Wilkening, Traci v. Barnhart, Jo Anne

UNPUBLISHED ORDER
Not to be cited per Circuit Rule 53
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Argued April 14, 2005
Decided May 31, 2005
Before
Hon. JOHN L. COFFEY, Circuit Judge
Hon. KENNETH F. RIPPLE, Circuit Judge
Hon. MICHAEL S. KANNE, Circuit Judge
No. 04-2517
TRACI WILKENING, Appeal from the United States District
Plaintiff-Appellant, Court for the Northern District of
Illinois, Eastern Division.
v.
No. 02 C 9096
JO ANNE B. BARNHART,
Defendant-Appellee. Martin C. Ashman,
Magistrate Judge.
ORDER
The Social Security Administration (“the Agency”) informed Traci Wilkening
that the Agency had overpaid her disability benefits. Ms. Wilkening pursued an
administrative appeal, and an administrative law judge (“ALJ”) denied Ms.
Wilkening’s request for a waiver of recovery of her overpayment. Ms. Wilkening then
sought judicial review in the district court. See 42 U.S.C. § 405(g). The court
concluded that the ALJ’s decision was supported by substantial evidence, and granted
the Agency’s motion for summary judgment. Ms. Wilkening now appeals to this
court.
No. 04-2517 Page 2
I
BACKGROUND
A. Facts
Ms. Wilkening was diagnosed with bipolar disorder in 1990 and became eligible
for Social Security disability benefits in October of that year. Generally, a person is not
entitled to disability benefits if she works in substantial gainful employment. See 42
U.S.C. § 423(e). However, the “trial work period” provides a time during which Social
Security beneficiaries may try out their ability to work by working in substantial gainful
employment while still receiving their benefits. See 42 U.S.C. § 422(c). The trial work
period ends after the ninth month in which the beneficiary has been working; the nine
months in which work is done do not have to be consecutive. See id. The “extended
period of eligibility” (also called the “reentitlement period”) is an additional three years--
after the trial work period--in which the beneficiary may work without having her
benefits terminated completely. See 42 U.S.C. § 423(e); 20 C.F.R. § 404.1592a. During
the extended period of eligibility, the beneficiary is not entitled to benefits during the
months in which she works, but she is entitled to benefits in months in which she does
not work (without having to file a new application). See 20 C.F.R. § 404.1592a. After
the extended period of eligibility, the beneficiary’s disability payments are terminated
completely if she works at any time. See id.
Ms. Wilkening’s trial work period began in November 1990 and ended in April
1992. She began working in substantial gainful employment, as defined at 20 C.F.R. §
404.1574(b)(2), during certain months after she became eligible for benefits. Her
extended period of eligibility ended in October 1995. She continued to receive payments,
however, after her extended period of eligibility and did not inform the Agency of her
receipt of these benefits or of her employment at that time. The Agency twice has
charged Ms. Wilkening with overpayment of disability benefits (only the second
overpayment is at issue in this appeal).
In December 1995, the Agency notified Ms. Wilkening that she and her minor
daughter had been overpaid benefits. In February 1996, May 1996 and March 1997, Ms.
Wilkening filed requests for waiver of overpayment recovery.
Ms. Wilkening received a medical review from state examiners in July 1996. The
examining doctor concluded that Ms. Wilkening still suffered from a listed disability and
the Agency sent her a letter informing her that she still met the disability criteria and
that her status as a Social Security beneficiary was unchanged. The same letter stated
that she must report any changes in her employment status and informed her that her
trial work period had ended.
No. 04-2517 Page 3
Ms. Wilkening’s waiver requests were denied on September 20, 1997. The Agency
denied her request for waiver because she had not timely notified the Agency of her
employment. In November 1997, Ms. Wilkening met personally with a claims
representative from the Agency who again refused waiver of overpayment. Ms.
Wilkening requested a hearing but the request was dismissed in January 1999 when she
repeatedly failed to appear.
Ms. Wilkening was paid benefits until March 1999. Eventually, she received a
second notice1 of overpayment in July 1999 (the record appears to be silent, as the court
recognized, as to the form this notice took). She requested waiver or reconsideration
and, when those requests were denied, she sought a hearing before an ALJ.
B. Proceedings Before the ALJ
Ms. Wilkening testified that she has a GED and that she attended a year of
college but did not finish the year. She testified that she did not always take the
medication prescribed for her condition. She asserted that she had been unsure
whether her earnings would affect her eligibility for Social Security benefits and
claimed that she did not know about trial work periods and that she did not recall her
past overpayments and past request for waivers.
The ALJ concluded that Ms. Wilkening had returned to work and had
continued to receive benefits even after the conclusion of her trial work period and
her extended period of eligibility. Therefore, the ALJ determined that she was
overpaid by $29,280.10. The ALJ’s determination of the amount of overpayment was
based on exhibits provided by the Agency and on the fact that, at the hearing, Ms.
