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CARQUEVILLE v. FOLSOM

July 16, 1958

LILLIE T. CARQUEVILLE
v.
MARION B. FOLSOM, SECRETARY OF HEALTH, EDUCATION AND WELFARE.



The opinion of the court was delivered by: Julius J. Hoffman, District Judge.

  This is an action to review a determination by the Secretary of Health, Education and Welfare (hereafter "Secretary") that the plaintiff is not entitled to Widow's Monthly Insurance Benefits under the Social Security Laws of the United States, 42 U.S.C.A. § 301ff. The alleged wage earner, plaintiff's husband, died on August 14, 1946. However, plaintiff did not file an application for benefits until July 3, 1956. This application was disallowed on September 6, 1956, by the Bureau of Old-Age and Survivors Insurance, and plaintiff then requested a hearing before a referee. In February and March of 1957, a hearing was held at which plaintiff was represented by counsel, and plaintiff's claim was rejected by the referee on April 30, 1957. Thereupon, plaintiff attempted to appeal, but plaintiff's request for review was denied by the Appeals Council of the Social Security Administration. As a result of denial of review, the referee's decision became the final decision of the Secretary and is reviewable by this court pursuant to 42 U.S.C.A. § 405(g). Goldman v. Folsom, 3 Cir., 1957, 246 F.2d 776; Jacobson v. Folsom, D.C.S.D.N.Y. 1957, 158 F. Supp. 281; Norment v. Hobby, D.C.N.D.Ala., 1953, 124 F. Supp. 489; 20 C.F.R. § 403.710(e), 422.6(d) (1949).

After the filing of pleadings, both parties moved for summary judgment. Since the defendant's answer incorporates a transcript of the hearings held by the referee, the court now has before it all the matters it would have upon a full trial. Accordingly, the cross-motions for summary judgment are proper. Irvin v. Hobby, D.C.N.D.Iowa 1955, 131 F. Supp. 851; MacPherson v. Ewing, D. C.N.D.Cal., 1952, 107 F. Supp. 666. Further, 42 U.S.C.A. § 405(g) provides in relevant part:

    "The court shall have power to enter, upon the
  pleadings and transcript of the record, a judgment
  affirming, modifying, or reversing the decision of
  the Secretary, with or without remanding the cause
  for a rehearing."

Scope of Review

Although a liberal construction of the Social Security Laws is to be preferred, Carroll v. Social Security Board, 7 Cir., 1942, 128 F.2d 876; Willard v. Hobby, D.C.E.D.Pa., 1955, 134 F. Supp. 66, judicial review of the final decisions of the Secretary is rigidly circumscribed by statute and case law. The instant action is not a trial de novo of plaintiff's claims. Thompson v. Social Security Board, 81 U.S.App.D.C. 27, 1946, 154 F.2d 204; Scalzi v. Folsom, D.C.R.I., 1957, 156 F. Supp. 838. The findings of the Secretary (in this case the referee) as to any fact, if supported by substantial evidence, are conclusive and binding on this court. 42 U.S.C.A. § 405(g); Rosewall v. Folsom, 7 Cir., 1957, 239 F.2d 724; Teder v. Hobby, 7 Cir., 1956, 230 F.2d 385. Similarly, inferences drawn by the referee and conclusions made by him, for which there is a substantial basis, are conclusive and binding. Folsom v. O'Neal, 10 Cir., 1957, 250 F.2d 946; Livingstone v. Folsom, 3 Cir., 1956, 234 F.2d 75; United States v. LaLone, 9 Cir., 1945, 152 F.2d 43; Murray v. Folsom, D.C. 1957, 147 F. Supp. 298. As stated in Rosewall v. Folsom, 7 Cir., 1957, 239 F.2d 724, at page 728:

    "In any event, we think the Referee as trier of
  fact, invested with the function of evaluating the
  evidence and drawing inferences therefrom, was
  justified in concluding that plaintiff had failed to
  show that the wage earner had left Illinois prior to
  September 11, 1940, and that the evidence failed to
  establish exactly when he did leave the state. We
  cannot make our own appraisal of the evidence.
  Section 205(g) of the Act expressly makes the
  Secretary's finding conclusive if supported by
  substantial evidence (citing case). Of course, the
  finality accorded by Section 205(g) to the
  Administrative findings extends as well to the
  inferences from the evidence made by the Secretary if
  a substantial basis for them appears in the record. *
  * *"

Substantial evidence is evidence which affords

    "* * * a substantial basis of fact from which the
  fact in issue can be reasonably inferred. * * *
  Substantial evidence is more than a scintilla, and
  must do more than create a suspicion of the existence
  of the fact to be established. `It means such
  relevant evidence as a reasonable mind might accept
  as adequate to support a conclusion' * * *, and it
  must be enough to justify, if the trial were to a
  jury, a refusal to direct a verdict when the
  conclusion sought to be drawn from it is one of fact
  for the jury. * * *" National Labor Relations Board
  v. Columbian Enameling & Stamping Co., 1939,
  306 U.S. 292, 299-300, 59 S.Ct. 501, 505, 83 L.Ed. 660.

