Keith D. Snyder v. R. James Nicholson , 2006 U.S. Vet. App. LEXIS 89 ( 2006 )


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  •           UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS
    No. 04-0381
    KEITH D. SNYDER, APPELLANT ,
    V.
    R. JAMES NICHOLSON ,
    SECRETARY OF VETERANS AFFAIRS, APPELLEE.
    On Appeal from the Board of Veterans' Appeals
    (Argued September 29, 2005                            Decided     February 24, 2006 )
    Kenneth M. Carpenter, of Topeka, Kansas, was on the brief for the appellant.
    Ralph G. Davis, with whom Tim S. McClain, General Counsel; R. Randall Campbell,
    Assistant General Counsel; and Edward V. Cassidy, Jr., Deputy Assistant General Counsel, were
    on the brief for the appellee, all of Washington, D.C.
    Before GREENE, Chief Judge, and KASOLD and DAVIS, Judges.
    DAVIS, Judge: Attorney Keith D. Snyder appeals, through counsel, a February 2, 2004,
    decision of the Board of Veterans' Appeals (Board) that denied him entitlement under 
    38 U.S.C. § 5904
     to attorney fees in excess of $1,820.45 payable from his client's award of past-due benefits.
    Because we hold that the amount of fees paid directly to an attorney from VA under § 5904(d) must
    be based on the amount of past-due payments that a veteran will actually receive, the Board's
    decision will be affirmed.
    I. BACKGROUND
    In 1992, veteran John Creekmore was convicted of aggravated robbery and sentenced to 30
    years' incarceration in a state prison. After an April 2000 Board decision denied his disability-
    compensation claim for his psychiatric disorder, the veteran retained counsel, Eric Conn, in July
    2000. Mr. Conn later withdrew, claiming no entitlement to attorney fees. In May 2001, the veteran
    retained attorney Keith Snyder, and they executed a fee agreement that provided the following:
    [The veteran] agrees to pay a fee equal to 20 percent of the total amount of any past-
    due benefits awarded on the basis of the [veteran's] claim . . . . It is understood that
    this [c]ontingent fee is to be paid by the VA directly to [Mr. Snyder] from any past-
    due benefits awarded on the basis of the [veteran's] claim. However, [the veteran]
    remains liable for the amount of the contingent fee of 20 percent of any past-due
    benefits awarded on the basis of the [veteran's] claim until and unless the fee is paid
    to [Mr. Snyder] by the VA, and [the veteran] agrees to pay said contingent fee
    directly to [Mr. Snyder] in the event VA fails to do so.
    Record (R.) at 49.
    In July 2002, a VA regional office (RO) issued a decision granting service connection for a
    bipolar disorder and assigning a 70% disability rating, effective July 25, 1994. At the time of the
    RO decision, the veteran was still incarcerated. By letter, the RO informed the veteran and Mr.
    Snyder that because of the veteran's incarceration, the RO would withhold part of the monthly award
    and pay to the veteran reduced monthly compensation equivalent to a 10% disability rating in
    accordance with 
    38 U.S.C. § 1114
    (a). In this regard, the RO letter set forth a schedule of payments
    in table form; the first column indicated the "Total Award Amount" reflecting compensation for a
    70% rating, the second column indicated the "Amount Withheld" pursuant to statute, and the third
    column reflected the veteran's "Monthly Entitlement Amount" which documented the 10%
    compensation that the veteran would actually receive. R. at 214. The RO letter informed the veteran
    that all or part of the amount withheld from his payments may be apportioned to dependents.
    Although paperwork regarding dependent identification was provided to the veteran, there is no
    evidence in the record indicating that he ever identified dependents or that any part of his award was
    apportioned; in fact, Mr. Snyder acknowledged at oral argument that there were no dependents.
    Finally, the RO calculated that it would withhold $1,820.45 from the veteran to pay to Mr. Snyder
    based on 20 percent of the past-due benefits that would be actually paid to the veteran after the award
    was reduced because of his incarceration. Mr. Snyder appealed that decision.
