United States District Court, E.D. New York
For Plaintiff: Jeffrey Herzberg, Zinker & Herzberg, LLP, Hauppauge, NY.
For Defendant: Vincent Lipari, Assistant United States, Attorney, Loretta E. Lynch, United States Attorney for the Eastern District of New York, Central Islip, NY.
JOSEPH F. BIANCO, United States District Judge.
Plaintiff Binder & Binder, P.C. (" B& B" or " plaintiff" ) successfully assisted Jay Scott Lerner (" Lerner" ) in obtaining disability insurance benefits from the Social Security Administration (" SSA" or " defendant" ). Although the SSA should have withheld $6,000.00 from Lerner's past-due benefits in order to pay B& B its attorney's fee, the SSA failed to do so. Lerner then filed for bankruptcy, which means that B& B cannot recover the $6,000.00 attorney's fee directly from Lerner.
In the instant case, B& B now seeks a judgment against the SSA in the amount of $6,000.00. B& B and the SSA have filed cross-motions for summary judgment. For the reasons that follow, the Court grants summary judgment in favor of the SSA on the basis of sovereign immunity.
The following facts are taken from the parties' depositions, declarations, exhibits, and respective Local Rule 56.1 statements of facts. Upon consideration of a motion for summary judgment, the Court construes the facts in the light most favorable to the nonmoving party. See, e.g., Capobianco v. City of New York, 422 F.3d 47, 50 n.1 (2d Cir. 2005). Unless otherwise noted, where a party's Rule 56.1 statement is cited, that fact is undisputed, or the opposing party has not pointed to any evidence in the record to contradict it.
Lerner applied to the SSA for disability insurance benefits on May 3, 2012. (Def. 56.1 ¶ 1.) Lerner retained B& B to represent him, and he executed a fee agreement with B& B on June 29, 2012 (the " Fee Agreement" ). (Pl. 56.1 ¶ 2; Def. 56.1 ¶ 3.) The Fee Agreement provided that if Lerner received a favorable decision on his application, he would pay B& B an attorney's fee amounting to the lesser of either (1) 25% of past due benefits awarded, or (2) $6,000.00, which at that time was the maximum amount set by the Commissioner pursuant to 42 U.S.C. § 406(a). (Pl. 56.1 ¶ 2; Def. 56.1 ¶ 3.) In a letter dated July 24, 2012, Mario Davila (" Davila" ), a representative of B& B, informed the SSA that B& B was representing Lerner and enclosed a copy of the Fee Agreement. (Def. 56.1 ¶ 2.)
In a notice dated October 22, 2012, the SSA notified Lerner that his application for benefits had been approved, that he would receive $36,080.00 in past due benefits on or about October 28, 2012, and that he would receive $2,036.00 per month beginning in November 2012. (Pl. 56.1 ¶ 4; Def. 56.1 ¶ 4.)
In a subsequent notice dated February 17, 2013, the SSA advised Davila that he was not authorized to collect a fee for his representation of Lerner because he had failed to register for direct payment with the SSA before the SSA had adjudicated Lerner's benefits claim. (Def. 56.1 ¶ 5.) In a response on B& B's behalf, Davila informed the SSA that he had submitted the
Fee Agreement and all other required documents to the SSA before the SSA had adjudicated Lerner's claim. ( Id. ¶ 9.) On March 26, 2014, the SSA approved the Fee Agreement ( id. ¶ 11), and by notice dated April 14, 2014, the SSA informed Davila that a fee of $6,000.00 was authorized ...