Singer v. SSA CV-02-387-M 09/02/03
UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Robert Singer
o/b/o Joyce Singer,
Claimant
v. Crvrl No. 02-387-M
Opinion No. 2003 DNH 152
Jo Anne B. Barnhart,
Commissioner, Social
Security Administration,
Respondent
O R D E R
Pursuant to 42 U.S.C. § 405(g), claimant moves to reverse
the Commissioner's decision finding Joyce Singer ineligible for
supplemental security income ("SSI") benefits, as well as her
determination that Ms. Singer had been overpaid (between May 1998
and November 2000) because she had disgualifying resources during
that period. The Commissioner, in turn, moves for an order
affirming the decision. For the reasons given below, the
decision of the Appeals Council is reversed and the matter is
remanded.
Standard of Review
The applicable standard of review in this case provides, in
pertinent part:
The [district] court shall have power to enter, upon
the pleadings and transcript of the record, a judgment
affirming, modifying, or reversing the decision of the
Commissioner of Social Security, with or without
remanding the cause for a rehearing. The findings of
the Commissioner of Social Security as to any fact, if
supported by substantial evidence, shall be conclusive
42 U.S.C. § 405(g) (setting out the standard of review for DIB
decisions); see also
42 U.S.C. § 1383(c) (c) (establishing §
405(g) as the standard of review for SSI decisions). However,
the court "must uphold a denial of social security . . . benefits
unless 'the [Commissioner] has committed a legal or factual error
in evaluating a particular claim.'" Manso-Pizarro v. Sec'v of
HHS,
76 F.3d 15, 16 (1st Cir. 1996) (guoting Sullivan v. Hudson,
490 U.S. 877, 885 (1989)).
The Commissioner's findings of fact must be supported by
substantial evidence in the record. "The substantial evidence
test applies not only to findings of basic evidentiary facts, but
also to inferences and conclusions drawn from such facts."
2
Alexandrou v. Sullivan, 764 F. Supp. 916, 917-18 (S.D.N.Y. 1991)
(citing Levine v. Gardner,
360 F.2d 727, 730 (2d Cir. 1966)) . In
turn, "[s]ubstantial evidence is 'more than [a] mere scintilla.
It means such relevant evidence as a reasonable mind might accept
as adeguate to support a conclusion.'" Currier v. Sec'v of HEW,
612 F.2d 594, 597 (1st Cir. 1980) (guoting Richardson v. Perales,
402 U.S. 389, 401 (1971)). Finally, when determining whether a
decision of the Commissioner is supported by substantial
evidence, the court must "review[] the evidence in the record as
a whole." Irlanda Ortiz v. Sec'v of HHS,
955 F.2d 765, 769 (1st
Cir. 1991) (guoting Rodriquez v. Sec'v of HHS,
647 F.2d 218, 222
(1st Cir. 1981)).1
Background
Joyce Singer ("Joyce") has been receiving Social Security
disability insurance benefits since 1981 and has been receiving
1 "It is the responsibility of the [Commissioner] to
determine issues of credibility and to draw inferences from the
record evidence. Indeed, the resolution of conflicts in the
evidence is for the [Commissioner], not the courts." Irlanda
Ortiz, 955 F.2d at 769 (citations omitted). Moreover, the court
"must uphold the [Commissioner's] conclusion, even if the record
arguably could justify a different conclusion, so long as it is
supported by substantial evidence." Tsarelka v. Sec'v of HHS,
842 F .2d 529, 535 (1st Cir. 1988).
3
Social Security supplemental security income since 1983. Joyce's
father, Robert Singer ("Singer"), an attorney, serves as Joyce's
representative payee. Joyce's benefit payments are directly
deposited into an account at Citizens Bank. Singer also claims
to have made deposits into that account from time to time for
Joyce's benefit. (Jt. Statement of Material Facts at 6.)
However, the record contains insufficient evidence from which to
determine the dates or the amounts of Singer's deposits. The
account is titled: "Robert Singer Trustee for Joyce Singer."
(Jt. Statement at 2.) Since he opened the account. Singer has
operated it as he would a client trust account, including
reporting on it to the New Hampshire Supreme Court in the same
way he reported on his actual client trust account.
In December 2000, the Commissioner stopped paying Joyce's
SSI benefit after determining that her available financial
resources exceeded the statutory limit of $2,000, beginning in
May of 1998. That determination was based exclusively on the
monthly balances of the Citizens Bank account. Singer concedes
that the account did contain more than $2,000 from May 1998
4
through November 1, 2000 .2 (Administrative Transcript ("Tr.") at
50 .)
