Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-4_05-cv-00575/USCOURTS-azd-4_05-cv-00575-0/pdf.json

Nature of Suit Code: 864
Nature of Suit: Social Security - SSID Title XVI
Cause of Action: 42:205 Denial Social Security Benefits

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

DEBRA DIANNA MIDDLETON )

 ) CV 05-575-TUC-RCC [CRP]

Plaintiff, ) 

)

vs. ) 

) REPORT AND RECOMMENDATION

JOANNE B. BARNHART )

Commissioner of Social Security )

)

Defendant. )

________________________________)

Plaintiff seeks review of the final decisions of the Commissioner of Social Security

that denied her claims of disability and waiver of overpayment recovery. Plaintiff moves for

summary judgment. Defendant opposes that motion and files a cross-motion for summary

judgment. For the following reasons, this Court recommends that the District Judge, after

his independent review and consideration, DENY Plaintiff’s Motion for Summary Judgment

and GRANT Defendant’s Cross-Motion for Summary Judgment.

STATEMENT OF FACTS

On December 2, 1990, Plaintiff suffered multiple injuries in a car accident. Tr. 50,

453. As a result, Plaintiff filed for disability benefits in early 1991. Tr. 50. The Social

Security Administration (SSA) denied this application, resulting in Ms. Middleton’s request

for a hearing before an administrative law judge (ALJ). Tr. 56, 61, 63. On April 10, 1992,

the ALJ found Ms. Middleton disabled as of October 1991. Tr. 122-127. In that decision,

the ALJ denied benefits prior to October 1991 because of Plaintiff’s three months of work

activity earlier in 1991. Tr. 122-127.

Plaintiff remained on disability for the next three years, but began working in January

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1995. Tr. 136-137. The SSA allows beneficiaries to test their ability to work through a ninemonth trial work period (TWP). 20 C.F.R. § 220.170. The TWP permits individuals to work

and still collect full disability benefits. § 220.170. Should the individual successfully

complete the TWP, the 36-month extended period of eligibility (EPE) begins. 20 C.F.R. §

220.171. During the EPE, an individual can earn disability benefits for any month in which

she does not engage in substantial gainful activity. § 220.171.

Here, Ms. Middleton earned at least $416.50 each month between January and

September 1995. Tr, 137. Thus, a later disability review determined that Ms. Middleton’s

disability ended in October 1995. Tr. 138. This meant that Plaintiff successfully completed

the TWP in September 1995 and entered the EPE in October 1995. Tr. 138. In 1999, the

SSA asserted that Plaintiff engaged in substantial gainful activity during many months of the

EPE, but did not notify the SSA of this income and still collected disability benefits. Tr. 135-

141, 571-574. Consequently, the SSA notified Ms. Middleton in August 1999 that they

overpaid her by approximately $11,500. Tr. 571-574.

With this letter, the SSA included terms under which Ms. Middleton could appeal

their findings or request a waiver of the overpayment. Tr. 571-574. The letter stipulated that

Plaintiff had sixty days from receipt of the letter to request an appeal. Tr. 571-574.

Alternatively, Ms. Middleton could request waiver of overpayment recovery if she was not

at fault for the overpayment in any way. Tr. 571-574. 

Ms. Middleton did not file an appeal. In March 2003, she filed a waiver of

overpayment recovery request. In the request, Plaintiff stated that she did not tell the SSA

about her employment income because she knew she could not maintain a full-time job for

very long. Tr. 577. In addition, she agreed to pay back ten dollars per month, provided that

the SSA reinstate her disability and deduct the money from those benefits. Tr. 576-583.

Accordingly, Plaintiff had filed another application for disability benefits. Tr. 243-

245. In her application, Ms. Middleton stated that she was unable to work since August 2001

due to Post-traumatic Stress Disorder (PTSD), depression, and back injury. Tr. 182, 243.

The SSA denied Plaintiff’s application, asserting that her disability was not severe enough

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to prevent her from working. Tr. 142, 182-186. On reconsideration, the SSA upheld its

initial finding. Tr. 189-192. In addition, the SSA rejected Plaintiff’s waiver request. Tr. 592.

Plaintiff appealed these findings to an ALJ. Tr. 158.

