Francis M. Jackson v. Eric K. Shinseki

UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS
NO. 12-0738
FRANCIS M. JACKSON, APPELLANT,
V.
ERIC K. SHINSEKI,
SECRETARY OF VETERANS AFFAIRS, APPELLEE.
On Appeal from the Board of Veterans' Appeals
(Argued November 19, 2013 Decided March 6, 2014)
Kenneth M. Carpenter, of Topeka, Kansas, for the appellant.
Michael A. Carr, with whom Will A. Gunn, General Counsel; R. Randall Campbell, Assistant
General Counsel; and Leslie C. Rogall, Deputy Assistant General Counsel, were on the brief, all of
Washington, D.C., for the appellee.
Before MOORMAN, DAVIS, and SCHOELEN, Judges.
MOORMAN, Judge, filed the opinion of the Court. SCHOELEN, Judge, filed a dissenting
opinion.
MOORMAN, Judge: The appellant, Francis M. Jackson, appeals through counsel a
November 15, 2011, Board of Veterans' Appeals (Board) decision that denied his claim for eligibility
for payment of attorney fees pursuant to 38 U.S.C. § 5904(d). This appeal is timely, and the Court
has jurisdiction to review the Board's decision pursuant to 38 U.S.C. §§ 7252(a) and 7266(a). This
case was referred to a panel to determine whether section 5904(d) authorizes VA to pay attorney fees
pursuant to a valid contingency fee agreement where the veteran died after the Board's favorable
decision granting his claims for service connection but before the regional office (RO) implemented
that decision by assigning a disability rating and effective date and where past-due benefits were
subsequently awarded and paid to the veteran's surviving spouse as accrued benefits. For the reasons
that follow, the Court will affirm the Board's decision.
I. BACKGROUND
The veteran, H.M. Cates Finemore, served honorably on active duty in the U.S. Army from
April 1957 to April 1959. Record (R.) at 201. On March 4, 1998, the Board denied the veteran's
claims for disability compensation for disabilities of the legs, back, and feet. R. at 657-62, 761-67.
Three months after the Board's decision, on June 9, 1998, the appellant, attorney Francis M. Jackson,
entered into a valid contingency fee agreement with the veteran. R. at 285-88; see R. at 10 ("[T]he
Board finds that the appellant was in substantial compliance with the provisions of 38 C.F.R.
§ 20.609(g)(h)."). On May 22, 2007, the Board issued a decision granting the veteran "[e]ntitlement
to service connection" for a back disability and a disability of the legs. R. at 314-20. On January
20, 2008, before the RO issued a rating decision implementing the Board's decision, Mr. Finemore
died. R. at 198. The record contains a rating decision, dated January 31, 2008, that stated that
service connection for the veteran's back and foot disabilities and entitlement to special monthly
compensation based upon loss of use of the left foot was granted and assigned disability ratings and
effective dates for those conditions. R. at 301-06. The rating decision is not accompanied by an
award letter, nor is there any indication in the record that the rating decision was mailed to the
veteran.
On April 3, 2008, the appellant sent a letter to VA stating that he represented the veteran and
that it was his "understanding that [the veteran's] claim has been granted and that payment is being
calculated." R. at 187. On May 14, 2008, the RO issued a rating decision denying the appellant
payment of his contingency fee due to the veteran's death. R.185-86. That decision stated: "We are
unable to pay any [a]ttorney [f]ees due you due to the veteran's death. The past-due benefits can only
be payable as accrued benefits and if the accrued benefits claimant has filed a fee agreement with
you." Id. The appellant filed a timely Notice of Disagreement (NOD) (R. at 183), and later perfected
his appeal to the Board (R. at 170).
On January 20, 2009, the appellant forwarded to VA an application for dependency and
indemnity compensation (DIC) and accrued benefits for the veteran's surviving spouse, Patricia
Finemore. R. at 138-46. The RO granted Mrs. Finemore's claim for accrued benefits in a decision
dated May 15, 2009. R. at 87-99. The RO notified Mrs. Finemore of this determination on July 24,
2009. R. at 87-88. The letter informed her that
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At the time of the veteran's death, he had been granted service connection for a back
condition, foot drop, and special monthly compensation for the loss of use of the left
foot. We granted entitlement to this accrued benefit in the amount of $136,652. Of
this amount, $27,330.40 is being withheld for possible attorney fees. The issue of
attorney fees is currently under appeal. You will be notified when the issue is
decided.
R. at 87. VA received evidence (R. at 57) and subsequently determined that Patricia Finemore was
not capable of managing her funds (R. at 34-38, 45-50). In June 2011, VA released $109,321.60 to
Mrs. Finemore's custodian. R. at 27-28.
