United States District Court, E.D. New York
MEMORANDUM & ORDER
DORA L. IRIZARRY, District Judge.
Angela Franklin ("Plaintiff"), pro se,  was overpaid Supplemental Security Income ("SSI") by the Social Security Administration ("SSA") and requested a waiver of overpayment recovery. An Administrative Law Judge ("ALJ") denied Plaintiff's request for waiver concluding that Plaintiff was overpaid benefits, Plaintiff was at fault in causing the overpayment for failing to report resources in excess of the $2, 000 maximum allowed to be eligible for SSI, and Plaintiff knew or could have been expected to know that she was receiving those benefits incorrectly. ( See Certified Administrative Record ("R."), Dkt. Entry No. 23 and 24 at 13-14.) On August 28, 2012, the Appeals Council denied Plaintiff's request for review, and the ALJ's decision became the Commissioner's final decision. (R. 2-5.)
On October 25, 2012, Plaintiff filed the instant appeal seeking review of the Commissioner's final decision pursuant to 42 U.S.C. 405(g). The Commissioner moved for judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure. (Comm'r's Mem. in Supp. of Mot. for J. on Pleadings ("Comm'r's Mem."), Dkt. Entry No. 21.) Plaintiff filed an affidavit in opposition, denying receipt of any SSI payments during the time in question, other than isolated payments from December 2007 to February 2008. (Pl.'s Aff. in Opp'n to Def.'s Mot. ("Pl. Mem."), Dkt. Entry No. 22.) Additionally, Plaintiff requested back pay from June 2008 to the present. ( Id. ) Upon review of the parties' submissions, the Court requested clarification from the Commissioner regarding the evidence in support of the overpayment at issue. ( See 7/21/2014 ECF Order.) In response, the Commissioner proposed that the parties stipulate to remand for additional proceedings. ( See Comm'r's 8/20/2014 Letter.) To date, the parties have not submitted any such stipulation.
For the reasons set forth below, the Commissioner's motion for judgment on the pleadings is denied. This action is remanded for the ALJ to determine the amount of overpayment that Plaintiff received during the period in which her bank account exceeded the $2, 000 statutory threshold, as well as whether Plaintiff purposely disposed of assets below market value, such that she is subject to a three-year penalty of ineligibility.
Plaintiff has not worked since 1986 and lives in a home that she co-owns with her brother and sister. (R. at 165.) On January 27, 1997, Plaintiff began receiving SSI. (R. 17.). On March 4, 2008, the SSA sent Plaintiff a notice that, as of February 2006, she no longer qualified for SSI as the SSA had learned that she had resources in excess of $2, 000. (R. 41-50.) On May 8, 2008, Plaintiff filed a request for reconsideration, which was denied. (R. 55-56, 69-71.) On August 18, 2010, Plaintiff filed a request for a hearing which was granted. (R. 72.) Additionally, Plaintiff filed for a waiver of overpayment recovery. However, Plaintiff failed to attend the requisite conference and the waiver was denied. (R. 67.)
At the hearing, Plaintiff testified that her father passed away and that she inherited $20, 000 from his estate in April 2006. (R. 161.) Plaintiff testified that "$9, 000 and change went towards" paying for her father's funeral and the rest of the money, more than $10, 000, went towards maintenance of the home she co-owns with her brother and sister. (R. 163.) The ALJ requested bank statements from Plaintiff for the period of February 2006 to January 2008. (R. 170.) The ALJ warned Plaintiff that, if at any time during that period, Plaintiff's account balance exceeded $2, 000, she would be ineligible for SSI. (R. 171-172.) Additionally, the ALJ warned Plaintiff that disposing of assets for less than their fair market value to qualify for SSI carries a penalty of up to 36 months of ineligibility for SSI. (R. 171.)
Shortly thereafter, the ALJ received Plaintiff's bank records. (R. 93-149.) A review of these records indicates that, during the entire period in question, Plaintiff's account balance exceeded the statutory threshold. ( Id. ) Indeed, in June 2006, her account held a balance of $86, 731.96. (R. 101.)
On November 23, 2010, the ALJ issued his decision. (R. 8.) Based on the bank statements and Plaintiff's testimony, the ALJ determined that Plaintiff was overpaid SSI benefits because she had an account balance in excess of $2, 000 from February 1, 2006 to January 2008 and Plaintiff was faulted for knowingly accepting the incorrect payments and making no effort to return them. (R. 13-14.) The ALJ denied Plaintiff a waiver for recovery of payment and determined that Plaintiff was liable for repayment of $4, 981.60. (R. 14.) The ALJ made no findings as to whether Plaintiff was subject to the three-year penalty.
A. Standard of Review
Claimants may bring an action in federal district court seeking judicial review of the Commissioner's denial of a waiver of overpayment recovery "within sixty days after the mailing... of notice of such decision or within such further time as the Commissioner of Social Security may allow." 42 U.S.C. § 405(g). A district court reviewing the final determination of the Commissioner must decide whether the ALJ applied the correct legal standards and whether substantial evidence supports the decision. See Schaal v. Apfel, 134 F.3d 496, 504 (2d Cir. 1998). The former determination requires the court to ask whether "the claimant has had a full hearing under the [Commissioner's] regulations and in accordance with the beneficent purposes of the [Social Security] Act." Echevarria v. Sec'y of Health & Human Servs., 685 F.2d 751, 755 (2d Cir. 1982) (internal quotation marks omitted). The latter determination requires the court to ask whether the decision is supported by "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Richardson v. Perales, 402 U.S. 389, 401 (1971) (quoting Consol. Edison Co. v. N.L.R.B., 305 U.S. 197, 229 (1938)).
The district court is empowered "to enter, upon the pleadings and transcript of the record, a judgment affirming, modifying, or reversing the decision of the Commissioner of Social Security, with or without remanding the cause for a rehearing." 42 U.S.C. § 405(g). A remand by the court for further proceedings is appropriate when "the Commissioner has failed to provide a full and fair hearing, to make explicit findings, or to have correctly applied the... regulations." Manago v. Barnhart, 321 F.Supp.2d 559, 568 (E.D.N.Y. 2004). A remand to the Commissioner is also appropriate "[w]here there are gaps in the administrative record." Rosa v. Callahan, 168 F.3d 72, 83 (2d Cir. 1999) (quoting Sobolewski v. Apfel, 985 F.Supp. 300, 314 (E.D.N.Y. 1997)). ALJs, ...