United States District Court, N.D. New York
SELIM SERO, Binghamton, New York, Plaintiff pro se.
SIXTINA FERNANDEZ, ESQ., Special Assistant United States Attorney, RICHARD S. HARTUNIAN, United States Attorney for the Northern District of New York, Albany, New York, Attorney for Defendant.
REPORT-RECOMMENDATION AND ORDER
CHRISTIAN F. HUMMEL, Magistrate Judge.
Plaintiff pro se Selim Sero ("Sero") brings this action pursuant to 42 U.S.C. § 405(g) seeking review of a decision by the Commissioner of Social Security ("Commissioner") that Sero was not without fault accepting an alleged overpayment of Supplemental Security Income ("SSI") benefits, and that Sero was therefore not entitled to a waiver. Dkt. No. 17. The Commissioner cross-moves for a judgment on the pleadings. Dkt. No. 19. For the reasons which follow, it is recommended that the Commissioner's decision be affirmed.
Sero filed an application for SSI, which was granted on the basis of disability, on July 26, 2005. T. 9. Sero had a representative payee appointed from the Broome County Department of Social Services who, in connection with a Fair Hearing Request submitted in April of 2010, discovered and reported to the Social Security Administration (hereinafter "the Administration") Sero's excess resources. T. 9, 11; see also T. 76-83 (Fair Hearing Decision dated April 14, 2010). In February of 2011, Sero received notification that he was placed on non-payment status with a charged overpayment. T. 9, 14-24.
In that notification, it indicated that from November of 2010 through the present, Sero and his spouse retained resources worth more than $3, 000, making them ineligible to continue receiving SSI payments. T. 14. Specifically, Sero was informed that as of November 2010, he had resources totaling approximately $11, 000 more than the resource limit, composed primarily of seven vehicles that were titled to either himself or his spouse. T. 23.
On February 16, 2011, Sero filed a Request for Reconsideration. T. 25-27. Sero stated that he did not own any of the vehicles; the vehicles, specifically a 1999 Audi Quattro, 1999 Mercedes-Benz ML430, and a 1996 Ford F150 truck, all belonged to his wife; two of his daughters required vehicles to go to school but are too young to have them titled in their names; and the other unaccounted for vehicle was "junked" in December of 2010. T. 14. On February 25, 2011, the Administration responded to Sero's request, which they liberally construed as one to waive the collection of the overpayment of $2, 788. T. 28. The Administration scheduled a personal conference with Sero on March 3, 2011. T. 28. After the conference, Sero received correspondence from the Administration dated March 22, 2011 which again denied his request to waive collection of the overpayment because "[v]ehicles count as resources... [and there is an] indication that [Sero] currently ha[s] 4 vehicles: 99 Audi, 99 Mercedes, 01 Mitsubishi, [and] 95 Ford pickup, " and given such, Sero was "still over the resource limit and not eligible to receive SSI." T. 30. The Administration went on to explain that:
[w]hen [Sero] receive[d] SSI [he was] given instructions to report all income and resources to [the Administration]. This prints on letters and on the application. [The Administration] w[as] not informed of the vehicles [in Sero and his spouse's possession] until the Department of Social Services advised [them] that there were numerous cars in [Sero's] wife's name. The values of these vehicles places [Sero] over the resource limit. Therefore, based on the facts [the Administration] ha[s], [it] cannot waive the collection of this overpayment[; thus, Sero was directed that he]... must pay this money [totaling $2, 788] back.
On July 8, 2011, the Administration sent Sero a letter indicating that they had received payments from him and his outstanding balance was $1, 285.30. T. 33; see also T. 11 (indicating payments of $53 and $1, 502.70 resulting in the balance of $1, 285.30). On or about July 21, 2011, Sero filed another request for waiver of the overpayment recovery citing that "[t]he overpayment was not [his] fault and [that he could] not afford to pay the money back and/or [repayment]... [was] unfair...." T. 37; see also T. 45-47. As of this date, Sero contended that the vehicles and owners of said vehicles in his household were as follows: A Ford F150 owned by his wife with a value of $200; an Audi A6 owned by his nineteen year old daughter with a value of $600; and a Honda motorcycle owned by himself with a value of $50. T. 40. On August 5, 2011, the Administration affirmed the termination of pay status. T. 48-50.
Sero then timely requested a hearing by an administrative law judge ("ALJ"). T. 51-53. Attached to his request for a hearing was a written explanation in which Sero discussed various problems with law enforcement and perceived discrimination and purposeful inaccessibility to public assistance programs. T. 52. Sero also explained which vehicles were in his possession and their respective worth. T. 53. Specifically,
[Sero] currently ha[s] four cars which [he] ha[d] paid two hundred dollars [a piece for] because they are all old cars... [Sero's 1996] Ford F150 [was purchased for] 200 dollars... from a private seller about seven days ago. Another car is [the 1997] Mitsubishi Eclipse... [which was also purchased for] 200 dollars from a private seller about 4 years ago. [Sero's] third car is a  Mercede[s]... [which he] paid 2, 500 [dollars for] about a year ago from a private seller and finally the  Audi A6... bought about six months ago... [for] 200 dollars from a private seller... [Sero] never sold any [of the] cars....
