Iris Dervin v. Michael J. Astrue

FILED
NOT FOR PUBLICATION DEC 27 2010
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S . CO U RT OF AP PE A LS
FOR THE NINTH CIRCUIT
IRIS R. DERVIN, No. 08-56816
Plaintiff - Appellant, D.C. No. 2:06-cv-08217-RGK-
PJW
v.
MICHAEL J. ASTRUE, MEMORANDUM *
Defendant - Appellee.
Appeal from the United States District Court
for the Central District of California
R. Gary Klausner, District Judge, Presiding
Argued and Submitted February 1, 2010
Pasadena, California
Before: KLEINFELD, WARDLAW and CALLAHAN, Circuit Judges.
Iris Dervin received Social Security benefit payments from 1995 to 2002. In
2002, her benefits were retroactively terminated as of June 2000. Her benefits
were terminated because she had engaged in periodic temporary employment
constituting 'substantial gainful activity' between 1998 and 2000.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Upon termination of her benefits, the Social Security Administration
pursued reimbursement from Dervin of approximately ü28,000 in disability
overpayments. Dervin sought a waiver of the overpayment. She also brought a
new petition for disability benefits, claiming she is disabled by schizophrenia and
by µnee and bacµ pain. The ALJ denied Dervin's application for a waiver and
petition for benefits. The district court affirmed. We review its legal
determinations de novo and affirm the Commissioner's denial of benefits only
when it is supported by substantial evidence in the record. Rollins v. Massanari,
261 F.3d 853, 855 (9th Cir. 2001); Reddicµ v. Chater, 157 F.3d 715, 720 (9th Cir.
1998). We reverse.
A. Disability Determination
The ALJ's determination that Dervin's physical ailments were not disabling
was supported by substantial evidence in the record. There was no medical
evidence to support a finding of disability based on Dervin's joint and bacµ pain.
The ALJ's determination that Dervin was not mentally impaired lacµs
substantial evidence in the record. First, ALJ failed to account for two previous
2
determinations by the Social Security Administration that Dervin suffered from
schizophrenia and was therefore disabled. The ALJ's finding that Dervin suffered
from no mental limitation is patently incompatible with these previous findings and
diagnoses, which are not addressed in the ALJ's discussion. Schizophrenia is not
curable, and the record indicates that Dervin was not controlling her illness with
psychiatric medication. The ALJ found that Dervin lacµed 'a treatment history
with clinical and diagnostic findings.' This finding is not supported by the record,
which shows that Dervin was hospitalized for mental illness in 1994, and that for a
period thereafter she was diagnosed with and received ongoing outpatient
treatment for schizoaffective disorder.
The ALJ rejected the opinion of Dr. Walµer, a psychiatrist that Dervin had
seen at Kaiser Permanente. Dr. Walµer opined in 2001 and again in 2004 that
Dervin was mentally disabled. Although Dr. Walµer's 2001 letter does not
confirm a specific diagnosis, Dr. Walµer's 2004 letters reference Dervin's
psychiatric records at Kaiser Permanente, which he notes 'reflects a long history of
serious mental illness and diagnosis Schizoaffective Disorder.' Dr. Walµer agreed
with that psychiatric diagnosis, and gave the names of her previous psychiatrists at
Kaiser Permanente. It appears that the ALJ did not seeµ supplemental material
3
from the psychiatrists mentioned in Dr. Walµer's letters, in spite of the ALJ's duty
to fully and fairly develop the record in a social security case and to assure that the
claimant's interests are considered. Tonapetyan v. Halter, 242 F.3d 1144, 1150
(9th Cir. 2001). The duty to develop the record is heightened in cases where the
claimant is mentally impaired. See Delorme v. Sullivan, 924 F.2d 841, 849 (9th
Cir. 1991). In cases of chronic mental impairment such as this one, the ALJ is
required to gather all records of past treatment. Id. at 848 & n.17.
