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Judith R v. Commissioner, Social Security Administration

United States District Court, D. Maryland

January 3, 2019

Judith R.
v.
Commissioner, Social Security Administration;[1]

         LETTER TO COUNSEL

          ORDER

          STEPHANIE A. GALLAGHER UNITED STATES MAGISTRATE JUDGE

         Dear Counsel:

         On March 8, 2018, Plaintiff Judith R. petitioned this Court to review the Social Security Administration's (“SSA”) final decision to deny her request for waiver of an overpayment. [ECF 1]. I have considered the parties' cross-motions for summary judgment, and Plaintiff's Reply. [ECF 18, 23, 24]. I find that no hearing is necessary. See Loc. R. 105.6 (D. Md. 2018). This Court must uphold the decision of the Agency if it is supported by substantial evidence and if the Agency employed proper legal standards. See 42 U.S.C. §§ 405(g), 1383(c)(3); Craig v. Chater, 76 F.3d 585, 589 (4th Cir. 1996). Under that standard, I will deny Plaintiff's motion, grant the SSA's motion, and affirm the SSA's judgment pursuant to sentence four of 42 U.S.C. § 405(g). This letter explains my rationale.

         Plaintiff was found disabled and began receiving disability benefits as of August 1, 1993. (Tr. 274). In 2003, Plaintiff returned to work. (Tr. 35-38). As required, she reported the information about her return to work to the SSA. (Tr. 310). Almost two years later, on June 22, 2005, the SSA sent Plaintiff a letter stating that, “it appears we will decide that your disability ended because of substantial work February 2004 [sic] and that you are not entitled to payments for: May 2004 through July 2004, September 2004 and continuing.” (Tr. 39). The letter also states, “[b]ased on the information we have, your extended period of eligibility began February 2004 and will end if substantial work is performed after 36 months following this date.” (Tr. 41). Finally, the letter states, “[u]sually, we find that work is substantial if gross monthly earnings average more than the following amounts (followed by a list of amounts for a given year).” (Tr. 41). The SSA sent Plaintiff a near-identical letter two weeks later, on July 7, 2005. (Tr. 50-53).

         On September 13, 2005, Plaintiff submitted an informal waiver request. (Tr. 229). Then, on September 20, 2005, the SSA sent Plaintiff a letter stating that, “[w]e received your request that we not collect the overpayment. You will receive benefits as follows until we respond to your request . . .. You will receive $557.00 for September 2005 in October 2005. After that, you will receive $557.00 on or about the third of each month.” (Tr. 69). Several years later, on November 6, 2008, the SSA sent Plaintiff another letter stating,

[w]e restarted your Social Security disability payments during your extended period of eligibility because you were no longer doing substantial work. However, we now have information about your work and earnings that could affect your payments. Based on this information, it appears we will decide that you are not entitled to payments for: October 2005 through June 2006, October 2006 and continuing.

(Tr. 72). On December 2, 2008, the SSA sent Plaintiff a letter stating that she owed a new overpayment of $26, 792.70. (Tr. 74). Plaintiff again requested a waiver. The total amount of the overpayments the SSA ultimately sought to collect was $34, 604.71. (Tr. 81-82).

         Plaintiff's request to waive recovery of the overpayment was denied. (Tr. 85-87). A hearing was held on September 12, 2012, before an Administrative Law Judge (“ALJ”). (Tr. 300-17). Following the hearing, the ALJ determined that a waiver was inappropriate because Plaintiff was at fault in causing the overpayment. (Tr. 19-21). The Appeals Council (“AC”) issued a decision incorporating and adopting the ALJ's opinion, and making further findings in support of a waiver denial. (Tr. 8-10). Plaintiff appealed the final determination of the SSA. (Tr. 390). On appeal, this Court remanded the case “for further hearing and consideration of [Plaintiff's] position.” (Tr. 390-93). Specifically, this Court highlighted the ALJ's failure to assess Plaintiff's credibility. (Tr. 392). The AC vacated the earlier decision and remanded the case to an ALJ for further proceedings. (Tr. 431-33). A second hearing was held on September 21, 2016. (Tr. 462-516). Following that hearing, on March 1, 2017, the ALJ issued a partially favorable decision, determining that Plaintiff was at fault for $26, 692.70 of overpayment for the periods of October, 2005, through June, 2006, and October, 2006, through December, 2008, but was not at fault for $7, 912.00 of overpayment for the periods of May, 2004, through July, 2004, and September, 2004 through June, 2005. (Tr. 342-47). This time, the AC denied Plaintiff's request for review, (Tr. 318-22), so the ALJ's 2017 decision constitutes the final, reviewable decision of the Agency.

         This case turns on whether the ALJ provided substantial evidence to support the determination that Plaintiff was not entitled to a waiver of $26, 692.70 of the overpayment. The ALJ found that Plaintiff was without fault for the periods of May, 2004, through July, 2004, and September 2004, through June, 2005, but that she was not without fault for the periods of October, 2005, through June, 2006, and October, 2006, through December, 2008. (Tr. 344-46). Accordingly, the only issue before this Court is whether Plaintiff was without fault for those latter time periods.

         An overpayment is defined as “the difference between the amount paid to the beneficiary and the amount of the payment to which the beneficiary was actually entitled.” 20 C.F.R. § 404.504. When an overpayment occurs, SSA will adjust any benefit payments due to an overpaid claimant, or recover the funds by, for example, requiring the claimant to refund the overpayment. See 42 U.S.C. § 404(a)(1)(A). No. adjustment or recovery is permitted if: (1) the overpaid individual is without fault and; (2) recovery would defeat the purpose of Title II of the Act, or be “against equity and good conscience.” 42 U.S.C. § 404(b)(1); Garnett v. Sullivan, 905 F.2d 778, 781 (4th Cir. 1990). In determining whether an individual is without fault, the Agency will consider all pertinent circumstances, including any physical, mental, educational, or linguistic limitations the individual might have. See 42 U.S.C. § 404(b); 20 C.F.R. § 404.507.

         The SSA regulations provide that what constitutes fault on the part of the overpaid individual depends upon whether the facts show that the overpayment resulted from:

(a) An incorrect statement made by the individual which he knew or should have known to be incorrect; or (b) Failure to furnish information which he knew or should have known to be material; or (c) With respect to the overpaid individual only, acceptance of a payment which he either knew or could have been expected to know was incorrect.

20 C.F.R. § 404.507. The overpaid individual bears the burden of demonstrating that she is without fault, and that repayment would be inequitable, or would defeat the purposes of the Act. Gatewood v. Astrue, Civil No. JKS-08-1744, 2011 WL 939027, at *2 (D. Md. Mar. 16, 2011) (citing Valente v. Sec'y of HHS, 733 F.2d 1037, 1042 (2d Cir. 1984); Harrison v. Heckler, 746 F.2d 480, 482 (9th Cir. 1984)). Even when the Agency has some culpability in making the overpayment, an assessment of fault applies only to the overpaid individual. See 20 C.F.R. ยง 404.507. Thus, the fact that the SSA made overpayments and confused Plaintiff with its correspondence in this case is not dispositive as to whether ...


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