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Barnett v. Colvin

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

November 15, 2016

CAROLYN W. COLVIN, Acting Commissioner of the U.S. Social Security Administration, Defendant.



         Plaintiff Donald W. Barnett seeks judicial review under 42 U.S.C. § 405(g) of a final decision of Defendant Commissioner of the Social Security Administration ("SSA") denying his request for waiver of overpayment. See 42 U.S.C. §§ 404(a). After the Administrative Law Judge ("ALP") denied the request for waiver, Mr. Barnett filed a timely request for review of the ALJ's decision with the Appeals Council. The Appeals Council denied review, and plaintiff sought review in federal court. By agreement, the case was remanded for further proceedings (13 C 2548: doc. # 35). The Appeals Council assumed jurisdiction of the remanded case and, on May 21, 2015, denied Plaintiffs request for waiver (R. 267), making the Appeals Council's decision the final determination of the Commissioner. See 20 C.F.R. § 404.984(a).

         Before the Court is Plaintiffs motion for summary judgment. Mr. Barnett contends that the Appeals Council erred in denying his request that the SSA waive its claim for overpayments because he was not at fault for causing the overpayment, and requiring repayment would defeat the purpose of the Social Security Act (doc. #16: P1. Mot. for SJ, at 6-8).

         For the reasons that follow, Plaintiffs motion is granted in part and denied in part. The case is remanded to the SSA for further proceedings consistent with this opinion.


         Mr. Barnett has the equivalent of three years of college credits (doc. #16-3: P1. Aff, at ¶ 1). Mr. Barnett worked at Illinois Tool Works at least until he applied for disability on September 27, 2000.[2] SSA granted him Disability Insurance Benefits ("DIB") beginning in September 2000 (R. 270).

         On February 28, 2006, the SSA requested that Mr. Barnett complete a "Work Activity Report" (R. 227). He completed the report on June 12, 2006 (R. 227-235). In the report, Mr. Barnett affirmed that his current employer was the Village of Franklin Park (the "Village") (R. 231). Mr. Barnett reported that he performed part-time work as a reserve police officer for the Village from March 11, 2004 through the time of the report, earning $12.00 per hour (R. 231). However, elsewhere in the report, in a section entitled "Special Work Conditions, " Mr. Barnett wrote that in February 2006 the Village hired him part-time on a trial basis as a building inspector, and on May 1, 2006 hired him full-time "in inspectional services on a probational period" (R. 231, 233).[3]

         On January 25, 2007, the SSA sent Mr. Barnett a letter stating that he had completed his trial work period in November 2005 (R. 51). The letter explained that during the trial work period, a recipient can work and earn any amount of money for up to nine months (the months do not have to be consecutive) and still receive disability payments (R. 53). The letter clarified that the SSA only counts months in which a recipient earns more than $580, 00 a month beginning in January 2004, and $590.00 a month beginning in January 2005 (Id.). The letter further stated that after the trial work period, a claimant's right to monthly payments will continue if he or she is disabled and has average earnings less than $860.00 a month beginning in January 2006 and less than $900.00 a month beginning in January 2007 (R. 54). Specifically, the letter states, "[i]f your average earnings are more than these amounts, we call your work 'substantial' and we will stop your monthly payments" (Id.). However, the SSA found that Mr. Barnett's work did not amount to "substantial" work that would disqualify him from continuing to receive benefits (Id.). The SSA sent Mr. Baraett a second letter on February 1, 2007 with substantially the same information (R. 56).

         Mr. Barnett contends that he contacted the SSA to request that the SSA cancel his benefits because he was working full time (R. 86). Specifically, Mr. Barnett telephoned the SSA's toll-free 800 telephone number on February 5, 2007 and on July 10, 2007, requesting that his benefits be canceled effective immediately (R. 57). On August 19, 2007, he completed a second work activity form. In the report, Mr. Barnett stated that he had been working full-time for the Village of Franklin Park as a code enforcer since May 1, 2006, starting at $15.00 per hour and earning $18.30 per hour as of August 19, 2007 (R 240, 244).

         On August 21, 2007, the SSA sent a third letter notifying Mr. Barnett that as of May 2006, he had sufficient earnings to qualify as substantial work (R. 60). The letter stated that Mr. Barnett was not entitled to payments from August 2006 and thereafter (R. 60, 271). Mr. Barnett received his last DIB check from the SSA in September 2007 (R. 81).

         On June 23, 2008, the SSA sent Mr. Barnett a fourth letter, informing him that the SSA had overpaid him in the amount of $24, 443.00 (R. 69). The letter states that due to his work and earnings, Mr. Barnett was not due the benefits he was paid from May 2006 through September 2007, specifying that the determination of the overpayment was made based on the following benefits paid: $1, 616.00 per month from August through November 2006; $1, 668.00 per month from December 2006 through September 2007; and, $1, 289.00 for Medicare (Id.)[4] The letter provided information on how to repay the SSA, the right to appeal, and the right to request a waiver (R. 69-70). Mr. Barnett was informed he could obtain a waiver of the need to make repayment only if "both of the following are true: a. The overpayment was not your fault in any way; and b. You could not meet your necessary living expenses if we recovered the overpayment, or recovery would be unfair for some other reason" (R. 70).

         On July 22, 2008, Mr. Barnett filed a form with the SSA requesting that it waive the overpayment or reconsider the overpayment determination (R. 73-75). In his request, Mr. Barnett stated that he thought he was entitled to the payments he received because the payments continued to come even after he notified the SSA that he was working full time. On October 22, 2008, before responding to Mr. Barnett's request for waiver, the SSA scheduled a "personal conference" for October 29, 2008 at 11:30 a.m., at which Mr. Barnett could review and add to his file, and (by himself or with an assistant or attorney) could present his case to the SSA representative who would decide his waiver request (R. 77).[5]

         On December 19, 2008, in a brief letter, the SSA denied Mr. Barnett's request for a waiver, finding he was at fault in causing the overpayment. The SSA explained Mr. Barnett failed to provide the SSA with timely information regarding his work, and accepted payments that he "should have known and been expected to know were incorrect" (R. 85). However, because Mr. Barnett could not repay the overpayment in full without causing hardship, the SSA determined that Mr. Barnett could pay forty dollars a month until the overpayment was reimbursed (Id.).


         On February 10, 2009, plaintiff filed a request for a hearing before an ALJ to review the denial of his waiver request (R. 86, 88-89). Mr. Barnett participated in a hearing before an ALJ on December 3, 2009 (R. 47). He waived his right to be represented by an attorney at that hearing. There is no transcript of the December 3, 2009 hearing, but the ALJ's decision described Mr. Barnett's testimony. In addition to the facts listed above, Mr. Barnett testified regarding his financial status. Mr. Barnett and his wife continue to work; she earned $9.80 per hour (though her pay was subsequently cut by $1.00 per hour) and he earned $19.04 per hour (R. 48). In addition to utility expenses, they owe $22, 000.00 on their house and $30, 000.00 in credit card debt (due in part to $10, 000.00 in costs for repairing a broken sewer line under their driveway) (Id.). Their two cars ...

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