167 F.3d 369 (7th Cir. 1999), 98-1738, White ex rel. Smith v. Apfel

Docket Nº98-1738.
Citation167 F.3d 369
Party NameBrenda M. WHITE, for Stanley A. SMITH, Plaintiff-Appellant, v. Kenneth S. APFEL, Commissioner of Social Security Administration, Defendant-Appellee.
Case DateFebruary 04, 1999
CourtUnited States Courts of Appeals, United States Court of Appeals (7th Circuit)

Page 369

167 F.3d 369 (7th Cir. 1999)

Brenda M. WHITE, for Stanley A. SMITH, Plaintiff-Appellant,

v.

Kenneth S. APFEL, Commissioner of Social Security

Administration, Defendant-Appellee.

No. 98-1738.

United States Court of Appeals, Seventh Circuit

February 4, 1999

Argued Sept. 11, 1998.

Page 370

Susan Dawson-Tibbits (argued), Prairie State Legal Services, Inc., Peoria, IL, for Plaintiff-Appellant.

K. Tate Chambers, Office of the United States Attorney, Peoria, IL, Ekaterina Scherb (argued), Social Security Administration, Office of the General Counsel, Chicago, IL, for Defendant-Appellee.

Before CUMMINGS, FLAUM and ROVNER, Circuit Judges.

ILANA DIAMOND ROVNER, Circuit Judge.

Joseph Heller could have written the plot of Brenda White's struggle to maintain SSI benefits for her disabled son. After being caught between a rock (the Missouri probate court) and a hard place (the Social Security Administration) for nearly four years, Ms. White comes to this Court, asking us to extricate her from the Catch 22 in which she finds herself. With the statutory language behind her, she has proved her entitlement to that relief. For the reasons stated below, we reverse the judgment of the district court.

I.

Brenda White's son, Stanley Smith, was injured in a car accident when he was three years old. His injuries rendered him eligible for supplemental security income (SSI) benefits, which he began receiving in 1990. Ms. White pursued a personal injury action on Stanley's behalf to recover damages for the injuries he suffered in the accident, and in December 1991, Stanley received a $35,000 settlement from that action. Ms. White and her son were living in Missouri at the time, and the Missouri probate court appointed Ms. White conservator of Stanley's assets. The settlement was placed in a restricted trust pursuant to a court order. Because Ms. White had no income at the time of the appointment, a probate court interviewer stressed to her that she remained primarily responsible for Stanley's needs, and that the trust was to remain untouched until Stanley reached the age of eighteen. The court interviewer also informed Ms. White that court approval was required before she did anything with the money other than placing it in government-backed investments. Ms. White represented to the probate court that, at that time, the assets were not needed for Stanley's maintenance and support, and under those circumstances the court appointed her

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conservator and issued an order of "no further process." 1

In January 1995, Ms. White moved her family to Peoria, Illinois. She completed a Statement for Determining Continuing Eligibility for SSI Payments in which she informed the Social Security Administration ("SSA") for the first time about the restricted trust fund. On the basis of this information, the SSA determined that Stanley was no longer eligible for SSI benefits because he had "excess resources." Federal regulations prohibit a person from collecting SSI benefits if that person has more than $2000 in resources available for care or maintenance. The SSA notified Ms. White that the money in the restricted trust constituted a resource under the regulations, and that, not only was Stanley no longer eligible for benefits, but also that he had not been eligible since January 1992, when the trust was created. The SSA informed Ms. White that the amount of SSI benefits that Stanley collected from January 1992 forward could be charged against her. Ms. White sought a reconsideration of that decision, which was denied on March 24, 1995. The Notice of Reconsideration specified that the SSA considered the trust fund to be available for Stanley's support and maintenance, despite the fact that a court order was needed to access the funds.

Brenda White then requested a hearing before an administrative law judge, and simultaneously filed a petition in the Missouri probate court for a release of some of the trust funds. She filed the probate petition with the assistance of the attorney who represented her both in the personal injury action and in her petition for appointment as conservator. She asked the probate court to release $500 per month for Stanley's support and maintenance, for both current support and support retroactive to the date of the personal injury settlement. She also requested access to part of the trust for use as an emergency fund. She explained in the petition that she was unemployed, disabled, and unable to provide for Stanley's support. She maintained that this condition had existed since the creation of the conservatorship, and that the release of funds would be in Stanley's best interest. The probate court summarily denied the petition on July 7, 1995.

In August 1995, an ALJ heard testimony from Ms. White, who was represented by a legal aid attorney. Before the hearing, Ms. White's attorney filed a letter with the ALJ explaining the sequence of events to date and informing the ALJ that the Missouri probate court had denied Ms. White's request for a release of funds. The ALJ issued a Recommended Decision on November 1, 1995, finding that the settlement funds constituted a resource under SSA regulations, and that Stanley had not been eligible for SSI benefits since January 1992 due to excess resources. The ALJ noted that, although the Missouri probate court refused to release the funds, the ALJ did "not know how forcefully this matter was pursued in the Missouri courts." See In the case of Smith, Recommended Decision, November 1, 1995, SSA Office of Hearings and Appeals, ALJ Alan M. Weinman, at 4. Moreover, the ALJ explained, no provision of Missouri law indicated that the funds could not be invaded for Stanley's support and maintenance. Because the trust fund was not earmarked for any particular purpose, the ALJ concluded that a "reworded petition," perhaps a more narrow one, not seeking access to an emergency fund, might be granted by the probate court. Id. Given that possibility, the ALJ held that the settlement funds held in trust for Stanley were a resource under SSA regulations.