Singer sought reconsideration of the initial determination,
on grounds that the bank account was actually a trust, the corpus
of which did not count as a resource owned by Joyce. The
Commissioner's Notice of Reconsideration gave two reasons for
upholding the initial determination:
1) There is no formal written document that establishes
the legal arrangement of a bona fide trust. I find
that both you [Singer] and Joyce Singer have
unrestricted total access to the proceeds. This means
that the money is egually hers as it is yours.
Furthermore, you admit that the balance in the account
is primarily sourced from Joyce's monthly SSI payments.
2) The mere titling of an account ("Trustee") does not
give rise to the automatic foundation of a trust
agreement or arrangement. Trusts are often complex
legal arrangements involving property or ownership
interests. But this account, which was established in
1983 and which you wish to call a trust is, in fact, a
simple checking account. Therefore, it is to be
included in counting the claimant's resources. At this
time, the claimant, Joyce, has more than $2000.00 which
causes her to be over the SSI resource limit.
(Tr. at 56 .)
2 In May 1998, the account held $2,973.78, and in October
2000, it held $3,284. Between those two dates, it held as much
as $3,308.14 and as little as $2,324. (Tr. at 77.)
5
Singer requested a hearing before an ALJ, which was held in
Manchester, New Hampshire, on August 22, 2001. After collecting
additional evidence from employees of Citizens Bank, the ALJ
issued a decision that was fully favorable to claimant. Based
upon the history of the bank account, including the bank's
statement that Joyce would not be allowed to withdraw funds from
it, and based upon the New Hampshire Supreme Court's decision in
Lanoue v. Commissioner, Social Security Administration, 146 N.H.
504 (2001), the ALJ found that the account constituted an
irrevocable trust "for purposes of determining countable
resources for supplemental security income for disability." (Tr.
at 20.) Consequently, he ruled that the "trust does not impact
the claimant's eligibility for supplemental security income for
disability." (Tr. at 20.)
The Appeals Council took up the matter on its own motion,
after receiving a memorandum from the Office of the Boston
Regional Commissioner questioning the ALJ's decision. (Tr. at
125-26.) The Appeals Council made the following relevant
findings:
6
1. A checking account at Citizen's Bank set up by
Robert Singer as a trust account, "Robert Singer:
Trustee (in trust for) Joyce Singer," was
established with Joyce B. Singer's funds and
contains funds belonging to Joyce B. Singer.
2. Joyce B. Singer is the grantor and sole
beneficiary of the trust account.
3. The trust account may be revoked by Joyce B.
Singer or someone acting as her agent.
4. The funds in the trust account are countable as
resources of Joyce B. Singer for supplemental
security income purposes.
5. The Social Security Administration correctly
determined that Joyce B. Singer was not eligible
for supplemental security income for months
beginning May 1998 because of excess resources and
had been overpaid.
(Tr. at 9.) Based upon those findings, the Appeals council
reached the following conclusion:
Upon consideration of the evidence and the applicable
law, the Appeals Council has concluded that the trust
account at Citizen's Bank is revocable by Joyce B.
Singer or a person acting on her behalf under general
trust law because she is both the grantor of the trust
and the sole "beneficiary," that the trust principal is
countable as a resource of Joyce B. Singer for purposes
of determining her eligibility for supplemental
security income for that reason, and that the Social
Security Administration correctly determined that she
received an overpayment of supplemental security income
because of excess resources.
7
(Tr. at 6.) This appeal followed.
Discussion
Claimant argues that the Appeals Council erred in finding
that the "trust account created for the claimant's benefits" was
a resource within the meaning of the Social Security Act and its
associated regulations. Under Title XVI of the Social Security
Act, an individual who does not have a spouse living with him or
her is eligible for supplemental security income only if his or
her resources amount to less than $2,000. See 42 U.S.C. §§
1382(a)(1)(B) and 1382(a)(3)(B). The term "resource" is defined
in the Social Security regulations:
(a) Resources; defined. For purposes of this
subpart L, resources means cash or other liguid assets3
3 The term "liguid resources" is defined in the regulations
as follows:
Liquid Resources. Liguid resources are cash or
other property which can be converted to cash within 20
days, excluding certain nonwork days as explained in §
416.120(d). Examples of resources that are ordinarily
liguid are stocks, bonds, mutual fund shares,
promissory notes, mortgages, life insurance policies,
financial institution accounts (including savings,
checking, and time deposits, also known as certificates
of deposit) and similar items. Liguid resources, other
than cash, are evaluated according to the individual's
eguity in those resources. . . .
or any real or personal property that an individual (or
spouse, if any) owns and could convert to cash to be
used for his or her support and maintenance.