    On February 2, 2004, the Board issued the decision now on appeal. The Board upheld the
    RO's determination after relying on the definition of "past-due benefits" as defined in 
    38 C.F.R. § 20.609
    (h)(3) (2003). The Board concluded that attorney fees should be calculated based on the
    2
    "actual lump sum paid to the veteran, and not on the total award amount." R. at 7. The Board placed
    significance on the statement in § 20.609(h)(1)(iii) that "an award of past-due benefits will not
    always result in a cash payment to a claimant or an appellant." Id. The Board also reasoned that
    statutory and regulatory language prohibits VA from paying in excess of 20 percent of past-due
    benefits to an attorney, but does not mandate that award. Because the lump-sum payment owed to
    the veteran for the time period between August 1, 1994, and July 19, 2002, amounted to $9,102.23
    after the payments were reduced because of the veteran's incarceration (pursuant to 
    38 U.S.C. § 5313
    (a)(1), and its implementing regulation, 
    38 C.F.R. § 3.665
     (2003)), the Board found that the
    RO appropriately calculated 20 percent of that amount to determine Mr. Snyder's resulting $1,820.45
    attorney fee. Mr. Snyder appealed to the Court.
    II. CONTENTIONS ON APPEAL
    On appeal, Mr. Snyder presents several arguments for reversal of the Board's decision. First,
    he contends that the Board misinterpreted and misapplied 
    38 U.S.C. § 5904
    (d)(2)(A)(i), which states
    that a fee agreement "is one under which the total amount of the fee payable to the attorney is to be
    paid to the attorney by the Secretary directly from any past-due benefits awarded on the basis of the
    claim." Appellant's Brief (Br.) at 4. He argues that the veteran's 70% disability award was made "on
    the basis of the claim" that Mr. Snyder filed on the veteran's behalf (id. at 5), and it is the veteran,
    not the attorney, who is prohibited from receiving the full amount of the award. He maintains that
    the award of service connection in the July 2002 RO decision resulted in an award of past-due
    benefits amounting to $91,022.30. Therefore, he asserts that although the law required the amount
    of the award to the veteran to be reduced because of his incarceration, the Board erred by reducing
    Mr. Snyder's compensation based on the statute and regulations directed only to the veteran.
    Next, Mr. Snyder contends that the Board erred when it failed to discuss 
    38 C.F.R. § 3.665
    .
    Additionally, Mr. Snyder argues that the Board misapplied § 20.609(h)(1); he asserts that when the
    three predicate regulatory conditions are met, VA is required to pay the attorney 20 percent of the
    total amount awarded to the veteran as called for in the fee agreement. In support of that contention,
    Mr. Snyder proffered at oral argument that section 5904 creates an implied-in-fact contract between
    an attorney and VA. Finally, Mr. Snyder argues that the Board misinterpreted § 20.609(h)(3)
    3
    (defining past-due benefits) by adding the word "actual" to the regulation's phrase "lump sum paid
    to the veteran." Id. at 10. Therefore, he seeks reversal of the Board's decision and an award to him
    of attorney fees in the amount of $18,204.46.
    In response, the Secretary seeks a remand of the matter for further development and
    reajudication. He asserts that the Board decision does not contain an adequate statement of reasons
    or bases for the conclusion that attorney fees should be calculated based on the reduced amount
    actually paid to the veteran. The Secretary notes that the key question is how to apportion "proceeds
    among the veteran, his attorney, and any eligible dependents," but the Secretary does not proffer an
    argument as to the correct outcome. Secretary's Br. at 8-11. Although the Secretary seeks remand
    for further development on the issue of the veteran's dependents, that issue was mooted by Mr.
    Snyder's statement at oral argument that there are no dependents to whom an apportionment may be
    made.