Instead, the ALJ relied on the opinion of Dr. Bagner, to whom Dervin was
referred by Social Services for a psychiatric evaluation. Dr. Bagner was not a
board-certified psychiatrist. He indicated that Dervin was his only source of
information for his evaluation. Evidently, he did not obtain or read her medical
records from Kaiser Permanente. Dr. Bagner was incorrect in his assessment of
Dervin as a 'reliable historian.' Dr. Bagner based his opinion in part on Dervin's
denials that she suffered from hallucinations or delusions, and that she had any
history of suicidal thoughts. The record shows, however, that she had paranoid
delusions regarding a conspiracy theory between her neighbors and her landlord, in
which they spied on her and made noises as they followed her around, and a
psychiatric history including hospitalization for suicidal ideation. (Dervin denies
4
that she is delusional, stating that the problems she has with her conspiratorial
neighbors are real.) Additionally, Dr. Bagner's opinion was inconsistent with
reports in the record from other medical professionals who encountered Dervin in
the context of examining her physical ailments. An email to her referring
physician from Rit Tun in Orthopaedics noted that during Dervin's visit Dervin
exihibted 'inappropriate behavior, was offensive to myself and the staff, exhibited
paranoia, and heard voices over the intercom that were supposedly derogatory to
her.' Rit Tun noted that Dervin 'seem[ed] to be well-functioning' but was
'concerned that she may have schizophrenia' and recommended Dervin be
evaluated. Similarly, the notes from Dervin's chiropractor reveal that she was
asµed to leave the treatment facility and treatment was discontinued because of
Dervin's inappropriate behavior (apparently auditory hallucinations related to
Dervin hearing noises coming through the walls).
The ALJ erred in rejecting Dr. Walµer's opinion in favor of Dr. Bagner's
opinion. The ALJ found that because Dervin had seen Dr. Walµer only twice, he
was not a 'treating physician' for purposes of the ALJ's disability determination.
We disagree. Kaiser Permanente is a medical group, in which patients may see
different doctors on different visits. Although Dr. Walµer did not prescribe
5
psychiatric medication to Dervin, it appears that his opinion represents the long
history of Dervin's treatment at Kaiser Permanente for psychiatric illness. Thus,
the ALJ could not reject it in favor of Dr. Bagner's opinion without giving
'specific, legitimate reasons for doing so that are based on substantial evidence in
the record.' See Morgan v. Comm'r of Soc. Security Admin., 169 F.3d 595, 600
(9th Cir. 1999). The ALJ failed to account for the evidence in the record of
Dervin's mental illness, and did not give specific, legitimate reasons based on
substantial evidence for rejecting Dr. Walµer's opinion. The evidence in the record
as a whole unambiguously supports the conclusion that Dervin is mentally ill.
Accordingly, we reverse the ALJ's determination that Dervin was not mentally
impaired, and remand for further proceedings consistent with this disposition.
B. Waiver of Overpayment
Overpayments are amounts paid to the beneficiary in excess of the amount
due to that individual under the Social Security Act or payments resulting from the
failure to suspend, reduce, or terminate benefits. 20 C.F.R. y 404.501(a). The
Social Security Act provides that the Administration may seeµ recovery of the
amounts that were overpaid. 20 C.F.R. y 404.501(a). The individuals who
6
received the overpayments are entitled to 'immediate notice' '[w]henever an
initial determination is made' that there has been an overpayment and that the
Administration seeµs 'adjustment or recovery of the overpayment[.]' 20 C.F.R.
404.502a.
The Act and regulations also provide, however, that 'there shall be no
adjustment or recovery in any case where an overpayment under title II has been
made to an individual who is without fault if adjustment or recovery would either
defeat the purpose of title II of the Act, or be against equity and good conscience.'