In the November 15, 2011, decision here on appeal the Board found that the appellant was
not entitled to payment of attorney fees. R. at 4-11. The Board found
Although the appellant and the Veteran entered into a valid contingent fee agreement
in June 1998 for a percentage of past-due benefits paid to the Veteran, and such
benefits were awarded by virtue of a May 2007 Board decision, the Board's award did
not result in any cash payment to the Veteran due to the Veteran's death.
R. at 5. Because a "cash payment," as required by 38 C.F.R. § 20.609(h)(1) (2006), was not made,
the Board denied the appellant's claim. The Board noted that the veteran's widow had been awarded
and paid past-due benefits due and unpaid to the veteran as accrued benefits, but found that payment
could not be made from Mrs. Finemore's accrued benefits award because the appellant had not
entered into a fee agreement with her.
The appellant filed a Notice of Appeal to this Court on March 1, 2012. On July 25, 2012,
the appellant provided Patricia Finemore's custodian with a copy of his Notice of Appeal and
informed her, in accordance with Rule 15, that she had a right to intervene in the appeal. The Court
discovered that Patricia Finemore passed away on October 4, 2013. Pursuant to the Court's October
28, 2013, order, both parties filed a supplemental brief in which they maintain that Mrs. Finemore's
death has no bearing on the outcome of this appeal.
II. ANALYSIS
Pursuant to 38 U.S.C. § 5904(d), an attorney may enter into a fee agreement with a claimant
for VA benefits and, if certain conditions are met, the attorney is entitled to have his fee deducted
from past-due benefits awarded to the claimant and to be paid from that award directly by VA.
"When a claimant and an agent or attorney have entered into a [valid fee agreement], the total fee
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payable to the agent or 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) (emphasis added). The statute
further provides that a valid fee agreement is one that provides that the fee "is to be paid to the agent
or attorney by the Secretary directly from any past-due benefits awarded on the basis of the claim"
and "is contingent on whether or not the matter is resolved in a manner favorable to the claimant."
38 U.S.C. § 5904(d)(2)(A)(I) (emphasis added). Finally, section 5904 provides that
[t]o the extent that past-due benefits are awarded in any proceeding before the
Secretary, the Board of Veterans' Appeals, or the United States Court of Appeals for
Veterans Claims, the Secretary may direct that payment of any fee to an agent or
attorney under a fee arrangement described in paragraph (1) be made out of such
past-due benefits.
38 U.S.C. § 5904(d)(3) (emphasis added). The Secretary's regulation implementing section 5904(d)
states that a valid fee agreement will be honored by VA only when (1) the total fee payable does not
exceed 20% of past-due benefits awarded, (2) the amount of the fee is contingent on whether or not
the claim is resolved in a manner favorable to the claimant, and (3) "[t]he award of past-due benefits
results in a cash payment to a claimant or an appellant from which the fee may be deducted." 38
C.F.R. § 20.609(h)(1) (2006).
The appellant argues there are four reasons that compel payment of his fee pursuant to the
contingency fee agreement between him and the veteran: (1) he was retained within one year after
the first final Board decision in the case in accordance with 38 U.S.C. § 5904(c); (2) he successfully
represented the veteran before the Court resulting in a remand to the Board; (3) when the Board
granted the veteran's claims in May 2007, his entitlement to a fee was established; and (4) VA
implemented an award of past-due benefits in May 2009 for those service-connected benefits by
awarding accrued benefits to the veteran's widow. In other words, the appellant argues that the
award and cash payment requirements of the statute and regulation were satisfied in May 2009 when
the RO assigned a disability rating and effective date regarding the veteran's entitlement to service-
connected compensation for purposes of determining the veteran's unpaid compensation, which was
later paid to Mrs. Finemore as accrued benefits. The appellant concedes that all four elements he
outlined at oral argument are required for him to be eligible for payment of his attorney fee and that
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the Board's May 2007 decision granting service connection does not satisfy the requirement in
section 5904(d) that "past-due benefits are awarded" on the basis of the claim.
The Secretary argues that the plain language of 38 U.S.C. § 5121, as well as the U.S. Court
of Appeals for the Federal Circuit's (Federal Circuit) decisions in Seymore v. Principi, 245 F.3d 1377
(Fed. Cir. 2001) and Zevalkink v. Brown, 102 F.2d 1236 (Fed. Cir. 1996), and two VA General
Counsel Opinions demonstrate that a claim for accrued benefits is a separate claim. Thus, as a
separate claim, Mrs. Finemore's "accrued benefits claim was not a continuation of the [v]eteran's
benefits claim." Secretary's Brief at 14. As a result, the Secretary maintains that, because the
appellant did not, and could not, have a valid fee agreement with Mrs. Finemore, he cannot collect
20% of the past due benefits awarded on the basis of the accrued benefits claim. The Secretary
points out "[w]hat [the a]ppellant is asking the Court to do is order VA to pay $27,330.40 from the
surviving spouse's accrued benefits award to someone with whom she never entered into a legal
relationship." Secretary's Brief at 20.
