Ballweg v. Califano

• Decision Date: 16 March 1979
• Docket Number: No. CV76-L-52.,CV76-L-52.
• Parties: Mary M. BALLWEG, Plaintiff, v. Joseph CALIFANO, Jr., Secretary of Health, Education and Welfare of the United States of America, Defendant.
• Court: U.S. District Court — District of Nebraska

469 F. Supp. 458

Mary M. BALLWEG, Plaintiff, v. Joseph CALIFANO, Jr., Secretary of Health, Education and Welfare of the United States of America, Defendant.

No. CV76-L-52.

United States District Court, D. Nebraska.

March 16, 1979.

Thomas A. Wagoner, Grand Island, Neb., for plaintiff.

Thomas D. Thalken, Asst. U. S. Atty., Omaha, Neb., for defendant.

MEMORANDUM

URBOM, Chief Judge.

On December 19, 1977, an Appeals Council of the Bureau of Hearings and Appeals of the Social Security Administration determined that Mary Ballweg was not entitled to disability insurance benefits under the Social Security Act. It concluded that although the claimant is totally disabled, she had

". . . failed to submit substantiating evidence in support of her contention that she was a partner with her husband and, therefore, entitled to self employment income for the years 1968, 1969 and 1970, and that these earnings should be removed from her earnings record." Transcript, p. 8

Mrs. Ballweg had received benefits in the amount of $6,179.40 for the years in question. However, the Appeals Council found she was "without fault" in accepting the payments and it waived recovery of that amount. The final decision of the Secretary of Health, Education, and Welfare is before the court pursuant to 42 U.S.C. § 405(g).

There appears to be no dispute that the plaintiff has been totally disabled since she sustained brain damage during an extended period of unconsciousness following surgery in December, 1970. At the time of this occurrence the plaintiff was thirty years old. Most of the oral testimony upon which the decision was based was supplied at the administrative hearing held on May 16, 1975, by the claimant's husband. He testified that he operates a farm and a small auction business.

The plaintiff's work experience was reviewed at the hearing. Upon graduation from high school in 1958 she began working at the Cedar Rapids State Bank and worked there until November, 1961, when she was married and moved to another town. In 1962 and 1963 she worked for short intervals on a part-time basis at the Spaulding City Bank. A letter in the record indicates her employment at the Spaulding bank terminated in July, 1963. Transcript, p. 111. She did not report any income from 1964 through 1967. The Ballwegs' income tax returns for 1968, 1969, and 1970 were amended after the onset of disability to attribute self-employment income to Mrs. Ballweg.

At the hearing Mr. Ballweg outlined what he believed his wife did to merit self-employment status. He stated that she did "practically everything and anything that I did." Transcript, p. 55. He stated that she looked after livestock, helped drive cattle to and from the pasture, did minor veterinary work, raked hay, hauled fuel or provided transportation if equipment was moved from one farm to another, delivered items — including lunches — to the field, and helped move irrigation pipe; that at least once she borrowed money for farm business in her own name; and that when he was hospitalized, she operated the farm.

In an affidavit executed on November 2, 1971, the plaintiff stated that she is co-owner of a farm with her husband and that they operated the farm jointly in 1966, 1967, 1968, 1969, and 1970. Transcript, pp. 111-113. Her duties, which she described as essential to the farming operation, included, besides those already described by her husband, checking water tanks, counting cattle, hauling feed from town with a pickup, making trips to town for machine repairs, preparing meals for extra help, and various other duties. The plaintiff on occasion served as a clerk at auctions which her husband conducted on an average of once every two weeks. The couple was engaged by school districts to inventory vacated schools and sell the property at auction. A letter from Ronald Gillham verifies the fact that the plaintiff worked at several of those sales. Transcript, p. 237. Auctioneers normally split their commission with the clerk on a 50-50 basis, according to Mr. Ballweg, and when the Ballwegs worked an auction together the entire commission was deposited in a joint account.

Mr. Ballweg admitted that the couple never incorporated their businesses or filed any formal partnership papers. The couple did not keep separate bank accounts and Mr. Ballweg never wrote a check to his wife for work performed. Mrs. Ballweg kept the books and separate books for the auction and farming businesses were not kept at that time. Bookkeeping duties required approximately one hour each month; time spent by Mrs. Ballweg in other duties involving those businesses averaged about two hours per day.

