Mick Rodysill v. Carolyn W. Colvin , 745 F.3d 947 ( 2014 )

United States Court of Appeals
For the Eighth Circuit
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No. 13-1880
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Mick Thomas Rodysill
lllllllllllllllllllll Plaintiff - Appellant
v.
Carolyn W. Colvin, Acting Commissioner of the Social Security Administration
lllllllllllllllllllll Defendant - Appellee
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Appeal from United States District Court
for the District of Nebraska - Lincoln
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Submitted: November 20, 2013
Filed: March 21, 2014
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Before WOLLMAN, COLLOTON, and GRUENDER, Circuit Judges.
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GRUENDER, Circuit Judge.
Mick Rodysill appeals the district court’s1 judgment upholding the decision of
the Commissioner of the Social Security Administration (the “Commissioner”). The
1
The Honorable Thomas D. Thalken, United States Magistrate Judge for the
District of Nebraska, to whom the case was referred for final disposition by consent
of the parties pursuant to 28 U.S.C. § 636(c).
Commissioner determined that Rodysill was not entitled to waiver of recovery of
overpaid disability benefits. Finding that substantial evidence supports the
Commissioner’s decision, we affirm.
I. Background
Rodysill began receiving Social Security disability benefits in 1996. In April
2007, the Commissioner notified Rodysill that his eligibility for disability benefits
had ended in July 2003 based upon his substantial work activity. The Commissioner
subsequently issued a revised decision that Rodysill’s benefits should have ended in
June 2004. The Commissioner ordered Rodysill to repay the overpayment of
disability benefits that he received between June 2004 and March 2007, which the
Commissioner calculated to be $21,929.
Rodysill requested waiver of recovery of the overpayment. The Commissioner
denied waiver of recovery and proposed that Rodysill make payments of $300 per
month to repay the overpayment. Rodysill then requested and received a hearing
before an administrative law judge (“ALJ”). Although the ALJ determined that
Rodysill was not at fault in causing the overpayment, the ALJ denied waiver of
recovery. The ALJ concluded that recovery of the overpayment did not defeat the
purpose of Title II of the Social Security Act and was not against equity and good
conscience. In finding that recovery of the overpayment did not defeat the purpose
of Title II, the ALJ determined Rodysill’s ability to repay the overpayment by
considering the incomes and expenses of both Rodysill and his wife. Rodysill’s
financial reports showed that their household income exceeded their expenses by
$970 in April 2009 and by $477 in April 2010. The ALJ also mentioned Rodysill and
his wife’s purchase of a home while his appeal was pending. The ALJ concluded,
“Nonetheless, [Rodysill] and his wife still [] have some income each month that could
be used for repayment.” The ALJ also alluded to Rodysill’s testimony that he would
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be working more hours in the future. However, the ALJ did not adjust Rodysill’s
income due to this possible increase in income.
After the Appeals Council denied Rodysill’s request for review, Rodysill
sought review in the district court pursuant to 42 U.S.C. § 405(g). The district court
concluded that substantial evidence supports the Commissioner’s decision to deny
waiver of recovery of the overpayment. Rodysill appeals.
II. Discussion
We review de novo a district court’s conclusion that substantial evidence
supports the Commissioner’s decision. Perkins v. Astrue, 648 F.3d 892, 897 (8th Cir.
2011). Substantial evidence is “less than a preponderance but . . . enough that a
reasonable mind would find it adequate to support the conclusion.” Jones v. Astrue,
619 F.3d 963, 968 (8th Cir. 2010) (alteration in original) (quoting Kluesner v. Astrue,
607 F.3d 533, 536 (8th Cir. 2010)). In determining whether substantial evidence
supports the Commissioner’s decision, we “‘consider the evidence that supports the
Commissioner’s decision as well as the evidence that detracts from it.’ We may not
reverse the Commissioner merely because ‘we would have come to a different
conclusion.’” Id. (quoting Kluesner, 607 F.3d at 536) (internal citation omitted).
Whenever the Commissioner determines that an individual has received an
overpayment of benefits, “proper adjustment or recovery shall be made.” 42 U.S.C.