The appellant and the veteran entered into a valid contingency fee agreement. It is not
disputed that (1) the attorney was retained within one year of the Board's first final decision denying
the veteran's claims for service connection for back and leg disabilities, see 38 U.S.C. § 5904(c)(1);
and (2) the fee agreement directs VA to pay the attorney directly from any past-due benefits awarded
on the basis of the claim, limits the attorney's fee to 20% of the total amount of past due benefits
awarded on the basis of the claim, and is contingent on whether the matter is resolved in favor of the
claimant. See 38 U.S.C. § 5904(d)(1), (2)(A)(i)(ii). It is also not disputed that the attorney's
representation of the veteran resulted in a favorable decision concerning the claim in May 2007 when
the Board granted entitlement to service connection for the veteran's leg and back disabilities. What
is disputed is whether past-due benefits were awarded on the basis of the veteran's claim as
contemplated by section 5904(d).
In Snyder v. Nicholson, the Federal Circuit considered the meaning of the term "past-due
benefits awarded" as it appears in section 5904(d). 489 F.3d 1213, 1219 (Fed. Cir. 2007). Starting,
as it must, with the language of the statute, the Federal Circuit found that "the statutory language
does in fact provide 'a clear answer' to the meaning of section 5904(d)." Id. at 1217-18 (quoting
Hughes Aircraft Co. v. Jacobson, 525 U.S. 432, 438 (1999)). The Federal Circuit explained "[a]
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claimant's service-connected disability forms the 'basis' of his or her claim for compensation" and
"in order to make an 'award[]' on the 'basis' of that claim, the VA must assign a disability rating to
the claimant." 489 F.3d at 1218 (emphasis added). Accordingly, the court found that "[t]he word
'award' is clear and unambiguous, and in the parlance of veterans' benefits it means the amount stated
as the award for success in pursuit of a claim for benefits." Id. Although the May 2007 Board
decision established the veteran's entitlement to service connection for his disabilities, that decision
did not state "the amount" to be paid to the veteran.
Thus, in the veteran's claim for benefits on which the appellant represented the veteran,
entitlement to service connection had been established before the veteran died, forming the "basis"
for his claim for compensation, but not yet making the "award of past-due benefits." Because the
veteran died before the RO had issued a rating decision assigning a disability rating or effective date,
the "amount stated as the award for success in pursuit of a claim for benefits" had not been
determined. Snyder, 489 F.3d at 1218. Accordingly, the Board's May 2007 decision is insufficient
to establish "past-due benefits awarded on the basis of the claim." 38 U.S.C. § 5904(d)(2)(A)(i); see
Snyder, supra.
However, disability ratings and effective dates for the veteran's service-connected disabilities
were subsequently determined by the RO for the purposes of awarding the veteran's widow accrued
benefits pursuant to 38 U.S.C. § 5121. The appellant argues that the determination of the "amount"
subsequently awarded as accrued benefits to the veteran's widow satisfied the final requirement for
him to be paid (past-due benefits awarded on the basis of the claim for the fee to be paid out of such
past-due benefits).
The parties agree, and we do not depart from well-established precedent, that an accrued
benefits claim is a separate claim from the veteran's claim for service connection. Zevalkink,
102 F.3d at 1241. At the same time, however, we cannot ignore that an accrued benefits claim is
derivative of the veteran's claim for service connection and, therefore, the accrued benefits claimant
is only entitled to what was properly due the veteran at the time of his death, but which was unpaid.
Id. The statutory scheme precludes an accrued benefits claimant from readjudicating the veteran's
claim. Instead, "[t]he main thrust of the statute is to pay benefits that were 'due and unpaid' to the
6
veteran based on 'existing ratings or decisions'" or evidence in the file at the date of death. Id.
(quoting 38 U.S.C. § 5121).
The appellant argues, because a claim for accrued benefits is derivative of the veteran's claim,
the award of past-due benefits to Mrs. Finemore was on the basis of the veteran's claim. Thus, he
argues, that award satisfied the final requirement for him to be paid (past-due benefits awarded on
the basis of the claim for the fee to be paid out of such past-due benefits) in fulfillment of his
agreement with the veteran, Mr. Finemore. Although the appellant expressly states that "[t]he nature
of an accrued benefits claim as a 'separate claim' is not challenged by this appeal" (Reply Brief at 3),
he maintains that "[t]here is only one 'claim' in this case" (Reply Brief at 8).
