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Bailey v. Berryhill

United States District Court, N.D. West Virginia

April 6, 2018

SUSAN L. BAILEY, Plaintiff,
v.
NANCY A. BERRYHILL, Acting Commissioner of Social Security, Defendant.

          BAILEY, Judge

          REPORT AND RECOMMENDATION

          ROBERT W. TRUMBLE UNITED STATES MAGISTRATE JUDGE.

         I. INTRODUCTION

         This case arises from a civil monetary penalty imposed on Plaintiff Susan L. Bailey (“Plaintiff”) for the overpayment of social security benefits. After the penalty was imposed, Plaintiff challenged the Social Security Administration's (“the SSA”) attempt to collect that debt by withholding her social security benefits. After proceeding through the administrative process, a United States Administrative Law Judge (“the ALJ”) concluded that Plaintiff was at fault for the overpayment of benefits, and she was not entitled to have the recovery of said overpayment waived. Now, Plaintiff seeks judicial review of the ALJ's decision. Because the ALJ's decision is supported by substantial evidence, the undersigned recommends that Plaintiff's Motion for Summary Judgment be denied and Defendant's Motion for Summary Judgment be granted.

         II. FACTS & PROCEDURAL HISTORY [1]

         From February 2010 to January 2012, Plaintiff also received $15, 526.00 in social security insurance (“SSI”) on behalf of a minor, T.C., serving as his representative payee. R. 241. But T.C. was removed from Plaintiff's custody in February 2010 and transferred to the legal (and physical) custody of Columbiana County Jobs and Family Services (“Columbiana”). R. 241. Although Plaintiff returned the January 2012 SSI payment, the other $15, 526.00 was not saved or paid forward to Columbiana. R. 241.

         The Office of the Inspector General (“OIG”) conducted an investigation and determined that Plaintiff improperly converted twenty-three of T.C.'s SSI payments for her own use. R. 215. Then, in June 2013, OIG notified her that it would impose a penalty of $47, 000.00 and an assessment in lieu of damages of only $15, 526.00 against her, rather than the maximum penalty of $115, 000.00 and the maximum assessment in lieu of damages of $31, 052.00. R. 215-16; 241. The letter enclosed a financial disclosure form for Plaintiff to complete and return to OIG at the requested address. R. 215-16. In addition, the letter said that it would forward the matter to the Counsel to the Inspector General for a final determination, if they did not hear from Plaintiff in thirty days. R. 216.

         Although Plaintiff completed and returned the financial disclosure form as requested, R. 212, she did not otherwise contact OIG within thirty days. Later that year, in September 2013, OIG again notified Plaintiff that it would impose a penalty of $47, 000.00 and an assessment in lieu of damages of only $15, 526.00 against her, for a total civil monetary penalty of $62, 526.00. R. 211-13. In that letter, OIG informed Plaintiff of her right to contest the civil monetary penalty and assessment, by sending a written request for a hearing to the U.S. Department of Health and Human Services (“DHHS”) within sixty days. R. 213. And, the letter warned: “If you do not request a hearing within the 60-day period, the proposed civil monetary penalty and assessment will be imposed upon you. You will have no right to an administrative appeal after that time.” R. 213 (emphasis in original). Despite those specific instructions, Plaintiff attempted to contest the civil monetary penalty by speaking with her local Social Security office and reaching out to OIG by telephone and letter dated October 7, 2013. R. 223, 225. That letter was sent to Counsel to the Inspector General in New York, New York, not DHHS. R. 225.

         In February 2014, the SSA informed Plaintiff that it had been notified of OIG's civil monetary penalty of $62, 526.00, and it would withhold her social security benefits to collect the debt. R. 218-20. The next month, Plaintiff filed a request for reconsideration of the SSA's decision to collect OIG's civil monetary penalty by withholding her benefits. R. 221-25. That request was denied. R. 229-31. Plaintiff then requested a hearing before an Administrative Law Judge (“ALJ”). R. 232. That hearing was held in September 2015. R. 297-309. Three months later, the ALJ issued his decision, R. 13-17, concluding that Plaintiff was at fault for the overpayment of benefits and, therefore, she was not entitled to have the recovery of the overpayment waived, R. 16-17. In June 2017, the Appeals Council denied Plaintiff's request to review the ALJ's decision, making the ALJ's decision the final decision of the Commissioner. R. 4-7.

         Less than two months later, Plaintiff, through counsel, Dean G. Makricostas, Esq., filed a Complaint in this Court to obtain judicial review of the Commissioner's final decision pursuant to Section 205(g) of the Social Security Act, as amended, 42 U.S.C. § 405(g) (2015). Compl., ECF No. 1. In November, the Commissioner, through counsel Helen Campbell Altmeyer, Assistant United States Attorney, filed her Answer and the Administrative Record. Answer, ECF No. 5; Admin. R., ECF No. 6. Plaintiff and the Commissioner filed their Motions for Summary Judgment in January 2018, and March 2018, respectively. Pl.'s Br., ECF No. 12; Def.'s Mot. Summ. J., ECF No. 15. Plaintiff filed a response to the Commissioner's motion one week later. Pl.'s Resp. to Def.'s Mot. Summ. J., ECF No. 19. According to Plaintiff, she repaid approximately $42, 142.50 to the SSA to date. ECF No. 12 at 5.

         The matter is now before the undersigned United States Magistrate Judge for a Report and Recommendation to the District Judge pursuant to 28 U.S.C. § 636(b)(1)(B) and Local Rule of Civil Procedure 9.02(a). Having reviewed the parties' motions and the administrative record, the undersigned now issues the following Report and Recommendation.

         III. ADMINISTRATIVE LAW JUDGE'S DECISION

         First, the ALJ concluded that Plaintiff was overpaid benefits in the amount of $69, 686.00 from March 2010 to April 2012. R. 16. In support, the ALJ emphasized that Plaintiff did not contest that she was, in fact, overpaid benefits, and, instead, argued that she was entitled to have the recovery of said benefits waived because she was not at fault for the overpayment. R. 16. Second, the ALJ concluded that Plaintiff was at fault for the overpayment of benefits because she failed to report her 2011 and 2012 employment, which had an effect on her retirement insurance benefits, and continued to receive SSI benefits on behalf of T.C., and convert them for her own use, even though he had been removed from her custody in February 2010. R. 16-17. Third, the ALJ concluded that Plaintiff was not entitled to have the recovery of the overpaid benefits waived. R. 17.

         IV. ...


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