Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_17-cv-01677/USCOURTS-casd-3_17-cv-01677-0/pdf.json

Nature of Suit Code: 864
Nature of Suit: Social Security - SSID Title XVI
Cause of Action: 42:1381a Supplemental Security Income benefits (SSID)

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– 1 – 17-cv-1677 DMS (JMA)

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

MATTHEW W. ARGUE and 

MICHELLE ARGUE,

Plaintiffs,

Case No. 17-cv-1677 DMS (JMA)

ORDER (1) GRANTING 

PLAINTIFF’S MOTION FOR 

SUMMARY JUDGMENT AND (2) 

DENYING DEFENDANT’S 

CROSS-MOTION FOR 

SUMMARY JUDGMENT

v.

NANCY A. BERRYHILL, Acting

Commissioner of Social Security,

Defendant.

Plaintiff Matthew M. Argue, proceeding pro se, moves for reversal or remand 

of Defendant Commissioner of Social Security’s decision denying his request for 

waiver of overpayment. Defendant opposes Plaintiff’s motion and cross-moves for 

summary judgment. For the reasons discussed below, Plaintiff’s motion is granted, 

and Defendant’s motion is denied. The ALJ’s decision is remanded for further 

consideration.

I.

BACKGROUND

Relevant to the present action, Plaintiff began receiving disability insurance 

benefits pursuant to Title II of the Social Security Act in November 2002, after he 

was diagnosed with testicular cancer. (Administrative Record (“AR”) at 432.) In 

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July 2005, Plaintiff began to work under the Ticket to Work program, which assists 

disabled individuals “in obtaining the services necessary to find, enter and retain 

employment” to reduce their dependency upon disability benefits. (Id.); 20 C.F.R. 

§ 411.105. The program consists of a “trial work period,” which allows beneficiaries 

to perform work activity for up to nine months total and “still be considered 

disabled,” i.e. not lose their eligibility for benefits or have their benefit payments 

suspended. 20 C.F.R. § 404.1592(a). Plaintiff completed the nine-month trial work 

period in October 2007. (AR at 33, 97, 102, 162–63.) 

Beneficiaries who complete a full nine-month trial work period and still have 

a “disabling impairment” as defined in 20 C.F.R. § 404.1511 may continue to test 

their ability to work during a 36-month “reentitlement period,” also known as an 

extended period of eligibility. 20 C.F.R. § 404.1592a. Plaintiff’s extended period 

of eligibility began in November 2007, at which time Plaintiff returned to work at a 

substantial gainful activity level and continued to collect disability benefits. (AR at 

97, 163, 362, 466.) On October 1, 2008, Plaintiff received a notice of overpayment, 

which he appealed. (Id. at 362, 364.) On September 15, 2010, Administrative Law 

Judge Mason D. Harrell, Jr. concluded, in part, the overpayment should be waived, 

explaining Plaintiff was without fault because he had received misinformation from 

a Social Security Administration (“SSA”) employee regarding the Ticket to Work 

program, and recovery would defeat the purpose of Title II of the Act and be against 

equity and good conscience. (Id. at 363–64.)

In October 2009, Plaintiff was diagnosed with acute lymphoid leukemia. 

Subsequently, a SSA employee Jennifer Lisk filed a request for expedited 

reinstatement of benefits on behalf of Plaintiff, and as a result, Plaintiff continued to 

receive disability benefits. (AR at 163, 165, 432.) Plaintiff’s extended period of 

eligibility ended in December 2010, when Plaintiff returned to work in January 2011 

and has worked at a level of substantial gainful activity. (Id. at 97, 432, 466.) 

Nevertheless, Plaintiff continued to receive disability insurance benefits through 

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February 2012. (Id.) On February 29, 2012, the SSA sent Plaintiff and his family a 

notice of overpayment of benefits.1 (Id. at 102–07.) On August 27, 2012, Plaintiff 

and his family members each requested a waiver, stating the overpayment was not 

their fault and they could not afford to pay it back. (Id. at 117–27.) Subsequently, 

the field office denied their requests for a waiver. (Id. at 146–51.) After a timely 

request for a hearing, Plaintiff appeared and testified before ALJ Eric V. Benham on 

September 4, 2014.2 (Id. at 464–87.)

On November 7, 2014, the ALJ issued a written decision, finding that Plaintiff 

was not entitled to a waiver of the overpayment because he was not without fault.3 

(AR at 433.) Plaintiff filed a request for review of that decision, which the Appeals 

Council denied on April 28, 2017. (Id. at 23–26.) Plaintiff filed the present action 

on August 22, 2017.

II.

LEGAL STANDARD

When a claimant receives more disability benefits than he is entitled to, an 

overpayment has been made and the Social Security Administration is entitled to 

recover the overpayment. 20 C.F.R. § 404.501. Recovery of the overpayment may 

be partially or completely waived in certain circumstances. Under the regulations, 

repayment may be waived if the claimant was without fault and if recovery would 

defeat the purpose of the Act or be contrary to equity and good conscience. 20 

 

1 The family was collectively overpaid a total amount of $43,567.00, consisting of 

overpayments of $29,838.80 to Plaintiff, $4,197.00 to Plaintiff’s spouse, and 

$4,766.00 each to Plaintiff’s two children for the period from January 1, 2011 to 

February 28, 2012. (AR at 111–16, 229, 292.)

2 At the hearing, the ALJ consolidated the cases of Plaintiff and family members, 

who individually appealed the decision of the SSA denying his or her request for 

waiver, and the ALJ appears to have erroneously stated that each claimant was 

overpaid benefits of $43,567.00. (See AR at 44, 52, 60, 432) (“The claimant was 

overpaid benefits in the total amount of $43,567.00 during the [relevant] period”).