Pursuant to 38 U.S.C. § 5904(c), "a fee may not be charged, allowed, or paid for services of
. . . attorneys with respect to services provided before the date on which a notice of disagreement is
filed with respect to the case." Because Mrs. Finemore was granted accrued benefits upon her initial
application, an NOD was never filed with respect to that matter. Similarly, in Cameron v. Shinseki,
an attorney represented a veteran in pursuit of an initial claim for benefits pursuant to a valid fee
agreement and also represented the veteran in her claim for an increased disability rating claim,
which could not be the subject of a valid fee agreement pursuant to section 5904(c) because an NOD
had not been filed with respect to that claim. 26 Vet. App. 109 (2012). The appellant argued that
because the claim for an increased disability rating was factually related to the initial claim for
benefits, the increased rating claim was part of the same "case," as used in section 5904(c). This
Court held that the increased disability rating claim was "a stand-alone claim, adjudicated separately
and independently from her claim for benefits," and therefore, the attorney's fee agreement with the
veteran did not entitle him to a fee with respect to her increased rating claim. Id. at 111. Relying
upon the Federal Circuit's decision in Jackson v. Shinseki, 587 F.3d 1106 (Fed. Cir. 2009), the Court
held in Cameron that, because the veteran's increased rating claim contained "a separate essential
element from an initial service-connection claim: an increase in the level of disability that occurs
after the record before the Board has closed," the two claims constituted "two distinct 'cases' for
purposes of section 5904(c)." 26 Vet. App. at 116; see Jackson, 587 F.3d at 1111 (claim for total
disability based upon individual unemployability was a separate case for purposes of section 5904(c)
because it required evidence of an essential element not present in the initial claim, i.e., evidence of
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unemployability); but see Carpenter v. Nicholson, 452 F.3d 1379, 1384 (Fed. Cir. 2006) (challenge
to an RO decision on the basis of clear and unmistakable error did not constitute a separate case as
contemplated by section 5904(c)).
Although an accrued benefits claim is based upon only the evidence in, or deemed to be in,
the veteran's file at the time of death, a successful accrued-benefits claim also requires an additional
"essential element:" demonstrating that the applicant qualifies as an accrued benefits claimant.
38 U.S.C. § 5121; Zevalkink, 102 F.3d at 1244 (the determination of whether a party qualifies as an
accrued benefits claimant necessarily involves fact finding); Hayes v. Brown, 4 Vet. App. 353, 358-
59 (1993). Accordingly, the Court finds Jackson and Cameron, both supra, dispositive on this issue.
Mrs. Finemore's accrued benefits claim and Mr. Finemore's service-connection claims are not all part
of the same case.
In addition to the nature of an accrued benefits claim setting Mrs. Finemore's case apart from
her husband's claims during his lifetime, another "essential element" the appellant would have this
Court ignore is that Mrs. Finemore is a separate claimant from her husband and she was never a party
to a fee agreement with the appellant.
In Hanlin v. Nicholson, the Federal Circuit considered a similar issue in the context of two
DIC claims. 474 F.3d 1355 (Fed. Cir. 2007). The claimant with whom the attorney entered into a
fee agreement was the widow of a veteran who was ultimately awarded DIC benefits and the attorney
collected his fee directly from VA pursuant to a section 5904(d) fee agreement. The veteran's adult
son later filed an application for "helpless child" DIC benefits. The attorney argued that since both
his client's (the widow) and the son's entitlement to DIC benefits were dependent on the
determination that the veteran's cause of death was service connected, and his representation of the
widow resulted in the Board's determination that the veteran's death was service connected, the
award of DIC benefits was all part of the same "case" and he was therefore entitled to 20% of the
past-due DIC benefits awarded to the son. The Federal Circuit stated
Even assuming Mr. Hanlin's interpretation of the terms "case" and "claim" in the
statute are correct, he cannot collect from [the veteran's son] in the absence of a fee
agreement. We reject Mr. Hanlin's argument that [the widow's] fee agreement
entitles him to 20% of [the son's] past-due award because it arose under the same
"claim" under § 5904(d). . . . The VA, however, can withhold past-due benefits only
if there is a fee agreement with the claimant.
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474 F.3d at 1360 (emphasis added). The Federal Circuit therefore held that "even under Hanlin's
theory that there is a single claim for benefits in this case, he must have a fee agreement with each
'claimant' from whose compensation he seeks the VA to withhold attorney fees." Id.
In the case now before us, as in Hanlin, both "awards" were dependent upon a finding of
"service connection" for a deceased veteran and were based upon different statutes than the awards
granted to the attorneys' clients. In Mr. Jackson's case, Mr. Jackson represented Mr. Finemore in the
pursuit of a claim for service-connected benefits pursuant to 38 U.S.C. § 1110. Mr. Jackson did not
represent Mrs. Finemore in her pursuit of accrued benefits pursuant to 38 U.S.C. § 5121.1 In Mr.