(1) If the individual has the right, authority or
power to liquidate the property or his or her share of
the property, it is considered a resource. If a
property right cannot be liquidated, the property will
not be considered a resource of the individual (or
spouse).
20 C.F.R. § 416.1201.
Among the liquid assets qualifying as resources for purposes
of determining eligibility for SSI benefits are unspent (or
conserved) current (i.e., non-retroactive) SSI benefit payments.
See Beatty v. Schweiker, 678 F.2d 359, 361 (3d Cir. 1982)
("[u]nspent SSI payments clearly fall within [the] definition" of
resources given in § 416.1201); Cruz v. Apfel, 48 F. Supp. 2d
375, 377 (S.D.N.Y. 1999) (explaining that as an exception to the
general rule that unspent SSI benefits are resources, unspent
retroactive benefit payments are excluded from resources for six
months after receipt, and may be permanently sheltered from being
counted as resources); Singer v. Sec'v, HHS,
566 F. Supp. 204
(S.D.N.Y. 1983) (ruling that when SSI recipient saved a portion
of his benefits, those savings counted as excess resources when
20 C.F.R. § 416.1201 (b) .
9
they exceeded the statutory cap on resources). See also 20
C.F.R. § 416.1210 (listing Title XVI retroactive payments, but
not unspent non-retroactive payments,4 as excluded from
resources).
To the extent the Citizens Bank account balance represented
Joyce's saved SSI benefits, the account was her property, and is
not sheltered from being counted as a "resource" for SSI
purposes. In other words, Joyce's saved SSI benefits cannot form
the corpus of a trust that serves to shelter those assets from
being counted as resources.5 While the regulations provide that
4 In the balance of this order, unspent non-retroactive
payments will be referred to as conserved current benefits.
5 Tellingly, in none of the four SSI cases involving trusts
or conservatorships cited by claimant was the trust corpus
derived from SSI benefits. See Lanoue, 146 N.H. at 505 ($900,000
settlement of medical malpractice action placed in "special needs
trust" established under 42 U.S.C. § 1396p); White v. Apfel,
167
F.3d 369, 370 (7th Cir. 1999) ($35,000 settlement of personal
injury action "placed in a restricted trust pursuant to a court
order"); Frerks v. Shalala,
52 F.3d 412, 413 (2d Cir. 1995)
($333,000 settlement of medical malpractice action placed in bank
account subject to the control of the Surrogate Court); Navarro
v. Sullivan,
751 F. Supp. 349, 350 (S.D.N.Y. 1990) ($133,333
medical malpractice settlement restricted, by court order, to
uses other than support and maintenance). Claimant has
identified no case, nor has the court found one, involving a
trust, or any other financial arrangement, that was funded by
conserved current SSI benefits and that was sheltered from
recognition as a resource.
10
unspent retroactive Title XVI benefits may be sheltered from
being counted as resources, the regulations do not permit
sheltering of conserved current benefits.
When paid to her, Joyce's SSI benefits must be spent on her
support and maintenance, or, if "not needed for the beneficiary's
current maintenance or reasonably forseeable needs," they must be
conserved and invested. See 20 C.F.R. § 416.645(a). When
unspent benefits are conserved and invested, they remain the
property of the beneficiary, and the account in which they are
placed must indicate the beneficiary's ownership of the account.
See
20 C.F.R. § 416.645(b). The preferred forms of investment
listed in § 416.645(b) all fall within the category of liguid
resources defined in § 416.1201(b). Thus, both case precedent
and the regulations themselves establish that notwithstanding how
the Citizens Bank account established for Joyce's benefit may be
titled, any unspent SSI benefits deposited in it remain Joyce's
property, and are countable resources.
Far from being unavailable for Joyce's support and
maintenance, the Citizens Bank account, opened by her
11
representative payee for the express purpose of receiving and
managing her Social Security benefits checks, was and is
routinely used by her representative payee to pay for her support
and maintenance.6 (See Pl.'s Mot. for Order Reversing the
Decision of the Comm'r at 5 (Singer "continued to use this
account to pay [Joyce's] living expenses).) To the extent it
contained Joyce's SSI benefits, the account could not be used for
anything other than her support and maintenance, and could not
gualify as a trust, for Social Security purposes, because unspent
current benefit payments cannot, as a matter of law, make up the
corpus of a trust - at least not one that successfully avoids
recognition of the accumulated funds as disgualifying assets when
they exceed $2,000.
