United States District Court, D. Maryland
REPORT AND RECOMMENDATIONS
STEPHANIE A. GALLAGHER, UNITED STATES MAGISTRATE JUDGE
to Standing Order 2014-01, the above-captioned case has been
referred to me to review the parties' motions and to make
recommendations pursuant to 28 U.S.C. § 636(b)(1)(B) and
Local Rule 301.5(b)(ix). ECF 5. I have considered the
Defendant's Motion for Summary Judgment, and
Plaintiff's Reply. ECF 20, 22. I find that no hearing is
necessary. See Loc. R. 105.6 (D. Md. 2018). This
Court must uphold the decision of the Social Security
Administration (“SSA”) if it is supported by
substantial evidence and if the SSA employed proper legal
standards. 42 U.S.C. §§ 405(g), 1383(c)(3);
Craig v. Chater, 76 F.3d 585, 589 (4th Cir. 1996);
Coffman v. Bowen, 829 F.2d 514, 517 (4th Cir. 1987).
For the reasons set forth below, I recommend that the
SSA's Motion for Summary Judgment be GRANTED, and the
Court AFFIRM the SSA's judgment pursuant to sentence four
of 42 U.S.C. § 405(g).
was found disabled and began receiving Supplementary Security
Income (“SSI”) benefits beginning July 1, 2008.
Tr. 21. In 2012, Plaintiff returned to work. Tr. 48, 108.
Plaintiff continued receiving benefits through August 2014.
Tr. 47, 58. Plaintiff received a series of letters from the
SSA indicating he had been overpaid because of his increased
income. Tr. 34-60. The first letter was dated February 14,
2012. Tr. 34. On February 2, 2015, the SSA sent a letter
to Plaintiff claiming that he had been overpaid $12, 317.48
from February 2012 through August 2014. Tr. 55. Plaintiff
filed a request for reconsideration, Tr. 70, but after
reconsideration the SSA determined the initial overpayment
decision was correct. Tr. 85-86. Plaintiff then filed a
request for a hearing before an Administrative Law Judge
(“ALJ”). Tr. 95. A hearing was held on May 26,
2016, with a short supplementary hearing the following day.
Tr. 150-83, 184-89. Following the hearings, the ALJ issued a
written decision finding Plaintiff was overpaid $12, 317.48
from February 1, 2012 to August 1, 2014, and denying
Plaintiff's request for a waiver of the overpayment. Tr.
9-14. The Appeals Council denied Plaintiff's request for
review, Tr. 2-5, making the ALJ's decision the final
reviewable decision of the SSA.
Plaintiff raises issues in his Response that are outside the
scope of this Court's review of the ALJ's decision.
Plaintiff explains that he has suffered new injuries and is
currently unable to work. ECF 22 at 1. However, this Court is
confined to reviewing the ALJ's decision and determining
if substantial evidence, in the record as it was reviewed by
the ALJ, supports the decision and whether correct legal
standards were applied. Richardson v. Perales, 402
U.S. 389, 390 (1971). Plaintiff's current allegations of
disability would have to be addressed by the SSA in response
to a new application for benefits. Additionally, Plaintiff
has offered a compromise to sell his vehicle to satisfy the
overpayment. ECF 22 at 2. Should the ALJ's decision
ultimately be affirmed by this Court, Plaintiff may engage in
discussions with the SSA to reach a repayment agreement that
accounts for his current circumstances. However, such
arrangements are outside the limited role of this Court in
reviewing the ALJ's decision.
background, an overpayment is defined as “payment of
more than the amount due for any period.” 20 C.F.R.
§ 416.537(a). When an overpayment occurs, the 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 the SSI program, 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 SSA will consider all pertinent
circumstances, including any physical, mental, educational,
or linguistic limitations the individual might have.
See 42 U.S.C. § 404(b)(2); 20 C.F.R. §
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) Failure to furnish information which the individual knew
or should have known was material; (b) An incorrect statement
made by the individual which he knew or should have known was
incorrect (this includes the individual's furnishing his
opinion or conclusion when he was asked for facts), or (c)
The individual did not return a payment which he knew or
could have been expected to know was incorrect.
