The opinion of the court was delivered by: Suzanne H. Segal United States Magistrate Judge
MEMORANDUM DECISION AND ORDER
Judith Jimenez ("Plaintiff") brings this action seeking to overturn the decision of the Commissioner of the Social Security Administration (hereinafter the "Commissioner" or the "Agency") denying her application for Supplemental Security Income ("SSI"). The parties consented, pursuant to 28 U.S.C. § 636(c), to the jurisdiction of the undersigned United States Magistrate Judge. This matter is before the Court on the parties' Joint Stipulation ("Jt. Stip.") filed on July 14, 2009. For the reasons stated below, the decision of the Commissioner is REVERSED and REMANDED for further proceedings.
Plaintiff filed an application for SSI on February 11, 2004. (AR 116-118). Plaintiff alleged a disability onset date of July 1, 2003. (AR 116). The Commissioner denied benefits on May 3, 2004. (AR 103-107). Plaintiff submitted a request for reconsideration on June 16, 2004. (AR 109). The Commissioner denied Plaintiff's request for reconsideration on October 14, 2004. (AR 102). Plaintiff requested a hearing before an administrative law judge ("ALJ") on October 25, 2004. (AR 66; 110-11).
Plaintiff's hearing proceeded before ALJ F. Keith Varni on April 11, 2007. (AR 68-88). ALJ Varni issued an unfavorable decision on April 24, 2007. (AR 40-47). Plaintiff requested review by the Appeals Council on June 12, 2007. (AR 35). The Appeals Council remanded the case on July 30, 2007. (AR 32-34).*fn1 Plaintiff's new hearing proceeded before ALJ Varni on April 3, 2008. (AR 89-100). ALJ Varni issued an unfavorable decision on May 10, 2008. (AR 13-23). Plaintiff requested review by the Appeals Council on June 4, 2008. (AR 8). The Appeals Council denied Plaintiff's request for review on July 21, 2008. (AR 5-7). Plaintiff commenced the instant action on September 19, 2008.
Plaintiff was born on March 6, 1969. (AR 116). Plaintiff claims disability as a result of "[irregular] heart beat, depression, stress, chest pain, high [blood sugar] levels, blur[r]ed vision, [weakness], . . . enlarged liver, [and] enlarge[d] heart." (AR 132).
B. Relevant Medical History
1. Mental Health Condition
James A. Grishom, M.F.T.*fn2 , R.N.*fn3 , assessed Plaintiff on April 29, 2004. (AR 350-51). Mr. Grishom diagnosed Plaintiff with non-specific depressive disorder and post-traumatic stress disorder. (AR 350). Mr. Grishom noted that Plaintiff had mild suicidal ideation. (Id.).
On August 11, 2004, J.N. Allison, M.D., indicated that Plaintiff reported "seeing people who are not there [and] hearing noises when nobody is there." (AR 348). Dr. Allison noted that Plaintiff experienced "crying spells." (Id.). Plaintiff was prescribed twenty milligrams of Lexapro*fn4 , zero to five milligrams of Risperdal*fn5 and fifty milligrams of Trazodone*fn6 . (Id.)
On September 8, 2004, Dr. Allison found that Plaintiff "remain[ed] depressed." (Id.). Dr. Allison indicated that Plaintiff suffered from insomnia. (Id.) Dr. Allison continued Plaintiff on the same dosage of Lexapro and Risperdal, but increased the Trazodone to one hundred milligrams. (AR 348).
On October 6, 2004, Dr. Allison indicated that Plaintiff "state[d] [she is] less depressed" and noted that Plaintiff's "crying spells" had become less frequent. (AR 347). Dr. Allison prescribed Plaintiff thirty milligrams of Lexapro and the same dosages of Risperdal and Trazodone. (Id.).
Records on October 20, 2004 and November 10, 2004 indicate that Plaintiff did not appear for her psychiatric appointments. (AR 346). Dr. Allison indicated that Plaintiff's case was "closed" on December 23, 2004. (Id.).
John Lavey, L.C.S.W.*fn7 , treated Plaintiff on February 5, 2007. (AR 336-38). Mr. Lavey found that Plaintiff suffered from paranoia, mood swings, and suicidal ideation. (AR 337). Mr. Lavey indicated Plaintiff's current mood was "depressed." (Id.). Mr. Lavey found that Plaintiff had a Global Assessment of Functioning ("GAF") of 50. (AR 336). Mr. Lavey diagnosed Plaintiff with non-specific depressive disorder and post-traumatic stress disorder. (AR 338).
2. Consultative Psychiatric Evaluation
Kent Jordan, M.D., a Diplomate of the American Board of Psychiatry and Neurology, evaluated Plaintiff for the Disability Determination Service ("DDS") on December 1, 2007. (AR 314-20). Dr. Jordan diagnosed Plaintiff with polysubstance abuse and dependence, amphetamine-induced auditory and visual hallucinations and personality disorder with manipulative trends. (AR 318). Dr. Jordan concluded that "[Plaintiff] cannot responsibly handle funds because of her substance abuse history and also manipulative personality." (AR 319).
THE FIVE-STEP SEQUENTIAL EVALUATION PROCESS
To qualify for disability benefits, a claimant must demonstrate a medically determinable physical or mental impairment that prevents him from engaging in substantial gainful activity*fn8 and that is expected to result in death or to last for a continuous period of at least twelve months. Reddick v. Chater, 157 F.3d 715, 721 (9th Cir. 1998) (citing 42 U.S.C. § 423(d)(1)(A)). The impairment must render the claimant incapable of performing the work he previously performed and incapable of performing any other substantial gainful employment that exists in the national economy. Tackett v. Apfel, 180 F.3d 1094, 1098 (9th Cir. 1999) (citing 42 U.S.C. § 423(d)(2)(A)).
To decide if a claimant is entitled to benefits, an ALJ conducts a five-step inquiry. 20 C.F.R. §§ 404.1520, 416.920. The steps are:
(1) Is the claimant presently engaged in substantial gainful activity? If so, the claimant is found not disabled. If not, proceed to step two.
(2) Is the claimant's impairment severe? If not, the claimant is found not disabled. If so, proceed to step three.
(3) Does the claimant's impairment meet or equal the requirements of any impairment listed at 20 C.F.R. Part 404, Subpart P, Appendix 1? If so, the claimant is ...