Davis v. Bowen, 87-3417

Decision Date21 March 1988
Docket NumberNo. 87-3417,87-3417
Parties, Unempl.Ins.Rep. CCH 17,946 Bernie DAVIS, Plaintiff-Appellant, v. Otis R. BOWEN, Secretary of Health and Human Services, Defendant-Appellee.
CourtU.S. Court of Appeals — Eleventh Circuit

William Davis, Jacksonville, Fla., for plaintiff-appellant.

Dorothea Beane, Asst. U.S. Atty., Tampa, Fla., for defendant-appellee.

Appeal from the United States District Court for the Middle District of Florida.

Before HILL and JOHNSON, Circuit Judges, and TUTTLE, Senior Circuit Judge.

TUTTLE, Senior Circuit Judge:

This is an appeal from the dismissal by the trial court of a complaint seeking reinstatement by the Secretary of Health and Human Services of the plaintiff Davis's Social Security retirement payments. In effect, it is an appeal from a decision by the appeals council affirming a decision by an administrative law judge of the department.

I. STATEMENT OF THE CASE AND OF THE FACTS

Plaintiff filed an application for retirement insurance benefits on April 9, 1980, alleging that he was born on August 12, 1915. He was granted benefits thereafter. On June 12, 1984, the plaintiff and his wife were notified by Social Security that they had been overpaid in benefits. The overpayment was stated to be $8,797.50 and was caused, according to the notice, by the appellant's excessive earnings in 1983. 1 These excessive earnings were computed by the Social Security Administration. The yearly earnings limitation for those individuals over 65 for taxable year 1983 was $6,600.

For the taxable year involved, plaintiff worked exclusively for Pincus Brothers-Maxwell as a traveling salesman for the states of Florida, Georgia, Alabama, Tennessee and the commonwealth of Puerto Rico. He was paid on a commission basis with an advance of $1,000 per week against commissions. This weekly payment was to be the total amount of his payments unless his commissions exceeded $52,000 per year. Plaintiff claims that he had business expenses of $39,130 for the year 1983. His W-2 forms show that Pincus Brothers-Maxwell withheld federal income taxes and paid FICA and unemployment taxes on the full $52,000. Davis's excessive earnings were arrived at by the Secretary's disallowing any claimed expenses.

In his complaint, Davis alleged that he was an employee of Pincus Brothers-Maxwell, thus obviating the question whether he was an employee or an independent contractor.

Davis filed a request for a hearing and a de novo hearing was held by an administrative law judge on April 23, 1985. He appeared and testified, accompanied by his counsel. The administrative law judge issued his decision finding the appellant was overpaid in the Social Security retirement benefits but was without fault in causing the overpayment. However, the administrative law judge found that the Secretary should not waive the overpayment on the grounds of equity or good conscience or that a refusal to do so would defeat the purpose of the act. The ALJ found that there was no record evidence indicating that repayment would deprive the plaintiff of income required for ordinary and necessary living expenses.

Davis sought review by the appeals council. The appeals council, after considering plaintiff's letter and a memorandum, on November 20, 1985, notified plaintiff that it had found no basis on which to grant review. Thus, the ALJ's decision became the final decision of the Secretary.

Thereafter, Davis filed this complaint in the United States District Court. The magistrate recommended affirmance of the Secretary's decision and this recommendation was adopted by the trial court, and the complaint was dismissed. This appeal followed.

II. DISCUSSION

Appellant's claim is facially appealing. He apparently actually had a net income in 1983 of $12,870, but in determining whether he had excessive earnings for the year the Secretary claimed his earnings were $52,000, because due to a regulation of the Department of Health and Human Services, the Secretary was not permitted to make any allowance for the $39,130 of expenses incurred in Davis's operation. It is also true that if Davis had been self employed instead of a wage earner, he could have deducted all of his expenses in order to arrive at his net earnings for the year. See 42 U.S.C. Sec. 403(f)(5)(A).

However, when we consider the actual language of the regulation, we note that it is unambiguous and plain and, if the regulation is valid, the ALJ could rule only as he did. The regulation dealing with what is to be considered as wages of an employee follows:

Amounts that your employer pays you specifically--either as advances or reimbursements--for traveling or for other ordinary and necessary business expenses incurred, or reasonably expected to be incurred, in your employer's business are not wages. The employer must identify these travel and other expenses either by making a separate payment or by specifically stating the separate amounts if both wages and expense allowances are combined in a single payment.

20 C.F.R. Sec. 404.1045 (emphasis added.)

Here, as indicated above, the employer reported to Davis on his W-2 form a full salary of $52,000 and neither made a separate payment for expenses nor specifically stated any separate amounts that were to be considered reimbursement for...

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4 cases
  • Turner v. Sullivan, Civ. A. No. 88-1750.
    • United States
    • U.S. District Court — District of Columbia
    • June 6, 1990
    ...U.S.C. § 404(b); 20 C.F.R. § 404.506. Peterson v. U.S. Railroad Retirement Bd., 780 F.2d 1361 at 1363 (8th Cir.1985); Davis v. Bowen, 840 F.2d 822, 824 (11th Cir.1988). The Appeals Council found that the ALJ made an error of law in finding plaintiff without fault in causing the overpayment,......
  • Hendrix v. Colvin
    • United States
    • U.S. District Court — Northern District of Florida
    • October 2, 2015
    ...the purposes of the Act or would be against equity and good conscience. See 20 C.F.R. § 404.506(a); 42 U.S.C. § 404(b); Davis v. Bowen, 840 F.2d 822, 824 (11th Cir. 1988). Thus, the court need not consider whether recovery would defeat the purpose of the Act or be against equity or good con......
  • Ballard v. Sullivan
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • May 25, 1990
    ...have also held, in cases involving traveling salesmen, that section 404.1045 "has a rational basis and is authorized." Davis v. Bowen, 840 F.2d 822, 824 (11th Cir.1988) (quoting and following Colby v. Harris, 622 F.2d 644, 646 (2d REVERSED and REMANDED. * Louis W. Sullivan, M.D., has been s......
  • Adams v. Sullivan, 90-5448
    • United States
    • U.S. Court of Appeals — Sixth Circuit
    • January 8, 1991
    ...the regulation in question and upheld it. Greenhow v. Secretary of Health & Human Servs., 863 F.2d 633 (9th Cir.1988); Davis v. Bowen, 840 F.2d 822 (11th Cir.1988); Colby v. Harris, 622 F.2d 644 (2d Cir.), cert. denied, 449 U.S. 900, 101 S.Ct. 269, 66 L.Ed.2d 130 (1980) (affirming for reaso......

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