§ 404(a)(1). However, the Commissioner is not permitted to recover an overpayment
of benefits “from[] any person who is without fault if such adjustment or recovery
would defeat the purpose of this subchapter or would be against equity and good
conscience.” Id. § 404(b). An individual who has received an overpayment and who
is without fault may request waiver of recovery based upon either of these
prohibitions, 20 C.F.R. § 404.506, and in doing so, bears the burden of proof, Sipp
v. Astrue, 641 F.3d 975, 981 (8th Cir. 2011).
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Rodysill argues that recovery of the overpayment defeats the purpose of Title
II of the Social Security Act. This occurs where recovery “deprive[s] a person of
income required for ordinary and necessary living expenses,” such as in “situations
where the person from whom recovery is sought needs substantially all of his current
income . . . to meet current ordinary and necessary living expenses.” 20 C.F.R.
§ 404.508(a), (b); see also id. § 404.508(a) (explaining that “[t]his depends upon
whether the person has an income or financial resources sufficient for more than
ordinary and necessary needs, or is dependent upon all of his current benefits for such
needs”). As the ALJ observed, both of Rodysill’s financial reports show that his
household income exceeds his monthly expenses. Based upon this fact and the other
evidence in the record, the ALJ determined that Rodysill does not need “substantially
all” of his household income to meet ordinary and necessary living expenses.
Rodysill claims that the ALJ erred by including Rodysill’s wife’s income as
part of the income available for repayment. This was improper, Rodysill argues,
because he was not married when he received the disability overpayments. However,
the procedures used by the Commissioner to process claims for Social Security
benefits, which are termed the Commissioner’s Program Operations Manual System
(“POMS”), provide that a spouse’s income is included when calculating the income
available for repayment. Setting forth the Commissioner’s policy for determining
“income” and “ordinary and necessary living expenses,” the relevant POMS guideline
provides that the Commissioner “[c]onsider income to a spouse and dependents as
being available to the person requesting waiver.” POMS GN § 02250.120. This
POMS guideline does not draw a distinction based upon marital status at the time that
the individual received the overpayment. Accordingly, the Commissioner interprets
the term “income” in 20 C.F.R. § 404.508 to include a spouse’s income.
As an interpretation of a regulation promulgated by the Commissioner, the
POMS control unless they are inconsistent with the regulation or plainly erroneous.
Reutter ex rel. Reutter v. Barnhart, 372 F.3d 946, 951 (8th Cir. 2004) (citing Auer v.
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Robbins, 519 U.S. 452, 461 (1997)); Gragert v. Lake, 541 F. App’x 853, 856 n.1
(10th Cir. 2013) (unpublished). Rodysill does not dispute that the relevant POMS
guideline specifies that his wife’s income should be included when determining his
ability to repay the overpayment. Nor does he contend that the POMS guideline is
inconsistent with 20 C.F.R. § 404.508. Instead, Rodysill argues that, by including his
wife’s income when calculating the income available for repayment, the relevant
POMS guideline is inequitable and effectively imposes a pre-marital debt on his wife.
In support of this argument, Rodysill cites Nebraska law, which provides that
“[m]arital debt includes only those obligations incurred during the marriage for the
joint benefit of the parties.” Mathews v. Mathews, 676 N.W.2d 42, 58 (Neb. 2004).
However, by including the income of Rodysill’s wife when calculating current
income, the Commissioner is not seeking or securing a judgment against Rodysill’s
wife for the amount of the overpayment. Instead, the Commissioner is considering
Rodysill’s household income for the limited purpose of determining how much
income is available for repayment. Based upon this record, we cannot say that the
relevant POMS guideline is plainly erroneous. See Reutter, 372 F.3d at 951. The
ALJ, then, did not err by considering Rodysill’s wife’s income in determining
whether Rodysill was able to repay the overpayment.2
Rodysill also argues that the ALJ erred by considering his purchase of a home
while his appeal from the denial of waiver of recovery was pending. While the ALJ
acknowledged that Rodysill and his wife had purchased a home, the ALJ did not
include Rodysill’s home as a liquefiable asset that would be relevant to Rodysill’s
ability to repay the overpayment. See POMS GN § 02250.125 (noting that a “family
home” is not considered an asset “which may be liquidated to repay an
2
Even if the Commissioner did not include the income of Rodysill’s wife when
calculating current income, Rodysill concedes that, based upon his pro rata income
and his share of household expenses, “at best he would be left with several hundred
dollars per month.” Thus, Rodysill admits that he would have excess income for
repayment even without including his wife’s income.
