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Ballard v. Saul

United States District Court, N.D. California

October 23, 2019

ANDREW SAUL, Commissioner of the Social Security Administration, Defendant.


          RICHARD SEEBORG, United States District Judge.


         Plaintiff Shaun Marie Ballard appeals the determination of the Social Security Administration that she is no longer eligible for supplemental security income (“SSI”) benefits because she has resources in excess of the regulatory limit of $2, 000. Ballard's motion for summary judgment will be granted and the Commissioner's cross-motion will be denied. Ballard remains entitled to SSI benefits because her interest in certain real property held in trust cannot be converted to cash without litigation.

         II. BACKGROUND[1]

         Ballard is a 61-year-old woman who resides in Watsonville, CA and who previously received monthly SSI benefits. In March 2005, Ballard's father established the Buck B. Ballard Trust. The Trust instrument provided that Ballard and her sister, Kimberly, would each receive one-half of the property “outright and free of trust, ” upon his death. The Trust listed real property consisting of a parcel of farmland with several mobile-homes and a second parcel with a single-family home, both in Montezuma County, Colorado. Ballard and her sister became co-trustees of the Trust following the death of the originally designated trustee. Ballard's father died in April 2010 and left a will, which is currently being probated in Colorado.[2] The properties at issue in this case are not involved in that probate case.

         According to Montezuma County records, the properties in question are currently recorded in the name of the Buck B. Ballard Trust with both sisters as beneficiaries. While the Trust mandates that the properties should pass to the beneficiaries upon the death of Ballard's father, there has been no recorded transfer of the two properties from the Trust to the Ballard sisters. In June 2010 and again in April 2015, Ballard's counsel sent letters to Kimberly requesting that she agree to liquidate the Colorado properties and distribute the proceeds equally. In response to the 2016 letter, Kimberly's attorney sent a letter to Ballard stating, “liquidation of real property held in the trust will not be considered until such time as the estate is closed and assets distributed equally.”

         In October 2016, an ALJ considered Ballard's appeal of the Social Security Administration's finding that she had resources in excess of the statutory limit. The ALJ applied the POMS criteria and found that the real property in Colorado counted as a resource for the purposes of SSI benefits because Ballard inherited one-half of the property “outright and free of trust” when her father died. The ALJ reasoned that there was no legal restriction preventing Ballard's right to access, spend, or convert the property because there was no evidence that she had attempted to sell her share of the property or asked Kimberly to agree to liquidate the entire property.


         Under 42 U.S.C. § 405(g), a district court has jurisdiction to review the Commissioner's final decision denying benefits under the Social Security Act. An ALJ's decision to that effect must be affirmed if it is supported by substantial evidence and free of legal error. Beltran v. Astrue, 700 F.3d 386, 388 (9th Cir. 2012). Substantial evidence is defined as “more than a mere scintilla but less than a preponderance-it is such relevant evidence that a reasonable mind might accept as adequate to support the conclusion.” Moncada v. Chater, 60 F.3d 521, 523 (9th Cir. 1995) (per curiam). In determining whether a decision is supported by substantial evidence, the court must examine the administrative record as a whole, considering all the facts. Drouin v. Sullivan, 966 F.2d 1255, 1257 (9th Cir. 1992). If the evidence supports more than one rational interpretation, the court must defer to the ALJ's decision. Id. at 1258. “If additional proceedings can remedy defects in the original administrative proceeding, a social security case should be remanded.” Garrison v. Colvin, 759 F.3d 995, 1019 (9th Cir. 2014) (internal quotation marks and citation omitted).


         A. Definition of “Resource”

         The issue in this case is whether properties belonging to the Trust under which Shaun Ballard is a beneficiary count toward the $2, 000 resource limit, making her ineligible for SSI disability benefits. See 42 U.S.C. § 1382(a)(3)(B); 20 C.F.R. § 416.1205. According to 20 C.F.R. § 416.1201(a), “resources means cash or other liquid assets or any real or personal property that an individual (or spouse, if any) owns and could convert to cash to be used for his or her support and maintenance.”

         The Social Security Administration's initial inquiry into the issue is governed by Program Operations Manual System (POMS) SI 01120.010. POMS are not binding on courts, although they frequently consider them in interpreting the statutory and regulatory policies of that agency. Kubetin v. Astrue, 637 F.Supp.2d 60, 63 (2009). Under POMS SI 01120.010, the agency will not consider property of any kind to be a resource for SSI eligibility purposes “unless . . . it meets all three criteria” listed in the section. First, the individual “must have some form of ownership interest in property in order for the property to be considered a resource.” POMS SI 01120.010.B.1. Second, the individual “must have a legal right to access [the] property” and “the legal ability to access funds for spending or to convert noncash property into cash.” POMS SI 01120.010.B.2. “The fact that an owner does not have physical possession of property does not mean it is not his/her resource, provided the owner still has the legal ability to spend it or convert it to cash.” Id. The property is not a resource “[w]hen there is a legal bar to sale of property (e.g., if a co-owner legally blocks sale of jointly-owned property)” such that litigation would be required “. . . in order to accomplish sale or access.” POMS SI 01120.010.C.2. Third, the individual must have the legal ability to use the property for his/her personal support and maintenance, such that even if the individual meets the first two requirements, “a legal restriction against the property's use for the owner's own support and maintenance means the property is not his/her resource.” POMS SI 01120.010.B.3.

         B. ...

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