[00:00:01] Speaker 01:
The first argued case this morning is number 147088, Jackson against McDonald.

[00:00:09] Speaker 01:
Mr. Carpenter.

[00:00:12] Speaker 04:
Good morning, Your Honors.

[00:00:13] Speaker 04:
Thank you very much.

[00:00:14] Speaker 04:
Kenneth Carpenter appearing on behalf of Mr. Francis Jackson.

[00:00:18] Speaker 04:
Mrs. Feinmore's claim for accrued benefits could not have been paid by the VA unless Mr. Feinmore

[00:00:26] Speaker 04:
had in fact been awarded past good benefits by the VA based upon his pending claim for service-connected compensation.

[00:00:33] Speaker 04:
Because Mr. Feinmore was awarded past good benefits as a result of his claim, Mr. Jackson was entitled to the fee called for in his fee agreement.

[00:00:42] Speaker 02:
I'm sorry, you said that Mr. Feinmore was awarded benefits.

[00:00:46] Speaker 02:
I thought the issue here was that Mr. Feinmore was in fact not awarded benefits.

[00:00:51] Speaker 02:
He was on the verge of being awarded benefits when he died.

[00:00:55] Speaker 02:
and only his surviving, his widow was actually awarded benefits.

[00:00:59] Speaker 04:
And that's the issue in this case, Your Honor, is whether or not in fact there is a difference under 5904 between that distinction.

[00:01:10] Speaker 04:
And there is, in our view, no distinction under 5904 that either deals with death or with a subsequent accrued benefit claim.

[00:01:20] Speaker 04:
In point of fact,

[00:01:21] Speaker 04:
Mr. Jackson.

[00:01:22] Speaker 03:
The death of Mr. McDonnell, it eliminated or rather... Mr. Feinmore.

[00:01:27] Speaker 03:
Mr. who?

[00:01:28] Speaker 03:
Feinmore.

[00:01:28] Speaker 03:
Feinmore.

[00:01:29] Speaker 03:
You said McDonnell.

[00:01:29] Speaker 03:
Okay.

[00:01:30] Speaker 03:
Of Mr. Feinmore.

[00:01:32] Speaker 03:
His death eliminated the or prevented the implementation of the award that was going to be given to him.

[00:01:38] Speaker 04:
It did temporarily, Your Honor.

[00:01:40] Speaker 04:
And that's the key here.

[00:01:42] Speaker 04:
if Mr. Feinmore had had no survivors that qualified under the accrued benefit statute.

[00:01:49] Speaker 03:
He had not died.

[00:01:50] Speaker 03:
He would have received an award.

[00:01:51] Speaker 03:
That's correct.

[00:01:52] Speaker 04:
But if he died, then his qualifying survivors were entitled to have those benefits, those past due benefits that were due in owing, paid.

[00:02:03] Speaker 04:
And those past due benefits that were due in owing were subject to a pre-existing fee agreement in which Mr. Feinmore, prior to his death,

[00:02:12] Speaker 04:
had assigned 20% of those past due benefits.

[00:02:15] Speaker 04:
So in fact, there were only 80% of the total past due benefits that were available for accrued benefit purposes.

[00:02:22] Speaker 03:
But the claim was attorney's fees on the award to Mrs. Feinmore.

[00:02:26] Speaker 04:
No, it's based upon the award to Mr. Feinmore, because there would not be an award.

[00:02:31] Speaker 03:
It's based upon the award, but there was no award ever made.

[00:02:34] Speaker 04:
Well, with respect, Your Honor, under this court's definition... Your argument is that he worked for Mr. Feinmore,

[00:02:41] Speaker 03:
Finemore dies, then he's entitled to the fees that were awarded to Mrs. Finemore on the basis of the work that he did for her husband.

[00:02:50] Speaker 04:
No, Your Honor, not the benefits that were paid to Mrs. Finemore.

[00:02:54] Speaker 04:
The benefits that were paid to Mrs. Finemore were the 80% of those past due benefits.

[00:03:01] Speaker 04:
The 20% has remained with the VA.

[00:03:04] Speaker 04:
That 20% was assigned, pursuant to the provisions of 5904,

[00:03:08] Speaker 04:
based upon a valid fee agreement with Mr. Feinmore.

[00:03:12] Speaker 04:
Mr. Jackson's claim is based upon his fee agreement under 5904.

[00:03:18] Speaker 04:
This is a statutory provision that creates a contract between the veteran and the attorney that if it meets the terms of the statute, the VA is required to withhold.

[00:03:30] Speaker 04:
It met the requirements of statute.

[00:03:33] Speaker 03:
Suppose that Mr. Feinmore was not married at the time of his death and had no survivors.

[00:03:37] Speaker 03:
Would there have been any type of award that would have been implemented?