20 C.F.R. § 416.552. The overpaid individual bears the
burden of demonstrating both that he 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 SSA has some
culpability in making the overpayment, the overpaid
individual may still be found to be at fault. See 20
C.F.R. § 416.552. “Neither good faith nor the
absence of bad faith suffices to establish that the overpaid
individual is without fault.” Thomas v.
Sullivan, 923 F.2d 849 (4th Cir. 1991) (unpublished
table decision) (citing Center v. Schweicker, 704
F.2d 678, 679-80 (2d Cir.1983)).
Plaintiff argues, at least in part, that the amount of
overpayment was incorrect. ECF 22 at 2. (“Many of the
months in [the relevant time] period I was unable to work . .
. [h]alf of the period of not being eligible for assistance I
was unable to even work.”). Although I am unable to
discern from the records any record of Plaintiff's
monthly income, his annual incomes in 2012, 2013, and 2014,
were respectively, $18, 525.18, $60, 976.15, and $77, 000.40,
Tr. 11, 108. The ALJ also relied on a record, Tr. 58.,
reflecting the months during the relevant time period in
which Plaintiff did not exceed the income threshold for
substantial gainful activity (“SGA”). Tr. 11.
That record suggests that Plaintiff did not perform SGA, and
thus properly received benefits, in the months of April 2012
through June 2012, and October 2012 through November 2012.
Tr. 58. The benefits from those months were not included in
the overpayment amount. Id. Therefore, the ALJ
supported his finding of the amount of Plaintiff's
overpayment with substantial evidence.
then proceeded to evaluate Plaintiff's waiver request.
The ALJ denied the waiver because he found that Plaintiff was
“at fault” in causing the overpayment because he
“continued to accept disability payments when he knew,
or could have been expected to know, he was no longer
entitled to them.” Tr. 12 (citing 20 C.F.R. §
416.552(c)). The ALJ found that the numerous letters the SSA
sent to Plaintiff should have alerted Plaintiff that he was
not entitled to continue to receive benefits after he
returned to work. Tr. 12-13. Specifically, the ALJ cited
Plaintiff's receipt of the letter dated February 14,
2012, Tr. 34, which claimed Plaintiff received an overpayment
in August and September of 2011 because the SSA did not know
about the other income he received in those months. Tr. 12.
The ALJ explained that the letter “alerted the
[Plaintiff] that he would have to repay any SSA payments when
his earnings surpassed a certain threshold.” Tr. 12-13.
The ALJ also found that Plaintiff's “effort to
notify [the] SSA about his income change [was] an indication
that the claimant knew he was not entitled to benefits
anymore when he returned to work.” Tr. 12. Although
that particular inference appears tenuous, I find that the
letters upon which the ALJ concluded Plaintiff knew or could
have known he was receiving overpayments constitute
substantial evidence in finding Plaintiff was at
also made alternative findings that, even if Plaintiff was
not at fault in causing the overpayments, his waiver request
should be denied because recovery of the overpayment would
neither defeat the purpose of the SSI program, nor be against
equity and good conscience. Tr. 13-14. Recovery of an
overpayment would defeat the purpose of the SSI program
“if the individual's income and resources are
needed for ordinary and necessary living expenses.” 20
C.F.R. § 416.553(a); see also 20 C.F.R. §
404.508. Recovery of an overpayment is against equity and
good conscience “if an individual changed his or her
position for the worse or relinquished a valuable right
because of reliance upon a notice that payment would be made
or because of the incorrect payment itself.” 20 C.F.R.
§ 416.554. The ALJ found that recovery would not defeat
the purpose of the SSI program, based on Plaintiff's
income at the time of the decision. Tr. 13. The ALJ
considered Plaintiff's annual income of $90, 487 in 2015,
and his expected income of $70, 000 in 2016, and concluded
when comparing Plaintiff's income with his expenses that
there was “room for some amount of repayment.”
Tr. 13. The ALJ noted there was no evidence or suggestion
that Plaintiff changed his position or relinquished a right
based on the benefits he received. Tr. 13-14. Accordingly,
the ALJ supported with substantial evidence his alternative
findings that, even if Plaintiff was not at fault, recovery
of the overpayment would neither defeat the purpose of the
SSI program, nor be against equity and good conscience.
reasons set forth above, I respectfully recommend that:
Court GRANT Defendant's Motion for ...