Hanlin v. United States

43 Fed. Cl. 34, 1999 U.S. Claims LEXIS 25, 1999 WL 58969
CourtUnited States Court of Federal Claims
DecidedFebruary 9, 1999
DocketNo. 97-751 C
StatusPublished
Cited by4 cases

This text of 43 Fed. Cl. 34 (Hanlin v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hanlin v. United States, 43 Fed. Cl. 34, 1999 U.S. Claims LEXIS 25, 1999 WL 58969 (uscfc 1999).

Opinion

OPINION

WIESE, Judge.

This ease is before the court on defendant’s motion to dismiss.

The question presented is whether plaintiff, an attorney, may sue here to recover from the United States a contingency fee due under a fee agreement that was acknowledged by the Secretary of the Department of Veterans Affairs and executed as part of a contract for legal services between plaintiff and a claimant seeking past-due veterans benefits. Plaintiffs demand arises from the Secretary’s failure to withhold the fee, as otherwise contemplated by the terms of the agreement, from the past-due benefits awarded the claimant.

Defendant has moved to dismiss the action claiming, alternatively, that this court is without jurisdiction in the matter and that plaintiff has failed to state a claim on which relief can be granted. Plaintiff maintains the suit can go forward here as a contract action under the Tucker Act, 28 U.S.C. § 1491 (1994). The matter has been briefed and oral argument was heard on February 4, 1999. We now decide in defendant’s favor.

FACTS

On May 29, 1991, plaintiffs law firm entered into a contract to provide legal representation to John E. Reaves, a military veteran, in connection with Mr. Reaves’ claim for past-due benefits before the Veterans Administration — now called the Department of Veterans Affairs (the Department). As part of that contract, and in a separate fee agreement dated that same day, Mr. Reaves agreed to a contingency fee arrangement in which the law firm was to receive 20% of any past-due veterans benefits awarded to him as a result of the firm’s successful prosecution of his claim.

The original fee agreement was amended approximately four years later. In the second fee agreement, dated January 17, 1995, Mr. Reaves authorized the Secretary to withhold 20% of his past-due benefits, if any in fact were awarded, and to make direct payment of those funds to plaintiffs law firm. The direct payment of an attorney’s fee from an award of past-due veterans benefits is authorized by 38 U.S.C.A. § 5904(d) (West 1991 & Supp.1998) and that section’s implementing regulation, 38 C.F.R. § 20.609(h) (1998). In order for an attorney to qualify for direct payment, the fee agreement with the veteran must: (i) be contingent on a favorable resolution of the veteran’s claim; (ii) not exceed 20% of any past-due benefits awarded to the veteran; and (iii) provide expressly for direct payment by the Secretary to the attorney. 38 U.S.C.A. § 5904(d)(l-2). Plaintiff alleges that his fee agreement with Mr. Reaves satisfied all of these conditions.

On March 10, 1995, plaintiff forwarded the second fee agreement to both the Department’s regional office in Montgomery, Alabama and the Board of Veterans’ Appeals (the Board) in Washington, D.C. By letter dated April 7, 1995, the Board acknowledged receipt of the fee agreement. The Board’s letter also informed plaintiff that the Montgomery regional office would withhold 20% of any past-due benefits awarded to Mr. Reaves. The letter concluded by stating that if such benefits were awarded to Mr. Reaves, the Board would, at that point, review the parties’ fee agreement — for compliance with [36]*36relevant statutory and regulatory provisions — prior to sending plaintiff his fee.1

In July of 1997, the Department determined that Mr. Reaves was entitled to veteran’s pension benefits and accordingly awarded him $63,835. However, rather than withholding 20% of these funds for legal fees, the Montgomery regional office released the entire amount to Mr. Reaves.

The regional office notified Mr. Reaves of its error by letter dated August 5,1997. The letter further explained that the fee agreement on file — the one that plaintiff had sent to the Department in March 1995 — would still be reviewed by the Board for compliance with the applicable statute and regulations. Upon completion of that review, the letter continued, Mr. Reaves would be notified of the amount that he was “required to repay [his] attorney.” The Montgomery regional office concluded its letter by stating:

Under the circumstances, we are constrained to follow a 1992 precedent opinion of the VA [Veterans Administration] General Counsel (O.G.C.Prec.27-92) in which it was held that VA has no legal authority to pay attorney fees when payment of the complete amount of past-due benefits has been made to the claimant.

Although the letter was addressed to Mr. Reaves, plaintiff also received a copy.

Plaintiff filed his complaint in this court on November 3, 1997. The essence of the complaint is that a fee agreement executed in accordance with statutory authority (meaning in compliance with 38 U.S.C.A. § 5904(d)), and thereafter accepted by the Secretary, gives rise to an implied-in-fact contract and, as such, is enforceable in this court.

Defendant, as we have said, seeks dismissal of the suit on either of two grounds: (i) that the claim lies exclusively within the jurisdiction of the Secretary under 38 U.S.C. § 511(a) (1994); or, (ii) that payment of the claim involves an exercise of Secretarial discretion and therefore does not qualify as a monetary demand enforceable in this court as a matter of legal right.

DISCUSSION

In Cox v. West, 149 F.3d 1360 (Fed.Cir. 1998), the court of appeals faced the question whether the Court of Veterans Appeals (now the United States Court of Appeals for Veterans Claims) had improperly declined to issue a writ of mandamus that was sought to facilitate review of a claim identical to that presented here, i.e., a claim for the payment of a contingency fee that the Secretary had failed to withhold from an award of past-due veterans benefits. In resolving this issue, the appellate court ruled, in partial affir-mance of the decision below, that the claim arose under a law that affected the provision of benefits by the Secretary to veterans and, as such, not only fit squarely within the provisions of 28 U.S.C. § 511(a), but also involved a matter as to which a decision by the Secretary was mandatory. The appellate court explained:

As the Court of Veterans Appeals correctly held, Cox’s claim requires the Secretary to make a decision “under a law that affects the provision of benefits by the Secretary to veterans.” 28 U.S.C. § 511(a).... The relevant issue under section 511(a) is whether the decision necessarily interpreted a law that affects veterans’ benefits.
Likewise, the court properly held that such a decision by the Secretary is mandatory under section 511(a) and that a claimant is then entitled to review by the Board [of Veterans’ Appeals]. See 38 U.S.C. § 7104(a).

149 F.3d at 1365.

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Related

Hanlin v. United States
50 Fed. Cl. 697 (Federal Claims, 2001)
William M. Hanlin v. United States
214 F.3d 1319 (Federal Circuit, 2000)

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Bluebook (online)
43 Fed. Cl. 34, 1999 U.S. Claims LEXIS 25, 1999 WL 58969, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hanlin-v-united-states-uscfc-1999.