[00:03:41] Speaker 04:
Not under the facts of this case, Your Honor.

[00:03:43] Speaker 03:
And what makes it different in this case is that he was married.

[00:03:47] Speaker 04:
That's right.

[00:03:47] Speaker 04:
And therefore, his qualifying survivors under 38 USC 5121 small a were entitled to compel... They have to make a claim for that, correct?

[00:03:58] Speaker 04:
Yes.

[00:03:59] Speaker 04:
Yes.

[00:04:00] Speaker 04:
That's a separate claim.

[00:04:02] Speaker 04:
It isn't a separate claim.

[00:04:03] Speaker 04:
It's a derivative claim.

[00:04:05] Speaker 04:
It is a claim that does not exist but for the pending claim that was the subject matter of both the fee agreement and the award of past due benefits.

[00:04:15] Speaker 04:
And to make the distinction that the Veterans Court made here is to create an artificial distinction that defeats the purpose of the statute.

[00:04:23] Speaker 04:
The statute was to ensure the purpose of the statute, as indicated by this court and its case law, is to ensure that

[00:04:32] Speaker 04:
veterans have the opportunity to be represented by attorneys.

[00:04:35] Speaker 04:
Mr. Feinmore was represented by Mr. Jackson for a period of nearly 10 years to get this award of past due benefits.

[00:04:43] Speaker 04:
That award of past due benefits was made by the board.

[00:04:46] Speaker 04:
It was delayed in its implementation and ultimately resulted in a document that promulgated and assigned multiple ratings that resulted in a significant award of past due benefits.

[00:04:59] Speaker 04:
Those benefits were then payable

[00:05:02] Speaker 04:
to his survivors, but they were payable to his survivors, subject to the assignment of the portion of those benefits under 5904.

[00:05:12] Speaker 03:
To interpret 5904... The benefits were payable based on the claim that Mrs. Finemore made, correct?

[00:05:18] Speaker 03:
She didn't receive Mr. Finemore's benefits as a survivor.

[00:05:23] Speaker 03:
She received them because a separate claim was made.

[00:05:26] Speaker 04:
I respectfully disagree.

[00:05:28] Speaker 04:
She could not receive her accrued benefits

[00:05:31] Speaker 04:
but for the existence of Mr. Feinmore's claim.

[00:05:34] Speaker 03:
Now that's understood.

[00:05:35] Speaker 03:
That's understood that he established, there's been establishment that Mr. Feinmore was entitled to some benefits.

[00:05:41] Speaker 03:
And you're saying that that entitlement, the work that he did for Mr. Feinmore should transfer over to Mrs. Feinmore.

[00:05:48] Speaker 03:
And because he, but for the work he had undertaken for Mr. Feinmore, there would have been no claim on behalf of Mrs. Feinmore.

[00:05:56] Speaker 04:
That's correct.

[00:05:57] Speaker 04:
It simply would not exist as either a matter of fact or a matter of law.

[00:06:01] Speaker 03:
So let's go back to my original question.

[00:06:03] Speaker 03:
The reason what happened here is that Mr. Feinmore, his award was never implemented because of his death.

[00:06:09] Speaker 04:
Prior to his death, that is correct, Your Honor.

[00:06:12] Speaker 03:
So we're talking about two different claims.

[00:06:17] Speaker 04:
To involve ourselves with a discussion about the distinction between claims here is to avoid the plain language of 5904.

[00:06:26] Speaker 04:
5904 talks about on the basis of the claim.

[00:06:31] Speaker 04:
The claim in this case is the claim for service-connected compensation.

[00:06:36] Speaker 04:
The statute also says that there will be an award of any past due benefits resulting from any proceeding before the VA.

[00:06:46] Speaker 04:
That is an unqualified statement by Congress that there is an intent to honor the contract that was statutorily created

[00:06:55] Speaker 04:
that required the VA to withhold, as they did in this case, 20 percent of the past due benefits from the award that was ultimately made.

[00:07:05] Speaker 04:
It was in fact not implemented until after death, and it was not in fact implemented but for the accrued benefit claim of Mrs. Feinmore.

[00:07:14] Speaker 04:
But that does not change the statutory language.

[00:07:17] Speaker 04:
The statutory language only talks in terms of past due benefits.

[00:07:22] Speaker 04:
There is no claim.

[00:07:26] Speaker 02:
Why isn't the most straightforward reading of the statute that there is no award until the announcement of the amount in the usual way where there might be liability and quantum are different issues the way we talk about in some other context.

[00:07:45] Speaker 02:
But at the time of death here there was not in fact

[00:07:50] Speaker 02:
not even quite a determination of amount, but certainly no announcement of amount.

[00:07:56] Speaker 02:
So that what the board had done was to say there was service connection, but there was still a determination for the regional office to make about how disabled Mr. Feinmore was and therefore whether it was going to be, as it turned out, 70 percent or something less.

