United States District Court, D. Arizona
James A. Teilbrorg Senior United States District Judge
Plaintiff Ryan Christopher Melton (“Plaintiff”) appeals the Commissioner of Social Security’s (the “Commissioner”) denial of a request for waiver of recovery for overpayment of Social Security benefits. The Court now rules on his appeal.
I. Factual and Procedural Background
On December 1, 2003, Plaintiff was found to be disabled by the Social Security Administration (“SSA”), based upon mental impairments which included Tourette’s Syndrome, bipolar disorder, attention deficit disorder, and obsessive compulsive disorder. (Tr. at 24). On May 1, 2004, Plaintiff began receiving Supplemental Security Income (“SSI”). (Tr. at 48). In 2006, Plaintiff began working. (Tr. at 64, 159). During this time, Plaintiff’s monthly earnings exceeded the amount permitted by the SSA to still receive supplemental income. (Tr. at 64, 66-67). In November 2010, the SSA terminated Plaintiff’s benefits retroactively to November 2007 and demanded repayment of $39, 417.10 for benefits paid after that date. (Tr. at 70).
Plaintiff’s initial request for waiver of the overpayment and subsequent requests for reconsideration were denied. (Tr. at 75, 98-101, 108, 114). On October 19, 2012, an Administrative Law Judge (“ALJ”) conducted a hearing to review Plaintiff’s request for waiver. (Tr. at 150-89). On December 12, 2012, the ALJ denied Plaintiff’s request to waive the overpayment of benefits and found Plaintiff liable for $36, 916.10. (Tr. at 19-21). After the SSA Appeals Council denied review, the ALJ’s decision became the final decision of the Commissioner. (Tr. at 4-6). Plaintiff then timely filed an appeal with the Court, seeking judicial review. (Doc. 1).
A. The ALJ Hearing
Plaintiff did not appear before the ALJ at the hearing on October 19, 2012. (Tr. at 152). Instead, Plaintiff’s father acted as his representative and Plaintiff’s mother (“Mrs. Melton”) testified on his behalf. (Tr. at 155-56). Mrs. Melton initially testified that Plaintiff possessed a driver’s license, drove himself to and from work, and handled his own finances. (Tr. at 159). However, Mrs. Melton later testified that Plaintiff was unable to make any major financial decisions. (Tr. at 166). Mrs. Melton also testified that Plaintiff’s psychological problems prevent him from being able to fully comprehend or respond to daily life occurrences. (Tr. at 167).
Mrs. Melton further testified that she and her husband had made repeated notifications to the SSA of Plaintiff’s employment status, in writing, by telephone, and in person, beginning in late 2007 or early 2008. (Tr. at 142, 162-64, 169, 170, 172-73). Mrs. Melton also testified the notifications were made at Plaintiff’s request and Plaintiff was aware his employment could affect his benefits. (Tr. at 161-64). Mrs. Melton testified that to her knowledge, Plaintiff had never been told that he should return any benefit checks that he received. (Tr. at 182-83). However, Mrs. Melton admitted that neither she nor Plaintiff had asked the SSA what they should do with the checks after they reported Plaintiff’s employment. (Tr. at 183).
B. The ALJ’s Findings
On December 12, 2012, the ALJ returned an unfavorable ruling against Plaintiff. (Tr. at 19). The ALJ found: (1) Plaintiff was overpaid $39, 417.10 in benefits between November 2007 and July 2010; (2) Plaintiff was at fault in causing and accepting the overpayment; and (3) recovery of the overpayment is not waived. (Tr. at 24-25). The ALJ noted that “[a]lthough [Plaintiff’s] impairments are mental disorders, he did complete his GED, he drives himself to and from work, and he manages his own finances.” (Tr. at 24). The ALJ also observed that though “claimant’s parent’s allege they help him with handling his money . . . the records do not indicate the need for a representative payee.” (Id.) The ALJ found the Plaintiff “should be able to comprehend the basic information about reporting work activity to the SSA.” (Id.) Further, the ALJ noted the evidence and testimony provided demonstrated Plaintiff was aware of his reporting requirements and that his benefits may be affected by his employment. (Tr. at 24-25). The ALJ found no representation by the SSA that “substantial gainful activity could be performed for years and that benefits would continue to be paid during that time.” (Tr. at 24). Lastly, the ALJ rejected Plaintiff’s claim that he was without fault in accepting the overpayment, instead finding that Plaintiff was notified by the SSA that work may affect his benefits and failed to inquire further when his benefit payments continued. (Tr. at 25).
II. Standard of Review
The Court has the authority to review the final decision of the Commissioner as to any fact to determine whether it is supported by substantial evidence. See 42 U.S.C. § 405(g) (“The findings of the Commissioner of Social Security as to any fact, if supported by substantial evidence, shall be conclusive . . . ”). The Court will set aside the ALJ’s findings only if they are “based on legal error or are not supported by substantial evidence.” Hiler v. Astrue, 687 F.3d 1208, 1211 (9th Cir. 2012) (citing McCartey v. Massanari, 298 F.3d 1072, 1075 (9th Cir. 2002)). Substantial evidence is “more than a mere scintilla but less than a preponderance; it is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Andrews v. Shalala, 53 F.3d 1035, 1039 (9th Cir. 2000) (citing Magallanes v. Bowen, 881 F.2d 747, 750 (9th Cir. 1989)). If the evidence can have more than one interpretation, “one of which supports the ALJ's decision, the ALJ's conclusion must be upheld.” Thomas v. Barnhart, 278 F.3d 947, 954 (9th Cir. 2002). The ALJ is responsible for determining credibility and resolving ambiguities. Andrews, 53 F.3d at 1039 (internal citation omitted).
III. Legal Standard
The Social Security Act provides that repayment for SSI benefits may be waived “with a view to avoiding penalizing [an] individual . . . who was without fault in connection with the overpayment, if adjustment or recovery on account of such overpayment in such case would defeat the purposes of this subchapter, or be against equity and good conscience . . . ” 42 U.S.C. § 1383(b)(1)(B); see also 20 CFR § 416.550. Thus, to qualify for waiver of repayment, a plaintiff must be (1) without fault; and (2) repayment would either defeat the ...