Hanlin's case, Mr. Hanlin represented the veteran's widow in support of her DIC claim pursuant to
38 U.S.C. § 1311. Mr. Hanlin did not represent the veteran's son in pursuit of his claim for DIC
pursuant to 38 U.S.C. § 1314. In both cases, the attorney had entered into a fee agreement with only
one person. Even if this Court were to assume, as the Federal Circuit assumed in Hanlin, that "there
is only one 'claim' in this case" (Reply Brief at 8), Mr. Jackson must have a fee agreement with each
claimant from whose compensation he seeks VA to withhold attorney fees. See Hanlin, 474 F.3d
at 1360. It is undisputed that Mr. Jackson had no such agreement with Mrs. Finemore. Accordingly,
the Court holds, in the absence of a valid fee agreement with Mrs. Finemore, Mr. Jackson cannot
collect a percentage of Mrs. Finemore's accrued benefits award.
The Court recognizes that in the Hanlin case, the widow's and son's awards are independent
of each other; that is, there are two distinct allotments of payment from which each claimant was
entitled to an award. On the other hand, in Mrs. Finemore's claim, she could only collect what was
"due and unpaid" to the veteran at the time of his death. We find this distinction to be irrelevant.
As discussed above, accrued benefits is still, and has been consistently held to be, a separate claim.
Zevalkink, 102 F.3d at 1241.2 Although an accrued benefits claim is also "derivative" of a service-
1
Although it appears Mr. Jackson prepared and submitted Mrs. Finemore's application for DIC and accrued
benefits on her behalf (R. at 138-47), nothing in the record indicates, nor does the appellant allege, that he had ever
entered into an attorney-client relationship with Mrs. Finemore.
2
Our dissenting colleague suggests that this Court's decision in Breedlove v. Shinseki, 24 Vet. App. 7 (2010),
may have changed the landscape with respect to the nature of accrued benefits claims. Post at 13. As the dissent points
out, this Court explained in Breedlove that, with the enactment of 38 U.S.C. § 5121A, "Congress has largely altered the
distinction previously drawn . . . between the deceased veteran's claim and that of the surviving eligible accrued-benefits
claimant [and that a]ny distinction has been reduced to the administrative requirement of filing an accrued benefits claim
9
connection claim, the Court notes that in Hanlin, in addition to being dependent upon a finding of
service connection (and the establishment of entitlement to "service connection" had been
successfully procured by the widow's attorney), section 1314(b) benefits are only payable to a
deceased veteran's helpless adult child when benefits are also payable to a surviving spouse under
section 1311. Thus, the son's claim was also derivative of his mother's award. Moreover, the
Federal Circuit specifically held that "[s]imply because [the widow's] qualification to receive DIC
as a surviving spouse is a prerequisite to [the son's] ability to receive benefits under section 1314(b)
did not make [the son] the same claimant as his mother." 474 F.3d at 1360. We find nothing in
Hanlin, or elsewhere in the Court's jurisprudence, to suggest that, although VA cannot bind a party
to a fee agreement because the claimants were seeking DIC benefits, nevertheless, the Court can, in
effect, bind an accrued benefits claimant to her deceased husband's contract concerning his disability
benefits.
In the November 15, 2011, decision here on appeal, the Board found that past-due benefits
"were awarded [to the veteran] by virtue of a May 2007 Board decision" but that "the Board's award
did not result in any cash payment to the [v]eteran due to the [v]eteran's death." R. at 5; see
38 C.F.R. § 20.609(h)(iii). The Board concluded that "[b]ecause a cash payment 'from which the fee
may be deducted' was never made VA cannot honor the [c]ontingent [f]ee [a]greement between the
[v]eteran and the appellant." R. at 11 (quoting 38 C.F.R. § 20.609(h)(iii)). To the extent that the
Board's finding of fact may be considered a determination that the Board's May 2007 grant of service
connection amounted to an award of past-due benefits as contemplated by 38 U.S.C. § 5904(d), as
discussed above, such a determination is clearly contrary to the law. See Snyder, supra. Because
we hold today that a determination of service connection is not an "award of past-due benefits" as
and the determination of eligibility for accrued benefits." 24 Vet. App. at 7. First, the Court notes that, even after
Breedlove, the additional "essential element" distinguishing a veteran's claim from his accrued benefits-eligible survivor's
claim remains; that is, an accrued benefits claimant must establish eligibility pursuant to section 5121. Moreover,
section 5121A did not become effective until October 10, 2008, ten months after Mr. Finemore's death. See Copeland
v. Shinseki, 26 Vet. App. 86 (2012). Thus, neither section 5121A nor this Court's decision in Breedlove could be
applicable in this matter. To the extent that one might argue that the outcome of this case might be different had Mrs.
