Opinion
17-cv-4844 (PMH)(AEK)
09-15-2021
DAVID SIMONS, Plaintiff, v. COMMISSIONER OF SOCIAL SECURITY, Defendant.
REPORT AND RECOMMENDATION
ANDREW E. KRAUSE UNITED STATES MAGISTRATE JUDGE
TO: THE HONORABLE PHILIP M. HALPERN, U.S.D.J.
This case was originally referred to Magistrate Judge Lisa Margaret Smith on July 25, 2017. ECF No. 5. The order of reference was reassigned to the undersigned on October 16, 2020.
Plaintiff David Simons, proceeding pro se, brings this action pursuant to 42 U.S.C. § 405(g), seeking judicial review of the final decision of Defendant Commissioner of Social Security (the “Commissioner”), which denied his application for waiver of an overpayment of benefits. ECF No. 1. Presently before this Court is the Commissioner's motion for judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure. ECF No. 17. For the reasons that follow, I respectfully recommend that the Commissioner's motion be GRANTED, and that judgment be entered in favor of the Commissioner.
BACKGROUND
A. Factual Background
On March 20, 2001, Plaintiff filed an application for retirement insurance benefits (“RIB”) under Title II of the Social Security Act (the “Act”). Administrative Record (“AR”) 23-24. Plaintiff applied for child's insurance benefits (“CIB”) on behalf of his son Cody Simons, who was a minor at that time, on March 23, 2001. AR 25-27. There is no dispute that Plaintiff met the eligibility requirements to receive RIB and that Cody Simons was eligible to receive CIB while he was a minor. See ECF No. 18 at 2 n.4.
Citations to “AR” refer to the certified copy of the administrative record filed by the Commissioner at ECF No. 13.
In the “Remarks” section of the RIB application, Plaintiff stated, “[m]y wife and I are in the process of divorcing. Cody lives with me.” AR 24. As part of the application for CIB, Plaintiff agreed to various terms and conditions, including a requirement to notify the Social Security Administration (the “SSA” or “Agency”) regarding certain key events. Specifically, Plaintiff agreed to “PROMPTLY NOTIFY THE SOCIAL SECURITY ADMINISTRATION IF ANY OF THE FOLLOWING EVENTS OCCUR AND TO PROMPTLY RETURN ANY BENEFIT CHECK I RECEIVE TO WHICH A CHILD IS NOT ENTITLED IF . . . ANY CHILD FOR WHOM I AM FILING OR WHO IS IN MY CARE DIES, LEAVES MY CARE OR CUSTODY, OR CHANGES ADDRESS.” AR 25-26 (capitalization in original).
Plaintiff submitted a separate application to have the CIB payments for his son made to him as the representative payee. AR 28-29. A representative payee is a person or organization that is selected by the SSA to receive benefits on behalf of a beneficiary. 20 C.F.R. § 404.2001(a). In the representative payee application, Plaintiff agreed to be “held personally liable for repayment if [he] misuse[d] the payments or if [he was] at fault for any overpayment of benefits, ” and to “[n]otify the Social Security Administration when the claimant dies, leaves my custody, or otherwise changes his/her living arrangements or when I no longer have responsibility for his/her care and welfare.” AR 28-29. Plaintiff again stated that his son lived with him. AR 28. Both Plaintiff and his son were awarded benefits effective March 2001, and Plaintiff was appointed as his son's representative payee. AR 475-80.
Meanwhile, on March 8, 2001, in connection with his divorce proceedings, Plaintiff filed a petition in New York State Family Court for joint custody of Cody with Cody's mother, Martine Abitbol. AR 20-22. In a June 21, 2002 family court order, Plaintiff was awarded visitation of his son every weekend, from Saturday morning at 9:00 a.m. to Sunday night at 8:30 p.m., with Ms. Abitbol to responsible for dropping off and picking up Cody each weekend. AR 542. During those weekends where Cody Simons had a Little League baseball game at 8:00 a.m. on Saturday, the visitation period was ordered to begin on Friday evening at 8:00 p.m. Id. Cody Simons was to reside with his mother at all other times. Id. The order also stated that Plaintiff consented to Ms. Abitbol moving with Cody to Shelter Island, New York, which is approximately 100 miles from New York City, where Plaintiff resided. Id.; see AR 93 (Plaintiff reports that he “consented” to Ms. Abitbol moving with Cody to Shelter Island).
Ms. Abitbol filed for mother's insurance benefits on November 26, 2003 and applied to be Cody's representative payee. AR 412. As part of her application, she “provided proof that she was [Cody's] custodial parent, and Cody had always resided with her, although [she] and Mr. Simons were separated.” AR 415. In an evaluation of Ms. Abitbol's application, an SSA representative “determined that [Plaintiff] did not tell the truth regarding having custody of Cody” when he applied to be the representative payee. Id. Ms. Abitbol was awarded benefits on November 28, 2003. Id.