    In reply, Mr. Snyder argues that the Secretary failed to address the arguments raised in his
    initial brief and, instead, conceded an error not alleged (inadequate statement of reasons or bases)
    "in order to avoid an interpretation by this Court of the relevant statutes and regulations placed at
    issue," and to give the Board an additional opportunity to apply applicable laws without the benefit
    of this Court's interpretation. Appellant's Reply Br. at 2-3. Additionally, Mr. Snyder states that
    whether the veteran has any dependents is irrelevant and that the veteran is not an interested party
    in this suit. Finally, Mr. Snyder reiterates that, based on the evidence, there is no plausible basis for
    the Board's decision, and it should be reversed.
    III. ANALYSIS
    A. Applicable Laws and Regulations
    1. Attorney Fees
    Under 
    38 U.S.C. § 5904
    (c)(1), a fee may not be charged, allowed, or paid for attorney
    services that were provided before the date on which the Board first made a final decision on the
    issues involved in the case. 
    38 U.S.C. § 5904
    (c)(1); see In re Fee Agreement of Smith, 
    4 Vet.App. 487
    , 490 (1993). If the attorney is retained within one year after the first final Board decision,
    attorney fees are allowed. See 
    38 U.S.C. § 5904
    (c)(1). In order for an attorney to have his or her
    4
    fees paid directly from VA, "the total fee payable to the attorney may not exceed 20 percent of the
    total amount of any past-due benefits awarded on the basis of the claim." 
    38 U.S.C. § 5904
    (d)(1).
    Title 38, § 20.609(h), Code of Federal Regulations, the regulation implementing 
    38 U.S.C. § 5904
    , reiterates that fee agreements are permissible and, when specified in the agreement, attorney
    fees will be paid directly from VA "out of any past-due benefits awarded" if certain conditions are
    met. 
    38 C.F.R. § 20.609
    (h) (2005). The fee agreements must meet the following conditions for VA
    direct payment:
    (i) The total fee payable (excluding expenses) does not exceed 20 percent of the total
    amount of the past-due benefits awarded,
    (ii) The amount of the fee is contingent on whether or not the claim is resolved in a
    manner favorable to the claimant or appellant, and
    (iii) The award of past-due benefits results in a cash payment to a claimant or an
    appellant from which the fee may be deducted. (An award of past-due benefits will
    not always result in a cash payment to a claimant or an appellant. For example, no
    cash payment will be made to military retirees unless there is a corresponding waiver
    of retirement pay.)
    
    38 C.F.R. § 20.609
    (h)(1) (citations omitted). In pertinent part, the regulation defines "past-due
    benefits" as follows:
    [A] nonrecurring payment resulting from a benefit . . . 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 . . . and the date of the grant of the benefit . . . .
    (i) . . . "[P]ast-due benefits" will be based on the initial disability rating assigned by
    the agency of original jurisdiction following the award of service connection. The
    sum will equal the payments accruing from the effective date of the award to the date
    of the initial disability rating decision.
    
    38 C.F.R. § 20.609
    (h)(3) - (h)(3)(i).
    2. Incarcerated Claimants
    Under 
    38 U.S.C. § 5313
    , a person entitled to compensation for a service-connected disability
    rated at 20% or more, but who is incarcerated for a period in excess of 60 days, shall not be paid an
    amount that exceeds "the rate of compensation payable under [38 U.S.C. §] 1114(a)." 
    38 U.S.C. § 5313
    (a)(1), (a)(1)(A); see 
    38 U.S.C. § 1114
    (a) (allowing compensation based on a 10% disability
    rating). "All or any part of the compensation not paid to a veteran [(withheld because of
    incarceration)] may, as appropriate in an individual case, be apportioned" to the veteran's dependents
    5
    while the veteran is incarcerated. 
    38 U.S.C. § 5313
    (b)(1); 
    38 C.F.R. § 3.665
    (e) (2005). If the
    veteran apportions payment to his dependents, unless otherwise provided in the fee agreement,
    attorney fees "will be determined on the basis of the total amount of the past-due benefits even
    though a portion of those benefits may have been apportioned to the claimant's or appellant's
    dependents." 
