Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_15-cv-00880/USCOURTS-caed-2_15-cv-00880-2/pdf.json

Parties Involved:
Commissioner of Social Security
Defendant
Steven McElvain
Plaintiff

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UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

STEVEN MCELVAIN

Plaintiff,

v.

COMMISSIONER OF SOCIAL 

SECURITY,

Defendant.

No. 2:15-cv-0880-KJN PS

ORDER

Plaintiff Steven McElvain, proceeding without counsel, seeks judicial review of a final 

decision by the Commissioner of Social Security (“Commissioner”), denying a waiver of 

recovery of an overpayment of Disability Insurance Benefits (“DIB”) under Title II of the Social 

Security Act. After the administrative record of the proceedings below was filed in this court, 

plaintiff filed a motion for summary judgment. (ECF No. 11.) The Commissioner opposed that 

motion and filed a cross-motion for summary judgment. (ECF No. 16.) No optional reply brief 

was filed. After carefully considering the parties’ written briefing, the record, and the applicable 

law, the court DENIES plaintiff’s motion for summary judgment, GRANTS the Commissioner’s 

cross-motion for summary judgment, and AFFIRMS the final decision of the Commissioner.

The court reviews the Commissioner’s decision to determine whether (1) it is based on 

proper legal standards pursuant to 42 U.S.C. § 405(g), and (2) substantial evidence in the record 

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as a whole supports it. Tackett v. Apfel, 180 F.3d 1094, 1097 (9th Cir. 1999). Substantial 

evidence is more than a mere scintilla, but less than a preponderance. Connett v. Barnhart, 340 

F.3d 871, 873 (9th Cir. 2003) (citation omitted). It means “such relevant evidence as a reasonable 

mind might accept as adequate to support a conclusion.” Orn v. Astrue, 495 F.3d 625, 630 (9th 

Cir. 2007), quoting Burch v. Barnhart, 400 F.3d 676, 679 (9th Cir. 2005). “The ALJ is 

responsible for determining credibility...and resolving ambiguities.” Edlund v. Massanari, 253 

F.3d 1152, 1156 (9th Cir. 2001) (citation omitted). “The court will uphold the ALJ’s conclusion 

when the evidence is susceptible to more than one rational interpretation.” Tommasetti v. Astrue, 

533 F.3d 1035, 1038 (9th Cir. 2008).

Plaintiff, a registered nurse, began receiving DIB as of May 2009. (AT 13, 40, 42, 179.) 

Around July 2010, plaintiff returned to work, but nonetheless continued receiving DIB until 

February 2013. (AT 29, 38, 142.) On March 5, 2013, the Commissioner issued a notice 

informing plaintiff that he was overpaid DIB in the amount of $32,478.00 from August 2011 

through February 2013, due to his earnings having exceeded substantial gainful activity levels 

during that period. (AT 13, 25-28, 29-31.) Plaintiff’s earnings records confirm that his income

during that period was generally between $4,000.00 and $7,000.00 per month, and far exceeded 

substantial gainful activity levels. (AT 28.) After a March 18, 2014 hearing, an administrative 

law judge (“ALJ”) issued a decision dated May 1, 2014, holding that plaintiff was overpaid DIB 

in the amount of $32,478.00 during the period from August 2011 through February 2013; that 

plaintiff was at fault in causing the overpayment; and that recovery of the overpayment was not 

waived. (AT 13-16, 171-90.) Subsequently, on November 28, 2014, the Appeals Council denied 

plaintiff’s request for review, making the ALJ’s decision the final decision of the Commissioner. 

(AT 5-7.) 

On appeal before this court, plaintiff does not dispute the fact that an overpayment was 

made, nor does he challenge the Commissioner’s computation of the amount of that overpayment. 

Instead, plaintiff contends that the ALJ erred in concluding that recovery of the overpayment 

should not be waived under applicable law. For the reasons discussed below, that argument is 

unpersuasive. 

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“In any case in which more than the correct amount of payment has been made, there shall 

be no adjustment of payments to, or recovery by the United States from, any person who is 

without fault if such adjustment or recovery would defeat the purpose of [Title II of the Act] or 

would be against equity and good conscience.” 42 U.S.C. § 404(b)(1) (emphasis added); see also

20 C.F.R. § 404.506(a). Even though the Commissioner “may have been at fault in making the 

overpayment, that fact does not relieve the overpaid individual...from liability for repayment if 

such individual is not without fault.” 20 C.F.R. § 404.507. In determining whether an individual 

is “without fault,” the Commissioner “shall specifically take into account any physical, mental, 

educational, or linguistic limitation such individual may have (including any lack of facility with 

the English language).” 42 U.S.C. § 404(b)(2); see also 20 C.F.R. § 404.507 (directing the 

Commissioner to consider “all pertinent circumstances, including the individual’s age and 

intelligence, and any physical, mental, educational, or linguistic limitations”). An overpaid 

individual may be deemed at fault if he or she accepted a payment which he or she “either knew 

or could have been expected to know was incorrect.” 20 C.F.R. § 404.507. “The overpaid 

individual bears the burden of proving that he was without fault.” McCarthy v. Apfel, 221 F.3d 

1119, 1126 (9th Cir. 2000).

In this case, it is undisputed that the Commissioner was at fault in making the 

overpayment. In fact, the Commissioner effectively concedes that plaintiff notified the 

Commissioner of his return to work and accurately reported his earnings, but that the 

Commissioner erroneously continued to pay plaintiff DIB until February 2013. The pertinent 

question is whether plaintiff himself had any fault with respect to the overpayment. 

