Schaefer on Behalf of Schaefer v. Heckler

• Decision Date: 04 June 1986
• Docket Number: No. 85-2094,85-2094
• Parties: , Unempl.Ins.Rep. CCH 16,822 Marilyn A. SCHAEFER, on Behalf of Deanne M. SCHAEFER, Plaintiff-Appellant, v. Margaret HECKLER, Secretary of Health and Human Services, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 81

792 F.2d 81

14 Soc.Sec.Rep.Ser. 40, Unempl.Ins.Rep. CCH 16,822

Marilyn A. SCHAEFER, on Behalf of Deanne M. SCHAEFER, Plaintiff-Appellant, v. Margaret HECKLER, Secretary of Health and Human Services,

Defendant-Appellee.

No. 85-2094.

United States Court of Appeals, Seventh Circuit.

Argued Jan. 7, 1986.

Decided June 4, 1986.

Ronald N. Walker, Angel & Walker, S.C., Dodgeville, Wis., for plaintiff-appellant.

Jeffrey M. Teske, Dept. of Health & Human Services, Chicago, Ill., for defendant-appellee.

Before WOOD and RIPPLE, Circuit Judges, and ESCHBACH, Senior Circuit Judge.

HARLINGTON WOOD, Jr., Circuit Judge.

Plaintiff-appellant Marilyn A. Schaefer, on behalf of her minor daughter Deanne M. Schaefer, appeals the district court's decision denying Deanne Schaefer surviving child's benefits under the Social Security Act (the "Act"). The court, upholding the final decision of the Secretary of Health and Human Services (the "Secretary"), concluded that Deanne Schaefer was not entitled to draw child's insurance benefits from her natural father's account. We affirm the decision of the district court.

I.

Deanne Schaefer was born on June 13, 1981. David A. Kroll, the Wisconsin-domiciled wage earner who was later adjudged to be Deanne's natural father, was present at the hospital at the time of her birth. On his way home from the hospital, Kroll was killed in an automobile accident. Kroll and Marilyn Schaefer were unmarried at the time of Deanne's birth, although they were engaged to be married. Kroll had acknowledged his paternity to numerous individuals; he had never, however, executed a written acknowledgement nor had any court adjudicated the matter. Additionally, Kroll had never lived with Marilyn Schaefer nor had he contributed to her support, although there was evidence that Kroll was intending to provide for the medical costs incurred by the pregnancy and birth and for Deanne's support until she reached the age of majority.

On October 6, 1981, Evangeline A. Kroll, the personal representative of David Kroll's estate, and Marilyn Schaefer filed a joint petition for a determination of paternity in state court. The court determined that, under Wis.Stat.Ann. Sec. 767.51 (West 1981 and 1985 Supp.), Kroll was Deanne's natural father, and, accordingly, ordered that a new birth certificate be issued listing Kroll as the father. The Secretary has acknowledged the validity of this determination.

Marilyn Schaefer also sought surviving child's insurance benefits for her daughter pursuant to the Act. She argues her daughter is entitled to these benefits under two theories. First, a dependent "child" of a deceased wage earner who has filed an appropriate application is entitled to such benefits under the Act. See 42 U.S.C.A. Sec. 402(d) (West 1983 and 1985 Supp.). ¹ The plaintiff argues that Deanne is Kroll's child for purposes of 42 U.S.C.A. Sec. 416(h)(2)(A) (West 1983) which provides:

In determining whether an applicant is a child or parent of a fully or currently insured individual for purposes of this subchapter, the Secretary shall apply such law as would be applied in determining the devolution of intestate personal property by the courts of the State in which such insured individual is domiciled at the time such applicant files application, or, if such insured individual is dead, by the courts of the State in which he was domiciled at the time of his death or, if such insured individual is or was not so domiciled in any State, by the courts of the District of Columbia. Applicants who according to such law would have the same status relative to taking intestate personal property as a child or parent shall be deemed such.

(emphasis added).

The plaintiff concedes that under the Wisconsin intestacy laws in effect on the date of Kroll's death her daughter would not have been entitled to inherit from her biological father based on a posthumous determination of paternity. At the time of Kroll's death, the Wisconsin statute regulating intestate succession for illegitimate children provided:

An illegitimate child or his issue is entitled to take in the same manner as a legitimate child by intestate succession from and through (a) his mother, and (b) his father if the father has either been adjudicated to be such under ss. 52.21 to 52.45, or has admitted in open court that he is the father, or has acknowledged himself to be the father in writing signed by him.

Wis.Stat.Ann. Sec. 852.05(1) (West 1971).

Kroll had neither executed a writing nor had he acknowledged paternity in open court. Furthermore, at the time of his death, Wisconsin law (Wis.Stat. ch. 52) did not provide for posthumous paternity proceedings. See In re Estate of Blumreich, 84 Wis.2d 545, 267 N.W.2d 870, 873 (1978), appeal dismissed sub nom. Caldwell v. Kaquatosh, 439 U.S. 1061, 99 S.Ct. 822, 59 L.Ed.2d 26 (1979).

