension purposes. The fee agreement, in essence, stated that the veteran agreed to pay attorney P.R.M.., in pertinent part, 25 percent of the total amount of any past-due benefits related to the claim for entitlement to a permanent and total rating for pension purposes. The fee agreement was originally received at the RO in March 1993. Thereafter, subsequent to completing the development directed by the Board in the remand decision, and before returning the case to the Board, the RO granted entitlement to a permanent and total rating for pension purposes in an April 1994 rating decision. The veteran and his representative were advised on the grant of pension benefits in a May 1994 letter. Under the governing legal criteria, a fee may not be "charged, allowed, or paid for services of agents and attorneys with respect to services provided before the date on which the Board of Veterans' Appeals first makes a final decision in the case." 38 U.S.C.A. § 5904(c)(1) (West 1991). In a precedent opinion, the VA's Office of General Counsel cited an analysis of the legislative history of the VJRA contained in the United States Court of Veterans Appeals (Court) decision in In the Matter of Smith, 1 Vet.App. 492, 508-09 (1991) (Steinberg, J., concurring), which highlighted the fact that Congress only envisioned paid attorney representation after the Board first enters a final decision on a claim. The General Counsel concluded that an attorney may not receive or solicit a fee in connection with a representation of a claimant before the Department on a benefits issue until after the Board first issues a final decision on that claim. A determination by the Board to remand a case prior to making a determination on the underlying claim is, pursuant to 38 C.F.R. § 20.1100(b), in the nature of a preliminary order and does not constitute a final decision subsequent to which an attorney may pursue the collection of fees for representing a claimant before the Board. VA O.G.C. Prec. No. 18-92, 57 Fed. Reg. 49747 (1992). In this case, the Board has never adjudicated the underlying issue of entitlement to a permanent and total rating for pension purposes. Thus, there clearly can be no final Board decision on this issue that would bring the fee agreement between the veteran and attorney P.R.M. within the required statutory and regulatory parameters. Accordingly, under 38 U.S.C.A. § 5904(c)(1) and 38 C.F.R. § 20.609(c)(1), the attorney may not charge the veteran a fee for representational services before VA. In view of the foregoing, the Board finds that attorney, P.R.M., is not entitled to payment of attorney fees under the fee agreement in this case from the veteran's past-due benefits and, thus, eligibility for payment of such benefits is not established. The Board notes that although there is a final November 1987 Board decision which denied entitlement to service connection for bronchitis, asthma, and allergies affecting the ears, nose, and throat, of record, that decision is not the subject of the current appeal and the veteran's attorney, P.R.M., has not asserted that he was the representative at that time. As previously noted, P.R.M. commenced representing the veteran as his attorney in August 1992 which was several years after the final Board decision dated in 1987. Therefore, P.R.M. was not retained within one year following the date of the November 1987 decision as required by 38 U.S.C.A. § 5904(c)(1) (West 1991) and 38 C.F.R. § 20.609(c)(3) (1993). ORDER Eligibility for payment by the VA of attorney fees from past-due benefits is denied. None of the veteran's past-due benefits resulting from the April 1994 rating decision granting entitlement to a permanent and total rating for pension purposes may be paid to the attorney in this case. G. H. SHUFELT Member, Board of Veterans' Appeals The Board of Veterans' Appeals Administrative Procedures Improvement Act, Pub. L. No. 103-271, § 6, 108 Stat. 740, ___ (1994), permits a proceeding instituted before the Board to be assigned to an individual member of the Board for a determination. This proceeding has been assigned to an individual member of the Board. NOTICE OF APPELLATE RIGHTS: Under 38 U.S.C.A. § 5904(c)(2) (West 1991), a finding or order of the Board of Veterans' Appeals upon review of an agent's or attorney's fee agreement may be reviewed by the United States Court of Veterans Appeals under 38 U.S.C.A. § 7263(d) (West 1991). Under 38 U.S.C.A. § 7266 (West 1991), a final decision of the Board of Veterans' Appeals may be appealed to the United States Court of Veterans Appeals by a person adversely affected by the decision within 120 days from the date of mailing of notice of the decision. The date which appears on the face of this decision constitutes the date of mailing and the copy of this decision which you have received is your notice of the action taken by the Board of Veterans' Appeals.