Ms. White appealed this Recommended Decision to the SSA Appeals Council, which issued a letter on September 4, 1996. In the letter, the Appeals Council

concluded that what is needed to establish that funds in the conservatorship account are not countable as [a] "resource" within the meaning of 20 CFR § 146.1201(a) is evidence proving that the [probate] court would not approve a request that asks for withdrawals for current support and maintenance only. Absent new and material

Page 372

evidence proving that fact, the Appeals Council intends to issue a decision finding that the evidence is not sufficient to establish that the funds in the conservatorship account may not be used for Stanley's support and maintenance and that they are countable as a resource, precluding Stanley's eligibility for supplemental security income benefits.

Letter from Appeals Council to Brenda White, September 4, 1995, Record at 118. Ms. White's legal aid attorney responded by filing two affidavits detailing efforts to further petition the Missouri probate court. In her own affidavit, the legal aid attorney stated that she learned from a staff attorney at the Missouri probate court that a person bringing a petition before that court must be represented by counsel. Because Stanley's case had been closed, Ms. White would also be required to file a petition to reopen the estate before she could bring a petition for the release of funds, neither of which she could do pro se. The legal aid attorney, who was licensed to practice in Illinois only, averred that she spoke to Ms. White's Missouri attorney and that he was unwilling to perform this work on a pro bono basis. Finally, Ms. White's Illinois legal aid attorney informed the Appeals Council that she tried unsuccessfully to obtain representation for Ms. White through the local legal aid agency in Eastern Missouri. In the second affidavit, Ms. White asserted that she was a single mother of two children, that the father of her children was deceased, that her total income was approximately $880 per month, and that she did not have the funds to hire an attorney in Missouri to file another petition. The SSA did not contest the truth of either affidavit.

The Appeals Council was not moved by this new information. The Council found that Ms. White's inability to petition the Missouri probate court due to her financial circumstances and the requirement that she be represented by counsel did not "bear on the issue of her legal right to do so." In the case of White, Decision of Appeals Council, SSA Office of Hearings and Appeals, November 12, 1996, at 5 (emphasis in original). The Council held that as long as Ms. White possessed the "legal right to liquidate a portion of the conservatorship account, it is a countable resource under 20 CFR § 416.1201(a), irrespective of extenuating circumstances that prevent her from immediately asserting that right." Id. In the absence of proof that the Missouri probate court would not approve a request for withdrawal for current support and maintenance only, the Appeals Council found that the conservatorship account contained excess resources, rendering Stanley ineligible for SSI benefits.

Ms. White appealed the ruling of the Appeals Council to the District Court, arguing that the Appeals Council made two errors. First, she claimed that the ruling that funds in the restricted conservatorship account were countable resources was not supported by substantial evidence. Second, she contended that the SSA's finding that her inability to hire counsel did not prove her inability to access the conservatorship funds was not supported by substantial evidence.

The district court noted that under Missouri law, a conservator generally has the power to use conservatorship funds for the care and maintenance of the beneficiary, and that a...

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5 practice notes
  • Margy Temponeras, M.D.; Decision and Order
    • United States
    • Federal Register August 01, 2012
    • August 1, 2012
    ...no substitute for evidence, and a decision based on speculation is not supported by substantial evidence.'' White ex rel. Smith v. Apfel, 167 F.3d 369, 375 (7th Cir. 1999) (citing Erhardt v. Sec'y, DHS, 969 F.2d 534, 538 (7th Cir. \48\ The Government did not seek to refresh DI Kresnak's rec......
  • Rene Casanova, M.D.; Decision and Order
    • United States
    • Federal Register September 19, 2012
    • September 19, 2012
    ...no substitute for evidence, and a decision based on speculation is not supported by substantial evidence.'' White ex rel. Smith v. Apfel, 167 F.3d 369, 375 (7th Cir. 1999) (citing Erhardt v. Sec'y, DHS, 969 F.2d 534, 538 (7th Cir. (g) Respondent's Positive Experience in Dispensing Controlle......
  • Darryl J. Mohr, M.D.; Affirmance of Immediate Suspension Order
    • United States
    • Federal Register June 12, 2012
    • June 12, 2012
    ...no substitute for evidence, and a decision based on speculation is not supported by substantial evidence.'' White ex rel. Smith v. Apfel, 167 F.3d 369, 375 (7th Cir. 1999) (citing Erhardt v. Sec'y, DHS, 969 F.2d 534, 538 (7th Cir. 1992)). I find there is insufficient evidence to conclude th......
  • Kwan Bo Jin, M.D.; Decision and Order
    • United States
    • Federal Register June 12, 2012
    • June 12, 2012
    ...no substitute for evidence, and a decision based on speculation is not supported by substantial evidence.'' White ex rel. Smith v. Apfel, 167 F.3d 369, 375 (7th Cir. 1999) (citing Erhardt v. Sec'y, DHS, 969 F.2d 534, 538 (7th Cir. 1992)). Accordingly, I give absolutely no weight to DI Pacel......
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