Court Opinion

ID: 9297944
Source: CourtListenerOpinion
Date Created: 2022-12-01 18:01:02.390398+00
Date Added: 2024-06-11T17:13:33.316874
License: Public Domain

Appellate Case: 22-2011         Document: 010110776244    Date Filed: 12/01/2022     Page: 1
                                                                                   FILED
                                                                       United States Court of Appeals
                           UNITED STATES COURT OF APPEALS                      Tenth Circuit

                                 FOR THE TENTH CIRCUIT                       December 1, 2022
                             _________________________________
                                                                           Christopher M. Wolpert
                                                                               Clerk of Court
  HILARY M. LEO,

         Plaintiff,

  v.                                                          No. 22-2011
                                                      (D.C. No. 1:18-CV-00977-LF)
  COMMISSIONER, SSA,                                            (D. N.M.)

         Defendant - Appellee.

  -----------------------------------

  VICTOR ROYBAL, JR.,

         Real-Party-In-Interest-Appellant.
                          _________________________________

                                 ORDER AND JUDGMENT*
                             _________________________________

 Before McHUGH, MORITZ, and CARSON, Circuit Judges.
                  _________________________________

        Attorney Victor Roybal, as real party in interest, appeals the district court’s

 denial of his motion for attorney fees during his representation of Hilary Leo in

        *
         After examining the briefs and appellate record, this panel has determined
 unanimously to honor the parties’ request for a decision on the briefs without oral
 argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
 submitted without oral argument. This order and judgment is not binding precedent,
 except under the doctrines of law of the case, res judicata, and collateral estoppel. It
 may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1
 and 10th Cir. R. 32.1.
Appellate Case: 22-2011      Document: 010110776244       Date Filed: 12/01/2022   Page: 2

 proceedings with the Social Security Administration. Exercising jurisdiction under

 28 U.S.C. § 1291, we affirm.

                                     BACKGROUND

          Mr. Roybal represented Ms. Leo in connection with her application for child

 disability benefits and disability insurance benefits. Her adoptive mother first filed

 an application for both types of benefits on her behalf in 2014. The agency initially

 denied the application and sustained the denial at all levels of review. Ms. Leo filed

 an action in district court seeking review of the agency determination under

 42 U.S.C. §§ 405(g) and 1383(c)(3).1 The district court reversed and remanded for

 further administrative proceedings, and, on remand, the agency concluded Ms. Leo

 was entitled to benefits. It awarded Ms. Leo $77,937.40, from which it withheld

 $19,484.35 for the potential payment of attorney fees. From that amount, the agency

 directly awarded Mr. Roybal $6,000.00 for work he performed at the administrative

 level.

          Mr. Roybal thereafter moved in district court for an award of attorney fees

 under 42 U.S.C. § 406(b), asserting he was entitled to the remaining $13,484.35 the

 agency withheld as compensation for his work before the district court. He attached

 to his motion a fee agreement Ms. Leo had signed in 2016. In his memorandum in

 support of his motion for attorney fees, he asserted this fee agreement, which was

          1
         Both parties consented, pursuant to Fed. R. Civ. P. 73, to a magistrate judge’s
 exercise of jurisdiction over the judicial proceedings. See Aplt. App. at 13.

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 subject to judicial review for reasonableness, was the primary basis for his recovery.

 See Aplt. App. at 165; id. at 179 (“Mr. Roybal acknowledges that the Court should

 approach fee determinations by looking first to the contingent-fee agreement, then

 testing it for reasonableness.” (internal quotation marks omitted)).

       The section of the fee agreement addressing attorney compensation stated:

              In consideration of the services to be performed by
              attorney and it being the desire of the claimant to
              compensate attorney, claimant agrees to pay attorney a fee
              equal to 25 percent of the past-due benefits or the dollar
              amount established pursuant to 42 U.S.C. § 406(a)(2)(A)
              or 42 U.S.C. § 406 (b) payable to me and my beneficiaries
              resulting from my claim [s] or $6,000.00.

 Id. at 152. The agreement also stated it “applies to appeals through the

 administrative hearing before an administrative law judge,” and that “[i]f further

 appeals are necessary, attorney fees will be renegotiated.” Id. Noting apparent

 ambiguity in these clauses, the court ordered Mr. Roybal to “submit supplemental

 briefing . . . explaining how the fee agreement entitles him to an award[] of

 $13,484.35, for legal services rendered before [the district court].” Id. at 181.