T. 53. Sero again disagreed with the determination that his SSI benefits were discontinued, and, in the alternative, requested a waiver for any assessed over payment. T. 9.
After due notice, a hearing was scheduled initially for November 2011; but [Sero] requested a postponement; this was granted. But when the hearing was re-set, for January 24, 2012, [Sero] once again asked for further postponement, on the basis of needing to obtain representation. [The ALJ] advised [Sero] that he had already had several months for this; but... once again granted the postponement.
T. 9; see also T. 97 (retaining counsel on January 19, less than a week before the hearing), 98 (requesting adjournment on January 19th due to counsel previous obligations in Albany on the same date Sero's hearing was scheduled), 100-101 (phone messages dated January 20th from counsel seeking adjournment and response from Chambers that a written explanation needed to be provided, and another message dated January 23rd from ALJ's chambers indicating that hearing would go forward as previously scheduled despite counsel's inability); 128-134 (transcript from proceedings held on January 24, 2012); 102-07 (Notice of Continued hearing dated January 27, 2012 indicating that a subsequent hearing would occur on April 6, 2014).
A hearing was conducted before ALJ Bruce Fein on April 6, 2012. T. 135-88 (transcript of the hearing). Sero, represented by counsel, and his son both testified at the hearing. Id. During the course of the hearing, Sero testified about the vehicles which he owned and what their approximate values were. He stated that his wife owned a 1999 Mercedes sport utility vehicle and a 1996 Ford F150 truck. T. 142, 145-46; see also T. 122-25 (titles for the 99 Mercedes and 96 F150 in Sero's wife's name and the 84 motorcycle in Sero's name). Sero stated that the Mercedes was purchased for his wife by his daughter three years prior, thus he was unaware of what the car was purchased for. T. 146, 165-66. Sero owned a 1984 Honda Shadow motorcycle that was presently inoperable. T. 143-44; see also T. 171. His son was the titled owner of a 2001 Mitsubishi which was impounded by, and never subsequently retrieved from, the New Jersey Police. T. 147-48, 151. His daughter was the titled owner of a 1999 Audi A4 which was disposed of in a junk yard in or around the end of 2010 or the beginning of 2011. T. 151-52, 175. Sero testified that he had previously owned a 1995 Windstar van and 1998 Chevy Malibu, but both had been disposed of in the junk yard several years prior. T. 152. Sero also placed a 1998 Chevy Cavalier and 1997 Mitsubishi in the junk yard after the cars were involved in car accidents. T. 153-55. Lastly, Sero testified to owning a 1992 Plymouth Acclaim when he first arrived in the United States which was also disposed of in the junk yard approximately four or five years prior. T. 154. Sero concluded that, at the present, the only vehicles in his or his wife's possession were the 96 Ford F150, 99 Mercedes, and 84 Honda motorcycle. T. 156-57.
During the course of the hearing, Sero was asked about various vehicle titles obtained from the New York State Department of Motor Vehicles. T. 119-25 (copies of car titles). Sero testified that none of the vehicles whose titles were produced in his childrens' names were previously titled to either himself or his wife. T. 162-64. Sero explained that the 1996 Audi A6 was owned by his daughter, who, when the title was issued in May of 2011, was 17 years old. T. 159-61 (testimony), 121 (title). Further, the 2001 Mitsubishi was owned by his son as of the date the title was issued in September of 2009. T. 163-64; see also T. 170. Sero's son testified that he is presently driving a 92 Mercedes. T. 177; see also T. 125 (title dated November 28, 2011 indicating that Sero's son is the owner of a 92 Mercedes).
Accepted as part of the hearing record was a decision after a Fair Housing Hearing by the New York State Office of Temporary and Disability Assistance. T. 76-83. Sero was seeking assistance paying rental arrears. T. 76. In the course of that hearing, it was noted that Sero stated that his SSI benefits could not be used to pay his rent as they were insufficient to pay for both his rent and personal expenses. Specifically, Sero needed to utilize his SSI benefits to pay for his monthly expense of $300 for the five vehicles that he has insured, in addition to the expenses for fueling said vehicles and providing clothing and paying for the cell phone bills of his three children. T. 77, 81. At the time of the hearing in March of 2010, Sero's children were ages four, seventeen, and eighteen. T. 77.