See also, Morand Bros. Beverage Co. v. National Labor Relations Board, 7 Cir., 1953, 204 F.2d 529, 534, certiorari denied, 1953, 346 U.S. 909, 74 S.Ct. 241, 98 L.Ed. 407; McGrew v. Hobby, D.C. Kan., 1955, 129 F. Supp. 627; Rambin v. Ewing, D.C.W.D.La., 1952, 106 F. Supp. 268.

With reference to questions of law and statutory construction, this court may inquire as to whether the Secretary correctly interpreted the law and applied it to the facts. Fuller v. Folsom, D.C.W.D.Ark., 1957, 155 F. Supp. 348; Aubrey v. Folsom, D.C.N.D. Cal., 1957, 151 F. Supp. 836. However, the Secretary's determination is entitled to great weight. Rosewall v. Folsom, 7 Cir., 1957, 239 F.2d 724; Bostick v. Folsom, D.C.W.D.Ark., 1957, 157 F. Supp. 108.

Merits of Plaintiff's Claim

A determination as to whether there is merit to plaintiff's claim that the findings of the referee are not supported by substantial evidence must be made in the light of certain procedural considerations. Plaintiff bore the burden of proof before the referee to establish that the required conditions for eligibility had been met. Jacobson v. Folsom, D.C.S.D.N.Y., 1957, 158 F. Supp. 281; Norment v. Hobby, D.C.N.D.Ala., 1953, 124 F. Supp. 489. In addition, 42 U.S.C.A. § 405(c)(2) provides that the Secretary shall establish and maintain records of amounts of wages paid to each wage earner and of the period in which such wages were paid. With reference to the evidentiary effect of such records, § 405(c)(3) provides that the records shall be evidence of the amount of wages paid and of the period in which such wages were paid. The absence of an entry as to wages shall be evidence that no wages were paid to the individual. Further, § 405(c)(4)(B) provides that after the expiration of 3 years, 3 months and 15 days following any year, the absence of an entry in the Secretary's records as to wages paid shall be presumptive evidence that no wages were paid during that period. The facts of this case bring it within the scope of § 405(c)(4)(B) since it is undisputed that the Secretary's records disclose no entry of wages paid to plaintiff's husband for the period in question which ended in 1946. Consequently, in the hearing before the referee, plaintiff bore, not only the usual burden of proof but also the burden of overcoming the presumption that wages were not paid to her husband.

The undisputed facts giving rise to plaintiff's claim are as follows: Plaintiff's husband was a commercial artist who attained the age of 65 on June 16, 1935. In 1937, he entered into a business arrangement with the General Outdoor Advertising Company (hereafter "General"). Pursuant to this arrangement, he worked at home, made drawings and submitted them to General. Although this relationship continued until 1939, it did not result in social security coverage because, under the then existing law, coverage was not afforded to individuals who had already attained the age of 65. Social Security Act of 1935, § 811(b)(4), 49 Stat. 636 (1935). In 1939, the plaintiff's husband contracted a serious disease. Whether he thereafter made drawings for General is disputed and will be discussed later. However, it is undisputed that from March 15, 1939 until August 14, 1946, the date on which plaintiff's husband died, he received semi-monthly checks from General in the amount of $86.90 less certain deductions. These deductions were probably made for income tax purposes. They were not made pursuant to the Social Security Act. Indeed, plaintiff's husband apparently never applied for, and certainly was never issued a social security card.

With these facts in mind, consideration must next be given to the statutes which govern this case. 42 U.S.C.A. § 402(e) confers social security benefits upon the widow of "* * * an individual who died a fully insured individual after 1939 * * *." Section 414(a), in relevant part, defines a "fully insured individual" as one who has "* * * at least six quarters of coverage." Section 413(a), in relevant part, defines "quarters of coverage" as a period of three calendar months ending on March 31, June 30, September 30, or December 31, in which an individual is paid $50 or more in wages. Section 409 defines wages as "* * * remuneration paid prior to 1951 which was wages for the purposes of this subchapter under the law applicable to the payment of such remuneration * * *." Section 210(a) of the Social Security Act of 1935, 49 Stat. 625, defined wages as "* * * all remuneration for employment * * *." Section 210(b) of the same Act defined employment as "* * * any service, of whatever nature, performed within the United States by an employee for his employer * * *." Although, as has already been noted, plaintiff's husband was not covered by the original Act, the possibility of coverage, beginning on January 1, 1939, was afforded him by § 209(b) of the Social Security Act Amendments of 1939, effective January 1, 1940, 53 Stat. 1373, which provided:

    "* * * the term `employment' means any service
  performed after December 31, 1936, and prior to
  January 1, 1940, which was employment as defined in
  section 210(b) of the Social Security Act prior to
  January 1, 1940 (except service performed by an
  individual after he attained the age of sixty-five
  if performed prior to January 1, 1939), and any
  service, of whatever nature, ...

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