On December 5, 2003, the SSA sent a notice to Plaintiff advising him that it “would be best” for Cody's checks to be sent to another payee. AR 170-71. The notice also advised Plaintiff to return any money he had saved or invested, interest earned from those savings and investments, any future checks he might receive after the date of the letter, and any money left over from the checks. Id. Shortly thereafter, Plaintiff informed the SSA that “all of the monies I received was [sic] spent on Cody's education such as tutoring, needs, ” and that he did not have any conserved funds. AR 179.
The SSA informed Plaintiff by notice dated June 18, 2006 that he had misused $5,526.00 in benefits that he received as a representative payee on behalf of his son, and that the amount of misused benefits would be deducted from Plaintiff's own benefits until the amount was recovered. See AR 326, 479. The SSA's policy was that a natural parent with custody of a minor child has a higher preference to serve as the representative payee for that child than a natural parent who does not have custody but is contributing to the beneficiary's support and “shows strong concern” for the child. AR 478; see 20 C.F.R. § 404.2021(c)(1).
The Administrative Record does not include a copy of this June 18, 2006 notice-the citations here are to other documents in the record that reference the June 18, 2006 communication.
On April 15, 2007, the SSA issued a notice advising Plaintiff that a payee who misuses benefits has an obligation to make restitution, either by returning funds to the SSA or voluntarily electing to have monies withheld from the payee's own benefits. AR 315-16. In response, Plaintiff requested a hearing before an Administrative Law Judge (“ALJ”) on May 10, 2007. AR 317. On May 27 and 29, 2007, Plaintiff was notified that money that had been withheld from his benefits to address the overpayment would be refunded to him. AR 318-21, 326. By order dated September 4, 2007, an ALJ found that Plaintiff's request for additional administrative proceedings was “moot” because the withheld funds had been restored to him. AR 326-27.
The SSA notified Plaintiff on September 22, 2008 that he owed a total outstanding overpayment balance of $5,526.00, and that, in accordance with his request, the SSA would withhold $200.00 from Plaintiff's RIB checks each month for 27 months to collect the overpayment. AR 328-30. In 2009, Plaintiff received various notices from the SSA regarding money withheld from and refunded to him. AR 331-34, 337-38. On multiple occasions, the SSA informed Plaintiff that it was withholding money from his benefits to pay his outstanding child support obligations rather than the CIB overpayment. AR 337-38, 384.
On August 11, 2010, Judge Arthur F. Engoron of the Civil Court of the City of New York issued a decision following a bench trial in a suit filed by Ms. Abitbol. AR 203. Judge Engoron found that during the period in question in that matter, Cody Simons “spent the majority of his time with [Mr. Simons], ” that “[Mr. Simons] was entitled to the benefit payments in issue, ” and that the suit was barred by the statute of limitations and “the decisions and actions of the Social Security Administration” pursuant to the doctrine of collateral estoppel. AR 203. The SSA was not a party to this New York State court suit, and the legal issues presented before the Civil Court judge were not identical to the matters at issue in this proceeding.
During his October 2014 hearing testimony before the ALJ in the instant case, see Section B, infra, Plaintiff referred to the amount at issue in the 2010 Civil Court matter as $1,300, which is a small fraction of the amount of the March 2001 through October 2003 overpayment at issue here. See AR 628-29.
By notice dated April 2, 2012, the SSA informed Plaintiff that the Agency had made a mistake in calculating the total CIB overpayment amount because it had only included benefits Plaintiff had received between March 2001 and March 2002. AR 432-34; see also AR 419. The SSA asserted that the total overpayment amount should reflect all CIB benefits paid to Plaintiff as his son's representative payee from March 2001 through October 2003, and that an additional $7,769.00 had been overpaid to Plaintiff between April 2002 and October 2003. AR 432.
The SSA notified Plaintiff by letter on July 24, 2013 that he would have to return a total of $13,295 to the Agency and provided a recitation of the bases for this determination. AR 478-81. Among other things, the July 24, 2013 notice specified that Ms. Abitbol had submitted proof in the form of court orders showing that she was the custodial parent at the time Plaintiff was collecting CIB as a representative payee, and that SSA policy is that a natural parent with custody is the preferred representative payee for a beneficiary who is a minor child. AR 478-79. In response, Plaintiff submitted a request for a hearing before an ALJ. AR 494.
Also included in the Administrative Record are various documents that Plaintiff submitted to the SSA regarding his finances, including bills, checks, and bank statements. See, e.g., AR 220-28 (tuition and canceled checks sent in by Plaintiff from 2005-2009), 241-43 (canceled checks from March to May 2006), 339-64 (tax returns from 2009 to 2011), 400-06 (summary of earnings from banks, 2011 to 2012), 436-58 (bank statements, real estate documents, child support payments, and student loan documents from 2011-2012). None of these materials pertain specifically to the time period of March 2001 through October 2003 when Plaintiff received benefits as the representative payee on behalf of Cody Simons.