Finemore been substituted under section 5121A, that is not the case before the Court today. In this matter, the undeniable
fact remains that Mrs. Finemore was not, in fact, substituted in Mr. Finemore's claim; she filed a separate claim pursuant
to 38 U.S.C. § 5121(a).
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contemplated by 38 U.S.C. § 5904(d), and no award was thus made in connection with Mr.
Finemore's claim, we need not consider whether the regulatory requirement that "[t]he award of past-
due benefits results in a cash payment" has been met. 38 C.F.R. § 20.609(h); see Snyder, 489 F.3d
at 1219-20 (suggesting that § 20.609(h) may have been "written unduly narrowly by VA," but
declining to address the validity of the regulation).
The dissent focuses on a number of disparate arguments that essentially amount to a single
argument: it is unfair for an attorney not to be paid for his work. The Court does not discount the
fact that Mr. Jackson did a great deal of the work in connection with Mr. Finemore's claim and that
his work benefited Mrs. Finemore in pursuing her claim. However, this Court may not award
equitable relief, in this instance, no matter how compelling the facts. See Taylor v. West,
11 Vet. App. 436, 440 (1998); Moffitt v. Brown, 10 Vet. App. 214, 225 (1997); Schleis v. Principi,
3 Vet. App. 415, 418 (1992) ("Only the Secretary is permitted by statute to take equitable
considerations into account in reviewing claims for administrative error" (citing 38 U.S.C.
§ 503(a))). Our colleague cites no statute, no legislative history, no case, that equates the solicitude
of Congress for veterans and their survivors to a comparable solicitude for attorneys who represent
the nation's veterans in exchange for 20% of their benefits.
III. CONCLUSION
Upon consideration of the foregoing analysis, appellant's and the Secretary's pleadings and
oral argument, and a review of the record, the Board's November 15, 2011, decision is AFFIRMED.
SCHOELEN, Judge, dissenting: The majority's holding relieves the Secretary of his statutory
obligation pursuant to 38 U.S.C. § 5904(d)(2) to honor a valid contingency fee agreement between
the appellant and the veteran and allows an absurd result, which permits an accrued-benefits claimant
to collect more monetary benefits than what was "due and unpaid" to the veteran at the time of his
death. Therefore, I must respectfully dissent.
As noted by my colleagues, there is no dispute that the appellant and the veteran entered into
a valid contingency fee agreement pursuant to 38 U.S.C. § 5904(c)(1) and (d)(1),(2)(A)(i)(ii). There
is also no dispute that the appellant's representation of the veteran resulted in a favorable resolution
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of the claim in May 2007 when the Board of Veterans' Appeals (Board) granted entitlement to
service connection for the veteran's back and leg disabilities. Notwithstanding the appellant's
successful representation of the veteran, the majority concludes that he is not entitled to collect a fee
for legal services provided to the veteran because the regional office (RO) failed to calculate the
amount of past-due benefits owed to the veteran prior to his death. Relying on the U.S. Court of
Appeals for the Federal Circuit's (Federal Circuit) decision in Snyder v. Nicholson, the majority notes
that "[a] claimant's service-connected disability forms the 'basis' of his or her claim for
compensation," and that "in order to make an 'award[]' on the 'basis' of that claim, the VA must
assign a disability rating to the claimant" from which monthly compensation may be set. 489 F.3d
1213, 1218 (Fed. Cir. 2007). As a result of the veteran's interceding death, the RO did not determine
the appropriate disability rating and effective date until it had granted Mrs. Finemore's claim for
accrued benefits. Because the calculation was made in the context of Mrs. Finemore's accrued
benefits claim, the majority concludes that past-due benefits were not awarded on the basis of the
veteran's claim. However, past-due benefits were, in fact, awarded.