In the interim, Plaintiff again requested waiver of overpayment recovery in January

2004, stating that the overpayment was not her fault and that she could not afford to pay the

money back. Tr. 605-612. Furthermore, Plaintiff asserted that she did not know she had to

tell the SSA about any employment during the EPE. Tr. 606. Instead, Ms. Middleton

indicated that she believed the SSA would simply deduct any earnings from disability

checks. Tr. 606.

In November 2004, an ALJ denied both Plaintiff’s waiver of overpayment request and

her disability claim. Tr. 16-27, 671. In so doing, the ALJ determined that Ms. Middleton was

not without fault in receiving the overpayment. Tr. 671. In addition, the ALJ asserted that

Ms. Middleton’s disability did not prevent her from engaging in substantial gainful activity.

Tr. 27. The SSA Appeals Council declined to review the decisions of the ALJ. Tr. 10, 660.

Plaintiff now files the immediate action. 

STANDARD OF REVIEW

The ALJ decisions to deny waiver and disability must stand unless those decisions are

unsupported by substantial evidence. 42 U.S.C. § 405(g). Substantial evidence means "more

than a mere scintilla but less than a preponderance; it is such relevant evidence as a

reasonable mind might accept as adequate to support a conclusion." Andrews v. Shalala, 53

F.3d 1035, 1039-1040 (9th Cir. 1995). If evidence is open to more than one interpretation,

courts must uphold ALJ decisions. Id.

WAIVER OF OVERPAYMENT ISSUE

When the SSA determines that it overpaid an individual, that person may appeal the

decision within sixty days of notification that the SSA overpaid. 20 C.F.R. § 404.502a, Tr.

573. Alternatively, the individual may request waiver of overpayment. 20 C.F.R. § 404.502a,

Tr. 573. In this case, Plaintiff did not appeal the overpayment determination within sixty

days. Consequently, the initial determination that the SSA overpaid is binding and not at

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issue in this case. 20 C.F.R. § 404.905. Therefore, the only issue regarding overpayment

here is whether Ms. Middleton should receive a waiver.

An individual may properly receive waiver of overpayment recovery when the

overpaid individual is without fault and (1) recovery would defeat the purpose of title II of

the Act or (2) be against equity and good conscience. 20 C.F.R. § 404.506(a). Because there

is substantial evidence that Ms. Middleton is not without fault, it is unnecessary to consider

these final two elements.

In analyzing an individual's fault, the SSA considers "all pertinent circumstances,

including the individual's age and intelligence, and any physical, mental, educational, or

linguistic limitations." 20 C.F.R. § 404.507. Additionally, the SSA determines fault by

examining whether the overpayment resulted from: 

(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. 

§ 404.507. Furthermore, the overpaid individual has the burden of proving she is without

fault. Anderson v. Sullivan, 914 F.2d 1121, 1122 (9th Cir. 1990).

Here, the ALJ found that Plaintiff's failure to furnish information about her work

activity meant she was not without fault. Tr. 670. There is substantial evidence to support

this conclusion. Beginning in 1995, Plaintiff held a series of jobs, including a full-time job

as a construction secretary for most of 1996. Tr. 268-272. Despite earning over $10,000 in

1995 and $16,000 in 1996, she failed to report this employment until April 1999. Tr. 235-

236, 268-272. As noted above, Plaintiff stated that she did not furnish this information

because she didn't know she was supposed to. Tr. 606. 

The record demonstrates, however, that Plaintiff should have known that she needed

to report this work activity sooner. In February 1991, Plaintiff filed an application for

disability benefits. Tr. 52. At that time, she agreed to inform the SSA if she returned to work.

Tr. 52. Furthermore, as noted above, the ALJ decision granting benefits as of October 1991

also rejected earlier disability benefits because of Plaintiff's three months of work activity

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earlier that year. Tr. 122-127. Thus, that decision notified Plaintiff of the importance of

reporting her work activity. Finally, in 1993, the SSA's benefit award letter to Plaintiff

included a pamphlet explaining what needed to be reported, including work activity. Tr. 130.

Consequently, there is substantial evidence to support the ALJ's decision denying waiver of

overpayment recovery.