B. Hearing Testimony
Plaintiff appeared pro se before ALJ Mark Solomon on October 21, 2014. AR 613-38. He testified that he was prompted to seek benefits on behalf of his son because an SSA representative called him and told him that his son was entitled to certain benefits. AR 620. According to Plaintiff, he told the SSA representative over the phone that while he did not have custody, his son lived with him from Friday through Monday. Id. Plaintiff testified that the SSA representative told him that because Cody Simons was with Plaintiff more than 50 percent of the time, Plaintiff could apply for and receive benefits on behalf of his son. Id. Yet Plaintiff also testified that at or around the time he applied for benefits, Cody Simons lived with his mother, was attending a private school on Shelter Island, and would take the bus to New York City on weekends to visit Plaintiff. AR 621-22.
Despite Plaintiff's testimony that he “never applied” for CIB, there is an application for CIB in the record which was signed by Plaintiff. ECF No. 18 at 6 n.11; see AR 25-26.
When asked whether he set up a separate account for the CIB funds he received for his son, Plaintiff stated that the funds went into his own account and that he did not think to set up a separate account. AR 622-23. Plaintiff reported spending this money on tutoring, vacations, clothing, and education for Cody. AR 622-26. He also testified that he set some money aside in an investment account that was held in trust for his son, but Plaintiff could not say with certainty whether he put any of his son's CIB funds into that account, and claimed that he did not think he “would be monitored for these funds.” AR 625.
Notably, shortly after he was removed as Cody's representative payee, Plaintiff reported to the SSA that he had spent all of the money he received as representative payee and that he did not have any conserved funds. AR 179.
C. The ALJ's Decision
In a decision dated November 19, 2014, ALJ Solomon found that Plaintiff was overpaid benefits in the amount of $13,295.00 between March 1, 2001 and October 31, 2003, that Plaintiff was at fault in causing the overpayment, and that recovery of the overpayment was not waived. AR 12-19. The ALJ determined that “at all times relevant to the period of payments in question . . . Cody Simons was in [the] legal custody of his mother, ” rather than Plaintiff. AR 17. Accordingly, Plaintiff's statement on the CIB application that Cody lived with him was not accurate, and Plaintiff's “failure to advise the Agency that he was not the custodial parent” contributed to Plaintiff being “at fault” in causing the overpayment. AR 18-19.
While the ALJ credited Plaintiff's testimony “that he was a loving and concerned parent who was clearly interested in the welfare of his minor child, ” and noted that there was “little reason to doubt that the claimant did expend at least some of the money received as payee for Cody's use and benefit, ” the ALJ also concluded that Plaintiff had failed to maintain the funds he received on behalf of his son in a separate account, and failed to document his expenditures as required. AR 18. As a result, Plaintiff “ha[d] not sustained his burden of proof that the funds he received as payee were properly expended on behalf of Cody.” Id. For all of these reasons, the ALJ found that Plaintiff was “at fault” for the overpayment of benefits and must therefore be required to repay the amount of the overpayment. AR 18-19.
The ALJ acknowledged the August 11, 2010 New York City Civil Court order, but noted that “this decision is not binding on the Agency, as the agency was not a party to the action and addresses issues which are different from the issues herein.” AR 19. Because the ALJ concluded that Plaintiff was at fault for causing the overpayment, the ALJ did not evaluate the other elements of the conjunctive test for waiver of overpayment.
The Appeals Council denied Plaintiff's request for review on April 28, 2017, making the ALJ's decision the final decision of the Commissioner. AR 7-10.
D. Plaintiff's Death
On May 18, 2021, counsel for the Commissioner filed a Suggestion of Death, reporting that Plaintiff had during the pendency of this action. ECF No. 36. The Suggestion of Death was served that same day via Federal Express at the Manhattan address that has been used throughout this case for service of documents on Plaintiff. See ECF No. 37 (certificate of service of Suggestion of Death); ECF No. 14 (March 6, 2018 certificate of service of the Administrative Record using the same address); ECF No. 19 (May 23, 2018 certificate of service of Defendant's motion papers using the same address).
In a subsequent filing, counsel specified that SSA records indicate that Plaintiff died on March 27, 2020. See ECF No. 40 at 1 n.2.
The docket sheet does not formally list any mailing address for Plaintiff, but there was never any objection to the Commissioner's use of this Manhattan address for service while Plaintiff was alive.
Counsel for the Commissioner also attempted to determine whether there were any relevant nonparties to be served with the Suggestion of Death. Specifically, counsel “contacted the Surrogate's Court for New York County, New York, and asked for any records relating to the estate of David Simons, ” and was advised that “no will nor any estate papers had been filed by or on behalf of David Simons.” ECF No. 40 at 1. In addition, counsel attempted to locate Cody Simons “[u]sing the best information available to [the U.S. Attorney's Office for the Southern District of New York], ” and asked a process server to effectuate service on Cody Simons at two potential addresses in New York City. Id. The process server subsequently reported that attempts at service were made, but that Cody Simons no longer resided at the two addresses that had been provided. ECF No. 42 at 1. Counsel also attempted to contact Cody Simons at a potential telephone number obtained by the U.S. Attorney's Office; while counsel left a message for the user of that telephone, counsel had not received a return call as of the date of the last update provided to the Court. Id. According to counsel, the Commissioner “has exhausted any potential leads for finding a relevant nonparty relating to this matter, ” and “despite . . . best efforts, ” was not able to serve the Suggestion of Death on any relevant nonparty. Id.