Mr. Ballweg inherited his farm from an uncle. He stated that he had told his attorney to have the title to the property listed in both his wife's and his name but he discovered later that this had not been done.

The administrative law judge examined in some detail the financial status of the claimant and her family.

The plaintiff applied for disability benefits on March 23, 1971. She was informed on May 7, 1971, that she did not meet the earnings requirements under the Act and therefore was not eligible for benefits. The Ballwegs filed amended tax returns for the years 1968, 1969, and 1970; they could not file amended returns for earlier years, because the Internal Revenue Code permits the filing of amended returns only within five years of the initial filing. The amended returns reflected self-employment income for Mary Ballweg of $3,418.50 for 1968, $3,565.00 for 1969, and $486.00 for 1970. Social Security self-employment taxes were computed from these figures — $218.79 for 1968, $245.98 for 1969, and $33.54 for 1970.

Following the filing of the amended tax returns the plaintiff applied a second time for disability benefits, asserting that in view of her self-employment she now met the earnings requirements and was entitled to disability benefits. Apparently benefits were paid until August 17, 1973, when the plaintiff was informed that payments were being halted "pending development of her entitlement as a disabled wage earner." Transcript, p. 104. She filed for a reconsideration on January 21, 1974, and on August 14, 1974, the Bureau of Disability Insurance Division of Reconsideration made the following findings:

"A person whose disability began between the ages of 24 and 31 must have social security credits for work in at least one-half the calendar quarters in the period beginning with the calendar quarter after age 21 and ending with a quarter before age 31 in which he is disabled. Your social security record shows that you last met this earnings requirement on September 30, 1964. For you to qualify for benefits your disability must have begun on or before that date.

"We are unable to credit your earnings record with self-employment income for 1968, 1969 and 1970 because it has been determined that the arrangement between you and your husband, Mr. Frank Ballweg, was not a partnership.

"The evidence on our records shows that you stopped working in 1965 to help your husband with the farm work. Even though you kept records, made joint decisions on buying cattle, borrowing money and sale of crops and had a joint banking account, there is no indication that a partnership was intended. The evidence indicates your participation in the farm work was by mutual agreement as husband and wife for whom it is normal to have joint funds and engage in mutual management. Also, the records in the Agricultural Stabilization Committee's Office show the farm operator as your husband, Mr. Frank Ballweg, with no partnership involved. As a result, you do not meet the earnings requirement for disability insurance benefits.

"This action is based upon the additional evidence received and replaces our previous determination.

"Based on this determination, you were not entitled to monthly benefits of $147.10 for July 1971 through August 1972 and $176.60 for September 1972 through July 1973. The amount shown for June 1973 through July 1973 represents benefit payments of $170.30 per month and medical insurance premiums of $6.30 which were withheld monthly from benefits for the same period. Your children were not entitled to monthly benefits of $26.70 each for July 1971 through August 1972 and $32.00 each for September 1972 through July 1973. Therefore, you have been overpaid $6,179.40. The Social Security representative will discuss this matter with you. "Since you are no longer entitled to disability benefits, your hospital and medical insurance coverage ends with the last day of August 1974." Transcript, pp. 106-107

The Division of Reconsideration informed the plaintiff at that time what needed to be proved in order for reimbursement of the overpayments to be waived.

The plaintiff requested a hearing and one was held, as noted above, on May 16, 1975. The administrative law judge rendered his decision on July 14, 1975, in which he concluded, in part:

"(5) That the Claimant has not established that she was insured for disability purposes beginning December 25, 1970, the alleged onset date of her disability considering either her own wage earnings record or the self employment income attributed to her from the farming enterprise; that without the farm income, her insurability expired on March 31, 1964, and with that income considered, it expired on March 31, 1970; and that she was improperly granted benefits because of the lack of insured status under either insuring provision of the Act;

"(6) That the income attributed to the Claimant from the amended tax returns for 1968, 1969, and 1970, were improperly allocated to the Claimant's wage earnings record because the applicant did not fully and equally participate with her husband in either the farming or auction businesses;" Transcript, p. 30

Because the administrative law judge found fault on the part of Mrs. Ballweg in the creation of the overpayment, he concluded that she must repay the $6,179.40....