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Argue v. Berryhill

United States District Court, S.D. California

May 7, 2018

NANCY A. BERRYHILL, Acting Commissioner of Social Security, Defendant.


          Hon. Dana M. Sabraw United States District Judge

         Plaintiff Matthew M. Argue, proceeding pro se, moves for reversal or remand of Defendant Commissioner of Social Security's decision denying his request for waiver of overpayment. Defendant opposes Plaintiff's motion and cross-moves for summary judgment. For the reasons discussed below, Plaintiff's motion is granted, and Defendant's motion is denied. The ALJ's decision is remanded for further consideration.

         I. BACKGROUND

         Relevant to the present action, Plaintiff began receiving disability insurance benefits pursuant to Title II of the Social Security Act in November 2002, after he was diagnosed with testicular cancer. (Administrative Record (“AR”) at 432.) In July 2005, Plaintiff began to work under the Ticket to Work program, which assists disabled individuals “in obtaining the services necessary to find, enter and retain employment” to reduce their dependency upon disability benefits. (Id.); 20 C.F.R. § 411.105. The program consists of a “trial work period, ” which allows beneficiaries to perform work activity for up to nine months total and “still be considered disabled, ” i.e. not lose their eligibility for benefits or have their benefit payments suspended. 20 C.F.R. § 404.1592(a). Plaintiff completed the nine-month trial work period in October 2007. (AR at 33, 97, 102, 162-63.)

         Beneficiaries who complete a full nine-month trial work period and still have a “disabling impairment” as defined in 20 C.F.R. § 404.1511 may continue to test their ability to work during a 36-month “reentitlement period, ” also known as an extended period of eligibility. 20 C.F.R. § 404.1592a. Plaintiff's extended period of eligibility began in November 2007, at which time Plaintiff returned to work at a substantial gainful activity level and continued to collect disability benefits. (AR at 97, 163, 362, 466.) On October 1, 2008, Plaintiff received a notice of overpayment, which he appealed. (Id. at 362, 364.) On September 15, 2010, Administrative Law Judge Mason D. Harrell, Jr. concluded, in part, the overpayment should be waived, explaining Plaintiff was without fault because he had received misinformation from a Social Security Administration (“SSA”) employee regarding the Ticket to Work program, and recovery would defeat the purpose of Title II of the Act and be against equity and good conscience. (Id. at 363-64.)

         In October 2009, Plaintiff was diagnosed with acute lymphoid leukemia. Subsequently, a SSA employee Jennifer Lisk filed a request for expedited reinstatement of benefits on behalf of Plaintiff, and as a result, Plaintiff continued to receive disability benefits. (AR at 163, 165, 432.) Plaintiff's extended period of eligibility ended in December 2010, when Plaintiff returned to work in January 2011 and has worked at a level of substantial gainful activity. (Id. at 97, 432, 466.) Nevertheless, Plaintiff continued to receive disability insurance benefits through February 2012. (Id.) On February 29, 2012, the SSA sent Plaintiff and his family a notice of overpayment of benefits.[1] (Id. at 102-07.) On August 27, 2012, Plaintiff and his family members each requested a waiver, stating the overpayment was not their fault and they could not afford to pay it back. (Id. at 117-27.) Subsequently, the field office denied their requests for a waiver. (Id. at 146-51.) After a timely request for a hearing, Plaintiff appeared and testified before ALJ Eric V. Benham on September 4, 2014.[2] (Id. at 464-87.)

         On November 7, 2014, the ALJ issued a written decision, finding that Plaintiff was not entitled to a waiver of the overpayment because he was not without fault.[3](AR at 433.) Plaintiff filed a request for review of that decision, which the Appeals Council denied on April 28, 2017. (Id. at 23-26.) Plaintiff filed the present action on August 22, 2017.


         When a claimant receives more disability benefits than he is entitled to, an overpayment has been made and the Social Security Administration is entitled to recover the overpayment. 20 C.F.R. § 404.501. Recovery of the overpayment may be partially or completely waived in certain circumstances. Under the regulations, repayment may be waived if the claimant was without fault and if recovery would defeat the purpose of the Act or be contrary to equity and good conscience. 20 C.F.R. § 404.506. Fault is defined as:

(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. “[T]he regulation requires the ALJ to make fact findings regarding the three definitions of fault.” Anderson v. Sullivan, 905 F.2d 1540 (9th Cir. 1990). The ALJ must “consider all pertinent circumstances, including the individual's age and intelligence, and any physical, mental, educational or linguistic limitations (including any lack of facility with the English language) the individual has.” 20 C.F.R. § 404.507. The claimant has the burden of proving that he was without fault. Anderson, 914 F.2d at 1122.

         The court must affirm the ALJ's refusal to waive repayment if the decision is “supported by substantial evidence and if the [ALJ] applied the proper legal standards.” Anderson, 914 F.2d at 1122. Substantial evidence is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion” and is more than a “mere scintilla” of the evidence but ...

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