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SCIME v. SECRETARY OF HHS

November 7, 1986

MARIA ANN SCIME, Plaintiff,
v.
SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant



The opinion of the court was delivered by: CURTIN

This is an action brought under section 205(g) of the Social Security Act, 42 U.S.C. § 405(g), to review a final determination of the Secretary of Health and Human Services, which denied plaintiff's application for child's insurance benefits retroactive to the date of plaintiff's eligibility. This matter is before the court on the motion for judgment on the pleadings.

The sole issue in this action is the date upon which claimant Maria Scime became entitled to receive surviving child's benefits after the death of her mother. The Administrative Law Judge [ALJ] who presided at claimant's original hearing determined that her entitlement commenced on September 30, 1978, the date of her mother's death. The ALJ who presided at claimant's supplemental hearing recommended a commencement date of June, 1981. The Appeals Council rejected the determinations of both ALJs, and twice held that the claimant's entitlement commenced in September, 1981, six months retroactive from the March, 1982, date of her first formal application for benefits.

I. Procedural History

 The procedural history of this case is complicated and requires some review. In general, it is a troubling history of careless errors by the Social Security Administration § SSA] on matters especially entrusted to it, made more troubling by the Administration's contention that it should take no responsibility for those errors.

 The central fact of this case is that the government failed to compute five years of earnings by the claimant's mother and, therefore, incorrectly determined that the claimant's mother was not an insured person at the time of her death. The records of the SSA represented this error of fact as true for more than three years. The error was corrected only after prompting by the claimant's father, Samuel Scime, who discovered that there might be a problem through reading a series of articles in the daily newspaper about losses in records transferred from the Railroad Retirement Board to the SSA. The corrected records indicated that the claimant's mother was a fully insured person.

 After the records were corrected, Samuel Scime, in March of 1982, made written application for lump sum burial benefits to defray the expenses of his wife's burial. He also applied on behalf of his daughter for surviving child's benefits from September 30, 1978, the date of her mother's death. These applications were denied initially and on reconsideration upon the ground of late filing of a written application by the claimants (Tr., pp.108-110). The claimants thereafter requested a hearing, which was held on August 16, 1982, before ALJ Lambert Haley.

 After a full hearing, Judge Haley found that the SSA records had been in error through 1981, as noted above, that the claimants had orally inquired about benefits a few weeks after Mrs. Scime's death, and that the SSA had advised the claimant by letter that Mrs. Scime was not an insured person. The ALJ determined that the SSA's denial through 1981 that Mrs. Scime was an insured person estopped the SSA from now barring these claims upon the ground of late filing of a written application. Judge Haley concluded that Mr. Scime's claim for lump sum burial benefits should be paid and that Maria Scime was entitled to surviving child's benefits as of the September 30, 1978, date of her mother's death. The ALJ reached this decision on October 13, 1982. Lump sum burial benefits of $255 were paid on Mr. Scime's claim pursuant to the decision (Tr., p.141), and that claim has not since been contested.

 On January 28, 1983, after expiration of the normal 60-day appeal period, Judge Haley's decision was referred to the Office of Insurance Programs for a "clarification" (Tr., p.37). On February 28, 1983, that office sent a memorandum back to the Office of Appeals, disagreeing with the decision of Judge Haley. The Appeals Council reopened the case on September 20, 1983, upon the ground urged by the memorandum from the Office of Insurance Programs: namely, that the SSA, regardless of its own misrepresentations, could not be estopped from enforcing the requirement that applications be made in writing (Tr., pp.30-33, 120). The Appeals Council reopened Judge Haley's decision pursuant to the authority of 20 C.F.R. §§ 404.988(b) and 404.989(a)(3) (Tr., p.3), which allows reopening within four years if "the evidence that was considered in making the determination or decision clearly shows on its face that an error was made."

 On February 28, 1984, the Appeals Council reversed the decision Judge Haley had reached on October 13, 1982. The Appeals Council held that the claimant was entitled to benefits only from March, 1982, when she made written application, plus the six months' retroactive eligibility allowed by section 404.621(a)(ii). This placed the claimant's entitlement date at September, 1981, instead of September, 1978, as found by Judge Haley. The Appeals Council stated that it had "carefully considered . . . the entire evidence of record" (Tr., p.31) in reaching its decision. However, when the claimant appealed for review by the district court, the taped transcript of claimant's hearing was discovered to be inaudible.

 Because of the inaudible hearing tape, the district court in November, 1984, remanded the claimant's case for a new hearing. The transcript of this second hearing (Tr., pp.51-97) is a record of great confusion, as could be expected. At the hearing, ALJ Simon J. Nash indicated that he did not understand how the Appeals Council could have reopened Judge Haley's decision. It was not clear to him whether payments had been made to the claimants, why the lump sum burial payment was apparently no longer contested, and why there were documents in the record (Tr., p.13) indicating an action by the SSA to recoup payments made to the claimants. Indeed, this court has been hard-pressed to make sense of the record on these matters. I note here that as to the documents seeking recoupment of overpayments, I have proceeded according to a provisional understanding that this matter derives from another error by the SSA not related to the present issue. Apparently, the SSA mistakenly paid the claimant child survivor benefits beyond the date upon which it claims she lost her eligibility due to age. It now seeks to recover those payments. This issue would thus be separate from the issue of when the claimant first became entitled to benefits. ALJ Nash ultimately reached this conclusion (Tr., p.15), and claimant's counsel has not indicated anything to the contrary.

 Judge Nash, after claimant's second "Supplemental Hearing," reiterated the basic factual findings of Judge Haley, including the finding that the claimants made oral inquiries to the SSA about benefits shortly after Mrs. Scime's death and that the SSA erroneously advised the claimants that Mrs. Scime was not an insured person (Tr., pp.17-18).

 However, Judge Nash concluded from his findings that the critical event for determining the commencement date of claimant's benefits was not Mrs. Scime's death, or the oral inquiries and erroneous responses concerning benefits in the wake of her death, but rather a December, 1981, telephone call by Mr. Scime to the SSA Office. It was during this call that Mr. Scime asked specific questions about whether the SSA's records fully reflected Mrs. Scime's railroad employment, an issue which had been brought to Mr. Scime's attention by a recent series of articles in the daily paper. Mr. Scime was again informed that SSA records showed that his deceased wife was not an insured person. Judge Nash concluded that an SSA employee's written "report of contact" covering this telephone call established a protective filing date for a subsequent formal application for benefits in March, 1982.

 Judge Nash further concluded that no written application for child's insurance benefits or written statement of intent to claim such benefits had been filed prior to December, 1981, and that the date of entitlement was thus six months retroactive to that date, or June, 1981.

 Upon review, the Appeals Council rejected the determination of Judge Nash and again found that the claimant was entitled to benefits only from a date six months retroactive to ...


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