Wilkening’s counsel stipulated to the amount of the overpayment. A.R. at 23; see
also R.22 at 5 (opinion of district court) (“Plaintiff’s representations at the hearing
entitled the ALJ to rely exclusively on the waiver determination . . . . Plaintiff did
not contest the issue of overpayment before the ALJ; specifically, she did not attack
the credibility or accuracy of [the Agency’s documents]. In fact, Plaintiff, through
her counsel, agreed with the figure stated in the waiver determination . . . .”).
The ALJ also concluded that Ms. Wilkening was not without fault in the
overpayment. The ALJ determined that Ms. Wilkening’s testimony that she had
been unaware that she was receiving benefits to which she was not entitled was not
credible. The credibility determination rested on the ALJ’s finding that she had been
informed in the past that her earnings would affect her eligibility. The ALJ also
1
From the ALJ’s decision, see A.R. at 11-12, it appears that the second charge did
not apply to the children because the Agency waived recovery of those payments.
No. 04-2517 Page 4
found that Ms. Wilkening had the “mental capacity” to comprehend her situation, in
light of her having completed some college. The ALJ also observed, “[E]ven
assuming her . . . apparent occasional relapses into substance and alcohol abuse . . .
interfered with her cognitive functioning, her testimony was that, at times, she felt
better and stopped taking medication.” A.R. at 14.
Ultimately, the ALJ concluded that the recovery of the overpayment could not
be waived. The Appeals Council of the Agency concluded that there was no basis to
grant Ms. Wilkening’s request for review, and, therefore, the ALJ’s decision stood as
the final decision of the Commissioner of Social Security (“the Commissioner”).
C. District Court Proceedings
Ms. Wilkening sought judicial review of the refusal to waive overpayment
recovery.2 The district court first addressed Ms. Wilkening’s challenge to the existence
and amount of the overpaid benefits. It indicated that the burden of proving the
existence and amount of an overpayment should rest with the Agency. The court noted
that, although the record contained references to the amount of the overpayment, the
ALJ’s decision did not make reference to the issue of overpayment, did not explain how
he reached the $29,280.10 figure and did not make reference to any notice to Ms.
Wilkening. The court also noted, however, that Ms. Wilkening’s representations at the
hearing entitled the ALJ to rely on the waiver determination that had been tendered to
Ms. Wilkening’s counsel. The court found that Ms. Wilkening had agreed, through her
counsel, to the figure stated in the waiver determination. Therefore, the court concluded
that the ALJ properly had relied on the waiver determination supplied by the Agency
and that his finding as to the existence and amount of overpayment had substantial
support in the record.
The court next addressed Ms. Wilkening’s contention that she was entitled to
waiver of the recovery of overpaid benefits because she was not at fault. The court
concluded that the ALJ’s determination of Ms. Wilkening’s credibility was supported by
substantial evidence in the record. Thus, the district court affirmed the final decision
of the Commissioner.
II
DISCUSSION
2
The parties consented to have a magistrate judge sit as the district court.
No. 04-2517 Page 5
We review the determination of the ALJ without giving any deference to the
district court. See Groves v. Apfel, 148 F.3d 809, 811 (7th Cir. 1998). We shall affirm the
ALJ if the ALJ’s decision is supported by substantial evidence. See Herron v. Shalala,
19 F.3d 329, 333 (7th Cir. 1994) (“Substantial evidence is such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion.”) (internal
quotations omitted). In reviewing the ALJ, this court is not entitled to “reweigh the
evidence, resolve conflicts, decide questions of credibility, or substitute [its] own
judgment for that of the Commissioner.” Clifford v. Apfel, 227 F.3d 863, 869 (7th Cir.
2000).
The Agency must seek a refund from a person to whom it has mistakenly made
an overpayment of disability benefits. See 42 U.S.C. § 404(a). Ms. Wilkening contends
that the ALJ’s determination of the existence and amount of the overpayment was not
supported by substantial evidence. She also contends that she was not given appropriate
notice of the overpayment.
Much of Ms. Wilkening’s argument on the issue of the overpayment goes to
claiming that the district court should not have found that she waived her objection to
the existence and amount of overpayment. Ms. Wilkening appears to believe that the
district court declined to consider, on the ground that Ms. Wilkening had never raised
the issue in administrative proceedings, her argument that substantial evidence did not
support the ALJ’s finding of the existence and amount of overpayment. See Appellant’s
Br. at 12 (“However, the Court rejected plaintiff’s arguments on this head on the ground
that the issue was not raised administratively.”). This contention clearly is wrong. The
district court noted that “a reviewing court will not decide issues that were not raised
administratively.” R.22 at 10. However, on the next page of the court’s memorandum
opinion, it concluded that the Agency’s argument that Ms. Wilkening had waived review
of the existence and amount of any overpayment was in error, because she had raised
the issue by filing a request for reconsideration of the amount of overpayment prior to
the hearing. In fact, the district court plainly stated that “the issue of whether Plaintiff
received overpayments, and how much, was in front of the ALJ, who made an explicit
finding on these issues. Thus this Court has the obligation to review both issues.” R.22
at 11.
