United States District Court, D. New Jersey
[Copyrighted Material Omitted]
For GENE KARLSON, Plaintiff: ELLEN RADIN, LEAD ATTORNEY, GINARTE, O'DWYER, GONZALEZ, GALLARDO & WINOGRAD, LLP, NEWARK, NJ.
For COMMISSIONER OF SOCIAL SECURITY, Defendant: ESTHER KIM, REBECCA HOPE ESTELLE, LEAD ATTORNEYS, U.S. SOCIAL SECURITY ADMINISTRATION, OFFICE OF GENERAL COUNSEL, NEW YORK, NY.
Susan D. Wigenton, United States District Judge.
Before this Court is Plaintiff Gene Karlson's (" Plaintiff" ) appeal of the final administrative decision of the Commissioner of Social Security (the " Commissioner" ), with respect to an administrative law judge's denial of Plaintiff's application for waiver of recovery of an overpayment of Social Security Disability Insurance Benefits (" SSDI" ). This appeal is decided without oral argument pursuant to Federal Rule of Civil Procedure 78. This Court has jurisdiction over this action pursuant to 42 U.S.C. § 405(g). Venue is proper under 28 U.S.C. § 1391(b). For the reasons discussed below, Plaintiff's application for waiver of the recovery of the overpayment is GRANTED, and the final decision of the Commissioner, via the determination of the administrative law judge, is REVERSED.
I. FACTS AND PROCEDURAL HISTORY
Plaintiff Karlson injured his back and knee in construction-related accidents in 1987 and in approximately 2000 or 2001. (R. 138-39.) As a result of the accidents and attendant injuries, Plaintiff began receiving SSDI in 2002. (R. 139.) In 2007, Plaintiff started working for IAP World Services, Inc. (" IAP" ) and earned approximately $43,000 that year. ( Id. ) Plaintiff was laid off from IAP in 2008. (R. 140.) On February 12, 2009, Plaintiff started working for Brady Corporation (" Brady" ). (R. 140.) Plaintiff was thereafter laid off from Brady on December 8, 2010. (R. 140.) Plaintiff, however, continued receiving SSDI while employed at IAP. (R. 15, 141.) The SSDI Plaintiff received while employed at IAP (i.e., the overpayment) is the subject of this matter. (R. 15.)
At the hearing to determine whether Plaintiff had to repay the overpayment, Plaintiff testified that he contacted the Social Security Administration (the " SSA" ) by phone a number of times to inform it that he had begun working. (R. 141.) Plaintiff testified that he sent two letters dated March 22, 2009 and September 20, 2009 to the SSA advising it that he was employed. (R. 141-43.) Plaintiff also submitted a letter showing that he sent his paychecks from IAP to the SSA on April 28, 2007, and that those paychecks were returned to him. (R. 30.) The letter also states that he called the SSA in April or May of 2007 and was told by a representative to keep the SSDI check unless notified by the SSA. (R. 30.) Plaintiff later spoke with another representative on or about February 28, 2008, advising the representative that he was working for IAP but was still receiving SSDI. (R. 30.) Plaintiff maintains that the representative told him that the SSA was still reviewing his case and that he could continue to receive payments while the case was under review. (R. 30.) The letter further states that Plaintiff was assured by a SSA representative that he would not be billed later for the SSDI payments. (R. 30.) Plaintiff spoke with another representative on August 19, 2008 to inform the SSA that he had been laid off from IAP, and he was
told by that representative that he would still continue to receive SSDI. (R. 30.)
The SSA sent a " Notice of Proposed Decision" dated January 9, 2009 to Plaintiff informing him of its intention to determine that Plaintiff's disability had ended in November 2007 due to his engagement in substantial work. (R. 19-22.) The letter explains that Plaintiff was not entitled to SSDI from February 2008 through August 2008. (R. 19.) The letter further explains that since Plaintiff had begun working in February 2007, the subsequent nine months (February through October 2007) were considered a trial work period . (R. 20.) It continues that after the trial work period, the SSA would pay SSDI for the two months following the trial work period. (R. 20.) The letter thus concludes that Plaintiff should not have received SSDI after January 2008. (R. 20.)
The SSA thereafter sent a letter to Plaintiff dated February 6, 2009 seeking to recover $11,902.80 in overpayment of SSDI to Plaintiff for February 2008 through August 2008 because he had engaged in substantial work. (R. 23-27.) Plaintiff sent the SSA a letter dated March 22, 2009, outlining the efforts he had undertaken to avoid the overpayment and inquiring as to how he could appeal the overpayment decision. (R. 30-31.)
On or about April 26, 2009, Plaintiff received a " Notice of Change in Benefits" from the SSA reiterating that he was no longer entitled to SSDI benefits from February 2008 to August 2008 because of his engagement in substantial work. (R. 35-38.) Plaintiff later received a letter from the SSA dated July 22, 2009, which acknowledged receipt of Plaintiff's request for waiver of collection of the overpayment. (R. 41-42.) The letter also advised Plaintiff of an in-person conference scheduled for August 6, 2009 with a SSA official. (R. 41-42.) Plaintiff apparently attended the conference because he executed a statement explaining why he believed that he was not at fault in causing the overpayment. (R. 43-44.) The statement is date-stamped August 6, 2009 with a SSA insignia. (R. 43-44.) The SSA thereafter sent Plaintiff a letter dated August 6, 2009 finding that Plaintiff was not at fault in causing the overpayment but also finding that he could afford to repay the $11,902.80 overpayment. (R. 45-47.) As such, the SSA decided that it could not waive collection of the overpayment. (R. 45-47.) Consequently, on or about September 20, 2009, Plaintiff requested a hearing before an Administrative Law Judge (" ALJ" ). (R. 48.)
The hearing was conducted on January 5, 2011. (R. 132.) The ALJ determined that Plaintiff was overpaid $11,902.80 for the months of February 2008 through August 2008. (R. 17.) After taking Plaintiff's testimony, the ALJ found that Plaintiff was at fault in causing the overpayment and denied waiver of recovery of the overpayment. (R. 16-17.) Plaintiff filed the instant complaint on January 30, 2013, asking this Court to reverse the Commissioner's decision and grant Plaintiff a waiver of recovery of the overpayment. (Dkt. No. 1.)
II. LEGAL STANDARD
In social security appeals, district courts have plenary review of the legal issues decided by ALJs. Knepp v. Apfel, 204 F.3d 78, 83 (3d Cir. 2000). The court's review of the ALJ's ...