The plaintiff notes, however, that effective July 1, 1981 (eighteen days after Kroll died), section 852.05(1) was amended to read:

An illegitimate child or the child's issue is entitled to take in the same manner as a legitimate child by intestate succession from and through his or her mother, and from and through his or her father if the father has either been adjudicated to be the father in a paternity proceeding under ch. 767, or has admitted in open court that he is the father, or has acknowledged himself to be the father in writing signed by him.

Wis.Stat.Ann. Sec. 852.05(1) (emphasis added). ²

The Wisconsin legislature, also effective on July 1, 1981, repealed Chapter 52 and in its place enacted Chapter 767. Under Chapter 767, posthumous paternity proceedings are now permitted. See Wis.Stat.Ann. Secs. 767.01(3), 767.45 (West 1981 and 1985 Supp.). Relying on these statutory changes and the paternity determination in this case, the plaintiff argues that her daughter is entitled to benefits as a surviving "child" under 42 U.S.C.A. Sec. 402(d).

In the alternative, the plaintiff claims benefits are appropriate under 42 U.S.C.A. Sec. 416(h)(3)(C)(ii) (West 1983). Under section 416(h)(3)(C)(ii) an applicant son or daughter of a deceased wage earner will be deemed a "child" entitled to benefits, even in the absence of a state court determination if the wage earner "is shown by evidence satisfactory to the Secretary to have been the mother or father of the applicant" and "was living with or contributing to the support of the applicant at the time" the wage earner died.

The Secretary rejected both arguments advanced by the plaintiff and denied Deanne Schaefer child's insurance benefits. Review of the decision was sought in the district court which affirmed the Secretary's denial. The plaintiff appeals from that court's decision.

II.

Before proceeding to the substantive issues presented by this case, we must first examine the standards under which we review the district court's decision. In reviewing that court's decision, we employ the same standards it applied in reviewing the Secretary's decision. With respect to findings of fact, it is well-established that the conclusions of the Secretary must be upheld if they are supported by substantial evidence in the record as a whole. 42 U.S.C.A. Sec. 405(g) (West 1983). See Whitney v. Schweiker, 695 F.2d 784, 786 (7th Cir.1982) (noting that "[t]he 'clearly erroneous' standard specified by Fed.R.Civ.P. 52(a) for review of a trial court's finding is inapplicable because the findings under scrutiny are those of the Secretary rather than a district court"). "Substantial evidence is that which 'a reasonable mind might accept as adequate to support [the] decision.' " Taylor v. Schweiker, 739 F.2d 1240, 1241 (7th Cir.1984) (quoting Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 1427, 28 L.Ed.2d 842 (1971)). The Secretary's conclusions of law, however, are not entitled to such deference. If the Secretary's decision is the result of an error of law, it must be reversed. See Strunk v. Heckler, 732 F.2d 1357, 1359 (7th Cir.1984); Schmoll v. Harris, 636 F.2d 1146, 1150 (7th Cir.1980).

With these standards in mind, we proceed to an examination of the two issues raised by the plaintiff. Her first contention is that the Secretary failed to give the proper retroactive effect to the amended sections of Wisconsin law which, after July 1, 1981, provide for posthumous paternity determinations. The plaintiff argues that these amendments affect the intestacy succession in Wisconsin so that Deanne Schaefer would now be deemed an heir of David Kroll for purposes of the distribution of his personal property. See Wis.Stat.Ann. Sec. 852.05(1). Accordingly, she maintains that under secion 416(h)(2)(A) Deanne Schaefer would be deemed Kroll's "child" and hence eligible for survivor's benefits. To bolster her argument, the plaintiff notes that the Wisconsin legislature specifically provided that Chapter 767 be applied retroactively in paternity proceedings. See Wis.Stat.Ann. Sec. 767.45 (historical note quoting 1979 Wis. Laws ch. 352, Sec. 40). ³

We agree with the plaintiff that paternity determinations in Wisconsin may now take place posthumously and that such proceedings may occur even though the natural parent died prior to the effective date of Chapter 767 (i.e., July 1, 1981). In fact, this is precisely what occurred in this case. However, we disagree with the plaintiff's contention that since Chapter 767 is to be applied retroactively in paternity cases, it must also be applied retroactively to determine intestate succession. ⁴ Contrary to the plaintiff's position, a judgment of paternity is something entirely distinct from a right of inheritance, and, although the Wisconsin legislature made it clear that Chapter 767 was to apply retroactively in paternity proceedings, the legislature was silent as to whether Chapter 767 was to have retroactive effect in cases involving intestate distributions. We agree with the district court that had the Wisconsin legislature wanted Chapter 767 to affect...