Scott King v. Michael Astrue

FILED
NOT FOR PUBLICATION NOV 16 2012
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
SCOTT R. KING, No. 11-55650
Plaintiff-Appellant, D.C. No. 3:09-CV-02420-MMA-
POR
v.
MEMORANDUM *
MICHAEL J. ASTRUE,
COMMISSIONER OF SOCIAL
SECURITY,
Defendant-Appellee.
On Appeal from the United States District Court
for the Southern District of California
Michael M. Anello, District Judge, Presiding
Submitted November 8, 2012 **
Pasadena, California
Before: GOODWIN and O’SCANNLAIN, Circuit Judges, and ZOUHARY,
District Judge.***
* This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
*** The Honorable Jack Zouhary, District Judge for the U.S. District Court
for the Northern District of Ohio, sitting by designation.
Plaintiff-Appellant Scott King’s Supplemental Security Income (“SSI”) was
reduced by a final decision of Defendant-Appellee Michael Astrue, Commissioner of
Social Security, after an Administrative Law Judge (“ALJ”) determined Plaintiff’s
receipt of charitable trust payments constitutes income for purposes of SSI eligibility,
and not a bona fide loan under SSR 92-8p. The district court affirmed that decision,
from which Plaintiff appeals. We have jurisdiction under 28 U.S.C. § 1291, review
the ALJ’s decision for substantial evidence, Flaten v. Sec’y of Health & Human
Servs., 44 F.3d 1453, 1457 (9th Cir. 1995), and now affirm.
Determinating that a loan did not exist, the ALJ relied, in part, on Plaintiff’s
failure to produce the written loan agreement. Plaintiff contends, however, that he
submitted the loan’s promissory notes to the Social Security Appeals Council as
attachments to his letter requesting review of the ALJ’s decision. Plaintiff argues we
may consider the promissory notes, even though they were not submitted to the ALJ,
because under Ramirez v. Shalala, 8 F.3d 1449 (9th Cir. 1993), they were “addressed”
by the Appeals Council when it denied Plaintiff’s request for review.
In Brewes v. Comm’r of Soc. Sec., 682 F.3d 1157, 1163 (9th Cir. 2012), this
Court held that “when the Appeals Council considers new evidence in deciding
whether to review a decision of the ALJ, that evidence becomes part of the
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administrative record, which the district court must consider when reviewing the
Commissioner’s final decision for substantial evidence.” But the only evidence
suggesting the Appeals Council considered the putative promissory notes is a
document in which the Appeals Council acknowledged receipt of a “[l]etter requesting
review of the [ALJ’s] decision with attachments dated, June 12, 2007.” The record
before this Court does not contain the promissory notes; it only contains Plaintiff’s
letter requesting review. We are unable to discern whether the Appeals Council
actually had, let alone considered, the promissory notes within the meaning of Brewes.
We are unable to review the promissory notes, and therefore, the notes cannot provide
a basis for finding the ALJ’s decision was unsupported by substantial evidence.
Plaintiff contends that, even without the promissory notes, the record contains
sufficient evidence to demonstrate the existence of a loan. Plaintiff’s argument,
however, misapplies the standard of review. Our inquiry is limited to a determination
of whether the ALJ’s decision is supported by substantial evidence. Flaten, 44 F.3d
at 1457. Indeed, even “[w]here the evidence as a whole can support either outcome,
we may not substitute our judgement for the ALJ’s.” Key v. Heckler, 754 F.2d 1545,
1549 (9th Cir. 1985); accord Matney v. Sullivan, 981 F.2d 1016, 1019 (9th Cir. 1992).
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Here, the ALJ considered all evidence bearing on the alleged loan, including
trust documents that characterized the payments as a loan, and bank statements
showing that Plaintiff—not the trust—directly paid his creditors. Additionally, the
ALJ’s opinion explicitly referenced testimony from the Trustee and from Plaintiff’s
attorney as to the existence of a written loan agreement. The ALJ found it persuasive
that the written agreement was not produced, and that there was no evidence regarding
the agreement’s terms. As the district court correctly stated:
[i]t was not error for the ALJ to consider the lack of substantiating loan
documentation when reaching his decision. Nor was it incumbent upon
the ALJ to request such documentation specifically, when the burden of
proof lies with [Plaintiff], and the Administration had given Plaintiff
prior notice that such documentation should be submitted in order to
establish the existence of a bona fide loan.
Plaintiff’s reliance on Varney v. Sec’y of Health & Human Servs., 859 F.2d
1396 (9th Cir. 1988), does not change this analysis. Plaintiff argues that under
Varney, courts are bound to accept as true any material testimony that the ALJ does
not specifically discredit. As such, Plaintiff contends we must accept the Trustee’s
testimony regarding the existence of a written loan agreement because the ALJ did not
reference the Trustee’s testimony in his decision. As explained above, the ALJ did
explicitly reference this testimony. Moreover, the credit-as-true rule adopted in
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Varney governs an ALJ’s responsibilities when addressing a claimant’s subjective
pain testimony. Id. at 1398. Varney is simply inapplicable in this case.
The ALJ properly considered all the evidence under SSR 92-8p’s guidelines
for determining the existence of a loan, and his subsequent conclusion is supported
by more than a scintilla of evidence. See Sandgathe v. Chater, 108 F.3d 978, 980 (9th
Cir. 1997).
AFFIRMED.
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