APPLICABLE LEGAL PRINCIPLES
A. Standard of Review
A reviewing district court may “set aside the ALJ's decision only where it is based on legal error or is not supported by substantial evidence.” Balsamo v. Chater, 142 F.3d 75, 79 (2d Cir. 1998) (citing Berry v. Schweiker, 675 F.2d 464, 467 (2d Cir. 1982)). “Substantial evidence is more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Talavera v. Astrue, 697 F.3d 145, 152 (2d Cir. 2012) (quotation marks omitted). When determining whether substantial evidence supports the Commissioner's decision, the court should “carefully consider[] the whole record, examining evidence from both sides.” Tejada v. Apfel, 167 F.3d 770, 774 (2d Cir. 1999). Yet “it is up to the agency, and not [the] court, to weigh conflicting evidence in the record.” Clark v. Comm'r of Soc. Sec., 143 F.3d 115, 118 (2d Cir. 1998). In the context of a challenge regarding overpayment of benefits, a “district court must uphold a decision by the [Commissioner] that a claimant was not without fault if it is supported by substantial evidence in the record as a whole, because that determination is factual in nature.” Valente v. Sec'y of Health & Human Servs., 733 F.2d 1037, 1041 (2d Cir. 1984); see also Langella v. Bush, No. 03-cv-5114 (RWS), 2004 WL 2668400, at *10 (S.D.N.Y. Nov. 22, 2004) (quoting Howard v. Sec'y of the Dep't of Health and Human Servs., 741 F.2d 4, 8 (2d Cir. 1984)).
In accordance with Lebron v. Sanders, 557 F.3d 76 (2d Cir. 2009) and Local Rule 7.2 of the Local Civil Rules of the United States District Courts for the Southern and Eastern Districts of New York, copies of this case and other cases that are unpublished or only available by electronic database shall be simultaneously mailed, along with this Report and Recommendation, to the address that has been used previously in this matter to send court documents to the pro se Plaintiff.
B. Representative Payee
A representative payee is a person or organization selected by the SSA to receive benefits on behalf of a beneficiary who is unable to manage or direct the management of benefit payments in his or her own interest. 42 U.S.C. § 1007(a); 20 C.F.R. §§ 404.2001(a). Generally, if a beneficiary is under age 18, the SSA will pay benefits to a representative payee. 20 C.F.R. § 404.2010(b). SSA regulations specify that the Agency's first preference for the representative payee for a minor beneficiary is a natural or adoptive parent who has custody of the beneficiary; the Agency's second preference for a representative payee is a natural or adoptive parent who does not have custody of the beneficiary, but who is contributing toward the beneficiary's support and is demonstrating strong concern for the beneficiary's well-being. 20 C.F.R. § 404.2021(c)(1)-(2).
A representative payee has certain enumerated responsibilities to the beneficiary. Any time after a representative payee is selected, he or she must be prepared to respond with information showing a continuing relationship with the beneficiary, a continuing responsibility for the beneficiary's care, and how he or she used the payments on behalf of the beneficiary. 20 C.F.R. § 404.2025. In addition, a representative payee may be asked to submit a written report accounting for the benefits received, and must make all supporting records available for review. 20 C.F.R. § 404.2035. The representative payee must use the benefits only for the beneficiary's best interest, and keep any benefits separate from his or her own funds. Id. If there is an event or change in circumstances that would affect the amount of benefits the beneficiary receives, the beneficiary's right to receive those benefits, or the manner in which the beneficiary receives benefits, the representative payee must notify the Agency. Id. A representative payee who misuses benefits is responsible for paying those benefits back. 20 C.F.R. §404.2041(a). Any amounts that the representative payee misuses and does not refund are treated as an overpayment to that representative payee. 42 U.S.C. § 1007(1)(1); 20 C.F.R. § 2041(f).
C. Overpayment of Benefits
Under the Act, if a person has been paid more than the correct amount in benefits, the Commissioner can require that person or his estate to refund anything in excess of the correct amount, or decrease any payment to that person. 42 U.S.C. §§ 404(a)(1)(A), 1007(1)(1). An “overpayment” is a payment in excess of the amount due under Title II of the Act, and can be caused by, inter alia, the failure to suspend or reduce benefits, a payment resulting from the failure to terminate benefits, and a payment where no amount was payable. 20 C.F.R. § 404.501(a).