[00:08:12] Speaker 02:
Why isn't the natural meaning of award, which is what all this, I think,

[00:08:17] Speaker 02:
turns on, maybe tell me if that's wrong.

[00:08:20] Speaker 02:
That simply didn't happen yet.

[00:08:24] Speaker 04:
Well, with respect, your honor, we are controlled.

[00:08:27] Speaker 04:
This panel is controlled by this court's decision in Snyder.

[00:08:32] Speaker 02:
But I take Snyder actually to say no award until the amount is determined.

[00:08:40] Speaker 04:
No, it says that there are two things that constitute a past due benefit awarded.

[00:08:46] Speaker 04:
And that is the claimant service-connected disability forms the basis for his or her claim for compensation.

[00:08:52] Speaker 04:
That happened in the 2007.

[00:08:54] Speaker 04:
And in order to make an award on the basis of that claim, the VA must assign a disability rating.

[00:09:02] Speaker 04:
And that's the key here.

[00:09:04] Speaker 04:
Based upon what the board did, the VA had no alternative but to assign it.

[00:09:10] Speaker 04:
They simply didn't, as I discussed with Judge Raina, if in fact Mr. Feinmore had no survivors.

[00:09:16] Speaker 04:
under 5121, then this matter would come to an end.

[00:09:20] Speaker 02:
Mr. Jackson's benefit... Can I just ask, would that have been true, again, assume, contrary to fact, no survivors, and assume that the official in the regional office had actually mailed a letter saying you are entitled to 70% than $90,000 or something, but no check had been issued yet.

[00:09:43] Speaker 02:
I don't know if that occurs.

[00:09:45] Speaker 02:
And then Mr. Findmore dies by assumption of this question, no survivors.

[00:09:50] Speaker 02:
Does that money go to his estate or does the money, even though awarded, but not yet sent, what happens to that money?

[00:09:59] Speaker 04:
That money essentially is cheats back to the VA under the current system.

[00:10:04] Speaker 04:
Now this court has not addressed the fact set under your hypothetical in which such a circumstance would happen and whether or not there would be an obligation

[00:10:14] Speaker 04:
for the VA to have still withheld.

[00:10:17] Speaker 04:
In Snyder, they said in the incarcerated veterans context that there was an obligation to withhold the full 20% of the amount that was awarded.

[00:10:27] Speaker 04:
So in your hypothetical, had in fact there been an award prior to death, then there would have been at least an argument under 5904 in Snyder that the attorney fee would have at least

[00:10:37] Speaker 04:
excuse me, the attorney, would still have been entitled to his fee, even though the 80% would have been retained by the VA.

[00:10:44] Speaker 02:
Can I just ask one, I guess it's really not much of a legal question, but it sounds to me like you have at least the beginnings of an unjust enrichment claim against survivors or I guess it's now Mrs. Findmore's daughter, is that right?

[00:11:00] Speaker 02:
But that it's just not bringing.

[00:11:02] Speaker 04:
But that really doesn't exist here, Your Honor, as a matter of fact, under the

[00:11:06] Speaker 04:
present fact-set, because Mrs. Feinmore has now died, there is no one for the VA to pay that 20% to.

[00:11:13] Speaker 04:
So if it's not paid to Mr. Jackson, then the VA, instead of paying out the full 100%... Not to her estate?

[00:11:20] Speaker 04:
No, sir.

[00:11:21] Speaker 04:
It's not authorized under the statute.

[00:11:23] Speaker 04:
Unfortunately, I've argued this issue many times before this court, and 5121A has been interpreted by this statute to exclude the estate.

[00:11:32] Speaker 04:
The estate is not mentioned.

[00:11:33] Speaker 04:
Now, there is a bill before Congress that would add the estate,

[00:11:36] Speaker 04:
But that's not the law presently.

[00:11:38] Speaker 03:
So the award that was going to Mr. Feinmore was reverted back to the VA, correct?

[00:11:48] Speaker 04:
Well, at this point, it's being held by the VA.

[00:11:50] Speaker 03:
The attorney's fees are being held.

[00:11:52] Speaker 03:
That's correct.

[00:11:52] Speaker 03:
I'm talking about the award that was made to him.

[00:11:55] Speaker 03:
He never did receive a check from the VA.

[00:11:57] Speaker 04:
No, Mrs. Feinmore received that.

[00:11:59] Speaker 03:
No, I'm talking about Mr. Feinmore.

[00:12:01] Speaker 04:
But Mr. Feinmore did not.

[00:12:02] Speaker 03:
And he did not because he died.

[00:12:05] Speaker 04:
That's correct.

[00:12:05] Speaker 03:
And that his death extinguished his claim.