    38 C.F.R. § 20.609
    (h)(3)(ii). The full amount of payment to the veteran will be
    resumed upon the veteran's release from incarceration (or assignment to a halfway house or a work-
    release program). 
    38 C.F.R. § 3.665
    (i)(1).
    B. Statutory and Regulatory Interpretation
    We review questions of statutory interpretation de novo. DeBeaord v. Principi, 
    18 Vet.App. 357
    , 363 (2004). In interpreting a statute, the Court examines the statutory structure and specific
    language of the statute, and "'if the intent of Congress is clear, that is the end of the matter.'"
    Cacatian v. West, 
    12 Vet.App. 373
    , 376 (1999) (quoting Gardner v. Brown, 
    5 F.3d 1456
     (Fed. Cir.
    1993), aff'd, 
    513 U.S. 115
     (1994)); see Trilles v. West, 
    13 Vet.App. 314
    , 321 (2000) (en banc).
    Administrative agencies are authorized to create rules to clarify disparities between statutes. See
    Gallegos v. Principi, 
    283 F.3d 1309
    , 1312 (Fed. Cir. 2002) (citing Morton v. Ruiz, 
    415 U.S. 199
    ,
    231 (1974) ("The power of an administrative agency to administer a congressionally created and
    funded program necessarily requires the formulation of policy and the making of rules to fill any gap
    left, implicitly or explicitly, by Congress.")). Generally, when Congress leaves "a gap for an agency
    to fill" or "does not directly address the precise question at issue," this Court must give deference to
    the Secretary's interpretation of the law. 
    Id.
     (citing Chevron U.S.A., Inc. v. Nat'l Res. Def. Council,
    Inc., 
    467 U.S. 837
    , 843 (1984)).
    The Secretary is expressly authorized to "prescribe all rules and regulations which are
    necessary or appropriate to carry out the laws administered by the Department and are consistent
    with those laws." 
    38 U.S.C. § 501
    . Because substantial deference is given to the Secretary's
    interpretation of a statute, his interpretation will not be set aside unless it is "arbitrary, capricious,
    or manifestly contrary to the statute." Gallegos, 
    283 F.3d at 1312
     (noting that, unless the statute
    speaks "directly" "to the precise question," under Chevron deference, "any ensuing [agency]
    regulation is binding in the courts unless procedurally defective, arbitrary or capricious in substance,
    6
    or manifestly contrary to the statute" (alteration in original) (citing United States v. Mead Corp., 
    533 U.S. 218
    , 229 (2001))).
    A plain reading of sections 5313 and 5904 of the United States Code and their application
    to this case demonstrates a disconnect between the two statutes–they are "like two ships passing in
    the night." See Longfellow, Tales of a Wayside Inn, pt. 3, "The Theologians Tale." Standing alone,
    each statute is clear and unambiguous, and no further interpretation is necessary. When applied in
    concert, however, ambiguity is created. Notably, neither the wording of the statutes nor the
    legislative history suggests that Congress contemplated a situation, such as this, that would require
    application of both statutes. See Bolton v. Brown, 
    8 Vet.App. 185
    , 192-93 (1995) (Ivers, J.,
    concurring) (discussing legislative history of 
    38 U.S.C. § 5313
    ); 
    id. at 194-97
     (Steinberg, J.,
    concurring) (same). Specifically, section 5313 does not define "compensation" or relate that term
    to "past-due benefits awarded," and a plain reading of the statutes does not indicate whether the
    "award" is the amount of money owed prior to, or after, statutorily required deductions. The
    Secretary has the authority to promulgate regulations to resolve this ambiguity and fill the gap
    created between the statutes. See 
    38 U.S.C. § 501
    ; see also Chevron, 
    467 U.S. at 843-44
     (discussing
    an agency's authority to fill explicit gaps and to provide a reasonable interpretation of implicit gaps
    left by Congress). The scope of judicial review of those regulations is limited–"we must decide '(1)
    whether the statute unambiguously forbids the Agency's interpretation, and, if not, (2) whether the
    interpretation for other reasons, exceeds the bounds of the permissible.'" Terry v. Principi, 
    340 F.3d 1378
    , 1383 (Fed. Cir. 2003) (quoting Barnhart v. Walton, 
    535 U.S. 212
    , 218 (2002)).