The Commissioner may waive recovery of an overpayment if the person is “without fault” and such recovery would defeat the purpose of Title II or would be against equity and good conscience. 42 U.S.C. § 404(b)(1); Chlieb v. Heckler, 777 F.2d 842, 846 (2d Cir. 1985). A reviewing court need not consider whether recovery of the overpayments would defeat the purpose of Title II or would be against equity and good conscience if the recipient is found to be at fault. Chlieb, 777 F.2d at 846.
In determining whether an individual was “at fault, ” the SSA must consider “all pertinent circumstances, ” including the recipient's age and intelligence, as well as any physical, mental, educational or linguistic limitations the individual might have. 20 C.F.R. § 404.507; Valente, 733 F.2d at 1043. Whether an individual is at fault for an overpayment depends on whether the facts show that the incorrect payment to the individual resulted from (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) acceptance of a payment which he either knew or could have been expected to know was incorrect. 20 C.F.R. § 404.507.
No showing of bad faith is required to find that the recipient of an overpayment was at fault-rather, an honest mistake may be sufficient. Center v. Schweiker, 704 F.2d 678, 680 (2d Cir. 1983) (per curiam); Hill ex rel. Hill v. Comm'r of Soc. Sec, 417 Fed. App'x 103, 104 (2d Cir. 2011) (summary order). The fact that the SSA may have been at fault in making the overpayment does not relieve the recipient from liability for repayment if the recipient was also at fault. 20 C.F.R. § 416.552; Center, 704 F.2d at 680. Recipients have a responsibility to exercise “a high degree of care in determining whether circumstances which may cause deductions from his benefits should be brought to the attention of the Administration by an immediate report or by return of a benefit check.” 20 C.F.R. § 404.511(a); Brown v. Bowen, 905 F.2d 632, 638 (2d Cir. 1990).
If a recipient shows that he is without fault, he must also show that repayment would be either inequitable or defeat the purposes of the Act. Valente, 733 F.2d at 1042; Pichardo on behalf of S.J.P. v. Berryhill, No. 17-cv-6908 (NSR) (PED), 2018 WL 5307098, at *3 (S.D.N.Y. Oct. 26, 2018). To “defeat the purpose of title II” means to “deprive a person of income required for ordinary and necessary living expenses.” 20 C.F.R. § 404.507(a). Recovery of an overpayment is against equity and good conscience “if an individual [c]hanged 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.” 20 C.F.R. § 404.509(a); Feuer v. Astrue, No. 06-cv-13478 (SAS), 2008 WL 4755554, at *3 (S.D.N.Y. Oct. 28, 2008).
DISCUSSION
For the reasons discussed below, the Court finds that the Commissioner's decisions with respect to the overpayment of benefits to Plaintiff were supported by substantial evidence, and therefore respectfully recommends that the Commissioner's motion be granted and that judgment be entered in favor of the Commissioner.
A. Overpayment of Benefits
There is substantial evidence to support the Commissioner's finding that Plaintiff was overpaid $13,295.00 in benefits between March 1, 2001 and October 31, 2003 while he served as the representative payee for Cody Simons. SSA regulations contain a preference for a parent with custody of a minor child beneficiary to serve as the representative payee for that child. 20 C.F.R. § 404.2021(c)(1). While there is little doubt that Plaintiff contributed towards his son's support and demonstrated strong concern for his son's well-being, there is substantial evidence in the record that Plaintiff did not have legal custody of Cody during the relevant period, despite having led the SSA to believe that Cody primarily resided with him at the time he applied to serve as representative payee. AR 24 (“Cody lives with me”), 28 (“I would be the best payee for Cody Andres Simons because I am his relative and I take care of him”). Plaintiff applied for joint custody of Cody in family court on March 8, 2001. AR 20. On June 21, 2002, he was awarded visitation with his son “every weekend from Saturday morning at 9:00 a.m. to Sunday night at 8:30 p.m., ” except on weekends with early Saturday Little League games, where Cody would start his weekend visit at 8:00 p.m. on Fridays. AR 542. Plaintiff also testified at the hearing before the ALJ that his wife had custody, and that Cody would travel by bus to New York City from Shelter Island each weekend. AR 621-22. It cannot be disputed that Ms. Abitbol had primary custody over Cody Simons during the relevant time period. Had this fact been known to the SSA at the time Plaintiff submitted his application to serve as representative payee, the Agency almost certainly would have made Ms. Abitbol the representative payee for Cody Simons. Indeed, when Ms. Abitbol made her own representative payee application in November 2003 and supported that application with documentation regarding the custody of her son, the SSA awarded benefits to her, immediately notified Plaintiff that it would be best for the representative payee payments to be directed elsewhere, and terminated Plaintiff's status as representative payee. AR 170-71; 412-17.
An overpayment “is the difference between the amount paid to the beneficiary and the amount of the payment to which the beneficiary was actually entitled.” 20 C.F.R. § 404.504. Here, the ALJ's determination that Plaintiff was overpaid benefits was supported by substantial evidence, most notably in the form of custody-related documentation from New York State courts and Plaintiff's own hearing testimony about how Cody Simons's time with his parents was allocated during the period when Plaintiff was receiving representative payee payments. Had these facts been made clearer at the time of Plaintiff's representative payee application, it is reasonable to conclude that Plaintiff would not have received representative payee payments at all. Accordingly, the ALJ correctly concluded that the entire amount of the payments made to Plaintiff as the representative payee for Cody Simons between March 2001 and October 2003 constituted an overpayment.