       In his supplemental briefing, Mr. Roybal characterized his agreement with

 Ms. Leo as a contingency agreement entitling him to 25% of the back benefits

 recovered. He attached an affidavit from Ms. Leo in which she stated: “I have

 reviewed Mr. Roybal’s request for attorney’s fees, and I am in agreement that he

 should be paid the full amount of 25% as I agreed and which has been withheld.”

 Id. at 188. He also cited an earlier social security case in which a different magistrate

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 awarded attorney fees to him under substantially the same fee agreement with a

 different claimant. The district court denied the motion for attorney fees, concluding:

              the agreement expressly contemplated renegotiation of attorney fees if

               further appeals were necessary beyond the administrative stage, but

               Mr. Roybal presented no renegotiated agreement in connection with his

               motion;

              the agreement was not clearly a contingency agreement because it

               “appear[ed] to give Ms. Leo a choice between 25 percent of past-due

               benefits, [fees pursuant to statute], or $6,000.00,” id. at 196; and

              Ms. Leo’s “affidavit [did] not change what is written in the fee

               agreement,” id.

 This appeal followed.

                                      DISCUSSION

        We review the denial of attorney fees under 42 U.S.C. § 406(b) for abuse of

 discretion. See Hubbard v. Shalala, 12 F.3d 946, 947 (10th Cir. 1993), abrogated on

 other grounds by Gisbrecht v. Barnhart, 535 U.S. 789, 799 (2002). An abuse of

 discretion “occurs when the district court bases its ruling on an erroneous conclusion

 of law or relies on clearly erroneous fact findings.” Madron v. Astrue, 646 F.3d

 1255, 1257 (10th Cir. 2011) (internal quotation marks omitted). In reviewing for

 abuse of discretion, “[o]ur appellate role is limited to ensuring that the district court’s

 discretionary decision did not fall beyond the bounds of the rationally available

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 choices before the district court given the facts and the applicable law in the case at

 hand.” Id. (internal quotation marks and brackets omitted).

        Section 406(b) of the Social Security Act provides, in relevant part:

              Whenever a court renders a judgment favorable to a
              claimant under this subchapter who was represented before
              the court by an attorney, the court may determine and
              allow as part of its judgment a reasonable fee for such
              representation, not in excess of 25 percent of the total of
              the past-due benefits to which the claimant is entitled by
              reason of such judgment . . . .

 42 U.S.C. § 406(b)(1)(A). “The tenor of § 406(b) is permissive rather than

 mandatory. It says that the court may make such an award, not that such an award

 shall be made.” Whitehead v. Richardson, 446 F.2d 126, 128 (6th Cir. 1971). Courts

 act appropriately when they “approach fee determinations by looking first to the

 contingent-fee agreement, then testing it for reasonableness.” Gisbrecht, 535 U.S. at

 808.

        The district court did just that. It looked first to the agreement between

 Mr. Roybal and Ms. Leo. The court concluded it did not unambiguously entitle Mr.

 Roybal to any more fees than he had received. The agreement stated Ms. Leo agreed

 to pay “a fee equal to 25 percent of past-due benefits, or the dollar amount

 established [by statute] or $6,000.00” Aplt. App. at 152 (emphasis added). Ms. Leo

 paid Mr. Roybal a fee equal to $6,000.00, thus fulfilling her obligations under the

 agreement. The agreement also stated the parties would renegotiate the fee owed if

 work was necessary past the administrative level. But because Mr. Roybal did not

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 submit any renegotiated agreement to the district court entitling him to more attorney

 fees, there was nothing for it to test for reasonableness.

       Mr. Roybal argues the district court “based its ruling on erroneous facts,”

 because it misinterpreted the fee agreement. Aplt. Opening Br. at 11. He disputes

 the conclusion that the agreement addressed only representation at the agency level

 by pointing to language in the agreement stating Ms. Leo “empowers attorney to take

 such action as may be advisable in the judgment of attorney, including the taking of

 judicial review.” Aplt. App. at 152. But he does not address the portion of the

 agreement stating “attorney fees will be renegotiated” if further appeals are necessary

 beyond a hearing before an administrative law judge. Id. And he discusses the

 portion of the fee agreement setting compensation by simply omitting the “or

 $6,000.00” language from his quotation. Compare Aplt. Opening Br. at 11–12 and

 Reply Br. at 4–5 with Aplt. App. at 152.