    C. The Agency's Interpretation is Consistent with the Statutes
    1. An award of past-due benefits contemplates a resulting payment to the veteran.
    The statutes in question do not define the term "past-due benefits awarded." See 
    38 U.S.C. §§ 5313
    , 5904. Our analysis, however, is guided by 
    38 C.F.R. § 20.609
    ; that regulation includes in
    its definition of "past-due benefits" "the lump sum payment which represents the total amount of
    recurring cash payments which accrued between the effective date of the award . . . and the date of
    the grant of the benefit." 
    38 C.F.R. § 20.609
    (h)(3) (emphasis added). The regulation reiterates that
    the sum of past-due benefits "will equal the payments accruing from the effective date of the award
    to the date of the initial disability rating decision." 
    38 C.F.R. § 20.609
    (h)(3)(i) (emphasis added).
    7
    The regulation contemplates "payments" made rather than an abstract entitlement to an award,
    lending support to the Board's finding that the "attorney fees awarded" should be calculated based
    upon the actual monetary payment made. See id; see also BLACK'S LAW DICTIONARY 1150 (7th ed.
    1999) ("Payment" is the "[p]erformance of an obligation, usu[ally] by the delivery of money.")
    Further, it is axiomatic that "past-due benefits" are those benefits that were owed to the
    veteran from VA over a period of time, but were not paid. Accordingly, § 20.609(h)(3) instructs that
    "[t]he sum [of past-due benefits] will equal the payments accruing from the effective date of the
    award of service connection to the date of the initial disability rating decision." 
    38 C.F.R. § 20.609
    (h)(3). Here, the veteran was continuously incarcerated from the effective date of the award
    to the initial disability rating decision; as such, the "payments" that would have been paid to him
    over that period, pursuant to statute, could not have exceeded compensation equivalent to a 10%
    rating. See 
    38 U.S.C. § 5313
    (a)(1), (a)(1)(A); 
    38 U.S.C. § 1114
    (a). In other words, the sum of "past-
    due benefits" is wholly dependent on the amount of what would have been the payment made during
    the relevant period of time and, consequently, an award of past-due benefits cannot, by definition,
    exceed that amount.
    2. Attorney fees are based on the actual payment to the claimant.
    Section 20.609(h)(1) specifies three predicate conditions that must be met before VA will
    honor an attorney fee agreement. One of those conditions mandates that an award of past-due
    benefits must "result in a cash payment to a claimant." 
    38 C.F.R. § 20.609
    (h)(1)(iii). Most
    instructive here is the regulation's recognition that an "award" will not necessarily result in a cash
    payment to a claimant; thus, where there is no payment to the claimant, despite a successful "award
    on the basis of a claim," VA would not pay the attorney fee. 
    38 C.F.R. § 20.609
    (h)(1)(iii) ("An
    award of past-due benefits will not always result in a cash payment to a claimant or an appellant.
    For example, no cash payment will be made to military retirees unless there is a corresponding
    waiver of retirement pay."). In instances where the veteran received no payment, even though there
    was an "award," there is no award from which VA could withhold and pay a fee directly to an
    attorney. Therefore, the attorney would not be paid from VA because he or she would have failed
    to meet all three requirements for a fee agreement to be honored. See 
    38 C.F.R. § 20.609
    (h)(1). As
    8
    clarified in this subsection, recovery for representation must be based upon a veteran's actual receipt
    of a monetary payment and not simply an adjudication of entitlement.