[00:12:10] Speaker 03:
That's the question of law here.

[00:12:12] Speaker 03:
Correct?

[00:12:12] Speaker 03:
I mean, yes or no?

[00:12:14] Speaker 03:
I believe no, Your Honor.

[00:12:16] Speaker 03:
His death did not extinguish his claim?

[00:12:18] Speaker 04:
There is nothing in 5904 that discusses the extinguishment of the legal obligation created by that statutory contract.

[00:12:27] Speaker 04:
That statutory contract is based upon

[00:12:30] Speaker 04:
the obligation once there was a determination of entitlement to service connection in 2007 by the board for the VA to implement and assign a rating.

[00:12:41] Speaker 04:
That would have resulted as a matter of law in an award of past due benefits.

[00:12:46] Speaker 04:
It was unknown what that amount was, but it was known and as a matter of law there was an entitlement to... I'll be interested in hearing what your opponent has to say about that.

[00:12:57] Speaker 03:
My understanding is that

[00:12:58] Speaker 03:
If a veteran dies in this situation and the award has not been implemented, that claim is extinguished.

[00:13:05] Speaker 03:
But either way, your argument is that because he did the work for Mr. Feinmore, it reverts back to Mrs. Feinmore.

[00:13:12] Speaker 03:
The work does, right?

[00:13:15] Speaker 03:
The derivative basis of the award for Mrs. Feinmore goes to her, and therefore he's entitled to that fee.

[00:13:23] Speaker 03:
But he had to file a different application on behalf of Mrs. Feinmore.

[00:13:28] Speaker 04:
Well, in fact, he did file that application.

[00:13:30] Speaker 04:
No one filed the application other than... No, I know.

[00:13:33] Speaker 04:
He did file the application.

[00:13:34] Speaker 04:
But that, in my view, Your Honor... Does that start a new process?

[00:13:38] Speaker 04:
No.

[00:13:39] Speaker 04:
It only starts a process to determine whether or not there are eligible survivors to receive that award of passage.

[00:13:46] Speaker 04:
Why isn't that a different claim?

[00:13:48] Speaker 04:
Because it is a claim that is predicated and only exists because of the claim that was pending

[00:13:55] Speaker 04:
and thus payable for attorney fees under 5904.

[00:13:59] Speaker 03:
So the regulation is pretty clear, I think, in my mind, that a fee arrangement needs to exist in order for the VA to pay out fees.

[00:14:08] Speaker 03:
Correct.

[00:14:08] Speaker 03:
They will not do that unless there's a fee agreement.

[00:14:11] Speaker 03:
And our court has upheld that interpretation.

[00:14:16] Speaker 03:
Your client did not sign a fee arrangement with Mrs. Fenmore.

[00:14:21] Speaker 04:
No.

[00:14:22] Speaker 04:
No.

[00:14:23] Speaker 04:
And he has never asserted

[00:14:24] Speaker 04:
that he is entitled to any part of that 80% that was paid to Mrs. Feinmore.

[00:14:29] Speaker 04:
As the dissent pointed out below, Mrs. Feinmore becomes unjustly enriched by getting 20% that her husband had assigned away for the nearly 10 years worth of work that Mr. Jackson did.

[00:14:43] Speaker 01:
Okay, let's hear from the VA and we'll see if you're in middle town, Mr. Carpenter.

[00:14:48] Speaker 01:
Ms.

[00:14:48] Speaker 01:
Thomas.

[00:14:51] Speaker 01:
If you could concentrate on the issues that are concerning us, it would be helpful.

[00:14:56] Speaker 00:
Certainly, Your Honor.

[00:14:59] Speaker 00:
And may it please the court.

[00:15:01] Speaker 00:
Under Schneider, there was no award made to Mr. Feinmore in this case.

[00:15:07] Speaker 00:
As was pointed out during the discussion with my friend, Schneider says that in order for an award to be made, there has to be an amount stated as the award for pursuing a claim for disability benefits.

[00:15:18] Speaker 02:
Can I ask, just because it's on my mind,

[00:15:22] Speaker 02:
You guys are going to keep the 20%?

[00:15:23] Speaker 02:
Yes.

[00:15:30] Speaker 00:
Because under a long line of precedent, there is no right to benefits that exists after the death of an accrued benefits claimant, just as there is no right that exists after the death of a veteran.

[00:15:45] Speaker 02:
The decision to hold on to the 20%

[00:15:51] Speaker 02:
and pay out Mrs. Signmore before she died, the 80% was with whose agreement?

[00:15:59] Speaker 00:
To withhold it?

[00:16:00] Speaker 02:
Yes.

[00:16:01] Speaker 02:
Had you not withholded it and just decided, you know, you're a stakeholder and essentially an interpleader action and you're just going to have done with it, give it to one side and let them fight about it, then at least they might have had an unjust enrichment claim, but you kept the 20%.

