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Cannuni v. Schweiker

August 1, 1984



Author: Weis

Before: WEIS and BECKER, Circuit Judges and ACKERMAN, District Judge.*fn*


WEIS, Circuit Judge.

The Social Security Administration determined that the addition of a retarded son's name to those of his parents on certificates of deposit and a bank account made him ineligible for continued Supplemental Security Income benefits. As a consequence, the agency demanded repayment of sums previously disbursed. We conclude that under state property law the deposits remained the property of the parents and that the Social Security Administration erred in treating the assets as resources of the son. Accordingly, we will direct entry of judgment denying repayment.

The Secretary determined that an overpayment of SSI benefits had been made to Antonina Cannuni as the representative payee of Joseph Mark Cannuni, her mentally retarded son. Her request for a waiver was denied after a hearing before an ALJ. The Appeals Council denied review. On appeal to the district court, summary judgment was entered in favor of the Secretary.

Joseph Mark Cannuni, often referred to by his parents and in the administrative proceedings as Mark, was awarded SSI benefits in 1976. Although 20 years of age, he was incapable of managing his own affairs, and his mother was designated as his representative payee. Mark had never been employed and had no assets of his own. His father, Domenico, was a self-employed contractor who maintained the home for his wife, Mark, and another younger son who was more severely retarded. Both sons required Antonina's constant care and attention.

At the time they applied for benefits on Mark's behalf, Domenico and Antonina owned several bank accounts. Between 1976 and 1979, apparently on the advice of local bank employees, Antonina put Mark's name along with hers on some bank accounts and certificates of deposit. However, in responding to periodic inquiries from the Social Security Administration during these same years, Antonina checked boxes on questionnaire forms indicating that Mark had no bank accounts in his name.

In 1979, after learning that Mark's name appeared on accounts at the Mellon bank, the local SSA office concluded he held resources in excess of the statutory allowance. Mark was therefore declared ineligible for benefits from April 1977 until March 1979, when the designation of the accounts was changed. SSA made a demand for overpayment of $3,354.78.

After a hearing, an ALJ concluded that there was an overpayment but that, because of his mental condition, Mark was without fault. Accordingly, as allowed by statute, recovery against him was waived. At the insistence of the local branch manager for SSA, the Secretary continued to press for recovery of the overpayment, this time from Antonina, the representative payee.

In November 1981, a hearing was held before a second ALJ. Because Antonina was ill, she did not attend the hearing. She had, however, submitted letters to the Social Security office, and her husband Domenico testified. The ALJ questioned Domenico about three certificates of deposit totaling $4,000 issued by Mellon Bank during the period in question. Each certificate referred to by the ALJ was titled, "Antonina Cannuni or Domenico Cannuni In Trust For Mark Cannuni."

Domenico testified that the certificates were currently titled in his and his wife's names, and that the couple held bank deposits in excess of $10,000. The ALJ remarked, "Now you understand that for resources that are either Mark's or can be deemed to be Mark's in excess of $1,500, that there is no question about whether or not there's an overpayment." Later, he commented, "We have established . . . that the resources in existence at the time Mark was paid . . . were in excess of the amount allowed. That means there was an overpayment."

Domenico testified that when he bought the certificates of deposit, the bank manager suggested putting money "in savings in trust of Mark [so] that if anything would happen to you in the future Mark would have the money." Domenico also stated that Mark did not have access to the money because of his mental condition and "because the books [were] in the Safety Deposit Box which Mark doesn't have the key for." Domenico said that the money could be taken out for use in his business and had been earned solely by him.

The testimony and documentary evidence from the first hearing were incorporated into the second record. In the first ALJ's decision, the discussion of the evidence includes reference to "a bank account . . . maintained in the name of the claimant [Mark] and Antonina Cannuni." The first ALJ also stated, "it was established that the claimant cannot read or write and does not manage his own benefits. . . . Mrs. Cannuni stated that the account in question was opened by her without knowledge of the claimant and contained her funds -- alone. She stated that she was unaware that ...

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