Here, the ALJ reasonably found that plaintiff was not without fault, because he accepted 

payments that he either knew, or at a minimum, could have been expected to know, were 

incorrect. As the ALJ noted, in March 2011, and again in January 2012, plaintiff was sent the 

pamphlet regarding work-related eligibility issues, “Working While Disabled - How We Can 

Help.” (AT 15, 118, 146.) Although the pamphlet generally indicates that income should be 

reported to the Commissioner for review of eligibility, which plaintiff undisputedly did, the 

pamphlet also makes clear that benefits should stop if a claimant makes more than a certain 

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amount per month; for example, $1,130.00 in 2016. See https://www.ssa.gov/pubs/EN-05-

10095.pdf. Additionally, in a letter dated February 9, 2012, the Commissioner again outlined the 

amount of monthly earnings considered to be substantial work, ranging from $980.00 in 2009 to 

$1,010.00 in 2012. (AT 69-72.) Given that plaintiff’s earnings during the relevant period 

generally ranged from $4,000 to $7,000 per month, plaintiff, a well-educated registered nurse 

with no pertinent mental, cognitive, educational, or linguistic limitations, knew or should have 

known that he was not entitled to DIB during that time. (AT 15.) 

Indeed, as the ALJ observed, plaintiff’s own actions suggested that plaintiff understood 

the effect of his work activity on his eligibility for DIB. (AT 15.) In a December 5, 2011 note, 

plaintiff stated: “I have been working full time since 2010. Please, if I am no longer eligible for 

SSDI, please stop the benefits.” (AT 142.) Shortly thereafter, in a December 14, 2011 telephone 

call with plaintiff, it was noted that plaintiff had undergone successful heart surgery and had 

returned to work: “He is working full-time and understands that his benefits should stop as he is 

well over SGA [substantial gainful activity]. In fact, he wants the benefits to stop. He also 

alleged returning the Medicare card as he is fully insured by his employer.” (AT 17.) Thereafter, 

in a February 3, 2012 work activity report, plaintiff again requested that disability benefits be 

ceased, because he had returned to work full time and “no longer need[ed]” the benefits. (AT 

130.) Nevertheless, plaintiff continued to accept DIB benefits until February 2013 instead of

returning them. See Manitsas v. Astrue, 2012 WL 2503267, at *5 (N.D. Cal. Jun. 28, 2012)

(unpublished) (“The fact that Manitsas accepted the payments despite her awareness that she was 

no longer due benefits substantially supports the ALJ’s conclusion that she was not ‘without 

fault’ for the overpayment of benefits.”).1 

 

1 As the ALJ acknowledged, on March 16, 2012, the Commissioner notified plaintiff that he was 

no longer entitled to DIB for July 2011 because of substantial work, but then incorrectly stated 

that plaintiff was again entitled to DIB for months beginning in August 2011 “because you are no 

longer doing substantial work.” (AT 15, 18.) However, that letter could not have reasonably

misled plaintiff, because it was based on an erroneous assumption (that plaintiff was no longer 

performing substantial work) that should have been obvious to plaintiff. Instead of informing the 

Commissioner of the error, plaintiff continued to accept the DIB checks. As such, the March 16, 

2012 letter does not materially affect the determination that plaintiff was not without fault. 

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To be sure, the court is not unsympathetic to plaintiff’s frustration with the 

Commissioner’s failure to have ceased payment of DIB when plaintiff accurately reported his 

return to work and earnings. As noted above, there is no question that the Commissioner was at 

fault. That said, under applicable law, the inquiry for purposes of whether recovery should be 

waived is focused not on the Commissioner’s fault, but on whether plaintiff himself had any fault 

with respect to the overpayment. Because substantial evidence supports the ALJ’s finding that 

plaintiff accepted payments that he either knew, or at a minimum, could have been expected to 

know, were incorrect, the ALJ reasonably found that plaintiff was not without fault.2 

In sum, the court finds that the ALJ’s decision was free from prejudicial legal error and 

supported by substantial evidence in the record as a whole. Accordingly, IT IS HEREBY 

ORDERED that:

1. Plaintiff’s motion for summary judgment (ECF No. 11) is DENIED.

2. The Commissioner’s cross-motion for summary judgment (ECF No. 16) is 

GRANTED.

3. The final decision of the Commissioner of Social Security is AFFIRMED, and 

judgment is entered for the Commissioner.

4. The Clerk of Court shall close this case.

IT IS SO ORDERED.

Dated: July 22, 2016

 

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In the alternative, the Commissioner argues that, even assuming that plaintiff was without fault, 

waiver of recovery would not be permitted, because: (1) plaintiff has the ability to repay the 

overpayment based on his declared income and expenses, and recovery would not defeat the 

purposes of Title II of the Act; and (2) recovery would not be against equity and good conscience, 

given that the record does not show that plaintiff changed his position for the worse or 

relinquished a valuable right in reliance on the overpayment. (AT 41, 50-51.) See 42 U.S.C. § 

404(b)(1); 20 C.F.R. § 404.506(a). However, in light of the court’s conclusion that substantial 

evidence supports the ALJ’s determination that plaintiff was not without fault in causing the 

overpayment, the court declines to reach those alternative arguments. 

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