We must conclude that the ALJ’s findings that an overpayment existed and
that it totaled $29,280.10 were supported by substantial evidence in the record. The
ALJ was entitled to rely on the stipulation by Ms. Wilkening’s counsel to the amount
of the overpayment. We also conclude that the notice provided to Ms. Wilkening was
adequate in this case. She received a letter in February 1998 that stated that she was
not entitled to payments for the period extending from October 1993 through
December 1994 and for the period including October 1995 and later. See A.R. at 117-
19. Agency records also show that, around July 1999, Ms. Wilkening was sent notice
of the overpayment amount of $29,280.10. See A.R. at 177.
No. 04-2517 Page 6
When the Agency mistakenly has made an overpayment of disability benefits,
the Agency may not recover an overpayment from the recipient when: (1) the
recipient is without fault and (2) “recovery would defeat the purpose of [the Social
Security Act] or would be against equity and good conscience.” 42 U.S.C. 404(b).
According to the regulations governing the implementation of this statutory
provision, “[a]lthough the [Agency] may have been at fault in making the
overpayment, that fact does not relieve the overpaid individual or any other
individual from whom the Administration seeks to recover the overpayment from
liability for repayment if such individual is not without fault.” 20 C.F.R. § 404.507.
A finding of fault can be based on any of the following:
(a) An incorrect statement made by the individual which he knew or should
have known to be incorrect; or
(b) Failure to furnish information which he knew or should have known to be
material; or
(c) With respect to the overpaid individual only, acceptance of a payment which
he either knew or could have been expected to know was incorrect.
Id.
In determining whether a person is without fault in causing the overpayment
of benefits, the ALJ must “specifically take into account any physical, mental,
educational, or linguistic limitation such individual may have (including any lack of
facility with the English language).” 42 U.S.C. 404(b); see also 20 C.F.R. § 404.507
(same).
Ms. Wilkening contends that the ALJ erred in determining that she had not
testified credibly that she did not know that working would render her ineligible for
benefits. But see Clifford, 227 F.3d at 869 (“[W]e . . . do not . . . decide questions of
credibility, or substitute our own judgment for that of the Commissioner.”). She
submits that the ALJ should have considered not only whether she had received
notification in the past regarding the effect that employment would have on her
benefits, but also whether she comprehended that information. See 42 U.S.C. §
404(b) (requiring ALJ considering an individual’s fault “specifically [to] take into
account any physical, mental, educational, or linguistic limitation such individual
may have”). She claims that, because she suffered from a severe bipolar disorder, she
could have been confused by the information with which she was provided. She also
contends that she was without fault and, thus, that the ALJ should have considered
No. 04-2517 Page 7
whether she was entitled to a waiver of the recovery of overpayment.3
The Agency submits that the ALJ appropriately concluded that Ms. Wilkening
was not without fault for the purpose of a waiver of recovery because she accepted
benefits that she either knew or should have known were incorrect. See 20 C.F.R. §
404.507. Specifically, the Agency contends that it was reasonable for the ALJ to
conclude that Ms. Wilkening’s receipt of the first overpayment charge informed her
that working would render her ineligible for benefits. Furthermore, the Agency
submits that the ALJ appropriately considered whether Ms. Wilkening’s bipolar
disorder affected her fault for the overpayment. It correctly points out that the ALJ
weighed several facts about Ms. Wilkening, including the fact that she completed one
year of college after being diagnosed with bipolar disorder and the fact that her
condition did not require continuous use of medication.
We must conclude that the ALJ’s determination that Ms. Wilkening was not
without fault is supported by substantial evidence in the record. Furthermore, we
conclude that the ALJ gave the proper consideration to the factors listed in 42 U.S.C.
404(b) and 20 C.F.R. § 404.507. Substantial evidence supports the ALJ’s conclusion
that Ms. Wilkening’s bipolar disorder did not render her without fault in the
overpayment of benefits. Because substantial evidence supports the ALJ’s
determination that Ms. Wilkening was not without fault, there was no occasion for
the ALJ to consider whether or not recovery would defeat the purposes of the Social
Security Act or would be against equity and good conscience. See Heins v. Shalala,
22 F.3d 157, 163 n.2 (7th Cir. 1994).
Conclusion
For the reasons set forth in this order, the judgment of the district court is
affirmed.
AFFIRMED
3
Ms. Wilkening contends that the ALJ’s determination that she was not without
fault was affected improperly by his conclusion that she had suffered “occasional relapses
into substance and alcohol abuse.” A.R. at 14. However, as the Agency points out, the
ALJ’s discussion of the alleged substance abuse problems, read in context, shows that
proven substance abuse would have inclined him towards finding Ms. Wilkening was
without fault. Therefore, she was not prejudiced by his consideration of alleged
substance abuse problems.