Plaintiff suggests in her summary judgment motion, however, that she may not have

the capacity to comprehend and remember reporting requirements. As noted above, mental

limitations are mentioned as "pertinent circumstances" in the determination of fault. 20

C.F.R. § 404.507. Here, though the ALJ asserted in his overpayment decision that he

considered "all pertinent circumstances," he included no direct discussion of mental

limitations. Tr. 669-671. Even so, an ALJ is not required to issue explicit findings on each

of the factors set forth in 20 C.F.R. § 404.507. Anderson, 914 F.2d at 1123. 

Moreover, the ALJ here expressly considered Plaintiff's mental limitations in his

separate determination that Ms. Middleton was not disabled, indicating awareness of this

factor in his consideration of the overpayment issue. Tr. 19-27. Furthermore, a June 2004

psychological examination asserted that Ms. Middleton's remote memory was "good" and

that she appears capable of understanding work-related tasks. Tr. 417. 

That said, some courts recognize that claimants may not be capable of remembering

reporting requirements stipulated years earlier. In one such case, the court found it

unreasonable to expect a claimant to remember to report when her only notice of this

requirement was on the initial disability application. Jefferson v. Bowen, 794 F.2d 631, 634

(11th Cir. 1986). There, however, the claimant had only a fourth-grade education and

minimal literacy. Id. at 633. In contrast, the plaintiff here has a GED and some college

education. Tr. 621. Moreover, Ms. Middleton received notification of the reporting

requirements multiple times. Tr. 52, 125-126, 130. Therefore, substantial evidence exists to

support the ALJ's decision.

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DISABILITY ISSUE

The United States Code defines disability as “inability to engage in substantial gainful

activity by reason of any medically determinable physical or mental impairment which...can

be expected to last for a continuous period of not less than 12 months.” 42 U.S.C. §

423(d)(1)(A). Even if an applicant cannot perform her previous work, she will not qualify

as disabled if there is other substantial gainful work she could perform. 42 U.S.C. §

423(d)(2)(A). Because there is substantial evidence supporting the ALJ’s conclusion that

Plaintiff can perform substantial gainful work, this Court recommends rejecting Plaintiff’s

disability claim.

At the time of filing for disability in 2001, Plaintiff had no treating medical sources.

Tr. 20, 454. Consequently, Dr. Irwin Steinberg examined Plaintiff in February 2002 for

Disability Determination Services. Tr. 453. Dr. Steinberg’s detailed report stated that despite

some degeneration, Ms. Middleton could walk well and accomplish movements “reasonably

readily.” Tr. 458-459. 

In addition, residual functional capacity (RFC) assessments in 2002 and 2003

indicated that Plaintiff retained the ability to occasionally lift twenty pounds and frequently

lift ten pounds. Tr. 521, 530. Moreover, the RFCs asserted that Ms. Middleton could sit or

stand for about six hours in an eight-hour work day. Tr. 521, 530. 

Dr. Machelle Martinez evaluated Plaintiff’s mental condition in May 2004, at the

request of the ALJ. Tr. 419-420. Dr. Martinez asserted that Plaintiff had only a slight

impairment in regard to understanding, remembering, and carrying out simple or detailed

instructions. Tr. 419. Furthermore, Dr. Martinez found that Ms. Middleton had no extreme

impairments. Tr. 420. Dr. Martinez did note, however, that Plaintiff had moderate or marked

trouble interacting with others. Tr. 420. 

At the October 2004 ALJ hearing, an impartial vocational expert (VE) testified that

though Plaintiff could not engage in her past work, she could become a data entry or file

clerk. Tr. 656. The VE’s opinion included consideration of the RFC assessments, Dr.

Steinberg’s report, and Dr. Martinez’s opinion of Plaintiff’s mental condition. Tr. 655-656.

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In contrast, two doctors wrote letters stating that they believed Plaintiff should qualify

for disability. Tr. 415. Dr. David Flieger, a dermatologist, indicated that he treated Plaintiff

for psoriasis in July 2003. Tr. 415. Dr. Flieger recommended Plaintiff for disability benefits,

suggesting that her depression and worsening psoriasis were “serious problems.” Tr. 415.

Additionally, in January 2006, Dr. John Klein asserted his belief that Ms. Middleton could

not engage in substantial gainful activity because of her back pain. 

