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Johnson v. Colvin

United States District Court, N.D. Illinois, Eastern Division

October 13, 2016

JEAN A. JOHNSON, Plaintiff,
CAROLYN W. COLVIN, Acting Commissioner of Social Security, Defendant.


          MARY M. ROWLAND United States Magistrate Judge.

         Plaintiff Jean A. Johnson seeks judicial review of a final decision of the Commissioner of Social Security, denying her request for a waiver of overpayment. The parties have consented to the jurisdiction of the United States Magistrate pursuant to 28 U.S.C. § 636(c). Before this Court is Plaintiff's Motion to Reverse the Decision of the Commissioner and the Commissioner's Motion for Summary Judgment. For the reasons that follow, Plaintiff's motion is granted, the Commissioner's motion is denied, and the case is remanded for further proceedings consistent with this Opinion.

         I. BACKGROUND

         A. Procedural History

         On August 27, 2012, the Commissioner notified Plaintiff of an $81, 670 overpayment, which had accrued during the period of August 2002 through December 2011. (R. at 25-28). Plaintiff was given 30 days to repay the overpayment or file an appeal or request a waiver. (Id. at 26-27). On October 31, 2012, Plaintiff filed a Request for Waiver of Overpayment Recovery or Change in Repayment Rate. (Id. at 29-41).

         Plaintiff resides with her 13-year-old son, owns a 2010 Honda Accord valued at $7, 156, and reported $442 in her savings account, $1, 312 in her checking account, and $230 in other assets. (R. at 33). As for monthly income, Plaintiff asserted that she receive $1, 259 in Disability Insurance Benefits (DIB) on behalf of her and her son, $929.80 in pension benefits from the State of Illinois, and $1, 849 in workers' compensation benefits. (Id. at 35). As for monthly expenses, she reported $500 for food, $540 for utilities, $250 for clothing, $700 for credit card payments, $668 for property and other taxes, $169 for insurance, $540 for medical expenses, $500 for automobile expenses, and $360 for loan payments. (Id. at 36). Plaintiff also asserted that she has $4, 450 in annual expenses for “farm payments.” (Id.).

         On November 1, 2012, Plaintiff informed the Commissioner that she was previously overpaid from June 2004 through September 2008. (R. at 280). She did not dispute this overpayment and went without receiving Social Security benefits from October 2008 through September 2011. (Id.). Her Social Security payments resumed in October 2011 and she was informed “by Social Security that whatever overpayment being claimed had been paid back.” (Id.).

         On December 20, 2012, the Commissioner determined that Plaintiff was not at fault for the overpayment, as it was due to the Agency's lack of information regarding Plaintiff's workers' compensation payments. (R. at 60). However, the Commis- sioner denied Plaintiff's waiver request as “she has the means to repay the overpayment.” (Id.).

         On January 11, 2013, the Agency informed Plaintiff that it had received her waiver request and that she would continue to receive $1, 085 in monthly benefits until a determination is made. (R. at 331). Several days later on January 16, Plaintiff requested written documentation regarding the exact amount of her overpayment and the calculations determining that such an amount was owed. (Id. at 332). On February 7, the Commissioner denied Plaintiff's request for a waiver, finding that she has the means to make repayments. (Id. at 65-68). Thereafter, on February 15, the Agency informed Plaintiff that her monthly benefits would be reduced to $235 beginning in February 2013, with her full regular monthly benefits resuming in April 2021. (Id. at 70-71).

         B. Administrative Hearing

         On June 27, 2013, Plaintiff testified at a hearing before an Administrative Law Judge (ALJ). (R. at 386-422). The ALJ first questioned Plaintiff about her lack of legal representation. (Id. at 391). Plaintiff explained that she sought the advice of some attorneys but that they would not represent her in an overpayment case without a retainer. (Id.). The ALJ provided Plaintiff with information regarding attorney representation and offered her more time to locate representation, but Plaintiff decided to proceed without an attorney. (Id. at 391-92).

         Plaintiff testified that she lives with her dependent son and receives Social Security benefits for her and her son, the combined monthly amount of which is $343. (R. at 397-99). Her monthly income also includes $644 in child support, $1, 844 in workers' compensation benefits, and $900 from her State of Illinois pension. (Id. at 400-01). The ALJ reviewed the waiver of overpayment form that Plaintiff had previously completed and asked her to verify the amounts. Plaintiff testified regarding various living expenses, including a loan that she took out for purchase of her car. (Id. at 403-04). She asserted that her monthly expenses include $290 for utilities, $300 for her cellular phone, $700 for food, and various taxes that total $4, 200 annually. (Id. at 407-11). When the ALJ questioned Plaintiff about the discrepancies between her oral testimony and her previous written statements, Plaintiff responded that she had been confused about how to complete the form at the field office. (Id. at 409, 417).

         C. ALJ Decision

         On September 9, 2013, the ALJ issued a written decision denying Plaintiff's request for waiver of her overpayment. (R. at 10-16). As an initial matter, the ALJ determined that Plaintiff was overpaid $80, 820 in benefits from June 2004 through September 2008. (Id. at 15). The ALJ then determined that Plaintiff was not at fault for the overpayment because the Agency erroneously processed her workers' compensation information which led to an error offsetting her DIB. (Id.). Nevertheless, the ALJ found that recovery of the overpayment would not defeat the purpose of Title II of the Social Security Act (Act) because Plaintiff “does not need substantially all of her current income, including benefits, to meet her ordinary and necessary living expenses.” (Id.). In making this finding, the ALJ determined that her monthly income totaled $4, 692 while her monthly expenses totaled $3, 230. (Id.). The ALJ further found that Plaintiff testified “to many extraordinary expenses which are not included in the calculation of ordinary and living expenses.” (Id. at 16). Thus, the ALJ found that Plaintiff had a monthly surplus of ...

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