First, I do not agree that the Federal Circuit's decision in Jackson v. Shinseki, 587 F.3d 1106
(Fed. Cir. 2009), and this Court's decision in Cameron v. Shinseki, 26 Vet. App. 109 (2012), are
dispositive on this issue. Both Jackson and Cameron address the meaning of the term "case" as used
in 38 U.S.C. § 5904(c), which prescribes when an attorney is permitted to charge and collect a fee
for legal services. See 38 U.S.C. § 5904(c)(1) (pre-2006) (limiting the ability to charge a fee to
services provided after the date on which the Board first makes a final decision in the case provided
the attorney is retained within one year of that decision). In Cameron, the Court focused on whether
worked performed by an attorney in two different claims was part of the "same case" so that the
attorney could collect a fee for representation provided in both claims. 26 Vet. App. at 114-16;
accord Jackson, 587 F.3d at 1109-11 (holding that the attorney was not entitled to charge and collect
a fee for work leading to the veteran's award of total disability based upon individual
unemployability (TDIU) where the original case did not reasonably raise the issue of TDIU). Here,
the appellant seeks only to collect a fee for work performed in the veteran's claim for disability
compensation for back and leg disabilities. He is not attempting to enforce a fee agreement with
Mrs. Finemore, nor is he attempting to collect a fee for legal services provided to her. Consequently,
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there is no question whether the veteran's claim for disability compensation and Mrs. Finemore's
claim for accrued benefits are part of the same "case" for purposes of section 5904(c)(1). Although
the appellant argues that Mrs. Finemore's "case" was no different than the veteran's "case" because
they are both based, as they must be, on the veteran's underlying claims for service connection, he
nevertheless very clearly states that he is seeking to enforce the veteran's contract. As a result, the
Court's focus and the determinative issue must be whether there was an award of past-due benefits
on the basis of the claim – i.e. the veteran's claim. See 38 U.S.C. § 5904(d)(1) (providing that "the
total fee payable to the attorney may not exceed 20[%] of the total amount of any past-due benefits
awarded on the basis of the claim").
The majority mistakenly relies on the Federal Circuit's decisions in Snyder, supra, and Hanlin
v. Nicholson, 474 F.3d 1355 (Fed. Cir. 2007), to conclude that there was not an award of past-due
benefits on the basis of the veteran's claim and that the appellant cannot collect a fee from Mrs.
Finemore because she is a separate claimant who was not a party to the fee agreement. In doing so,
my colleagues ignore the unique nature of an accrued benefits claim. Although an accrued benefits
claim is a separate claim from the veteran's claim for service connection for which an application
must be filed to receive benefits, Zevalkink v. Brown, 102 F.3d 1236, 1241 (Fed. Cir. 1996), the
Court has consistently recognized that "the substance of the . . . claim is purely derivative from any
benefit to which the veteran might have been 'entitled' at his death." Zevalkink v. Brown, 6 Vet. App.
483, 489-90 (1994); cf. Breedlove v. Shinseki, 24 Vet. App. 7, 20 (2010) (explaining that, with the
enactment of 38 U.S.C. § 5121A, "Congress has largely altered the distinction previously drawn . . .
between the deceased veteran's claim and that of the surviving eligible accrued-benefits claimant
[and that a]ny remaining distinction has been reduced to the administrative requirement of filing an
accrued-benefits claim and the determination of eligibility for accrued benefits"). Thus, under
section 5121, "a claimant is only entitled to what was properly due the veteran at the time of death,
but was unpaid." Zevalkink, 102 F.3d at 1241.
It is within the unique context of the nature of an accrued benefits claim that the Court must
examine whether the award of past-due benefits calculated as part of Mrs. Finemore's claim for
accrued benefits satisfies section 5904(d)(1)'s requirement that there be an "award of past-due
benefits on the basis of the claim," which was the subject of the fee agreement between the appellant
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and the veteran. 38 U.S.C. § 5904(d)(1). Neither the statute nor the Secretary's regulation, 38 C.F.R.
§ 20.609(h)(2006), speaks to the precise issue presented by the facts of this case. However, for
purposes of section 5904(d)(1), this Court is bound by the Federal Circuit's decision in Snyder, which
held that "a claimant's service-connected disability forms the 'basis' of his or her claim for
compensation," and that "[t]he word 'award' is clear and unambiguous, and in the parlance of
veterans' benefits it means the amount stated as the award for success in pursuit of a claim for
benefits." 489 F.3d at 1218-19. Snyder also instructs that the amount of awarded compensation and
the amount of payable compensation may not be the same, but that section 5904(d)(1) requires the
calculation of the attorney's fee to be based upon the amount of compensation awarded on the basis
of the veteran's claim, i.e., "the sum of each month's unpaid compensation – as determined by the
claimant's disability rating – beginning on the effective date and continuing through the date of the
award." Id.
Here, it is undisputed that no payment was made to the veteran because of his interceding
death. My colleagues conclude that past-due benefits were not awarded on the basis of the veteran's
claim because the calculation of the amount of unpaid compensation did not occur in the veteran's
claim. Ante at 6. However, in the unique context of Mrs. Finemore's accrued benefits claim, which
was statutorily limited to the evidence on file and existing ratings and decisions at the time of the
veteran's death, VA implemented an award – made a calculation of the unpaid compensation that
was due and owed to the veteran at the time of his death on the basis of his claims for service
connection for back and leg disabilities – the same claims that were the subject of the fee agreement
with the appellant. Because the accrued benefits statute, 38 U.S.C. § 5121, limits Mrs. Finemore's
entitlement to what was "due and unpaid" to the veteran at the time of his death, it is illogical to
conclude that her claim, the substance of which is purely derivative of the veteran's claim, can result
in a payment of accrued benefits that is greater than what the veteran would have been entitled to
receive but for the unfortunate timing of his death.
