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Kurt D. v. Saul

United States District Court, S.D. Indiana, Indianapolis Division

July 26, 2019

KURT D., Plaintiff,
v.
ANDREW M. SAUL, Defendant.

          REPORT AND RECOMMENDATION ON APPROPRIATE DISPOSITION OF THE ACTION

          Matthew P. Brookman, United States Magistrate Judge

         This matter was referred to the Magistrate Judge under 28 U.S.C. § 636(b)(1)(B) and Fed.R.Civ.P. 72(b) for a Report and Recommendation as to its appropriate disposition. (Docket No. 12). Plaintiff Kurt D.[1] seeks judicial review under 42 U.S.C. § 405(g) of a final decision of Defendant Commissioner of the Social Security Administration (“SSA”) denying his request for waiver of overpayment of $34, 687.00 in social security benefits. See42 U.S.C. § 404(a). After an Administrative Law Judge (“ALJ”) denied the request for waiver, Kurt D. filed a timely request for review of the ALJ's decision with the Appeals Council. The Appeals Council denied review, and plaintiff sought review in federal court. Plaintiff contends that the ALJ erred in denying his request because he was not at fault for causing the overpayment and requiring payment would defeat the purposes of the Social Security Act. This matter is fully briefed. (Docket No. 19, Docket No. 24, Docket No. 27). It is recommended that the District Judge REMAND the decision of the Commissioner of the Social Security Administration.

         I. Facts

         Kurt D. is legally blind. (Docket No. 9 at ECF p. 25). He initially applied for and began receiving disability insurance benefits (“DIB”) in December 2007. (Docket No. 9 at ECF p. 24). In March 2008 Kurt D. returned to work for Berends Hendricks Stuit Insurance (“BHS Insurance”). (Docket No. 9 at ECF p. 28; Docket No. 9-2 at ECF p. 19). He continued to work at BHS Insurance for longer than nine months-until February 2009-earning income at levels at or above substantial gainful employment. (Docket No. 9 at ECF p. 28; Docket No. 9-1 at ECF pp. 64-65; Docket No. 19 at ECF p. 3).

         Beginning in June of 2009, Kurt D. was self-employed as a licensed insurance agent. (Docket No. 9-2 at ECF p. 28). He remained in this position through July 2010. (Id.). In July 2010, Kurt D. remained self-employed, but under a new entity as an insurance consultant for his own business, where he acted as an independent contractor for groups of clients. (Id.). He remained in this role, but also began employment as a Manager for the Rehabilitation Center for Bosma Enterprises on July 8, 2013. (Id.). As of the time of the hearing, Kurt D. was still employed at Bosma Enterprises. (Id.). Kurt D. asserts that he informed the Employment Services Department at Bosma Enterprises that he was receiving disability payments from the SSA and that he wanted Bosma to take over his Ticket to Work.[2] Kurt D. indicates that Bosma made copies of each of his pay stubs and submitted them to the SSA. (Docket No. 19 at ECF p. 4).

         In May 2014, Debbie Thompson from the SSA contacted Kurt D. regarding specific income amounts. (Docket No. 9-2 at ECF p. 30). On June 24, 2014, Kurt D. received a letter from the SSA stating that the SSA had overpaid Kurt D. in the amount of $34, 687.40. (Docket No. 9-1 at ECF pp. 66-68). On July 21, 2014, Kurt D. submitted a request for a waiver of repayment. (Docket No. 9-1 at ECF pp. 63-65). A hearing was held on February 4, 2016, after the waiver request was denied initially and on reconsideration. (Docket No. 9-3 at ECF pp. 35- 49). Following the hearing, the ALJ denied Kurt D.'s request for a waiver of overpayment on June 15, 2016. (Docket No. 9 at ECF pp. 24-32). Kurt D. timely filed his appeal, which was denied on November 30, 2017. (Docket No. 9 at ECF pp. 3-6). This litigation followed. (Docket No. 1).

         II. Standard of Review

         The Court reviews the Commissioner's waiver decision under the same standards ordinarily applied in the denial of benefits context, affirming the Commissioner's decision as long as it is supported by substantial evidence and is not contrary to law. See Banuelos v. Apfel, 165 F.3d 1166, 1169 (7th Cir. 1999), overruled in part on other grounds by Johnson v. Apfel, 189 F.3d 561, 562-63 (7th Cir. 1999). For the purpose of judicial review, “[s]ubstantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Barnett v. Barnhart, 381 F.3d 664, 668 (7th Cir. 2004) (quotation omitted). The reviewing court must consider all evidence on the record; however, it may not decide the facts anew, reweigh the evidence, or substitute its judgment for that of the Commissioner. Shideler v. Astrue, 688 F.3d 306, 310 (7th Cir. 2012).

         III. Analysis

         I. The ALJ's Findings

         The ALJ determined that Kurt D.'s trial work period (“TWP”) began March 2008 and ended November 2008. (Docket No. 9 at ECF p. 28). Kurt D.'s re-entitlement period began December 2008, the month following the completion of his TWP. The ALJ then found that Kurt D.'s disability ceased due to substantial gainful activity (“SGA”) effective December 2008 and benefits were not payable due to SGA for March 2009, June 2010, September 2011 through October 2011, and July 2013 onward. (Docket No. 9 at ECF p. 29). Specifically, the ALJ found Kurt D.'s re-entitlement period ended December 2011; thus, when he performed SGA in July 2013-that became his termination month. (Id.). The ALJ found that work provisions and earnings information used for the work reviews were provided to the claimant, and he did not appeal the work review determinations. (Id.). The ALJ concluded that benefits were payable for the month the re-entitlement period began and the two succeeding months pursuant to 20 C.F.R. § 404.1592a(a)(2)(i). (Id.).

         The ALJ indicated that the self-employment income used for the work review was his net self-employment as reported to his earnings record from the IRS (Docket No. 9 at ECF p. 30). He noted that Kurt D. did not provide tax returns to suggest that his earnings record was incorrect or that he had filed amended tax returns. (Id.). The ALJ also responded to Kurt D.'s argument that he was allowed more than one TWP and that he was never informed of his work provisions by stating that the work review accurately applied the TWP and re-entitlement period provisions in accordance with pertinent laws and regulations. (Docket No. 9 at ECF p. 31). The ALJ indicated numerous ways Kurt D. could have had these provisions explained to him and that they were explained[3] by the field office when he inquired about his TWP. (Id.). The ALJ also held that a summary of work provisions is typically provided to a claimant if work is reported or when work reviews are conducted. (Id.).

         The ALJ determined Kurt D. was overpaid benefits in the amount of $34, 687.00 during the period of March 2009 to June 2014, and that he was at fault in causing the overpayment for failure to proactively notify the administration of his work activity as required by his reporting responsibilities, which were provided in his application for Social Security benefits. (Docket No. 9 at ECF p. 32). The ALJ reasoned that the record does not contain any work reports, or paystubs, or documentation that the claimant proactively notified the administration of his work activity as required by his reporting responsibilities. (Id.). Thus, he concluded that Kurt D. was at fault for causing the overpayment. (Id.). Finally, the ALJ found that recovery of the overpayment was not waived. (Id.).

         II. Review of Plaintiff's Assertions of Error

         A. The Social Security Administration (“the Administration”) did not waive its right to ...


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