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overpayment”). The ALJ simply explained that, even after purchasing a home,
“[Rodysill] and his wife still [] have some income each month that could be used for
repayment.”
Rodysill also asserts that the ALJ should not have considered his testimony that
he would work more hours in the future. The relevant regulation indicates that
recovery defeats the purpose of Title II when recovery “deprive[s] a person of income
required for ordinary and necessary living expenses,” such as in “situations where the
person . . . needs substantially all of his current income.” 20 C.F.R. § 404.508(a), (b).
The POMS provide that “[a]nticipated financial changes may . . . influence a person’s
ability to repay the overpayment, but they should be expected to occur within a few
months of the date of the waiver decision and should be verified.” POMS GN
§ 02250.115. Regardless of whether the Commissioner can consider an individual’s
potential for increased earnings in determining whether recovery defeats the purpose
of Title II, the ALJ here merely mentioned Rodysill’s prospect of working more hours
in the context of making the point that Rodysill had a stable job. The ALJ did not
give Rodysill’s potential for increased earnings any further weight and did not adjust
Rodysill’s income based upon this possibility. Moreover, even without a potential
increase in income, Rodysill’s household income still exceeded his expenses by $970
in April 2009 and by $477 in April 2010. Accordingly, substantial evidence supports
the Commissioner’s conclusion that recovery of the overpayment does not defeat the
purpose of Title II of the Social Security Act.
Rodysill next argues that recovery of the overpayment “would be against equity
and good conscience.” 42 U.S.C. § 404(b). The relevant regulation explains that
recovery is against equity and good conscience if an individual:
(1) Changed his or her position for the worse . . . or relinquished a
valuable right . . . because of reliance upon a notice that a payment
would be made or because of the overpayment itself; or
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(2) Was living in a separate household from the overpaid person at the
time of the overpayment and did not receive the overpayment.
20 C.F.R. § 404.509(a). The ALJ determined, and Rodysill does not dispute, that the
circumstances described in § 404.509(a)(1) are not present here. Rodysill contends
that § 404.509(a)(2) is applicable here because the Commissioner included his wife’s
income as part of the income available for repayment even though she did not receive
the overpayments and was not married to him at that time. But the Commissioner is
not seeking recovery of the overpayment from Rodysill’s wife. Rather, the
Commissioner is seeking recovery from Rodysill, the individual who received the
overpayments. See 42 U.S.C. § 404(a)(1)(A) (authorizing the Commissioner to
recoup overpaid benefits from the individual who received the overpayments).
Section 404.509(a)(2) is therefore inapplicable.
Drawing on our opinion in Groseclose v. Bowen, 809 F.2d 502 (8th Cir. 1987),
Rodysill next asserts that § 404.509(a) does not exhaustively list the circumstances
when recovery is against equity and good conscience. In Groseclose, the Secretary
of Health and Human Services sought adjustment of an individual’s retirement
benefits to recoup overpayments of insurance benefits that had been made to his
daughter. Id. at 503. The father did not receive the overpayments or accept them on
behalf of his daughter, was not at fault in causing the overpayments, and had no
knowledge that his daughter was receiving the overpayments. Id. at 505-06. Even
though the regulations did not specify that recovery in this circumstance was against
equity and good conscience—as they do now—the Groseclose court determined that
recovery from the father of the overpayments that were made to his daughter was
against equity and good conscience. Id. at 506. Rodysill urges that recovery is
against equity and good conscience because the ALJ considered his wife’s income in
determining his ability to repay the overpayment. However, “[t]he individual’s
financial circumstances are not material to a finding of against equity and good
conscience.” 20 C.F.R. § 404.509(b). Moreover, unlike Groseclose, the
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Commissioner is seeking recovery from the individual who received the
overpayments, thus minimizing the inequity that the court relied upon in Groseclose.
Rodysill further asserts that repayment is against equity and good conscience
because he had no knowledge of the overpayments and because the overpayments
were due to the negligence of the Commissioner. In essence, Rodysill equates the
fact that the ALJ adjudged him to be without fault in causing the overpayments with
the recovery of these overpayments being against equity and good conscience.