Even so, these statements do not eliminate the substantial evidence supporting the

ALJ’s decision. A doctors’ opinion that an applicant is disabled does not mean the SSA must

accept disability. 20 C.F.R. § 404.1527(e)(1). Furthermore, these assertions are afforded no

special significance in the disability determination. 20 C.F.R. § 404.1527(e)(3). 

Additionally, the fact that Dr. Klein’s letter advocating disability came over one year

after the ALJ’s ruling presents a problem for Plaintiff. In order for this Court to consider Dr.

Klein’s letter, Ms. Middleton must show that this new evidence is material and that she had

good cause for not bringing this evidence sooner. 42 U.S.C. § 405(g). 

New evidence is material when it bears “directly and substantially on the matter in

dispute.” Ward v. Schweiker, 686 F.2d 762, 764 (9th Cir. 1982). Here, Dr. Klein’s letter

concerns Plaintiff’s back pain, a chief issue in the ALJ’s disability determination. Therefore,

it qualifies as material evidence.

Unfortunately for Plaintiff, however, she fails to establish good cause for introducing

this new evidence. As noted by the Ninth Circuit, “[a] claimant does not meet the good cause

requirement by merely obtaining a more favorable report once his or her claim has been

denied.” Mayes v. Massanari, 276 F.3d 453, 463 (9th Cir. 2001). In addition, the claimant

must show good cause for not seeking the doctor’s opinion before the ALJ’s hearing. Id.

Here, Plaintiff had no treating sources at the time she filed for disability. Tr. 20, 454.

As Ms. Middleton herself indicates in a February 2004 letter, however, she did consult

doctors on multiple occasions after she applied. Tr. 288. In that letter, Plaintiff states that

these doctors informed her that they could find nothing wrong with her back. Tr. 288. Thus,

in light of Mayes, Plaintiff fails to establish good cause. Dr. Klein’s letter is simply a more

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favorable report that Ms. Middleton obtained after her claim was denied.

Finally, even if Plaintiff established good cause for introducing Dr. Klein’s letter, the

outcome likely would not change. As noted above, the standard of review used by this Court

does not require that a preponderance of the evidence support the ALJ’s conclusion. 

Andrews, 53 F.3d at 1039-1040. Instead, so long as an ALJ’s decision is supported by more

than a mere scintilla of evidence, courts must uphold it. Id. Here, because substantial

evidence supports the ALJ’s determination, this Court recommends rejecting Ms.

Middleton’s claim.

CONCLUSION

Though Plaintiff has some mental and physical impairment, a finding of disability is

inappropriate. At the time of filing for disability, no doctors treated Plaintiff for her physical

condition. Additionally, RFC assessments and Dr. Steinberg’s report indicate she retains

adequate physical function. Furthermore, Dr. Martinez found that Plaintiff’s only marked

or moderate mental impairments involved interaction with people. These impairments are

of lesser concern in occupations approved for Plaintiff by the vocational expert, like data

entry or filing. 

Moreover, Plaintiff fails to meet her burden of demonstrating that she is without fault

in receiving overpayments. Ms. Middleton received ample notification of the reporting

requirements, including a past ALJ decision denying her benefits on the basis of work

activity. In addition, the record indicates that Plaintiff is well-educated and retains sound

long-term memory function. Therefore, Ms. Middleton should have known that she needed

to report her work activity. Accordingly, substantial evidence exists to affirm the ALJ's

decisions.

RECOMMENDATION

For the foregoing reasons, this Court recommends that the District Judge, after its

independent review, 

1) Deny Petitioner’s Motion for Summary Judgment [Dkt 24]

2) Grant the Commissioner’s Cross-Motion for Summary Judgment [Dkt 29]

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Pursuant to Title 28 U.S.C. § 636(b), any party may serve and file written objections

within 10 days of being served with a copy of this Report and Recommendation. If

objections are not timely filed, they may be deemed waived. See United States v. ReynaTapia, 328 F.3d 1114, 1121 (9th Cir.2003) (en banc), cert. denied, 540 U.S. 900 (2003). If

objections are filed, the parties should use the following case number: CV 05-575-TUCRCC.

The Clerk of the Court is directed to send a copy of this Report and Recommendation

to all parties.

Dated this 28th day of June, 2007.

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