[00:16:17] Speaker 02:
And I don't remember, I think the papers actually say, but if you can

[00:16:21] Speaker 02:
remind me or just tell me who agreed to that withholding with this surprising consequence.

[00:16:29] Speaker 00:
So unfortunately, Your Honor, under precedents from this court, if the VA releases funds to a claimant and is later determined that the VA should have paid those funds to

[00:16:45] Speaker 00:
The lawyer, the VA is liable for the funds to the attorney and has to then itself attempt to recoup the funds that were incorrectly paid to the... But just as a factual matter here, did you make the decision unilaterally?

[00:17:01] Speaker 02:
Did Mr. Jackson sign off?

[00:17:03] Speaker 02:
Did Mrs. Feinmore sign off?

[00:17:05] Speaker 02:
Who said what at the time?

[00:17:08] Speaker 00:
As a matter of practice, the VA withholds a portion of benefits when they are released

[00:17:15] Speaker 00:
to the claimant if there is a potential claim for direct payment of attorney's fees.

[00:17:20] Speaker 00:
And here, Mr. Jackson had already, in fact, long before Mrs. Feinmore filed an application for accrued benefits, a few months after Mr. Feinmore's death, Mr. Jackson filed a claim for attorney's fees.

[00:17:35] Speaker 02:
Because... Did he ask for this withholding of the 20%?

[00:17:42] Speaker 02:
Did he or exceed to it or was it just done with silence on his part?

[00:17:46] Speaker 02:
I imagine at the time he might've had mixed feelings about the possibilities.

[00:17:52] Speaker 00:
He did not explicitly ask for this, but Mr. Jackson is a frequent representative of veterans before the VA and presumably knew that it is the practice of the VA when there is a contested amount of benefits, not to pay them until that dispute is resolved.

[00:18:09] Speaker 01:
I understood that withholding was by statute.

[00:18:15] Speaker 00:
The payment of the fees directly by the VA is by statute.

[00:18:23] Speaker 00:
I don't believe that the act of withholding as soon as there is a claim for attorney fees is necessarily mandated by statute, but that is the way that the VA has implemented the statute.

[00:18:37] Speaker 00:
to ensure that if it turns out that attorney fees are payable, that it retains the funds.

[00:18:41] Speaker 01:
Well, whether it's necessary or not, I had thought that it was necessary, but in any event, it was retained for this purpose.

[00:18:49] Speaker 01:
But what is, should it appear that there are ambiguities here?

[00:18:55] Speaker 01:
What is the VA's position to the policy argument that on the position now taken, any attorney who's doing

[00:19:05] Speaker 01:
pro bono or contingent work for an elderly veteran will know that if the veteran dies, that won't be honored.

[00:19:16] Speaker 00:
We don't believe that that policy concern has much to support it, and we also believe... Well, certainly the situation here.

[00:19:26] Speaker 01:
Yes, Your Honor.

[00:19:28] Speaker 01:
And if that becomes or is binding precedent, that ends it, does it not?

[00:19:34] Speaker 00:
Actually, Your Honor, there was a change in the statutory law made in 2008 that wasn't applicable to this case, but will be applicable in future cases that will make it easier for attorneys to avoid getting into this kind of situation.

[00:19:48] Speaker 01:
Well, if there's a change in law that would guarantee this payment, isn't it at least an apparent obligation of the agency to consider the policy underlying that change?

[00:20:02] Speaker 01:
especially if there's an ambiguity in the prior administration?

[00:20:08] Speaker 00:
Let me just explain the nature of the statutory change, Your Honor, because it doesn't guarantee payment.

[00:20:13] Speaker 00:
What it does is this was a change in the statutory law that's now codified at 38 USC section 5121A.

[00:20:22] Speaker 00:
That's A without a parentheses.

[00:20:26] Speaker 00:
That statute allows

[00:20:27] Speaker 00:
upon the death of a veteran direct who is pursuing a claim for benefits, direct substitution of someone who would be eligible for accrued benefits into the proceeding that the veteran was pursuing so that the surviving spouse in this case in effect becomes the claimant pursuing the veteran's claim.

[00:20:48] Speaker 00:
The VA takes the position that in that instance that the

[00:20:54] Speaker 00:
continuing claim with the surviving spouse substituted for the veteran is all of a piece with the original claim for veteran's benefits with the result that so long as the surviving spouse has agreed in writing that when the surviving spouse receives benefits, the attorney's fee may be directly paid from them.

[00:21:18] Speaker 03:
So you still require a separate attorney fee arrangement in that situation?

[00:21:23] Speaker 00:
Yes, Your Honor, and the reason for that is that the VA believes, aside from the clear emphasis in Section 5904 upon the consent of the person to whom the benefits belong, the VA believes it's important for the claimant, the surviving spouse, to have the right to their choice of counsel in prosecuting the claim when they bring it.

