United States District Court, N.D. Illinois, Eastern Division
MELISSA A. GIACCHETTI, Plaintiff,
NANCY A. BERRYHILL, Acting Commissioner of Social Security,  Defendant.
MEMORANDUM OPINION AND ORDER 
I. Schenkier United States Magistrate Judge.
Melissa Giacchetti has filed a motion seeking reversal and
remand of the decision of the Acting Commissioner of Social
Security ("Commissioner") denying her Social
Security benefits (doc. # 9: Pl.'s Mot. for Summ. J.).
The Commissioner has filed a response asking the Court to
affirm its decision (doc. # 20: Def.'s Resp.).
For the reasons that follow, we grant Ms. Giacchetti's
Giacchetti applied for benefits on July 5, 2012, alleging she
became disabled on March 1, 2010 (R. 9). After her claim was
denied initially and upon reconsideration, she received a
hearing before an Administrative Law Judge ("ALJ")
on July 8, 2014 (Id.). On September 2, 2014, the ALJ
issued a written opinion finding Ms, Giacchetti was not
disabled from March 1, 2010 through the date of the decision
(Id.). The Appeals Council upheld the ALJ's
determination, making it the final opinion of the
Commissioner (R. 1-3). See 20 C.F.R. § 404.981;
Shauger v. Astrue, 675 F.3d 690, 695 (7th Cir.
Giacchetti was born on November 9, 1983. She enlisted in the
Army in June 2002, eventually working as an intelligence
analyst, until she was discharged from the service on March
18, 2010 (R. 45-47, 284-86). She has not worked since leaving
the military (R. 47).
Giacchetti began receiving mental health treatment while with
the military in 2006 (R. 412). In June 2006, she was
diagnosed with irritable bowel syndrome secondary to anxiety
attacks and a misconception that she smelled foul (R. 494).
She began taking anti-anxiety medication and attending group
counseling and individual psychotherapy (Id.). In
July 2007, she was diagnosed with attention deficit disorder
("ADD") and prescribed Ritalin, and in August 2007,
she was diagnosed with neurotic excoriation secondary to
April 2009, Ms, Giacchetti experienced suicidal ideation,
"which necessitated an inpatient psychiatric stay"
(R. 493). Ms. Giacchetti received treatment from Lonny R.
Natter, M.D., and on May 4, 2009, he performed a fitness for
duty mental health evaluation of Ms. Giacchetti. Dr. Natter
found that she had "moderate impairment for further
military duty" and failed Army retention standards due
to depressive disorder and anxiety disorder (R. 409-11). Dr.
Natter further stated that Ms. Giacchetti's prognosis was
poor because she had longstanding symptoms that had not
responded to treatment (R. 411).
August 5, 2009, a Medical Evaluation Board ("MEB")
found Ms. Giacchetti failed to meet Army retention standards
due to her mental health issues (R. 493, 501). The MEB stated
that "in spite of going through the IOP (intensive
outpatient program), using various modalities of treatment to
include group therapy, cognitive-behavioral therapy, using
1:1 counseling, neuro-bio feedback and acupuncture, "
her mental impairments continued (R. 494). In addition, her
anxiety spells had worsened; they were triggered by being in
a classroom, smelling alcohol and feces, and hearing loud
noises (R. 500).
December 23, 2009, Ms. Giacchetti underwent a post-deployment
screening, during which she reported experiencing nightmares
and feeling watchful, numb, detached, depressed and hopeless
(R. 477-78). She also reported having diarrhea, headaches,
fatigue, forgetfulness, and joint pain that interfered with
her daily activities (R. 478).
she was medically discharged from the Army in March 2010, Ms.
Giacchetti filed a claim for disability benefits with the
U.S. Department of Veteran's Affairs ("VA") (R.
284). On August 19, 2010, the VA found that Ms.
Giacchetti's impairments were zero percent disabling, but
Ms. Giacchetti contested that finding, and on August 16,
2011, the VA issued a new decision finding Ms.