3 Here, only the ALJ’s decision on Plaintiff’s case is at issue as Plaintiff’s spouse 

did not move for summary judgment and his children are not parties to this action.

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C.F.R. § 404.506. Fault is defined as:

(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.

20 C.F.R. § 404.507. “[T]he regulation requires the ALJ to make fact findings 

regarding the three definitions of fault.” Anderson v. Sullivan, 905 F.2d 1540 (9th 

Cir. 1990). The ALJ must “consider all pertinent circumstances, including the 

individual’s age and intelligence, and any physical, mental, educational or linguistic 

limitations (including any lack of facility with the English language) the individual 

has.” 20 C.F.R. § 404.507. The claimant has the burden of proving that he was 

without fault. Anderson, 914 F.2d at 1122.

The court must affirm the ALJ’s refusal to waive repayment if the decision is 

“supported by substantial evidence and if the [ALJ] applied the proper legal 

standards.” Anderson, 914 F.2d at 1122. Substantial evidence is “such relevant 

evidence as a reasonable mind might accept as adequate to support a conclusion” 

and is more than a “mere scintilla” of the evidence but less than a preponderance. 

Molina v. Astrue, 674 F.3d 1104, 1110 (9th Cir. 2012) (internal quotation omitted).

III.

DISCUSSION

Plaintiff initially argues the ALJ failed to apply proper legal standards. The 

ALJ concluded Plaintiff “was not without fault in causing this overpayment, in that 

he worked at a level of substantial gainful activity, while receiving benefits.” (AR 

at 433.) However, it is unclear on precisely which basis the ALJ found Plaintiff to 

be at fault. As stated above, a finding of “fault” arises where incorrect information 

was given which the claimant knew or should have known was incorrect; where the 

claimant failed to furnish material information; or where the claimant accepted

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payments which the claimant knew or could have been expected to know was 

incorrect. See 20 C.F.R. § 404.507 (a)–(c). Although the ALJ’s decision may be 

interpreted as making an implicit finding under subsection (c), i.e., Plaintiff knew or 

should have known the overpayment was incorrect, this is insufficient because “the 

regulation requires the ALJ to make fact findings regarding the three definitions of 

fault.” Anderson, 914 F.2d at 1123. The ALJ must consider the “‘pertinent 

circumstances’ in determining whether ‘the facts show that the incorrect payments 

to the individual . . . resulted from’ the three criteria of fault.” Id. (quoting 20 C.F.R. 

§ 404.507). The ALJ’s decision, however, neither discussed nor applied the 

standards for determining fault set forth in subsections (a) through (c) in § 404.507. 

As a result, it is uncertain which ground(s) the ALJ found pertinent.

Moreover, Plaintiff contends the ALJ erred by failing to make any adverse 

findings as to Plaintiff’s credibility in determining fault. “[C]ourts have consistently 

recognized the need for full and detailed findings of fact essential to the [ALJ’s] 

conclusion.... and the courts have consistently required that there be an explicit 

finding whether the [ALJ] believed or disbelieved the claimant whenever the 

claimant’s credibility is a critical factor in the [ALJ’s] decision.” Albalos v. Sullivan, 

907 F.2d 871, 873 (9th Cir. 1990) (quoting Lewin v. Schwieker, 654 F.2d 631, 635 

(9th Cir. 1981)); see Rashad v. Sullivan, 903 F.2d 1229, 1231 (9th Cir. 1990) 

(requiring “an explicit credibility finding whenever the claimant’s credibility is a 

critical factor in the [ALJ’s] determination”). Here, Plaintiff’s credibility was 

critical to the determination of fault. Plaintiff argued he believed he was entitled to 

the overpayment based on his good faith belief that he was eligible for a second trial 

work period. Plaintiff explained Ms. Lisk filed the request for reinstatement of 

benefit without his authorization or knowledge. (AR at 11, 165.) Moreover, 

Plaintiff claimed Ms. Lisk did not explain to him that taking advantage of the 

expedited reinstatement provision would preclude his eligibility for a second trial 

work period. (Id. at 172, 477.) As a result, prior to receiving a notice from the SSA 

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regarding overpayment, Plaintiff believed he was entitled to a second trial work 

period based on his new disability of acute lymphoid leukemia. (Id. at 172, 470.) 

Nevertheless, the ALJ did not make an explicit finding as to whether he believed or 

disbelieved Plaintiff’s testimony. Because the ALJ’s decision neither expressly 

discredited Plaintiff’s testimony nor articulated any reasons for questioning his

credibility, it cannot stand. Lewin, 654 F.2d at 635.

The Court has discretion in determining whether to reverse or remand a social 

security case. See Lewin, 654 F.2d at 635. Here, the failure to make adequate 

findings “necessitate a remand for a redetermination of fault.” Id. Because 

“additional proceedings can remedy defects in the original administrative 

proceedings,” this case is remanded the ALJ for further consideration. Id.

IV.

CONCLUSION

For the reasons stated above, Plaintiff’s motion for summary judgment is 

granted and Defendant’s cross-motion for summary judgment is denied. 

Accordingly, the case is remanded for further proceedings consistent with this 

opinion. Upon remand, the ALJ is instructed to make a determination after 

application of the proper law to all pertinent evidence in the record and fully explain 

the legal and factual bases for these determinations. The Clerk of Court is directed 

to enter judgment and close the case.

IT IS SO ORDERED.

Dated: May 7, 2018

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