[00:21:44] Speaker 00:
And if there were an encumbrance upon the potential benefits award, it would be more difficult for the surviving spouse to secure a counsel of their choice.

[00:21:53] Speaker 02:
Does the new statute or the VA's implementation of it condition the substitution on an agreement of the survivor to use a sure hand honor the earlier

[00:22:09] Speaker 02:
It does not, Your Honor.

[00:22:12] Speaker 00:
And because of that, it would be the prudent course for an attorney concerned about this sort of circumstance would be entering into an agreement to represent a veteran who he feared was in poor health.

[00:22:26] Speaker 02:
Not that unusual.

[00:22:28] Speaker 00:
No, unfortunately not.

[00:22:30] Speaker 00:
To, at the same time, enter into agreement with both the veteran and his spouse.

[00:22:36] Speaker 00:
saying that he would represent the spouse if it became necessary, and that, in turn, he would be able to receive a portion of his fees from her benefits award.

[00:22:47] Speaker 03:
In this case, are we talking about two different claims?

[00:22:50] Speaker 03:
This is before the statute was amended, as you just... Yes, Your Honor, we are.

[00:22:55] Speaker 00:
And that's been made clear in a long line of cases holding that the claims are separate because the accrued benefits

[00:23:05] Speaker 00:
entitlement arises under a separate statute from the veteran's entitlement, and it requires submission of a separate application for veterans.

[00:23:14] Speaker 03:
So if there's separate claims, and the administration's not paying no attorney's fees on Mrs. Feinmore's claim, because there was no fee arrangement, and yet it seems to me that the case for Mr. Feinmore was completed.

[00:23:29] Speaker 03:
The only thing left was perhaps even to mail a check.

[00:23:33] Speaker 03:
It seems to me that the VA

[00:23:35] Speaker 03:
indicated that the claim had been granted and that payment was being calculated.

[00:23:40] Speaker 03:
What else is there?

[00:23:43] Speaker 03:
What else is there to do?

[00:23:44] Speaker 03:
Even had he survived and lived to see the check arrive, then Mr. Jackson would have been entitled to attorney's fees.

[00:23:56] Speaker 00:
As an initial matter, Your Honor, Mr. Jackson and his request for attorney's fees described

[00:24:02] Speaker 00:
his understanding of the situation as being that payment for Mr. Jackson, or Mr. Finer was being calculated.

[00:24:08] Speaker 00:
But the fact of the matter was that the VA hadn't issued a decision, a formal decision stating the amount, which means that there had been no award, no formal decree.

[00:24:20] Speaker 00:
As a result, one of the most important elements of the adjudication process would still have to be completed.

[00:24:28] Speaker 00:
That is the issuance of a formal decision.

[00:24:31] Speaker 00:
Furthermore, even once that decision had been issued... That was a formality, right?

[00:24:37] Speaker 03:
I mean, the decision had been made that Mr. Farmer was entitled.

[00:24:42] Speaker 03:
He made his service-connected case, so now he's entitled to those benefits.

[00:24:48] Speaker 00:
The determination had been made that his condition was service-connected.

[00:24:53] Speaker 00:
The determination had not been made that he was actually entitled to any past due benefits.

[00:25:00] Speaker 00:
before the rating decision is released, for all the VA or the claimant knows, the rating could be a zero, in which case... No, but that's not what happened here.

[00:25:10] Speaker 03:
Otherwise, Mrs. Farmer would not have been entitled to the accrual benefits, correct?

[00:25:16] Speaker 00:
That's right, Your Honor.

[00:25:17] Speaker 00:
So the distinction here, I think, is between the underlying facts existing, which ultimately led to the rating decision.

[00:25:26] Speaker 00:
So we know now that

[00:25:28] Speaker 00:
Mr. Findmore's disability was such that he was entitled to a 60% in the 20s.

[00:25:33] Speaker 03:
Okay, so there were no more hearings, no more filings.

[00:25:36] Speaker 03:
There wasn't anything of that sort after the decision had been made that he was entitled to the service-connected disability rate.

[00:25:45] Speaker 03:
Well, we don't actually... The case was closed at that point.

[00:25:48] Speaker 00:
Well, that never happened, so the case wasn't closed.

[00:25:53] Speaker 00:
And as a matter of procedure,

[00:25:57] Speaker 00:
There often is a lot of additional litigation after a decision.

[00:26:01] Speaker 03:
But that didn't happen in this case.

[00:26:03] Speaker 03:
In this case, the only thing that happened after Mr. Jackson sent the letter is that he made an application on behalf of Mrs. Finemore in January.