Though Plaintiff attempts to reply on the August 11, 2010 Civil Court order to support his arguments here, see, e.g., ECF No. 24 at 9, these arguments are unavailing. Whatever issues were addressed in the proceeding that led to the August 11, 2010 order, the SSA was not a party to that proceeding, and if anything, the Civil Court's reference to the collateral estoppel effect of prior SSA determinations suggests that it was relying on, rather than trying to disturb, any prior SSA actions. Moreover, Plaintiff's own testimony at the hearing that the 2010 matter involved a sum of $1,300 further indicates that the issues in this proceeding certainly do not fully overlap with the matters at issue in the 2010 Civil Court action. Accordingly, the 2010 order cannot dictate any result here.
B. ALJ's Determination of Fault
The ALJ properly found that Plaintiff was at fault in causing the overpayment, both because Plaintiff failed to advise the Agency that he was not the custodial parent for Cody Simons and because Plaintiff did not maintain or document the funds he received as representative payee in accordance with SSA regulations. AR 17-19. Accordingly, the ALJ properly determined that Plaintiff was not entitled to a waiver of the recovery of the overpayment of benefits.
1. Plaintiff's Failure to Advise SSA That He Was Not the Custodial Parent
The ALJ correctly determined that Plaintiff's failure to advise the Agency that he was not Cody's custodial parent was a factor in his receipt of the overpayment. As discussed above, there is ample evidence in the record to demonstrate that Plaintiff was not Cody's custodial parent during the relevant time period, yet Plaintiff affirmed in both his RIB application and his application to become Cody's representative payee that Cody lived with him. AR 24, 28. Even if Plaintiff meant no harm or deception by the statements in his applications, they create the distinct impression that Plaintiff is the custodial parent-a factor which was of obvious importance to the Agency in making its representative payee determination.
While Plaintiff testified that he told an SSA representative in 2001 that his son was with him Friday through Monday, a family court order entered on June 21, 2002 indicated that he only had visitation Saturday through Sunday (and occasionally Friday to Sunday). AR 542. That same order also reflected that Ms. Abitbol had relocated with Cody to Shelter Island, id., and Plaintiff's hearing testimony suggests that the move took place even earlier than that, AR 621-22.
At a minimum, as of the date of the June 21, 2002 order, Plaintiff failed to comply with his obligations as a representative payee to notify the SSA of a change of custody or living arrangement. See AR 25-26, 28-29. The application for CIB required that recipients notify the SSA, and promptly return any benefit check to which the child is entitled, if the child for whom the recipient is filing leaves the recipient's custody or changes address. AR 25-26. The application to become representative payee also contained a similar instruction: applicants agreed to be held “personally liable for repayment” if they misused payments or were at fault for an overpayment, and were required to notify the SSA when a claimant left the applicant's custody, or “otherwise change[d] his/her living arrangements.” AR 28-29. There is no evidence that Plaintiff ever updated the SSA regarding the change in Cody's custody or living arrangements.
Plaintiff maintains that the CIB and representative payee applications did not specifically inquire about legal custody, and that the Agency should have requested documentation. ECF No. 24 at 13. In short, Plaintiff places the blame on the SSA for not investigating him thoroughly. Id. But these objections are irrelevant, because even where the SSA may be at fault for an overpayment, the recipient is not absolved of liability for repayment if the recipient was also at fault. 20 C.F.R. § 416.552; Center, 704 F.2d at 680. As set forth in the regulations, a recipient has a responsibility to exercise “a high degree of care in determining whether circumstances which may cause deductions from his benefits should be brought to the attention of the Administration by an immediate report or by return of a benefit check.” 20 C.F.R. § 404.511(a). Plaintiff failed to do this both at the point of his initial application to serve as representative payee and throughout the period when he served as representative payee. Accordingly, the ALJ properly found that Plaintiff was not without fault for his receipt of the overpayment in part because he failed to advise the Agency that he was not Cody Simons's custodial parent during the relevant time period.
2. Failure to Keep Expenditures Separate and Follow Reporting Requirements
The ALJ also properly found that Plaintiff was at fault because he commingled Cody's benefits with his own accounts and failed to follow the reporting and accounting requirements imposed on representative payees. AR 18-19. A representative payee has a responsibility to keep any benefits received on behalf of a beneficiary separate from his or her own funds. 20 C.F.R. § 404.2035. The representative payee must also be prepared at any time to show the SSA how payments were used on behalf of the beneficiary. 20 C.F.R. § 404.2025. This may include submitting a written report accounting for the benefits received, with supporting documentation. 20 C.F.R. § 404.2035.