    Also, VA regulation 
    38 C.F.R. § 20.609
    (h)(3)(ii) specifically provides the amount of attorney
    fees that may be awarded when an award is apportioned. An incarcerated veteran may apportion to
    his or her dependents some or all of the money withheld from the veteran under section 5313.
    
    38 U.S.C. § 5313
    (b)(1); 
    38 C.F.R. § 3.665
    (e). If the veteran elects apportionment, the regulation
    provides that attorney fees "will be determined on the basis of the total amount of the past-due
    benefits even though a portion of those benefits may have been apportioned to the claimant's or
    appellant's dependents." 
    38 C.F.R. § 20.609
    (h)(3)(ii) (emphasis added). If, as Mr. Snyder suggests,
    attorneys were to receive their fees based upon the total amount of past-due benefits awarded in all
    cases, there would be no need for this regulation.          Because apportionment is specifically
    contemplated by the regulations and, in that instance attorney fees are calculated based on the total
    amount paid and apportioned, by implication, if there is no apportionment, the attorney fees are
    based only on the reduced amount.
    The gap between sections 5313 and 5904 implicitly created by Congress required the
    Secretary to determine whether attorney fees would be calculated before or after statutory deductions
    were made following a disability award. The foregoing analysis leads us to conclude that the
    Secretary filled that gap by creating a regulation that reasonably resolved the issue: it is the end
    result–the "payment" to the claimant–that is controlling. The Secretary's regulation is not contrary
    to the statutes. When the three predicate conditions are met, VA will calculate attorney fees based
    on the amount that is to be paid to the veteran after all statutorily mandated deductions have been
    made. Having determined that the regulation compels such a result, we now determine whether
    "th[at] interpretation for other reasons, exceeds the bounds of the permissible." See Terry, 
    340 F.3d at 1383
    .
    D. The Agency's Interpretation is Reasonable
    To determine whether the Secretary's interpretation "exceeds the bounds of the permissible,"
    we will examine its implications for the public and on attorneys. First, we note that, to be honored
    by VA, pursuant to 
    38 U.S.C. § 5904
    (d)(1), "the total fee payable to the attorney may not exceed
    20 percent of the total amount of any past-due benefits awarded on the basis of the claim." Thus,
    9
    20 percent of the total amount of past-due benefits awarded is the outer limit of the award; the total
    fee withheld and payable by VA simply cannot exceed that amount. See In the Matter of the Fee
    Agreement of Mason, 
    13 Vet.App. 79
    , 86 (1996).
    Mr. Snyder considers the Board's interpretation an "ambush." We do not agree. Mr. Snyder
    entered into the fee agreement with the veteran while the veteran was incarcerated. Mr. Snyder
    should have been aware that the amount of any compensation paid to the veteran would be
    determined in accordance with section 5313. That statute provides that some or all of the money
    withheld from the veteran could be apportioned to the veteran's dependents. 
    38 U.S.C. § 5313
    . The
    statute, in concert with the regulations, particularly § 20.609, placed Mr. Snyder on notice that, if the
    veteran did not elect to apportion part of the money withheld to his dependents, the attorney would
    be paid based only on the total amount of money paid to the veteran.                    See 
    38 C.F.R. § 20.609
    (h)(3)(ii).
    Mr. Snyder contends that the section 5313 reduction of the award is a punitive measure aimed
    only at the veteran, and not the attorney. Relying on his interpretation of the statute and regulations,
    Mr. Snyder maintains that he should be awarded a total of approximately $18,204.46, when the
    veteran himself received only $9,102.23. The regulations specify that in order for the fee agreement
    to be honored, the claim must result in "a cash payment to a claimant or an appellant from which the
    fee may be deducted." 
