Source: https://law.justia.com/cases/federal/appellate-courts/F2/718/507/417084/
Timestamp: 2019-07-17 16:20:09
Document Index: 143295431

Matched Legal Cases: ['§ 414', '§ 413', '§ 410', '§ 410', '§ 557', '§ 405']

Joseph S. Oldham, Plaintiff, Appellant, v. Secretary of Health and Human Services, Defendant, Appellee, 718 F.2d 507 (1st Cir. 1983) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › First Circuit › 1983 › Joseph S. Oldham, Plaintiff, Appellant, v. Secretary of Health and Human Services, Defendant, Appell...
Joseph S. Oldham, Plaintiff, Appellant, v. Secretary of Health and Human Services, Defendant, Appellee, 718 F.2d 507 (1st Cir. 1983)
US Court of Appeals for the First Circuit - 718 F.2d 507 (1st Cir. 1983)
Argued Sept. 9, 1983. Decided Oct. 6, 1983
Plaintiff needed an additional quarter of coverage to be fully insured for old-age insurance benefits under the Social Security Act. See 42 U.S.C. § 414(a) (1976). He contended that compensation received in return for his activities in connection with a house owned by his mother-in-law established another quarter of coverage. See 42 U.S.C. § 413 (1976). These activities included maintenance work and rent collection over a period of time. The arrangement was informal. Plaintiff originally did not expect compensation, but a different understanding was later formed. When the house was sold he was paid $689 out of the proceeds apparently for his activities. The critical question was whether the payment constituted wages for services as an employee. See 42 U.S.C. § 410 (1976).
The ALJ decided that the relationship was one of employment, and allowed credit. In the course of the findings he stated that "[Oldham] was an employee of his wife, who hired him under a power of attorney." The assertion that he was employed by his wife indicates that the ALJ's decision to count the remuneration as wages embodied an error of law. The Social Security Act provides that compensable employment "shall not include ... [s]ervice performed by an individual in the employ of his spouse." 42 U.S.C. § 410(a) (3) (A) (1976).
We begin with the general proposition that "[an] agency has all the powers [on review of an initial decision] which it would have in making the initial decision except as it may limit the issues on notice or by rule." 5 U.S.C. § 557(b) (1976). See 2 Fed.Proc.L. Ed. Sec. 2:169 (1981). Assuming but not deciding that Sec. 404.970 might be construed to limit the Appeals Council's right to review to the four grounds expressly provided, we are unable to find the Council erred in exercising jurisdiction over Oldham's case on the basis of a perceived error of law. The ALJ's decision was at least colorably predicated on an error of law because it appeared to count wages earned as an employee of a spouse. The Council's evident interpretation of its jurisdiction under Sec. 404.970 to review the ALJ's decision on this basis is entitled to substantial weight. Cf. Bowles v. Seminole Rock Co., 325 U.S. 410, 414, 65 S. Ct. 1215, 1217, 89 L. Ed. 1700 (1945) (observing that the Office of Price Administration's interpretation of its own regulation "becomes of controlling weight unless it is plainly erroneous or inconsistent with the regulation").
Accepting the Council's authority to examine the entire record, there is adequate support for the Appeals Council's decision on the merits. Plaintiff suggests that the Council was bound by the findings of the ALJ. The ALJ's findings and conclusions represent recommendations to the Secretary; the Council is free to independently weigh the evidence and arrive at its own findings and conclusions. See McCann v. Califano, 621 F.2d 829, 831-32 (6th Cir. 1980); Beavers v. Secretary of Health, Ed. & Welfare, 577 F.2d 383, 386-87 (6th Cir. 1978). See generally 2 Fed.Proc.L. Ed. Sec. 2:169 (1981). But see Novak v. Schweiker, 524 F. Supp. 795, 799 & n. 2 (N.D. Ill. 1981). The Council was free to conclude that in spite of the ALJ's possibly contrary opinion, or the assertions of the plaintiff, the weight of the evidence did not support a finding of an employer-employee relationship.2
The plaintiff contends that a determination whether a work relationship amounts to employment ultimately "boils down to the credibility of the claimant," and that the Council erred in not deferring to the ALJ's finding that Oldham's description of his relationship with his mother-in-law was credible. While the Council is required to give some weight to the ALJ's finding of credibility, our question is whether substantial evidence supports the Council's decision as a whole. 42 U.S.C. § 405(g) (1976). See McCann, 621 F.2d at 831-32; Beavers, 577 F.2d at 386-87. In this case the Council made clear its opinion that the record reflected an absence of factors typically indicating the existence of an employer-employee relationship. See 20 C.F.R. Sec. 404.1007(b) (1982). The Council decision suggests the finding of no employment relationship turned on the absence of sufficient criteria, not on Oldham's credibility
We also find no merit in plaintiff's apparent contention that the Council erred as a matter of law in concluding that Oldham's informal work relationship with his wife and mother-in-law did not constitute employment for purposes of old-age insurance coverage. "In a case involving closely related and closely living individuals claiming an employer-employee relationship, the entire picture of the history and circumstances of the parties must be considered." Velez v. Secretary of Health, Ed. & Welfare, 608 F.2d 21, 24 (1st Cir. 1979) (citations omitted). In this case the Council examined the complete record and applied standards defined in Sec. 404.1007(b). The balance reached by the Council in favor of no employer-employee relationship was within the range permitted by law.