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Cargile v. Berryhill

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

April 11, 2017

NANCY A. BERRYHILL, Acting Commissioner of the U.S. Social Security Administration, [1] Defendant.


          SIDNEY I. SCHENKIER, United States Magistrate Judge

         Plaintiff Allison Cargile ("plaintiff or "Ms. Cargile") seeks judicial review under 42 U.S.C. § 405(g) of a final decision of defendant Commissioner of the Social Security Administration ("SSA") denying her request for waiver of overpayment of social security benefits. See 42 U.S.C. §§ 404(a). After an Administrative Law Judge ("ALJ") denied the request for waiver, Ms. Cargile 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. Addressing cross-motions for summary judgment, the district court remanded the case to the Commissioner for further proceedings. Kainer-Cargile v. Colvin, No. 11 C 7435, 2013 WL 5587084 (N.D. 111. Oct. 10, 2013). The Appeals Council in turn remanded the case to a different ALJ for further proceedings consistent with the district court's ruling (R. 400). Following two hearings and the receipt of additional evidence, on December 11, 2015, the ALJ denied plaintiffs request for waiver (R. 148-154). Ms. Cargile declined to file exceptions to the decision with the Appeals Council, making the ALJ's decision the final decision of the Commissioner. See 20 C.F.R. § 404.984(d) ("If no exceptions are filed and the Appeals Council does not assume jurisdiction of your case, the decision of the administrative law judge becomes the final decision of the Commissioner after remand").

         Before the Court is plaintiffs brief in support of remanding her case (doc. # 15) and the Commissioner's motion for summary judgment seeking to affirm the Commissioner's decision (doc. # 22). Ms. Cargile contends that the ALJ erred in denying her request that the SSA waive its claim for overpayments, because she was not at fault for causing the overpayment and requiring repayment would defeat the purposes of the Social Security Act (doc. # 15: PL Brief, at 7-15). For the reasons that follow, plaintiffs request for remand is granted and the case is remanded to the SSA for further proceedings consistent with this opinion.


         Ms. Cargile is deaf. She received (a) Disabled Adult Child Insurance Benefits ("DAC") based on the earnings record and social security number of her father, who died in 1998;[3] and (b) Disability Insurance Benefits ("DIB"), for which she filed based on her own disability in 1997 (R. 30-32). Thereafter, Ms. Cargile began working in 2000. She earned $5, 814, 45 in 2000, $14, 811.97 in 2001, $19, 619.17 in 2002, $21, 229.37 in 2003, $23, 214.66 in 2004, and $13, 844.64 in 2005 (R. 67).

         The record contains five letters from the SSA addressed to plaintiff dated between November 1, 2001 and November 2, 2003 (R. 33-45). The November 1, 2001 letter, sent to Ms. Cargile at a Texas address and listing both Ms. Cargile's and her deceased father's social security numbers, "increased the benefit amount on [Ms. Cargile's] own record because [she] had additional earnings, " and decreased the benefit the SSA paid Ms. Cargile on her father's Social Security record (R. 33). The letter explained the breakdown of the monthly payment of benefits: $792.00 on plaintiffs account and $571.00 on her father's social security number (Id.). The letter informed plaintiff of her right to appeal if she disagreed with the SSA's decision (Id.).

         On April 20, 2002, the SSA sent plaintiff a letter addressed to her in North Aurora, Illinois (R. 35-37). Listing only Ms. Cargile's social security number, the letter states that it was providing "information about the disability benefits which you receive on this Social Security record"; specifically, that thereafter she would receive monthly checks in the amount of $642.00 (R. 35). Two months later, in a letter dated June 16, 2002, addressed to Ms. Cargile in North Aurora and again citing only plaintiffs social security number, the SSA wrote to her "about the disability benefits which you receive on this Social Security record" (R. 38). The letter stated that she would receive payments of $920.00 each month beginning in June 2002 (Id.). The fourth letter, dated July 29, 2002, was addressed to plaintiff at a new address in Aurora, Illinois, and simply noted that checks would be sent to the financial institution Ms. Cargile selected and requested that Ms. Cargile tell the SSA if she changed her mailing address or financial institutions or accounts where her payments were to be deposited (Id.).

         The final letter from the SSA to plaintiff during this time period was dated November 2, 2003 (R. 43-45). Citing solely plaintiffs social security number, the SSA wrote that it "raised the monthly benefit beginning January 2002 to give you credit for your December 2001 earnings" on this account (R. 43). The letter stated that plaintiff would receive a check for $1, 962.00 for money she was due through October 2003, and then would receive scheduled payments of $1, 004.00 for November 2003 and every third of the month thereafter (Id.).

