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Wiles v. Colvin

United States District Court, D. Nebraska

April 7, 2014

FRANCIS WILES AND JUDY T. WILES (REPRESENTATIVE), Plaintiff,
v.
CAROLYN W. COLVIN, Acting Commissioner of the Social Security Administration, Defendant. FRANCELLA WILES AND JUDY T. WILES (REPRESENTATIVE), Plaintiff,
v.
CAROLYN W. COLVIN, Acting Commissioner of the Social Security Administration, Defendant.

MEMORANDUM AND ORDER

JOHN M. GERRARD, District Judge.

The claimants, Francis and Francella Wiles, were overpaid child's survivor insurance benefits by the Social Security Administration (SSA). They sought to have recovery of the overpayments waived pursuant to 42 U.S.C. § 404(b), but their requests were denied. Before the Court are their appeals from those decisions. The Court has considered the parties' filings and the administrative records, and will reverse the Commissioner's decision and remand this case with directions for the SSA to waive recovery of the overpayments.

I. BACKGROUND

Francis, born July 30, 1990, and Francella, born March 11, 1992, are the youngest of four children. T18.[1] Their father, Terry Wiles, died on May 6, 1997. T18. On May 21, 1997, their mother, Judy Wiles, applied for survivor benefits on behalf of the four children, and asked for their benefits to be paid to her as representative payee, because they were minor children. T18-25.

On June 4, 2003, Judy was notified that the claimants' benefit amounts were being raised because the SSA had stopped paying another person on the record.[2] T26. On June 10, Judy called the SSA office in Lincoln, Nebraska, and spoke to a representative named Kevin, who told her that their benefit amounts were correct. T82, 149, 199, 202-03, 220-21. Judy called the SSA office again on August 1, [3] and a representative named Jeremy told her that the amounts were correct, and that a mother always gets lesser benefits than her children. T82, 199, 202-03, 220-21. She called again on August 14, and Jeremy gave her the same answer. T82, 147, 199, 202-03, 220-21.

On April 6, 2008, the SSA informed Judy of an overpayment of $13, 241 for each claimant, for the period between June 2003 and March 2008. T27; case no. 4:13-cv-3063 T18. The claimants filed requests for reconsideration, explaining that "[t]he overpayment was not our fault. The benefits were sent to us and we did not know that we were being overpaid." T32-34. The SSA replied that "the reason you gave for completing that form indicates that you did not really want a reconsideration but only wanted information." T52. So, the SSA did not reconsider the determination, and directed Judy to contact an SSA office if she "really wanted a reconsideration of the determination made." T52. Judy, in turn, replied that the appeal form had been filled out by the claims representative at the SSA office in Omaha, Nebraska, who had refused to accept the appeal form Judy had already filled out. T56. Judy asked for a formal determination of whether the overpayment and payment amounts were correct. T56.

On August 27, 2009, Judy requested a waiver of overpayment recovery, describing her contacts with SSA representatives in 2003 regarding whether the benefit amounts were correct. T81-88. Francis, now an adult, made his own request on October 3. T98-105. According to the requests, Francis was in college and not employed at the time. He had about $10, 000 in savings, and expenses of about $1, 000 per month. T100-03. Francella was still in high school and was not employed, and had savings of about $25, 000. T83-85. It was later established that those funds were an inheritance from a great-aunt that had been set aside for the claimants' college education. T198-201.

On February 17, 2010, the SSA denied the requests for waiver pending a "personal conference." T108. After the conference, the claims representative wrote that

[s]ince Judy states that she contacted our office several times about the amounts to check if they were correct, she is partialy [sic] without fault. But, she is at fault for not returning the checks and following through to appeal the changes in the benefit checks, especially since she did not agree that the children were now receiving more than she was.

T113. The claims representative also wrote that she was denying the waiver because there were funds available to repay the overpayment. T113. On April 7, 2010, the SSA finally denied the waiver requests, stating that it could not "find [the claimants] without fault in causing the overpayment"[4] and that the claimants "can afford to repay the overpayment." T114.

The claimants requested an administrative hearing. T117. At the hearing, Judy explained how she had saved the inherited funds that made up Francis' and Francella's college funds; that she "wouldn't touch the savings" to pay ordinary expenses, and would "make sacrifices" instead. T198-200, 218, 229. Judy again explained to the ALJ how she had attempted, in 2003, to confirm with the SSA that the benefits being paid were correct. T199, 202-03, 220-21.[5] And she presented telephone bills to substantiate her testimony regarding those contacts with the SSA. T147-49.

But the ALJ refused to waive recovery of the overpayments. T11-17; case no. 4:13-cv-3063 T15-21. The ALJ found that the claimants were without fault regarding the overpayment, but did not need their savings for ordinary and necessary living expenses. T16; case no. 4:13-cv-3063 T20. And according to the ALJ, there was no evidence that the claimants or Judy had "changed their financial positions to their detriment in reliance on the receipt of the erroneous benefits[, ]" because the claimants "received less than $200 each month in error" and that it was "unlikely that one would change his position for the worse or relinquish a valuable right in reliance on receiving such a relatively small sum each month." T16; case no. 4:13-cv-3063 T20. So, after the Appeals Council denied their respective requests for review, each claimant was held liable for $10, 853 that had been overpaid in error. T7-8; case no. 4:13-cv-3063 T7-8. Each claimant filed a pro se complaint with this Court seeking review of the administrative decision.[6] Filing 1; case no. 4:13cv-3063 filing 1.

II. STANDARD OF REVIEW

The Court reverses the findings of the Commissioner only if they are not supported by substantial evidence or result from an error of law. See Byes v. Astrue, 687 F.3d 913, 915 (8th Cir. 2012) (citing § 405(g)); see also Rodysill v. Colvin, ___ F.3d ___, 2014 WL 1099686, at *1 (8th Cir. Mar. 21, 2014). Substantial evidence is less than a preponderance, but enough that a reasonable mind would find it adequate to support the Commissioner's conclusion. Id. In determining whether evidence is substantial, the Court considers evidence that detracts from the Commissioner's decision as well as evidence that supports it. Id. If substantial evidence supports the ...


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