The opinion of the court was delivered by: Honorable Jacqueline Chooljian United States Magistrate Judge
MEMORANDUM OPINION AND ORDER OF REMAND
On January 6, 2011, plaintiff Mary Lee Lytle ("plaintiff") filed a Complaint seeking review of the Commissioner of Social Security's denial of plaintiff's application for benefits. The parties have consented to proceed before a United States Magistrate Judge.
This matter is before the Court on the parties' cross motions for summary judgment, respectively ("Plaintiff's Motion") and ("Defendant's Motion"). The Court has taken both motions under submission without oral argument. See Fed. R. Civ. P. 78; L.R. 7-15; January 12, 2011 Case Management Order ¶ 5.
Based on the record as a whole and the applicable law, the decision of the Commissioner is REVERSED AND REMANDED for further proceedings consistent with this Memorandum Opinion and Order of Remand because the Administrative Law Judge ("ALJ") failed properly to consider competent lay witness evidence and the Court cannot find such error harmless.
II. BACKGROUND AND SUMMARY OF ADMINISTRATIVE DECISION
On July 10, 2007, plaintiff filed an application for Disability Insurance Benefits. (Administrative Record ("AR") 8, 117). Plaintiff asserted that she became disabled on January 11, 2007, due to "cervical and lumbar injuries, fms [focal motor seizure], [and a] need [for] knee replacement." (AR 140). The ALJ examined the medical record and heard testimony on July 8, 2009 from plaintiff (who was represented by counsel), one of plaintiff's daughters (Mary Glacil), and a vocational expert. (AR 17-47).
On December 9, 2009, the ALJ determined that plaintiff was not disabled through the date of the decision. (AR 8-16). Specifically, the ALJ found:
(1) plaintiff suffered from the following severe impairments: degenerative disc disease of the cervical spine and lumbar spine, fibromyalgia, carpal tunnel syndrome, gastro esophageal reflux disease, and hypertension (AR 10-11);
(2) plaintiff's impairments, considered singly or in combination, did not meet or medically equal one of the listed impairments (AR 11-12); (3) plaintiff retained the residual functional capacity to perform sedentary work (20 C.F.R. § 404.1567(a)) with certain limitations (AR 12); (4) plaintiff could perform her *fn1 past relevant work as a real estate clerk and administrative assistant (AR 15); and (5) plaintiff's allegations regarding her limitations were not credible to the extent they were inconsistent with the ALJ's residual functional capacity assessment. (AR 14).
The Appeals Council denied plaintiff's application for review. (AR 1).
III. APPLICABLE LEGAL STANDARDS
A. Sequential Evaluation Process
To qualify for disability benefits, a claimant must show that the claimant is unable to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of at least twelve months. Burch v. Barnhart, 400 F.3d 676, 679 (9th Cir. 2005) (citing 42 U.S.C. § 423(d)(1)(A)). The impairment must render the claimant incapable of performing the work claimant previously performed and incapable of performing any other substantial ...