Also included as exhibits to the hearing record were correspondence records between Sero and the Social Security's Office of Disability Adjudication and Review. T. 84-85. In those notes it indicated that Sero claimed that he did not own any vehicles and that his wife owned a 99 Audi worth $2, 000 and a 96 F150 worth $500. T. 84. The note concluded that "even without the[ additional] vehicles listed... [which Sero contends he does not own] - [Sero] is over resources with the three vehicles he claims to have [-a] 99 Audi, 99 Mercedes, [and] 9 Ford." Id.
On April 23, 2012, the ALJ issued a decision denying Sero's requests and concluded that the recovery of overpayments to Sero could not be waived. T. 13. The ALJ concluded that:
[Sero's] statements are not generally credible. There was too much vague shifting around of these vehicular resources, especially among close family members, and too many inconsistent or imprecise assertions, particularly as to the actual value of any of the vehicles or when and how they had been gotten originally, or even where some of them are at the present time. There is, above all, no substantial and/or convincing evidence, including documentation, ... support [Sero's] overall assertions. to... [F]urther... [Sero] was at fault in creating the overpayment because he certainly knew, or should have known, that these vehicles, as a group, amounted to excess resources. Nor is it credible that imposition of the overpayment now, and its eventual recovery through appropriate monthly withholdings, would defeat the purpose of Title XVI of the Act, because there would still be remaining sufficient funds for basic ongoing expenses of necessary and ordinary living... And it would certainly not be against equity and good conscience given the arguably deceptive shifting around of resources over a very considerable period of time....
Sero filed a timely request for review, and on December 18, 2013, the Appeals Council denied Sero's request, thus making the ALJ's findings the final decision of the Commissioner. T. 1-5. This action followed.
A. Standard of Review
In reviewing a final decision of the Commissioner, a court must determine whether the correct legal standards were applied and whether substantial evidence supports the decision. Berry, 675 F.2d at 467. Substantial evidence is "more than a mere scintilla, " meaning that in the record one can find "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Halloran v. Barnhart, 362 F.3d 28, 31 (2d Cir. 2004) (citing Richardson v. Perales, 402 U.S. 389, 401 (1971) (internal citations omitted)).
"In addition, an ALJ must set forth the crucial factors justifying his findings with sufficient specificity to allow a court to determine whether substantial evidence supports the decision." Barringer v. Comm'r of Soc. Sec., 358 F.Supp.2d 67, 72 (N.D.N.Y. 2005) (citing Ferraris v. Heckler, 728 F.2d 582, 587 (2d Cir. 1984)). However, a court cannot substitute its interpretation of the administrative record for that of the Commissioner if the record contains substantial support for the ALJ's decision. Yancey v. Apfel, 145 F.3d 106, 111 (2d Cir. 1998). If the Commissioner's finding is supported by substantial evidence, it is conclusive. 42 USC § 405(g) (2006); Halloran, 362 F.3d at 31.
B. Determination of Benefits and Overpayment
"In order to be eligible for SSI an individual must be aged, blind or disabled and have income and countable resources' below specified statutory amounts." Singer v. Sec. of Health & Human Servs., 566 F.Supp. 204, 206 (2d Cir. 1983) (citing 42 U.S.C. § 1382(a)). "Under 42 U.S.C. § 1382(a)(3)(A), a claimant is financially eligible for SSI benefits if his... resources, together with the resources of his... spouse, do not exceed $3, 000." Rasheed v. Astrue, No. 07-CV-2726 (NGG), 2010 WL 3036795, at *3 (E.D.N.Y. July 30, 2010). Resources are defined as "cash or other liquid assets or any... personal property that an individual (or spouse...) owns and could convert to cash to be used for his... support and maintenance." 20 C.F.R. § 416.1201(a). In determining the resources a claimant owns, there is an exclusion for one vehicle, so long as its "total value does not exceed such amount as the Commissioner... determines to be reasonable." 42 U.S.C. § 1382b. However, additional automobiles in excess of the one allowed per the exclusions are considered a countable resource as it is personal property capable of conversion.
"An overpayment is a payment of an amount more than the amount due for a given period... If an individual receiving SSI benefits is incorrectly paid more than the amount he is entitled to, the Commissioner is authorized to seek a repayment of the excess amount of benefits." Mesias v. Doe, No. 11-CV-2373 (RRM), 2012 WL 3704824, at *3 (E.D.N.Y. Aug. 24, 2012) (citing 20 C.F.R. §§ 416.537 & 416.550; 42 U.S.C. § 1383(b)(1)(A)); see also 42 U.S.C. § 404 (providing in relevant part that "[w]henever the Commissioner... finds that more or less than the correct amount of payment has been made... proper adjustment or recovery shall be made...."). Federal regulations "allow for waiver of recovery of an overpayment... where (1) an overpayment has been made to an individual who is without fault, and (2) when adjustment or recovery would either defeat the purpose of the Act, or be against equity and good conscience." Hannon v. Barnhart, 134 Fed.App'x 485, 486 (2d Cir. 2005) (internal quotation marks omitted) (quoting 20 C.F.R. § 404.506). If the individual cannot satisfy the first prong of the analysis, namely that he or she was without fault, then the second prong need not be considered. See Chlieb v. Heckler, 777 F.2d 842, 846 (2d Cir. 1985) (citations omitted).