[00:26:14] Speaker 00:
Well, actually, Your Honor, what happened was after Mrs. Finemore's application was received, the VA recalculated and re-performed the rating analysis and then issued a formal decision.

[00:26:27] Speaker 00:
That was the piece missing from Mr. Finemore's claim, and that was the reason that no formal award was ever made to him.

[00:26:34] Speaker 00:
Now, neither was any cash payment made to him as required by Section 20.609.

[00:26:40] Speaker 02:
I just want to understand.

[00:26:47] Speaker 02:
This case on its facts does not present what might be a harder case, which is that a

[00:26:56] Speaker 02:
an actual dollar amount and percentage of disability determination had been made, but no money had been paid out, death in that period.

[00:27:08] Speaker 02:
This involves death before even the 70% had been determined, and the dollar amount determined, though not paid.

[00:27:19] Speaker 02:
Are those the facts?

[00:27:22] Speaker 00:
That's correct, Your Honor.

[00:27:24] Speaker 00:
It would be a harder case if

[00:27:26] Speaker 00:
the VA had issued a formal decision awarding a set amount of benefits prior to Mr. Feinworth's death.

[00:27:34] Speaker 00:
Of course, even in that instance, we take the position that there would be no attorney fee payable because once Mr. Feinworth died, the VA no longer possessed any benefits belonging to him.

[00:27:45] Speaker 00:
It is a well-established fact in this Court's precedent that when a

[00:27:51] Speaker 00:
veteran died, his disability claim, and his right to receive payment of disability benefits died with him.

[00:27:57] Speaker 00:
That means that extends even so far as preventing his common law heirs or the personal representative of his estate from receiving it.

[00:28:06] Speaker 03:
Let me make sure I understood your response to Judge Toronto's question.

[00:28:11] Speaker 03:
The way I understand it is that the rating decision had been made after Mr. Feimor died, but before the VA was notified of the death.

[00:28:20] Speaker 00:
That's correct, Your Honor, but the decision had never been issued, which is what makes the decision final under VA regulation.

[00:28:28] Speaker 03:
So the only thing left in the case was to issue the decision and to cut a check?

[00:28:36] Speaker 00:
Depending, I mean, assuming that there was, that no one wanted to, that Mr. Finemore didn't want to undertake additional litigation after receiving that decision, then yes, if he had

[00:28:49] Speaker 00:
survived, the only thing that would have happened remaining in this case is that the VA would have issued the rating decision, the benefits eventually would have been paid, and a portion of those benefits would have been paid to Mr. Jackson.

[00:29:00] Speaker 01:
Okay, so to be clear, what then was paid to the widow, 100% or 80%?

[00:29:06] Speaker 00:
80% of the amount calculated pursuant to the ratings that were assigned to Mr. Finemore.

[00:29:14] Speaker 01:
They didn't, as in the cases we've seen in the past.

[00:29:17] Speaker 01:
They didn't pay the entire award to the widow, to the survivor.

[00:29:23] Speaker 00:
No, they did not, Your Honor, because Mr. Jackson had already indicated that he believed he was entitled to attorney's fees from that money, and so the VA withheld it pending resolution.

[00:29:33] Speaker 01:
Which takes us back to an earlier point.

[00:29:35] Speaker 01:
So the VA pockets the 20%.

[00:29:40] Speaker 00:
In this instance, because of the continuing litigation over attorney's fees, yes.

[00:29:47] Speaker 00:
this litigation hadn't happened, then the VA would have released the full amount to Mrs. Feinmore.

[00:29:52] Speaker 03:
Why would you pay only those attorney's fees to the lawyer and create further incentive for our veterans to go out and get legal representation?

[00:30:03] Speaker 00:
Because the VA has to under

[00:30:05] Speaker 00:
Section 5904, the policy encouraging representation is balanced against the fundamental principle that the money the VA is paying out here doesn't belong to the VA.

[00:30:15] Speaker 00:
It belongs to the person it was awarded to who had the legal right to receive it.

[00:30:20] Speaker 00:
The statute provides that the VA is only permitted to release that money to an attorney if the awardee has authorized that in writing.

[00:30:30] Speaker 00:
Mrs. Feinmore has never provided that authorization.

[00:30:34] Speaker 00:
probably don't want to encourage the VA to begin releasing money that doesn't belong to it based upon its own feeling of what would be fair in the situation.

[00:30:45] Speaker 00:
Rather, we want the agency to rely upon the express written consent of the person who is entitled to the benefits under unambiguous statute.

[00:30:54] Speaker 01:
Yes, it sounds like whatever it is, no one can cope with it.

[00:30:59] Speaker 01:
It is a very complex case.

[00:31:00] Speaker 01:
Any more questions for the government?

[00:31:02] Speaker 01:
Thank you, Mr. Chairman.