       At best, Mr. Roybal’s arguments establish there may be ambiguities in the

 fee agreement, that, if construed in his favor, would entitle him to a higher fee than

 the $6,000 he already received. But Mr. Roybal drafted the agreement himself,

 so the district court reasonably construed any such ambiguities against him. See

 Castillo v. Arrieta, 368 P.3d 1249, 1253 (N.M. Ct. App. 2016); Hill v. Astrue, 248 F.

 App’x 923, 928–29 (10th Cir. 2007) (construing ambiguity in fee agreement between

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 social security attorney and client against attorney and thereby capping fees pursuant

 to language in that agreement).2

        Mr. Roybal also argues the district court should have placed greater weight on

 Ms. Leo’s affidavit in which she expressed agreement with his being paid a higher

 fee. But as the district court noted, “[t]he affidavit does not change what is written in

 the fee agreement.” Aplt. App. at 196. He also refers to a prior case in the same

 division in which a different magistrate judge recommended granting a motion

 for attorney fees under § 406(b) based on the same fee agreement for a different

 client: Key v. Saul, No. 17-cv-386-KWR-GBW (D.N.M. Dec. 4, 2020), ECF No. 42

 (Proposed Findings and Recommended Disposition). But that decision is

 non-precedential, see Camreta v. Greene, 563 U.S. 692, 709 n.7 (2011) (“A decision

 of a federal district court judge is not binding precedent in either a different judicial

 district, the same judicial district, or even upon the same judge in a different case.”

 (internal quotation marks omitted)), and Mr. Roybal points to no persuasive analysis

 in it supporting his interpretation of the fee agreement.

        Mr. Roybal further argues the district court “erred as a matter of law [in

 concluding] that it had the sound discretion to determine attorney fees because

 § 406(b) was permissive rather than mandatory.” Aplt. Opening Br. at 13. He faults

 the district court for its reliance on Whitehead, a Sixth Circuit case the Commissioner

 later incorporated into SSR 72-31c, which it subsequently rescinded in 2018. But the

        2
         Although unpublished, we cite Hill for its persuasive value. See
 10th Cir. R. 32.1(A).

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 basis for the recission of SSR 72-31c was not a repudiation of the holding in

 Whitehead. To the contrary, the Commissioner “rescind[ed] th[is] SSR[] . . . because

 the information provided therein either reflects well-established legal principles and

 is already reflected clearly in the Social Security Act or regulations, or has since been

 clarified in our regulations and subregulatory guidance.” Recission of SSRs,

 83 Fed. Reg. 46,771-01 (Sept. 14, 2018), available at 2018 WL 4359182.

       More fundamentally, regardless of the case’s status as precedent, Mr. Roybal

 does not address the key statutory insight in Whitehead: § 406(b) is permissive

 because it states the district court “may” award attorney fees. See 446 F.2d at 128.

 This usage pointedly contrasts with § 406(a), which governs attorney fee awards for

 work at the agency level and uses the mandatory term “shall.” See id.

       Mr. Roybal lastly argues that, even if his agreement with Ms. Leo did not by

 its terms entitle him to additional attorney fees, the agreement “could [have been]

 reformed when justice requires it.” Aplt. Opening Br. at 16. But Mr. Roybal did not

 request contract reformation before the district court,3 so we will not consider this

 request on appeal. See Singleton v. Wulff, 428 U.S. 106, 120 (1976) (“It is the

       3
          Mr. Roybal’s one-sentence passing citation to Thomas v. Barnhart,
 412 F. Supp. 2d 1240, 1244 (M.D. Ala. 2005) before the district court, see Aplt. App.
 at 184–85, did not amount to a request for contract reformation, nor does it preserve
 the issue before this court. See Folks v. State Farm Mut. Auto. Ins. Co., 784 F.3d
 730, 741 (10th Cir. 2015) (“[V]ague, arguable references to a point in the district
 court proceedings do not preserve the issue on appeal.” (internal quotation marks and
 citation omitted)). And although Thomas discusses circumstances in which a court
 may equitably reform a fee agreement to reduce the amount owed to an attorney,
 Mr. Roybal cites no authority supporting the reformation of such agreements to
 increase the fees taken out of a social security claimant’s benefits award.

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 general rule . . . that a federal appellate court does not consider an issue not passed

 upon below.”).

                                     CONCLUSION

       Mr. Roybal has not demonstrated the district court misapplied the law,

 relied on clearly erroneous factual findings, or otherwise exceeded the bounds of

 rationally available choices when it denied his request for attorney fees under

 42 U.S.C. § 406(b). We affirm the judgment of the district court.

                                              Entered for the Court

                                              Joel M. Carson III
                                              Circuit Judge

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