The majority, however, relies on the Federal Circuit's decision in Hanlin to conclude that in
the absence of a fee agreement with Mrs. Finemore, the appellant cannot collect a percentage of Mrs.
Finemore's accrued benefits award. Ante at 9. Unlike my colleagues, I find Hanlin distinguishable
from the present case. In Hanlin, the Federal Circuit rejected the attorney's attempt to collect a 20%
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contingency fee from separate past-due benefits awarded to the veteran's surviving spouse and the
veteran's helpless child where the attorney had only entered into a contingency fee agreement with
the surviving spouse and there had not been a Board decision on the helpless child's claim under
38 U.S.C. § 1314(b). 474 F.3d at 1360. The Federal Circuit held that the attorney "must have a fee
agreement with each 'claimant' from whose compensation he seeks VA to withhold attorney fees"
and "[s]imply because [the surviving spouse's] qualification to receive [dependency and indemnity
compensation (DIC)] . . . is a prerequisite to [the helpless child's] ability to receive benefits under
§ 1314(b) does not make [the helpless child] the same claimant as his mother[,]" the surviving
spouse. Id.
In the present case, the appellant is not seeking to collect a 20% contingency fee from two
claimants, nor is he attempting to bind Mrs. Finemore to the veteran's fee agreement with the
appellant. Unlike in Hanlin, there is only one claim on which compensation can be based, i.e., the
veteran's service-connection claim for back and leg disabilities. The award of past-due benefits can
only be paid to the veteran or the accrued benefits claimant, not both. The accrued benefits claimant
can only receive the veteran's past-due benefits, based on his evidence, and the calculation of the
award is made under the disability compensation scheme, just as if the veteran had survived. Thus,
although Hanlin says that VA "can withhold past-due benefits for a claim only if there is a fee
agreement with the claimant," 474 F.3d at 1360, requiring VA to honor the fee agreement between
the appellant and the veteran does not amount to a withholding from a separate claimant, because,
by the very nature of Mrs. Finemore's derivative entitlement, her claim is limited to the veteran's
entitlement.
Accordingly, I would find that, because the appellant's representation of the veteran resulted
in an award of past-due benefits on the basis of the veteran's service-connection claims for back and
leg disabilities, the appellant is entitled to receive, and VA is statutorily required to pay him, 20%
of the total amount of past-due benefits awarded. That the veteran's interceding death caused
payment to be made to the veteran's surviving spouse does not alter the fact that the award of past-
due benefits was made on the basis of the veteran's underlying claims for service connection or that
the appellant is entitled to a fee based on work successfully performed pursuant to his fee agreement
with the veteran.
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The majority's holding to the contrary is inconsistent with Congress's desire to promote
freedom for VA claimants to obtain access to judicial review and secure capable legal representation,
as well as the Court's consistent view that an attorney, who enters into a valid fee agreement, should
be compensated for work performed under that agreement that results in the claim being resolved
in a manner favorable to the claimant. See, e.g., Lippman v. Shinseki, 23 Vet. App. 243, 252-53
(2009) (holding that an attorney discharged after the initial decision on a claim, but prior to the
appeal of the initial disability rating assigned is entitled to "reasonable fees" based on a quantum
meruit analysis); see also Scates v. Principi, 282 F.3d 1362, 1366 (Fed. Cir. 2002) (holding that it
is implicit in the contingency fee agreement that an attorney, discharged prior to resolution of the
claim, is entitled to "only a fee that fairly and accurately reflects his contribution to and responsibility
for the benefits awarded"). It also renders an attorney without any potentially viable remedy if all
of the veteran's past-due benefits are paid to the veteran's surviving spouse and the veteran's estate
does not contain sufficient funds to satisfy the veteran's contractual obligation in a State court action
brought by such an attorney. Finally, an unfortunate consequence of the majority's holding may be
that some of our nation's veterans, particularly the very old or infirm, may have trouble retaining
qualified counsel who fear that VA will not resolve the claim prior to the veteran's death. This is
particularly troubling at a time when VA takes 923 days3 to process an appeal from the time a
claimant files a Notice of Disagreement (NOD)4 to issuance of a final Board decision. Accordingly,
for the reasons provided above, I must respectfully dissent.
3
See 2013 Department of Veterans Affairs Performance and Accountability Report (Dec. 16, 2013);
http://www.va.gov/budget/report/.
4
Under the current version of 38 U.S.C. § 5904(c)(1), an attorney may not charge or collect a fee with respect
to services provided before an NOD is filed with respect to the case.
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