[F]ault will be found when an incorrect payment "resulted from" one of the following:
(a) Failure to furnish information which the individual knew or should have known was material;
(b) An incorrect statement made by the individual which he knew or should have known was incorrect (this includes the individual's furnishing his opinion or conclusion when he was asked for facts), or
(c) The individual did not return a payment which he knew or could have been expected to know was incorrect.
Howard v. Secretary of Health & Human Servs, 741 F.2d 4, 7-8 (2d Cir. 1984) (citing 20 C.F.R. § 416.552). "No showing of bad faith is required; rather, an honest mistake may be sufficient to constitute fault[; moreover, t]he fact that the SSA may have been at fault in making the overpayment does not relieve the recipient from liability if the recipient was also at fault." Center v. Schweiker, 704 F.2d 678, 680 (2d Cir. 1983) (citations omitted). The burden of proof to show that waiver of overpayment should be applied falls on the plaintiff. See Hannon, 134 Fed.App'x at 487 (citing 42 U.S.C. § 404(b); 20 C.F.R. §§ 404.506, 404.507).
Liberally reading Sero's pro se complaint, he asserts that the ALJ was incorrect in affirming the continued recovery against the overpayment and failing to institute the waiver provision. However, substantial evidence supports the ALJ's decision as Sero was at fault for the overpayment.
Sero's recitation of which vehicles were under his ownership, when they were purchased, for how much, and when they were disposed of changed each time he filed paperwork or answered a question during his testimony. Initially, Sero admitted that three of the vehicles were registered to his wife, the 99 Audi, 99 Mercedes, and 96 F150. The Administration determined that the estimated value of these vehicles were $3, 200, $4, 200, and $200-$500 respectively. T. 23. Regardless of the ownership or whereabouts of the additional vehicles which the Department of Social Services identified, which Sero presently contends have either been disposed of or are in his childrens' possession, the value of the Audi and the Mercedes alone exceed the resources limitation for a married couple, thus providing evidence to support the initiation of a recovery for overpayment.
To the extent that Sero has provided alternate valuations for these vehicles, those have been inconsistent at best. In August of 2011, Sero stated that he paid $2, 500 for the Mercedes, giving an approximate value for the car. However, during his request for waiver of the obligation to repay in July of 2011, Sero did not include the 99 Mercedes in the list of vehicles his wife owned, essentially valuing the asset as zero because he claimed it did not exist. However, during his hearing testimony he indicated that his daughter purchased the vehicle for her mother, conceding to the fact that his spouse had the vehicle as a resource but taking no position on what the actual or estimated worth of the vehicle was.
Sero's testimony at the hearing was also extremely vague and imprecise. Most of the vehicles Sero was questioned about led to ambiguous explanations that the vehicles were bought some unspecific number of years ago, from private dealers, generally for the cost of $200 regardless of the year, make, or model of the vehicle. Further, the ownership of the vehicles was nearly impossible to follow. The best example would be the Audi. First, there is confusion over whether there was one or two vehicles, as there is reference to an Audi A4 and an Audi A6, both manufactured in the year 1999. Initially, Sero contended that his wife owned a 99 Audi. Then, during his testimony, Sero stated that his daughter had a 99 Audi A4 which had been junked in 2010 or 2011. Sero could not recall in whose name the car was titled. However, a title dated May 16, 2011, a date shortly after the determination that SSI payments would cease, indicated that Sero's daughter was the owner of a 99 Audi A6. Sero also testifies that the Audi was never in his wife's name, though the ultimate conclusion comes after some confusion and waffling back and forth.
An administrative law judge has discretion to evaluate credibility of a claimant and to make an independent judgment regarding the true extent of the claimant's symptoms. Mimms v. Heckler, 750 F.2d 180, 186 (2d Cir.1984). It is the function of the Commissioner, not the reviewing court, to "resolve evidentiary conflicts and to appraise the credibility of witnesses, including the claimant." Carroll v. Secretary of Health & Human Servs., 705 F.2d 638, 642 (2d Cir.1983); see Gernavaqe v. Shalala, 882 F.Supp. 1413, 1419 n. 6 (S.D.N.Y.1995) (An administrative judge's determination with respect to the credibility of witnesses is given great deference because the administrative law judge heard the testimony and observed the demeanor of the witnesses.). Hence, an ...