Hanlin v. United States

50 Fed. Cl. 697, 2001 U.S. Claims LEXIS 208, 2001 WL 1455943
CourtUnited States Court of Federal Claims
DecidedNovember 1, 2001
DocketNo. 97-751 C
StatusPublished
Cited by4 cases

This text of 50 Fed. Cl. 697 (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, 50 Fed. Cl. 697, 2001 U.S. Claims LEXIS 208, 2001 WL 1455943 (uscfc 2001).

Opinion

[698]*698OPINION

WIESE, Judge.

Plaintiff is an attorney who successfully represented a veteran seeking to recover past-due benefits from the Department of Veterans Affairs (VA). Plaintiff is now suing here, pursuant to an implied-in-fact contract theory, to recover his attorney’s fee, which he claims the VA had agreed, but failed, to withhold from the amount of past-due benefits awarded the veteran. Defendant denies the existence of any contract.

The case is now before the court on cross-motions for summary judgment.1 Oral argument was heard on October 25, 2001. We 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 the 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 of Veterans Affairs to withhold 20% of any past-due benefits 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. § 5904(d) (1994 & Supp. V 1999) and that section’s implementing regulation, 38 C.F.R. § 20.609(h) (2001).

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 relevant statutory and regulation provisions prior to sending plaintiff his fee.2

In July 1997, the Department determined that Mr. Reaves was entitled to veteran’s pension benefits and, accordingly, awarded him $63,835. Rather than withholding 20% of these funds for legal fees, however, 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 [699]*699still 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. § 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, denies the existence of any contract.

DISCUSSION

An implied-in-fact contract, the Supreme Court has explained, is “an agreement ... founded upon a meeting of minds, which, although not embodied in an express contract, is inferred, as a fact, from conduct of the parties showing, in the light of the surrounding circumstances, their tacit understanding.” Baltimore & Ohio R.R. v. United States, 261 U.S. 592, 597, 43 S.Ct. 425, 67 L.Ed. 816 (1923). Thus, as the Restatement of Contracts further explains, the distinction between an express contract and an implied-in-fact contract “involves ... no difference in legal effect, but lies merely in the mode of manifesting assent.” Restatement (Second) of Contracts § 4 cmt. a (1979). And, “|j']ust as assent may be manifested by words or other conduct ... so intention to make a promise may be manifested in language or by implication from other circumstances, including course of dealing or usage of trade or course of performance.” Id.

Except, then, for the absence of a writing memorializing the parties’ agreement, an implied-in-fact contact does not differ from an express contract. Like an express contract, therefore, the formation of an implied-in-fact contract requires a bargained-for promissory exchange. Specifically, plaintiff must show “mutuality of intent to contract, offer and acceptance, and that the officer whose conduct is relied upon had actual authority to bind the government in contract.” H.F. Allen Orchards v. United States, 749 F.2d 1571, 1575 (Fed.Cir.1984).

Plaintiff contends that he has satisfied these requirements. His argument, in substance, is that a fee agreement executed under the authority of the enabling statute and meeting the criteria enumerated in regulation, becomes a contract when approved by the Secretary. We do not share this view.

As indicated, the starting point of plaintiffs argument is 38 U.S.C. § 5904(d), the statute that provides the Secretary with the authority to direct payment of an attorney’s fee out of an award of past-due benefits. The statute reads in relevant part as follows:

(3) To 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 attorneys’ fee under a fee arrangement described in paragraph (1) of this subsection [authorizing a fee agreement not to exceed “20 percent of the total amount of any past-due benefits”] be made out of such past-due benefits.

38 U.S.C. § 5904(d)(3).

In the implementation of this grant of authority, the Secretary promulgated a regulation that reads in pertinent part as follows:

Rule 609.

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316 F.3d 1325 (Federal Circuit, 2003)

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Bluebook (online)
50 Fed. Cl. 697, 2001 U.S. Claims LEXIS 208, 2001 WL 1455943, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hanlin-v-united-states-uscfc-2001.