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Deuschel v. Astrue

July 28, 2009


The opinion of the court was delivered by: Gregory G. Hollows United States Magistrate Judge


Introduction and Summary

Not often are the procedures and processes involved in a case more complicated than the underlying substantive issues. However, this is a Social Security case involving a plaintiff previously found to be too disabled to work who seemingly performed more work than not during her periods of disability entitlement. As a result, plaintiff was overpaid. She then embarked upon a marathon of due process in order to keep her benefits, and have the amount of the overpayment withheld by SSA repaid.

Proceeding pro se, plaintiff brought this action to not only stave off overpayment collection/retention by the Commissioner, but also for damages and injunctive relief on a plethora of issues only marginally related to the overpayment. In the sections that follow, the undersigned will completely describe the procedures and process of this case both in the district court and the Social Security Administration. The substantive result stemming from this history is that, under the law, the overpayment was correctly found and not forgiven. Judgment should be awarded to the Commissioner.

Procedural and Background History

Plaintiff filed for disability benefits in 1996, and was awarded such benefits with an eligibility effective date of September 1995. Finding that she could nevertheless work despite her finding of total disability, plaintiff engaged in work which caught the attention of SSA in 1998. Plaintiff should have previously reported her work, but did not. The overpayment was computed by permitting benefits during a 9 month trial work period commencing with the month in which plaintiff engaged in substantial gainful activity, and then calculating an overpayment for every month thereafter for a 36 month "reentitlement period" in which plaintiff engaged in substantial gainful activity. See 20 C.F.R. § 404.1592a. The precise calculation methodology is not important here in that plaintiff does not contest herein in any meaningful fashion the fact of the initial overpayment -- $13, 848.30.*fn1

Plaintiff filed a request for waiver of overpayment. The precise administrative chronology of this initial request is not important except to note that plaintiff was not ultimately given the opportunity for a hearing into the overpayment waiver request, and that by the time plaintiff filed her action in district court in late 2003, most of the overpayment had been collected out of benefits owed to plaintiff on account of her on-again-off-again disability status, or through interception of other government benefits due to her. At the time of filing this action, only $1,143.50 remained unpaid.*fn2

Plaintiff's action in district court was a scatter gun attempt to sue SSA on account of the collection attempts in which she included civil rights claims, contract claims, and violation of bankruptcy law claims. In the June 10, 2004 Findings and Recommendations disposing of the Commissioner's motion to dismiss, the undersigned found that plaintiff had not been afforded a proper hearing on her request to have the overpayment waived. Thus, "[t]his action should be construed as and proceed as a claim against defendant [Commissioner] in her official capacity on plaintiff's constitutional challenge to the administration's actions in determining and recouping the overpayment of benefits and failing to waive overpayment. All other claims and all other defendants should be dismissed." F & Rs at page 13. These Findings and Recommendations were adopted in the Order of July 19, 2004 in which the Honorable Garland E. Burrell, Jr. added:

The case shall proceed as a civil action. The court is concerned by plaintiff's allegations that the Commissioner never determined the merits of her request for reconsideration and waiver of overpayments. Accordingly, the Commissioner is directed to show cause within 30 days after the filed date of this order why she should not be ordered to refund to plaintiff the amount of any overpayment until such time as the Commissioner or the court can render a decision on the merits of plaintiff's claims, including her request for reconsideration and waiver of overpayments.

After some delay, the order to show cause was discharged by the undersigned, and a determination was made that this case would not proceed pending adjudication of the request for waiver of overpayment by the Commissioner. Periodic status reports were required with the court growing increasingly concerned with the reasons why the administrative proceedings were taking so long.

The administrative record now before the court demonstrates those reasons. Plaintiff had continued her sometimes work efforts after the first overpayment; the SSA found plaintiff not to be eligible for disability benefits, then reinstating her, then terminating her, then plaintiff filing for new benefits. During this period in which the Commissioner was attempting to determine whether to waive the initial overpayment, another overpayment in the amount of $25,779.80 was computed. These matters were finally sorted out in the Appeals Council's November 29, 2007 decision (Tr. 18-24) which granted the requests for review of the ALJ's August 4, 2006 and March 23, 2007 decisions, and issued the final agency decision.

1. The claimant completed her nine-month trial work period in December 1997 (Exhibit 12, p4).

2. The claimant's 36-month extended period of disability commenced with January 1998 (Exhibit 12, p.5 and B-9).

3. The claimant did not demonstrate an ability to engage in substantial gainful activity in December 2002, after the expiration of the extended period of eligibility in December 2000 (Exhibits B-9 and AC-5, p.3-11).

4. The claimant received an overpayment of $13,848 in disability insurance benefits for the following months......

5. The claimants' disability did not end effective December 2002 due to her ability to engage in substantial gainful activity.....

6. The claimant did not receive an overpayment for January 2003 through December 2004 due to the cessation of her period of disability and/or entitlement to disability insurance benefits.

7. The claimant was not without fault in causing the overpayment of $13,848 for April 1998 through February 2000 and recovery thereof is ...

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