The claimant, the Commissioner, the ALJ, and the Appeals
Council have all devoted considerable time and energy to properly
6 The Administrative Transcript does not include cancelled
checks or other direct evidence of the expenditures made from the
account, but it may be presumed that the account was used to pay
for Joyce's support and maintenance. For example, for the fiscal
year ending October 31, 2000, Singer reported that all of Joyce's
SSI benefits for that year were spent on her support and
maintenance. (Tr. at 47.) If all of her benefit checks went
into the Citizens Bank account, and all of her benefits were used
for her support and maintenance, then, necessarily, the account
was used for her support and maintenance.
12
characterizing the trust qualities of the Citizens Bank account.
However, for reasons discussed above, it is not possible, on this
record, to determine the nature of that account, for resource-
counting purposes, because the record does not fully disclose the
source of the funds in that account. If the account has been
funded exclusively by Social Security benefits, then, as a matter
of law, it cannot be a trust, no matter how it may be titled, and
Joyce is ineligible for benefits whenever the account balance is
greater than $2,000.
The matter is complicated, however, by Singer's seemingly
uncontested assertion that he also deposited his own funds into
that account for Joyce's benefit, despite SSA's rather clear
warnings against commingling a beneficiary's funds with other
money. (See, e.g., Tr. at 124.) To the extent Singer put his
money into the account for his daughter's benefit - and the
record is not well developed on this point - that money may or
may not count as resources available to Joyce. Singer's funds
may not qualify as resources, depending on whether those funds -
commingled as they were with Social Security benefits - qualify
13
as having been placed in a bona fide trust.7 None of these
questions have been addressed below.
Given the absence of a developed record, the decision of the
Appeals Council cannot be affirmed. The record does not contain
substantial evidence supporting the finding that the Citizens
Bank account contained more than $2,000 of unspent Social
Security benefits at any particular time.8 The record contains
deposit and withdrawal data for only three months. At the same
time, however, the Appeals Council's decision is not properly
reversed, because reversal would have the effect of reinstating
the ALJ's decision, which itself is based upon an erroneous legal
7 It does seem unlikely that Singer's contributions to the
account will qualify as trust funds, given that his deposits were
commingled with funds legally incapable of forming the corpus of
a trust, and given that the account into which those deposits
were made was routinely used for Joyce's support and maintenance,
the very categories of expenditure for which a resourcesheltering trust cannot be used.
8 Plainly, however, the account did contain conserved
current benefits, converted to resources. For example, between
July 31, 2000, and September 29, 2000 - the only period for which
there are informative bank records - the account grew from
$2,469.17 to $3,284.69. More importantly, during that period,
the account was credited with $1,443.20 in directly deposited
Social Security benefits (both SSI and disability insurance
benefits) against which three checks were written, for a total of
$584.05, leaving $859.15 in unspent benefits in the account.
(T r . at 4 8.)
14
premise, namely that a trust can be funded with Social Security
benefits which then would escape recognition as available
resources for purposes of disqualification for continuing
benefits. The matter must be remanded.
On remand, it will be necessary to determine the source of
funds held in the account (Singer's contributions versus
accumulated Social Security benefits) at any time for which
ineligibility is claimed.
Of course, if it is determined that Joyce was ineligible in
any given month due to available excess resources, and was
overpaid, before determining her eligibility for the following
month, it will be necessary to deduct the overpayment, to
ascertain the balance the account should have had in it. A good
example of such a running accounting may be found in Gilbert v.
Sullivan, No. 89 C 20378, 1990 WL 304307 (N.D. 111. Dec. 28,
1990). Given that the account usually held less than $3,000, and
generally tended to hold steady rather than grow continually, it
seems more than likely that a correct calculation of Joyce's
available resources in any given month (even assuming Singer's
15
contributions are countable) will necessarily result in a
determination of ineligibility and overpayment for some number of
months substantially less than the full thirty months between May
1998 and October 2000. That is, the amount in controversy would
appear to be far less than the parties seem to think, and given
that circumstance, the cost of resolving this dispute has
probably already far exceeded the amount at issue. It may well
be time for rational judgment to strike a reasonable and
responsible compromise, and end the unwarranted financial drain
on the beneficiary and the taxpayers.
In any event, on the record before the court, the matter
must be remanded for further proceedings before the ALJ.
Conclusion
For the reasons given, the decision of the Appeals Council
is reversed, and the matter is remanded to the ALJ for further
proceedings consistent with this opinion. The Clerk of Court
shall enter judgment in accordance with this order and close the
case.
16
SO ORDERED.
Steven J. McAuliffe
United States District Judge
September 2, 2003
cc: Raymond J. Kelly, Esq.
David L. Broderick, Esq.
17