However, the Social Security Act explicitly distinguishes between these two
showings, specifying that there shall be no recovery of an overpayment “from[] any
person who is without fault if such adjustment or recovery . . . would be against
equity and good conscience.” 42 U.S.C. § 404(b) (emphasis added). Accordingly,
merely being without fault pursuant to § 404(b) does not render recovery of the
overpayment against equity and good conscience. See Coulston v. Apfel, 224 F.3d
897, 900-01 (8th Cir. 2000) (“Our finding that [the plaintiff] was without fault does
not automatically result in a victory for him. We must also determine whether
repayment would defeat the purpose of providing social security to [him] or would
be against equity or good conscience.”).
Rodysill also argues that waiver of recovery is proper because he accepted the
overpayments in reliance on representations made by the Commissioner. The
relevant regulations provide that an individual is entitled to waiver of recovery if he
“accepts such overpayment because of reliance on erroneous information from an
official source within the Social Security Administration . . . with respect to the
interpretation of a pertinent provision of the Social Security Act or regulations
pertaining thereto.” 20 C.F.R. § 404.510a; see also id. § 404.512(a) (“In the
situation[] described in . . . [§] 404.510a, adjustment or recovery will be waived since
it will be deemed such adjustment or recovery is against equity and good
conscience.”). In Gladden v. Callahan, 139 F.3d 1219 (8th Cir. 1998), we interpreted
these regulations to provide that an individual is entitled to waiver of recovery of an
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overpayment where he relied upon the statement of an ALJ in accepting the
overpayment. Id. at 1220, 1223.
Relying on Gladden, Rodysill asserts that he notified the Commissioner of his
work activity and that he accepted the overpayments because the Commissioner
continued to provide disability benefits. However, accepting overpayments in
reliance on the statement of an ALJ concerning one’s continuing entitlement to
disability benefits, as in Gladden, is entirely different from the situation present here,
where Rodysill relied on the mere fact that the Commissioner continued to provide
disability benefits. Indeed, the Sixth Circuit rejected an analogous argument in Valley
v. Commissioner of Social Security, 427 F.3d 388 (6th Cir. 2005), where the plaintiff
notified the Commissioner of his current work status and claimed that he accepted the
overpayments because of letters that he received from the Commissioner. Id. at 390,
393. These letters, which accompanied his benefits checks, described his current
benefits and informed him of increases in his benefits. Id. at 390. Interpreting
§ 404.510a, the Sixth Circuit reasoned, “Although the letters necessarily imply some
interpretation of the Act and its regulations because they outline [the plaintiff’s]
entitlement to benefits and a benefits increase, they do not purport to make any
explicit or specific interpretation.” Id. at 393. The court further explained, “If these
documents—obviously form letters—constituted official interpretation of the statute
or regulations sufficient to trigger the good conscience exception to repayment,
virtually every Social Security benefit recipient would be entitled to waiver of
repayment assuming they received benefits of any kind and a letter describing those
benefits.” Id. We agree with the Sixth Circuit’s interpretation of § 404.510a.
Consequently, Rodysill’s mere receipt of disability benefits after notifying the
Commissioner of his work activity does not satisfy § 404.510a.3 Substantial evidence
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Rodysill further argues that he accepted the overpayments under § 404.510a
because of conflicting written notices that he received from the Commissioner that
informed him of overpayments and underpayments of disability benefits. However,
Rodysill did not make this argument to the district court, and as such, the district
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thus supports the Commissioner’s conclusion that recovery of the overpayment from
Rodysill is not against equity and good conscience.
III. Conclusion
Because the Commissioner’s decision to deny waiver of recovery is supported
by substantial evidence, we affirm.
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court did not consider whether Rodysill accepted the overpayments pursuant to
§ 404.510a because of these conflicting notices. “[I]t is well established that, unless
a manifest injustice would result, a claim not articulated to the district court is subject
to forfeit on appeal.” Roberts v. Apfel, 222 F.3d 466, 470 (8th Cir. 2000). Because
manifest injustice would not otherwise result, we decline to consider this argument
made for the first time on appeal.
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