[00:31:04] Speaker 01:
Thank you, Your Honor.

[00:31:08] Speaker 02:
Can you clarify the matter of whether Mr. Jackson either requested or in some way exceeded to the VA's holding on to the 20% when it paid out the 80%?

[00:31:20] Speaker 04:
He certainly implicitly did.

[00:31:22] Speaker 04:
He did not explicitly do that.

[00:31:25] Speaker 04:
The government is correct.

[00:31:26] Speaker 04:
He did make a request that they withhold, but that was it.

[00:31:31] Speaker 04:
He didn't acquiesce in there with, he didn't object to their withholding.

[00:31:36] Speaker 02:
He also actually made a request that they do?

[00:31:41] Speaker 02:
Yes.

[00:31:43] Speaker 04:
In his demand for fees, that would have been the consequence of that demand.

[00:31:49] Speaker 04:
However, I would like to clarify, I believe the government is incorrect, that the statute does in fact

[00:31:55] Speaker 04:
mandate withholding.

[00:31:57] Speaker 04:
And therefore, what we have in this case is, I believe, a situation of the presumption of regularity that the VA would not have withheld but for the fact that there was reason to believe that there was an obligation under 5904 to make that withholding.

[00:32:14] Speaker 04:
As the panel has suggested, the government clearly could have said the position they're taking now, there's no reason for us to withhold.

[00:32:22] Speaker 04:
That money is

[00:32:25] Speaker 04:
reverted or paid entirely to the survivor, but that's not what they did.

[00:32:30] Speaker 04:
They withheld in this case.

[00:32:32] Speaker 02:
And do you agree that under the statutes now that Mrs. Findmore herself has died, they cannot pay her estate that 20%?

[00:32:45] Speaker 04:
I do agree that that is the case, that this money will remain with the VA if this case is resolved unfavorably to Mr. Jackson.

[00:32:55] Speaker 04:
Now, in regards to the purported change in law relative to substitution, I have to disagree with the government's assessment that that somehow puts attorneys in a better position because of substitution.

[00:33:10] Speaker 04:
To the contrary, based upon the position just articulated by the government, such a policy would... Because they still need the agreement of the survivor.

[00:33:18] Speaker 04:
That's right.

[00:33:19] Speaker 04:
And it would encourage litigation with the survivor.

[00:33:23] Speaker 04:
Because let's take the fact set here.

[00:33:25] Speaker 04:
You've got nine plus years worth of investment, and then the veteran dies, and the widow says to that attorney, too bad.

[00:33:33] Speaker 04:
We're not interested.

[00:33:34] Speaker 04:
We want to have attorney A represent us.

[00:33:37] Speaker 04:
No longer have you represent us.

[00:33:39] Speaker 04:
That's only going to encourage litigation.

[00:33:41] Speaker 04:
That's not what Congress contemplated here.

[00:33:44] Speaker 03:
Congress contemplated it.

[00:33:46] Speaker 03:
Shouldn't we respect that right, though, for the survivor's spouse to be able to choose their own legal representation?

[00:33:56] Speaker 04:
If there is a legitimate accrued benefit issue, yes.

[00:34:00] Speaker 04:
But there was no, as I believe your questions have correctly pointed out, Judge Raina, no legitimate accrued benefit issue.

[00:34:07] Speaker 04:
This was done in the record at page 46 through 51 is the January 31st, 2008 rating decision.

[00:34:18] Speaker 03:
Was there anything left to do in Mr. Feimor's case?

[00:34:20] Speaker 03:
Absolutely nothing, Your Honor.

[00:34:22] Speaker 03:
Is it reasonable to

[00:34:25] Speaker 03:
suggest or assume that that Mr. Fama would have objected and created more litigation somehow?

[00:34:32] Speaker 04:
Frankly, as a result of the decision that I just referred to, there was nothing for him to object to.

[00:34:38] Speaker 04:
He could not have gotten a higher rating.

[00:34:41] Speaker 04:
He got the maximum benefits at the correct... He got what he was looking for.

[00:34:45] Speaker 04:
He got everything that he was looking for and had been looking for for nearly 12 years.

[00:34:50] Speaker 04:
And tragically never got to see himself.

[00:34:53] Speaker 04:
His widow did get the benefit of that and got the correct benefit, 80 percent, because there was a pre-existing fee agreement that had assigned, while Mr. Feinmore was alive, 20 percent of those past due benefits, and those past due benefits were realized.

[00:35:11] Speaker 04:
I think that really covers everything I had intended to say, unless there's further questions from the panel.

[00:35:15] Speaker 01:
Any more questions?

[00:35:16] Speaker 01:
Thank you, Mr. Carpenter, and thank you, Ms.

[00:35:18] Speaker 01:
Thomas.

[00:35:18] Speaker 01:
This is taken under submission.