         The SSA next sent a letter to Ms. Cargile in the latter half of 2006.[4] In response to this letter, the record contains transcripts of telephone calls Ms. Cargile made to SSA offices attempting to "straighten out" her Social Security issues.[5] During her first call, plaintiff communicated with Ms. Faulkner (R. 14-17). Ms. Faulkner stated that plaintiffs disability payments should have terminated as of March 2004 because her gross monthly earnings were well over the monthly amount that the SSA allows (R. 14-15). Plaintiff responded that she and her mother had been told for years that it did not matter how many hours she worked because she was receiving her father's benefits, but that things would change when she got married (R, 15). Ms. Cargile had learned only a few months earlier - when she called SSA to let them know she got married - that it was her earnings, and not her marital status, that mattered (Id.). She felt "just totally lost on what ssi expects" (Id.). Ms. Faulkner explained that the SSA would discontinue benefits payments and seek repayment for the amount they overpaid since April 2004, but that Ms. Cargile could request a waiver for that overpayment (R. 16-17).

         Plaintiff next called the SSA on November 7, 2006, and communicated via TDD with Lillian (R. 18). Plaintiff explained that she was confused about what was going on with her benefits because she was being told many different things, and after having been told that her benefits would end in October, she still received a November deposit into her bank account (Id.). After looking up her account, Lillian told plaintiff that she was receiving Social Security benefits of $1, 072.00 per month (Id.). Plaintiff stated that she thought that she was not supposed to be receiving benefits and that there must be "some screw up somewhere" because the SSA suspended her account and said that she had been overpaid (Id.). Plaintiff asked if she needed to physically go to an SSA office to talk to someone about the status of her benefits, but Lillian assured Ms. Cargile that she did not need to go into an SSA office and nothing "need[ed] to be straightened out" because Ms. Cargile's benefits were not being suspended (Id.).

         Less than two weeks later, in a letter dated November 20, 2006, the SSA informed plaintiff that it had paid her $66, 535.50 too much in benefits between July 2001 and April 2004 (R. 47). The letter stated that plaintiff "should refund this overpayment within 30 days" (R, 48). The letter further explained that plaintiff had the right to appeal and to request a waiver from repaying the overpayment (Id.).

         Plaintiff filed a request for waiver of repayment on November 28, 2006 (R. 53-60). Plaintiff met with an SSA representative on December 14, 2006, and explained that she had always been told that marriage, not her wages, would affect her receipt of social security benefits (R. 62). On February 10, 2007, the SSA found Ms. Cargile was at fault for the overpayment because she never reported her work (R. 68-69). The February 10 report cites both plaintiff and her father's social security numbers under "claim number, " and notes that the author "believe[d]" that the work review was initiated when plaintiff reported her marriage in 2006 (R. 69).


         Following the denial of her waiver request, plaintiff requested a hearing before an ALJ (R. 85). On January 9, 2008, Ms. Cargile, her husband, Kevin Cargile, and a friend, John Gilbert, testified at a hearing before an ALJ (R. 112-144). After the ALJ informed her of her right to an attorney, plaintiff explained that she tried to get one, but was unable to do so (R. 115). The ALJ continued with the hearing (Id.)[6]The ALJ asked plaintiff "what type of social security benefits were you receiving when this overpayment occurred, " to which plaintiff responded she was "guessing" the disability benefits on her father's account (R. 116-117). When asked by the ALJ what her understanding was that caused the "huge overpayment, " Ms. Cargile testified that the first time she learned that her work income affected her receipt of disability payments was when she called the SSA to inform them of her upcoming wedding in two months; before that, she believed that only getting married would stop her disability payments (R. 118-121). Plaintiff stated that she did not know that working and earning money was inconsistent with receiving disability benefits; she believed she was receiving disability "based off of my father's income and I don't hear" (R. 124).

         The ALJ stated that he could not find plaintiffs "application .. . filed on September 15th, '97" and instead referred to her brother's DAC application filed on November 30, 1998 (R. 124-125). The ALJ pointed out that the form states: "I agree to promptly notify the Social Security Administration if any of the following events occur and to promptly return any benefit check I receive to which a child is not entitled, " including if "a disabled child age 18 or over goes to work . . . ." (R. 125). The ALJ stated that Ms. Cargile was overpaid because she did not notify the SSA when she started working; if the SSA had been aware that she was working, it would have stopped her disability checks (R. 126). Plaintiff responded that she did not know that she had to report her earnings or that her earnings affected her benefits; otherwise, she would have reported it (Id.). She reported her income every year to the IRS (R. 127-128).

         Plaintiffs husband then testified that based on plaintiffs checks fluctuating-going down when she worked a year full time and then going up when she went part time- he thought that the SSA must know how much she was earning (R. ...

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