As the ALJ explained, there is every reason to believe that Plaintiff likely spent at least some of the CIB funds he received for Cody's use and benefit. AR 18. But there is also substantial evidence in the record that Plaintiff did not separately maintain the funds he received as Cody's representative payee, nor did he keep a detailed accounting of payments or expenditures. AR 622-23. Plaintiff admitted in his hearing testimony that he did not have a separate account for funds he received on behalf of his son. AR 623. Indeed, Plaintiff's hearing testimony suggests that he had little to no regard for the exacting requirements for serving as a representative payee, despite having agreed to these terms in his application to serve in this role.
There is substantial evidence to support the conclusion. Though Plaintiff supplied various financial records to the SSA in the course of challenging various Agency determinations, none of the documents date back to the relevant period between March 1, 2001 and October 31, 2003. While it is certainly plausible that CIB benefits assisted in paying for Cody's schooling, there is nothing in the record that links CIB funds received by Plaintiff between 2001 and 2003 to payments for tuition made years later, or to any other expenditure during the relevant time.
At his hearing before the ALJ, Plaintiff testified that he was unaware of the reporting requirements imposed on representative payees, and that he “wasn't thinking that [he] was going to be monitored for these funds.” AR 625. But the relevant the applications that Plaintiff completed and signed contained information about his reporting requirements. The application for CIB states unambiguously that “[m]y reporting responsibilities have been explained to me.” AR 25-26. Plaintiff signed this document on March 23, 2001. Id. In addition, the application to become a representative payee states, among other things, that the payee must use all payments for the beneficiary's current needs or save them for the beneficiary's future needs, file an accounting report regarding how the payments were used upon request by the SSA, and comply with conditions for reporting certain events. AR 28-29. Plaintiff signed this application form on March 23, 2001 as well.
The Commissioner included a copy of the SSA's “Guide for Representative Payees” with the motion for judgment on the pleadings and asserted that this is the booklet that is provided to approved representative payees. See ECF No. 18 at 15, 19-43. This Guide was not included in the Administrative Record, however, and this version of the Guide is dated January 2018, long after Plaintiff ever served as a representative payee. Accordingly, the Court has not considered this extra-record submission as part of its evaluation of this matter.
Despite Plaintiff's assertion that he was not aware of his responsibilities as a representative payee, Plaintiff cannot simply disclaim knowledge of the terms plainly set forth in the relevant applications. See Greenberg v. Comm'r of Soc. Sec., No. 3:95CV593 (AWT), 1998 WL 229849, at *4-5 (D. Conn. Mar. 30, 1998) (representative payee was not without fault, despite her claim that her reporting responsibilities were not explained, because she had signed application containing those responsibilities); Kennedy v. Apfel, No. 96-cv-3295 (LAP) (SEG), 1998 WL 567676, at *5 (S.D.N.Y. June 26, 1998) (educated and literate plaintiff must be charged with knowledge of contents of application, even if his physician filled it in and he simply signed). There is no indication in the record that Plaintiff had any physical, mental, educational, or linguistic limitations that would have interfered with his ability to understand the applications or comply with the requirements specified in the applications. See 20 C.F.R. § 404.507; Valente, 733 F.2d at 1043. Thus, the ALJ again was correct in finding Plaintiff at fault for the overpayment due to his failure to maintain a separate account and document his expenditures during the time he served as representative payee.
3. Additional Requirements for Waiver of Overpayment
Once a determination has been made that an individual is at fault for an overpayment, it is not necessary to consider whether recovery of the overpayments would defeat the purpose of Title II or would be against equity and good conscience. Chlieb, 777 F.2d at 846. Given that the ALJ properly determined that Plaintiff was at fault in causing the overpayment, there was no error in the ALJ's decision not to address the remaining elements required to establish entitlement to a waiver of the overpayment, and the Court need not discuss those elements here either.
The ALJ properly concluded that recovery of the overpayment of benefits to Plaintiff should not be waived because Plaintiff was not without fault in causing the overpayment to occur.
C. Plaintiff's Due Process Claim
Plaintiff's claim that he was deprived of his right to due process because certain administrative decisions did not afford him the option of further administrative review within the SSA is meritless. See ECF No. 24 at 9-10. The denial of a request to be made a representative payee is not subject to the administrative review process or judicial review. 20 C.F.R. § 404.903(c). Decisions that are not “initial determinations” are not substantive determinations related to a claimant's eligibility for benefits and how those benefits should be calculated and applied. Dobson v. Comm'r of Soc. Sec., No. 10-cv-6167 (KPF), 2014 WL 1909363, at *8 (S.D.N.Y. May 12, 2014). Instead, actions that are not initial determinations are related to the administration of SSA's affairs, and while they may still be consequential for claimants, they are largely factual and procedural in nature, id. at 8-9, and this Court “simply may not review a claim . . . that does not arise from an initial determination of the Commissioner, ” id. at 12.