Giacchetti's mental impairments -- listed as
post-traumatic stress disorder ("PTSD") with
anxiety and depression - were 70 percent disabling, effective
March 19, 2010 (Id.)
October 27, 2011, Ms. Giacchetti was evaluated by
psychiatrist, Jack Yen, M.D. (R. 744), Ms. Giacchetti
reported that her panic attacks and anxiety had worsened, but
she was not taking medications or engaging in psychotherapy
at that time because she felt she was in a "good
place" (R. 745-48). After a mental status examination,
Dr. Yen diagnosed her with dysthymic disorder likely
manifested as insomnia and anxiety, and he noted her previous
diagnosis of PTSD (R. 748).
January 4, 2012, clinical psychologist, Karla Rennhofer,
Ph.D.,  a specialist in trauma and PTSD (R. 970),
completed a psychological assessment of Ms. Giacchetti in
connection with her claim for VA disability benefits (R.
730). Ms. Giacchetti reported a history of childhood sexual
and physical abuse and absenteeism and fighting in school,
and she stated that she had trouble leaving the house,
sleeping, and being near people for fear that she smelled (R.
732-35). Dr. Rennhofer observed her mood was anxious and
dysphoric, but otherwise normal (R. 736). She opined that Ms.
Giacchetti had PTSD and depression before the military, which
remitted but then recurred after she experienced trauma on
deployment to Kuwait in 2003 (Id.). Dr. Rennhofer
diagnosed Ms. Giacchetti with PTSD, anxiety disorder,
depressive disorder, parasomnia, impulse control disorder,
trichotillomania and body dysmoiphic disorder, and opined
these conditions would "likely significantly
affect" Ms. Giacchetti's ability to work or attend
Rennhofer treated Ms. Giacchetti beginning on May 21, 2012,
seeing her weekly until at least August 23, 2012 (R. 970). On
June 5, 2012, based on a rating decision of May 17, 2012, the
VA further increased Ms. Giacchetti's disability rating,
finding that her overall combined rating was 80 percent,
entitling her to be paid full disability benefits effective
March 19, 2010, because she was unemployable (R. 293). The VA
letter noted that individuals with total disability
compensation should still apply for vocational rehabilitation
benefits to help them try to obtain employment (R. 300).
August 23, 2012, Dr. Rennhofer filled out a mental residual
functional capacity ("RFC") form in connection with
Ms. Giacchetti's application for Social Security
benefits, opining that most of her mental impairments had
worsened since January 2012 (R. 970). Dr. Rennhofer explained
that Ms. Giacchetti's PTSD and her belief that she
smelled bad made it hard for her to be around people or in
stressful situations, and Ms. Giacchetti was "exhausted
continuously" and would likely decompensate if she were
exposed even to the stress of a routine work setting (R.
971). Dr. Rennhofer stated that Ms. Giacchetti had
"significant problems with memory" that interfered
with her concentration and ability to retain information and
added to her anxiety and depression (R. 974-75). Ms.
Giacchetti did not take medication for her mental impairments
because it made her feel worse, and Dr. Rennhofer wrote that
Ms. Giacchetti was not exaggerating her symptoms and "if
anything she [wa]s likely to under report" her
impairments (R. 971). Dr. Rennhofer opined that Ms.
Giacchetti was markedly limited in all areas of understanding
and memory and sustained concentration and persistence, and
markedly limited in three of five areas of social interaction
since March 1, 2010 (R. 972-73). Dr. Rennhofer concluded that
Ms. Giacchetti was not able to work because "[h]er
mental health problems coupled with her medical conditions
ma[d]e it too difficult for her to do so" (R. 975).
September 15, 2012, Matthew Galloucis, Ph.D., completed a
psychological evaluation for DDS (R. 827). Ms. Giacchetti
reported suffering from depression and anxiety for years,
although she did fine in school and had no limitations in
activities of daily living ("ADLs") (R. 828-29).
Dr. Galloucis noted that Ms. Giacchetti's mood was
anxious and her affect was variable in range and incongruent,
as she spoke of traumatic events in her life in a
"somewhat detached, matter of fact, and incongruent