    38 C.F.R. § 20.609
    (h)(3)(iii) (emphasis added). Mr. Snyder's interpretation
    of this regulation would require VA to calculate the attorney fee based on the pre-reduction amount
    of past-due benefits, with the result being that all of the veteran's actual past-due benefits would go
    to the attorney, and even then, a shortfall would be created. We conclude, therefore, that the
    Secretary's regulation requiring an attorney fee award to be based on the payments that the veteran
    will actually receive does not exceed the bounds of the permissible, and the Court thus holds that
    the Board did not err in its calculation of attorney fees owed to Mr. Snyder.
    E. Statement of Reasons or Bases
    The Board is required to consider all evidence of record and to consider and discuss in its
    decision all "potentially applicable" provisions of law and regulation. Schafrath v. Derwinski,
    
    1 Vet.App. 589
    , 593 (1991); see 
    38 U.S.C. § 7104
    (a); Weaver v. Principi, 
    14 Vet.App. 301
    , 302
    (2001) (per curiam order); Sanden v. Derwinski, 
    2 Vet.App. 97
    , 100 (1992). The Board is also
    10
    required to include in its decision a written statement of the reasons or bases for its findings and
    conclusions on all material issues of fact and law presented on the record; that statement must be
    adequate to enable an appellant to understand the precise basis for the Board's decision, as well as
    to facilitate informed review in this Court. See 
    38 U.S.C. § 7104
    (d)(1); Allday v. Brown, 
    7 Vet.App. 517
    , 527 (1995); Gilbert v. Derwinski, 
    1 Vet.App. 49
    , 56-57 (1990).
    Here, the Secretary contends that this case should be remanded because the Board failed to
    provide adequate reasons or bases for its decision. Notably, this is not a contention of error raised
    by Mr. Snyder. Although the Secretary argues that further development is necessary to determine
    whether any of the veteran's award was apportioned to his dependents, the record contains no
    evidence of apportionment, and Mr. Snyder acknowledged during oral arguments that there was no
    apportionment. Additionally, the appellant does not allege that he cannot understand the basis of the
    Board's decision. We find the Board's decision sufficient to facilitate informed review and the
    reasoning provided by the Board adequate; accordingly, the Secretary's argument in this regard is
    rejected. See Kay v. Principi, 
    16 Vet.App. 529
    , 532 (2002) (citing Allday, supra).
    F. Implied-in-Fact Contract
    Mr. Snyder argues that the plain language of section 5904 obligates VA to pay him directly
    from past-due benefits awarded on the basis of the claim, contending for the first time during oral
    argument that section 5904 creates an implied-in-fact contract between an attorney and VA.
    However, this argument has been expressly rejected by the U.S. Court of Appeals for the Federal
    Circuit (Federal Circuit). See Hanlin v. U.S., 
    316 F.3d 1325
     (Fed. Cir. 2003). In Hanlin, a veteran's
    attorney and his client entered into a fee agreement that provided that the attorney fees would be paid
    directly from VA to the attorney based on the past-due benefits awarded to the veteran. 
    Id. at 1326
    .
    The veteran was awarded benefits, but VA erroneously paid the entire sum to the veteran. 
    Id. at 1327
    . The attorney argued that section 5904(d) and § 20.609(h) created an implied-in-fact contract
    between himself and VA. Id. at 1328. In rejecting the attorney's theory, the Federal Circuit noted
    that, among other things, there was no "mutuality of intent and offer and acceptance" between the
    attorney and the Government. As to the role of section 5904(d) and § 20.609(h), the court concluded
    that "[t]he statute and the regulation set forth [ ]VA's authority and obligation to act, rather than a
    promissory undertaking to the attorney by [ ]VA." Id. Therefore, although the Government will
    11
    withhold fees and pay an attorney when appropriate, the terms of the fee agreement executed
    between an attorney and a veteran cannot obligate VA to pay a particular fee when VA is precluded
    by statute or regulation from doing so.
    IV. CONCLUSION
    Based on the foregoing, the Court holds that Mr. Snyder has not demonstrated that the Board
    committed either legal or factual error that would warrant reversal of the Board decision or remand
    of his attorney-fees claim.
    AFFIRMED.
    12