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Mounce v. Colvin

United States District Court, D. New Hampshire

June 23, 2016

Dennis M. Mounce
v.
Carolyn W. Colvin, Acting Commissioner, U.S. Social Security Administration Opinion No. 2016 DNH 106

          MEMORANDUM AND ORDER

          Paul Barbadoro Paul Barbadoro United States District Judge.

         Attorney Elizabeth R. Jones seeks $37, 953.63 in attorney’s fees for helping Social Security claimant Dennis Mounce win past-due disability benefits. She has filed a motion to award fees under 42 U.S.C. § 406(b), arguing that either of two fee agreements she entered into with Mounce entitle her to 25% of his past-due benefits. Both Mounce and the Social Security Commissioner oppose her request, arguing that the proposed fee is unreasonably high. Because I conclude that the parties have not adequately addressed whether Jones’s fee agreements entitle her to the relief she seeks, I reserve judgment on the merits and ask for further briefing as explained below.

         I. BACKGROUND

         A. Procedural History

         Dennis Mounce first applied for disability benefits in 2007. Doc. No. 14-1 at 1. His application was denied. Id. The next year, in June 2008, Mounce applied again for disability benefits, and in October 2008 he hired Attorney Jones to represent him with his claim. Id. at 1-2. At the beginning of the representation, Jones and Mounce signed a contingency fee agreement. That agreement applied only to Jones’s “representation through a hearing before the Administrative Law Judge.” Doc. No. 17-1 at 6. It provided that Jones’s attorney fee “shall be equal to 25%” of Mounce’s past-due benefits “or the maximum fee specified by 42 U.S.C. 406(a)(2)(A)[1] or $5, 300, “whichever is the least at the time of the ALJ decision.” Id. If Mounce lost his claim, Jones would be paid nothing. Id.

         After a June 2010 hearing, the ALJ denied Mounce’s application. Doc. No. 17 at 1. Without signing a new fee agreement, but with Jones’s ongoing assistance, Mounce appealed to the Decision Review Board. In October 2010, the Board affirmed the ALJ’s denial. Doc. No. 1 at 2. Two months later, in December 2010, Jones continued to represent Mounce by filing an appeal in this court. Doc. No. 1. Jones and the Commissioner completed briefing in the case by May 2011. See Doc. Nos. 7, 9. Then, in October 2011, after the parties had filed their briefs but before I ruled on the case, Jones had Mounce sign a second fee agreement. See Doc. No. 14-2 at 12.

         That second agreement had two “tiers.” The first tier stated that if Mounce won “at any administrative level” through the first ALJ decision after the date of the agreement, Jones would receive either 25% of Mounce’s past-due benefits or $6, 000, whichever was smaller. Doc. No. 17-1 at 7. In other words, if the court remanded the case and the ALJ subsequently awarded benefits, Jones would receive either 25% of those benefits or $6, 000. The second tier, however, provided a different fee structure: if Mounce lost at the first ALJ decision after the date of the agreement, and then wished to appeal, the agreement stated that Jones “will ask SSA to approve a fee no greater than 25% of all back benefits awarded in [Mounce’s] case.” Id. In other words, if the next ALJ decision was a denial, and Mounce wished to appeal again to the Appeals Council or another entity, Jones would not be subject to a $6, 000 cap, and would instead “ask SSA to approve” up to 25% of any back benefits. Id.

         The second agreement, unlike the first, also contained a provision addressing attorney fees under the Equal Access to Justice Act (EAJA). Id. It provided that “if a court awards [Mounce] a fee under the Equal Access to Justice Act, [Mounce] assign[s] them to [Jones].” Id. The provision also noted that if Jones received both an EAJA fee and a fee from Mounce’s back benefits, Jones would refund to Mounce the lesser of the two sums. Id. The agreement contained no other reference to Jones’s work before the court. See id.

         In November 2011, less than a month after Mounce signed the second fee agreement, I granted Mounce’s appeal and ordered a remand. See Doc. No. 12. Jones then represented Mounce at two more hearings before an ALJ. In September 2013, the ALJ denied, yet again, Mounce’s application. Doc. No. 14-1 at 2. Mounce chose to appeal that ruling to the Appeals Council. Id. In August 2014, the Appeals Council remanded the case to a new ALJ for yet another hearing. Id.

         While preparing for that hearing in June 2015, Jones had Mounce sign a third fee agreement. Doc. No. 17-1 at 8. That agreement provided that if Mounce “won at any administrative level through the first Appeals Council decision after the date of this agreement, [Mounce] agree[s] that the attorney fee will be 25% of all past-due benefits.” Id. (emphasis omitted). Other than an EAJA provision identical to that of the second agreement, the third agreement did not mention compensation for Jones’s work before the court. See id.

         Two months after the third agreement was signed, in August 2015, the ALJ approved Mounce’s claim and awarded him $151, 814.50 in past-due disability benefits. Doc. No. 14 at 2. In the decision, the ALJ attached a notice to Mounce stating: “I do not approve the fee agreement between you and your representative because [t]he fee agreement sets a fee that is more than the lesser of 25 percent of the past-due benefits or $6, 000.” Doc. No. 16-2 at 4. The notice provided instructions for reviewing this determination. Id. Jones, however, did not request review from the SSA. See Doc. Nos. 17; 16-1 at 1-2.

         Instead, on March 10, 2016, Jones filed a motion for attorney fees with this court seeking 25% of Mounce’s past-due benefits, or $37, 953.63, as compensation for work done before the court. Doc. No. 14. A month later, on April 13, 2016, the Commissioner filed a response opposing Jones’s fee request. Doc. No. 16. As part of her response, the Commissioner appended a letter that Mounce had written in January 2016 to ALJ James D’Alessandro asking D’Alessandro to deny Jones’s 25% fee petition.[2] See Doc. No. 16-3. The Commissioner cited Mounce’s letter as one reason, among others, why I should reduce Jones’s requested fee.

         Mounce’s letter made a number of accusations against Jones. Mounce claimed that he “always signed and resigned the same basic fee agreement” with Jones and made no mention of the three different agreements. Id. at 1. This “basic” agreement, Mounce argued, provided that Jones would receive “$5, 500-$6, 000, ” but only if Mounce won his claim. Id. Sometime before he won back benefits, however, Mounce was called into Jones’s office to sign over a “$5, 000” check in Mounce’s name from the SSA. Id. Mounce signed over the check, but stated that he “did not understand” why Jones was entitled to the money, since he had not yet won his case. Id.

         Mounce’s letter also described the events leading to the signing of the third and final fee agreement. A week before his June 2015 hearing, Mounce explained, he and his wife met with Jones at her office. Id. During that meeting, Mounce claims that Jones said “we needed to sign another fee agreement . . . stating she would receive 25% of the claim . . . .” Id.

         According to Mounce, “this did not go over well, ” and “my wife and I started to get very upset.” Id. “My wife started crying and we did not want to sign the paper we wanted to get up and leave.” Id. Mounce alleges that Jones told them ...


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