20 C.F.R. y 404.506. An individual is at 'fault' for the overpayment for purposes
of a waiver request if the facts show that the overpayment resulted from
(a) An incorrect statement made by the individual which
he µnew or should have µnown to be incorrect; or
(b) Failure to furnish information which he µnew or
should have µnown to be material; or
(c) With respect to the overpaid individual only,
acceptance of a payment which he either µnew or could
have been expected to µnow was incorrect.
7
20 C.F.R. y 404.507. Additionally, the Social Security Administration considers
'all pertinent circumstances, including the individual's age and intelligence, and
any physical, mental, educational, or linguistic limitations ... the individual has.'
20 C.F.R. y 404.507.
The ALJ found that Dervin was at fault because she failed to fully represent
her worµ activity to the Social Security Administration. The record shows that
Dervin made reports to the Social Security Administration regarding her worµ
activities, but a continuing benefits audits revealed that those reports were
incomplete. The ALJ failed to taµe into consideration all pertinent circumstances
when determining whether Dervin was at fault for the overpayment. The Social
Security Administration held a hearing in November 2001 and sent Dervin a
decision indicating that she was entitled to benefits. Thus, at least for the period
following that decision, Dervin reasonably relied on the Social Security
Administration's written determination of her eligibility in continuing to receive
payment of those benefits.
Moreover, the ALJ failed to taµe into account Dervin's mental illness and
the prior determinations that Dervin was mentally ill in denying the waiver. It
8
would be particularly unjust to require repayment if in fact Dervin's mental
condition is responsible for her current predicament. The law recognizes that the
mentally ill often act in ways that contradict their best interests. Cf. Higbee v.
Sullivan, 975 F.2d 558, 562 (9th Cir. 1992) ('The duty to provide an adequate
record is of extraordinary importance when a person once found eligible for S.S.I.
benefits may be in danger of losing them because he is too ill to act in his own best
interests.'). Multiple sources reflect Dervin's pre-occupation with her lacµ of
ability to worµ and her financial situation. Ann Bassett, Dervin's counselor,
diagnosed her with 'adjustment disorder' and 'acute stress disorder' tied to the
loss of her job in 1994. Bassett noted that Dervin 'suffers from extreme financial
stress' and that 'all her stress began in 1994, when she lost two jobs' and that she
'needs to worµ.' Dr. Walµer noted in his 2004 letter that Dervin 'says she used to
be a 'worµ horse' and finds the change to being disabled very frustrating' and
'feels worthless at times.' Dervin discussed with her social worµer her obsession
with finding the right job, and her worµ activity reports indicate (counter to her
interest) time spent looµing for worµ. Yet in her self-reporting, Dervin focuses on
physical ailments, denies her mental problems, and does not connect her inability
to hold any job with her mental illness (attributing her failures to being 'let go' or
a 'misplaced position'). Dervin's paranoia regarding her financial instability and
9
resulting attempts to worµ may have inadvertently caused those fears to materialize
when the Social Security Administration simultaneously denied her the benefits
upon which she depends and informed her she owed them an insurmountable debt.
We reverse the ALJ's determination that Dervin was at fault for the
overpayment, and remand to the ALJ to waive the claim for the overpayment.
REVERSED and REMANDED.
10
FILED
Dervin v. Astrue, No. 08-56816 DEC 27 2010
MOLLY C. DWYER, CLERK
CALLAHAN, CIRCUIT JUDGE, dissenting: U.S . CO U RT OF AP PE A LS
I agree with the majority's conclusions that Petitioner Iris Dervin's physical
impairments are not disabling and that she is disabled due to a psychiatric
impairment, but I dissent from the remainder of the majority's decision. I would
affirm the Administrative Law Judge's determination that Dervin was not entitled
to a waiver of the overpayment of Social Security benefits payments because she
was 'at fault' for the overpayments. See 20 C.F.R.yy 404.506 & 404.507. In my
view, substantial evidence supported this decision. Because the majority would
reverse on this issue, I dissent.