In any event, Plaintiff can hardly claim a deprivation of due process here because he was afforded a full hearing before an ALJ on his appeal of the overpayment determination, at which he had the opportunity to testify and submit other evidence in support of all of his theories. The original revocation of Petitioner's representative payee appointment was based on the same issues that were addressed in the 2014 proceedings before ALJ Solomon-namely, Plaintiff's misrepresentations and misleading statements about his custodial role between March 2001 and October 2003-and those issues were raised and addressed in the context of this appeal as well. In short, there is no colorable claim for any deprivation of any constitutional right here.
D. Dismissal of Complaint Pursuant to Rule 25 of the Federal Rules of Civil Procedure
Alternatively, Plaintiff's complaint may be dismissed at this time pursuant to Rule 25 of the Federal Rules of Civil Procedure. Rule 25(a)(1) provides the mechanism for substitution of a new party in the event of the death of a party. Specifically, Rule 25(a)(1) states that:
If a party dies and the claim is not extinguished, the court may order substitution of the proper party. A motion for substitution may be made by any party or by the decedent's successor or representative. If the motion is not made within 90 days after service of a statement noting the death, the action by or against the decedent must be dismissed.
(emphasis added). Here, the Commissioner served a statement noting the death of the pro se Plaintiff on May 18, 2021 at the address that has been used throughout this case for service of process on him. Ninety days from May 18, 2021 was August 16, 2021, and no motion to substitute a new party for the Plaintiff was made by that date, nor has any substitution motion been made since.
Dismissal is therefore warranted here despite the fact that the Commissioner was unable to serve the Suggestion of Death on any relevant nonparties. The Second Circuit has held that Rule 25(a)(1) “does not require that the statement [of death] identify the successor or legal representative; it merely requires that the statement of death be served on the involved parties.” Unicorn Tales, Inc. v. Banerjee, 138 F.3d 467, 470 (2d Cir. 1998). District courts in this Circuit have extrapolated from this principle to conclude that service on a deceased party's successors is not necessary in order for a case to dismissed as against the deceased party pursuant to Rule 25: “[i]f the Second Circuit no longer requires a successor to be identified, then it stands to reason that it no longer requires that successors be served in a particular manner.” Steward v. City of New York, No. 04-CV-1508 (CBA) (RML), 2007 WL 2693667, at *4 (E.D.N.Y. Sept. 10, 2007). And in any event, the good faith efforts of the U.S. Attorney's Office to attempt to locate and serve the successor of the pro se Plaintiff were themselves sufficient to allow for dismissal under the 90-day timeframe set forth in Rule 25(a)(1). See Chobot v. Powers, 169 F.R.D. 263, 267 (W.D.N.Y. 1996) (dismissing action upon finding that statement of death was properly served on pro se plaintiff at his last known address, and 90 days had passed since service); Jobe v. Ryan, No. CV-18-00254-PHX-DGC (ESW), 2019 WL 4017299, at *1 (D. Ariz. Aug. 8, 2019) (dismissing action since “[m]ore than ninety days have passed since Defendants filed and served the Notice of Suggestion of Death . . . at Plaintiff's last known prison address and no motion for substitution by Plaintiff's successors or representatives has been filed”), adopted by No. CV-18-0254-PHX-DGC (ESW), 2019 WL 4016611 (D. Ariz. Aug. 26, 2019).
Accordingly, because the Commissioner properly served a statement noting Plaintiff's death and no motion for substation was made within 90 days of such service, I respectfully recommend in the alternative that this case be dismissed pursuant to Rule 25(a)(1) of the Federal Rules of Civil Procedure.
CONCLUSION
For the forgoing reasons, I respectfully recommend that the Commissioner's motion for judgment on the pleadings (ECF No. 17) be GRANTED, and that judgment be entered in favor of the Commissioner.
Alternatively, I respectfully recommend that the complaint be DISMISSED pursuant to Rule 25(a)(1) of the Federal Rules of Civil Procedure, and that judgment be entered in favor of the Commissioner on that basis.
NOTICE
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days from service of this Report and Recommendation to file written objections. See also Fed. R. Civ. P. 6(a), (d) (adding three additional days when service is made by mail). A party may respond to another party's objections within fourteen (14) days after being served with a copy. Fed.R.Civ.P. 72(b)(2). Such objections, and any responses to such objections, shall be filed with the Clerk of the Court, with courtesy copies delivered to the chambers of the Honorable Philip M. Halpern, United States District Court, Southern District of New York, 300 Quarropas Street, White Plains, New York, 10601, and to the chambers of the Honorable Andrew E. Krause at the same address.
Any request for an extension of time for filing objections or responses to objections must be directed to Judge Halpern, and not to the undersigned.
Failure to file timely objections to this Report and Recommendation will result in a waiver of objections and will preclude appellate review. See Thomas v. Arn, 474 U.S. 140 (1985); Smith v. Campbell, 782 F.3d 93, 102 (2d Cir. 2015).
A copy of this Report and Recommendation has been mailed by Chambers to the address that has been used previously in this matter to send court documents to the Plaintiff.