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Lucas v. Saul

United States District Court, E.D. California

December 10, 2019

ANDREW SAUL, Commissioner of Social Security, Defendant.



         Plaintiff, proceeding pro se, seeks judicial review of a final decision of the Commissioner of Social Security (“Commissioner”) finding that she had excess resources for the period from January 2011 through June 2015 under Section 416.1201(a) of the Social Security Act (“Act”). The ALJ determined that the payment plaintiff received in the settlement of a civil lawsuit was a “resource” for the purposes of Supplemental Security Income (“SSI”) eligibility. For the reasons discussed below, the undersigned will recommend that plaintiff's motions for summary judgment and remand be denied, and the Commissioner's cross-motion for summary judgment be granted.


         Plaintiff began receiving supplemental security income benefits based on an application filed in September 1997.[1] Administrative Transcript (“AT”) 16.[2]

         Plaintiff's son, David Lucas, was born in 1968 and, as a young man, excelled at science and worked as a chef. However, in 1994, his vision began to worsen due to multiple sclerosis (MS) and, by 2000, he was blind. (ECF No. 30 at 7-8.) In 2007, Mr. Lucas was placed under a conservatorship and housed in a state-run hospital due to mental and physical health issues. (ECF No. 13-3 at 26; ECF No. 25-2 at 27.) On October 14, 2008, he suffered death by hanging, using an unsecured electrical cord. (ECF No. 25-1 at 3.)

         In January 2011, plaintiff received a settlement payment related to a wrongful death suit she filed on behalf of her son. (ECF No. 25-1 at 1; AT 27.) Plaintiff received a settlement check for $186, 890.58. (AT 85.) On February 7, 2011, plaintiff reported to the Social Security Administration that, on January 21, 2011, she “received money in an amount that, according to law, makes me ineligible to receive SSI benefits.” (AT 16, 48.)

         Plaintiff stopped receiving SSI benefits. Moreover, in February 2011, the agency informed her that she had received an overpayment of $1, 250.06 between January 1, 2011 and February 1, 2011, and was required to pay it back. (AT 50-53.) Plaintiff requested reconsideration of the determination, stating that no one had told her when she signed the settlement agreement that she would stop receiving SSI benefits. (AT 56-57.)

         On January 21, 2016, an ALJ held a hearing on plaintiff's case. Plaintiff testified at the hearing that she did not receive SSI benefits for a 54-month period between January 2011 and July 2015. She argued that she was entitled to retroactive payment of those benefits in the amount of $33, 751.62. AT 34-35. The ALJ framed the issue as follows:

The general issue before the ALJ is whether the claimant met the nondisability eligibility requirements for [SSI] for the period of January 2011 through June 2015. The specific issue is whether the claimant had resources in excess of the amount permitted under Title XVI during the period(s).
A related issue is whether the claimant was overpaid benefits within the meaning of Section 2014 of the Social Security Act and, if so, whether recovery of the overpayment may be waived. In determining whether an overpayment will be waived, it must be decided whether the claimant was ‘without fault' as defined in 20 CFR § 416.552 in causing the overpayment[.]

AT 15.

         After recounting the evidence and testimony, the ALJ concluded that plaintiff “did have excess resources during the period at issue, ” as her possession of a six-figure cash settlement “in and of itself qualifies as excess resources.” AT 17. The ALJ explained:

Section 416.1201(a) of the Social Security Administration regulations No. 16, as pertinent herein, defines resources as cash or other liquid assets or any real or personal property that an individual owns and could convert to cash to be used for his support and maintenance. If the individual has the right, authority, or power to liquidate the property, or his (or her) share of the property, it is considered a resource. If a property cannot be liquidated, the property will not be considered a resource of the individual (or spouse).
In the instant case, it is undisputed that the claimant had funds over $2, 000 during the period at issue. The record shows the claimant received cash in January 2011, from a $375, 000 compromise settlement. [Record citation.] As such, the cash falls directly under Section ...

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