Citation Nr: 0007944 Decision Date: 03/23/00 Archive Date: 03/28/00 DOCKET NO. 00-03 893 ) 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 August 1943 to January 1946, from November 1946 to December 1946, and from March 1948 to October 1948. 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 of entitlement to an initial evaluation in excess of 30 percent for post-traumatic stress disorder (PTSD) on December 17, 1997. 2. In the December 17, 1997, decision, the Board remanded the issues of entitlement to increased evaluations for residuals of a gunshot wound and related neuropathy, along with the issue of entitlement to a total rating based upon individual unemployability due to service connected disability (TDIU), but has not entered a final decision on those issues. 3. On April 4, 1998, 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. 4. A December 1999 RO rating decision granted a higher disability evaluation for the gunshot wound and granted TDIU, and those 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 April 1998 attorney fee agreement have not 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 generally 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). A fee may not be charged, allowed, or paid for services of attorneys with respect to services provided before the date on which the Board first makes a final decision in a case. 38 U.S.C.A. § 5904(c). In this case, the Board issued a decision on December 17, 1997, denying an initial evaluation in excess of 30 percent for PTSD and remanding the issues of entitlement to increased evaluations for residuals of a gunshot wound to the right arm, right ulnar neuropathy, and TDIU. Thereafter, on April 14, 1998, the veteran and his attorney entered into an attorney fee agreement to represent the veteran in his claim for VA benefits denied in the December 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 November 1999, the Court issued a memorandum decision ordering that the Board decision be vacated with respect to the PTSD claim and remanded the case to the Board. The case has recently been returned to the Board for action in accordance with the Court's decision. While the PTSD claim was being litigated, the RO was simultaneously carrying out the development ordered by the Board's December 1997 decision with regard to the gunshot wound, ulnar neuropathy, and TDIU issues. In a December 18, 1999, rating decision, the RO granted an increased evaluation to 40 percent for residuals of gunshot wound of the right arm and granted TDIU, both effective from April 1995, and denied an increased evaluation for right ulnar neuropathy. Thereafter, by letter dated January 21, 2000, the veteran and his attorney were informed that past-due benefits resulting from this award had been computed as $12,871.40, and that $12,871.40, 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. The Board notes that this letter contains obvious error in the amounts listed. Documentation in the file suggests that the actual total amount of past-due benefits is somewhere in the vicinity of $63,907.00, and that the amount withheld was approximately $12,871.40, or twenty percent of the past-due benefits. Based on this evidence, the Board finds that the attorney is not eligible for payment of attorneys fees with respect to the December 1999 award of increased compensation for residuals of gunshot wound or the TDIU, as all of the critical requirements of 38 U.S.C.A. § 5904 and 38 C.F.R. § 20.609, have not been met. Clearly the record includes a final decision promulgated by the Board on the issue of an initial evaluation in excess of 30 percent for PTSD in December 1999, and a notice of disagreement pertaining to that decision was received in January 1996, thus after November 18, 1988. Moreover, documentation reflects the retention of counsel within one year of the Board's December 1997 decision. Nonetheless, no services have been performed in relation to the issue of an increased rating for PTSD following the December 1997 decision for which past-due benefits were paid out in December 1999. The attorney is only able to collect fees from past due benefits for services provided after the final decision. No fee may be charged, allowed or paid for services provided before the date on which the Board first makes a final decision in the case. 38 U.S.C.A. § 5904(c)(1). Here, the December 1997 decision is the first final decision of record on that issue, and no fees may be charged for services performed prior to December 17, 1997. While the attorney may be eligible for payment of fees with relation to his work before the Court, such work has no relationship with the grant of additional compensation by the RO in December 1999 which resulted in the award of past-due benefits payable to the veteran. The attorney may be eligible for fees in the future given that the case has been returned to the Board for action on the PTSD claim. The Board has rendered no final decision on the issue of entitlement to increased evaluations for residuals of a gunshot wound to the right arm or right ulnar neuropathy, nor has it entered a final decision on the claim for TDIU. The record contains only one final decision of the Board on these issues, which is dated December 17, 1997. That decision remanded these issues. A remand, however, is not a final decision of the Board. 38 C.F.R. § 20.1100(b) (1999). Attorney fees are not payable from the RO's December 1999 grant of a TDIU. There was no final decision promulgated by the Board with respect to the issue of a TDIU. Therefore, per the requirements of 38 C.F.R. § 20.609(c)(1) (1999), the attorney is precluded by law from charging a fee for legal services provided to the veteran in connection with the grant of a TDIU. The Board recognizes that the grant of an award of TDIU can be based on the total effect of the veteran's service-connected conditions. However, the veteran has long maintained that his unemployability is primarily related to his back and arm conditions, and has not indicated that his PTSD has appreciably affected his ability to work. In this regard, it is noted that the veteran's application for TDIU lists his arm and back condition as reasons for his retirement in 1978. Thus, while it is accepted that PTSD is, in part, a causal factor in unemployability, as noted by the RO, the overwhelming evidence of record shows that other disabilities contribute considerably to his unemployability. While claims for TDIU and increased evaluations for PTSD can be closely related, the Board finds that this is not the case in the present appeal. The decision of the Court in In Matter of Smith, 10 Vet. App. 311 (1997) involved such an issue, but is distinguishable from the case now before the Board. The Court held in In Matter of Smith that, "Where the Board fails to adjudicate a claim that was reasonably before it, the net outcome for the veteran amounts to a denial of the benefit sought." Here, the Board addressed the issue of TDIU in the remand portion of its decision, and thus did not fail to address the issue. As no final decision has been promulgated by the Board with respect to the issue of entitlement to increased rating for a gunshot wound or TDIU, the Board concludes that the attorney is not eligible for the payment of attorney's fees from past- due benefits awarded as a result of the grant of increased compensation on those grounds. Therefore, the RO will not pay to the attorney the amount of the past-due benefits withheld pending this decision. ORDER Eligibility for payment directly by VA to the veteran's attorney is not established, and the attorney should not be paid any of the past-due benefits awarded the veteran for the grant of increased disability compensation for service- connected residuals of gunshot wound or the total disability based on individual unemployability due to service-connected disabilities. S. L. KENNEDY Member, Board of Veterans' Appeals