Fenix v. Celebrezze
| Decision Date | 08 August 1968 |
| Docket Number | Civ. A. No. 1750. |
| Parties | Frank G. FENIX and Jessie P. Fenix, Plaintiffs, v. Anthony J. CELEBREZZE, Secretary of Health, Education, and Welfare, Defendant. |
| Court | U.S. District Court — Western District of Missouri |
Blanchard & Van Fleet, by Robert E. Seiler, Joplin, Mo., for plaintiffs.
Calvin K. Hamilton, U. S. Atty., by Anthony P. Nugent, Jr., Kansas City, Mo., for defendant.
This is the second civil action under the Social Security Act to review a final decision of the Secretary of Health, Education, and Welfare denying to plaintiff old-age insurance benefits provided by Section 402(a) of Title 42, U.S.C., and requiring the repayment by plaintiff and his wife of benefits previously received by them under Sections 402(a) and 402(b), Title 42, U.S.C. The decision in the first action remanding the case to the Secretary is reported in 243 F.Supp. 816.
Unless otherwise designated, all statutes cited hereinafter are contained in Title 42, U.S.C.
Jurisdiction exists under Section 405(g).
Section 402(a) requires that an individual be a "fully insured individual" to qualify for old-age insurance benefits. Section 414(a) defines the term "fully insured individual". This definition, applied to the plaintiff, requires that the plaintiff have a minimum of six quarters of coverage in order that he be a fully insured individual.
Section 413(a) (1) provides:
"The term `quarter' * * * means a period of three calendar months ending on March 31, June 30, September 30, or December 31."
Section 413(a) (2) provides:
"The term `quarter of coverage' means a quarter in which the individual has been paid $50 or more in wages * * * or for which he has been credited (as determined under section 412 of this title) with $100 or more of self-employment income, * * * *."
The term "self-employment income" as used in Section 413(a) (2) means income from a trade or business carried on by an individual, and does not include investment or rental income. Section 411(a) and (b).
Section 412 requires self-employment income of plaintiff in a taxable calendar year to be credited equally to each quarter of that year.
Section 409 defines the term "wages" used in Section 413(a) (2) as "* * * remuneration * * * for employment * * * *."
Prior to 1961, services performed by an individual in the employ of his son (or other relatives not material here) were excluded from the definition of employment by Section 410(a) (3), so remuneration for such services did not constitute wages under Section 413(a) (2). This exclusion is sometimes designated as the "family employment" exclusion.
The question presented in this case (as in the earlier review action) is whether any employment of plaintiff from January 1, 1955, to September 30, 1956, was employment by plaintiff's son, as distinguished by employment by a Missouri co-partnership, St. Regis Mining Co., of which plaintiff's son was a partner.
The co-partners in the partnership were plaintiff's son, Gilbert Fenix and Russell Prigg, who was not related to plaintiff. Therefore, employment by the co-partnership was not family employment within the meaning of Section 413(a) (2).
On September 7, 1956, plaintiff, then 69 years old, applied for old-age insurance benefits. The Bureau of Old-Age and Survivors Insurance of the Social Security Administration ("Bureau" hereinafter) determined that plaintiff was entitled to benefits of $104.50 a month.
On January 21, 1957, plaintiff's wife applied for wife's insurance benefits under Section 402(b), which provides that the wife of a fully insured individual is entitled to benefits at age 65. The Bureau determined that she was entitled to benefits of $52.30 a month as of November 1956, the month in which she became 65 years old.
Benefits were paid to plaintiff for the months of October 1956 to May 1959, inclusive, in the total sum of $3,381.50. Benefits were paid to plaintiff's wife for the months of November 1956 to May 1959, inclusive, in the total sum of $1,639.80.
The Bureau's determination that plaintiff and his wife were entitled to benefits was based on a finding that plaintiff's employment from January 1, 1955, to September 30, 1956, was by the St. Regis Mining Company, a Missouri partnership, of which plaintiff's son, Gilbert (also known as G. J.) Fenix, and Russell Prigg ("Prigg" hereinafter), unrelated to plaintiff, were the only copartners.
Later the Bureau found that the St. Regis Mining Company was owned solely by plaintiff's son after February 7, 1955. Based on this finding it was concluded by the Bureau that after February 7, 1955, plaintiff's employment was family employment. Under this later finding and conclusion, plaintiff would not have the required six quarters of coverage. So the payment of benefits to plaintiff and his wife was terminated by the Bureau.
Plaintiff and his wife made further applications for benefits on July 31, 1959. These applications were based on alleged self-employment income of the plaintiff during the years 1957 and 1958. The Bureau denied plaintiff and his wife benefits on these applications on the finding that plaintiff's income in 1957 and 1958 was investment and rental income, not derived from a trade or business carried on by plaintiff.
The Bureau then reconsidered and affirmed the denials of benefits to plaintiff and his wife on all prior applications. Thereupon, plaintiff requested a de novo hearing. On January 18, 1961, a de novo hearing was held in this cause in Joplin, Missouri. This hearing was continued for the purpose of taking the deposition of Gilbert J. Fenix, which was done, and the hearing was completed on August 15, 1961. On March 9, 1962, the Hearing Examiner entered his decision that plaintiff's employment during the period January 1, 1955, through September 30, 1956, was family employment, that plaintiff was not a fully insured person under the Social Security Act, and that plaintiff and his wife had been overpaid benefits in the amount of $5,021.30 for which a recovery for over-payment could not be waived.
On April 26, 1962, plaintiff filed a request for review of the Hearing Examiner's decision with the Appeals Council. On June 25, 1962, the Appeals Council denied the request for review. Thus, the findings, conclusions, and decision of the Hearing Examiner became a final decision of the defendant subject to review in this Court.
On August 8, 1962, plaintiff filed in this Court a "Petition for Review" alleging error in the finding that plaintiff's employment was family employment. (Civil Action No. 1750). On December 31, 1963, defendant filed a "Motion for Summary Judgment."
On June 22, 1965, this Court entered a "Memorandum Opinion Denying Defendant's Motion For Summary Judgment And Reversing And Remanding Cause". This opinion stated that "there is substantial evidence to support the Hearing Examiner's finding that between the partners the partnership was dissolved on February 7, 1955," but noted that the question of notice of the dissolution to the plaintiff was not considered under the proper legal standards. Because the crucial issue in this cause could not be resolved until the question of notice of the dissolution to the plaintiff was answered, the Hearing Examiner's decision which was affirmed by the Appeals Council was reversed and the cause remanded for a rehearing not inconsistent with that opinion.
On April 6, 1966, the Appeals Council remanded the cause to a Hearing Examiner for further proceedings consistent with the order of this Court.
The Hearing Examiner received additional evidence on May 23, 1966, and on September 8, 1966, recommended a decision finding that plaintiff had neither actual nor constructive notice of the termination of the partnership before September 30, 1956; that this lack of notice was "immaterial" (Tr. 728) despite the ruling of this Court; that plaintiff had knowledge of facts sufficient to place him "on notice to make inquiry as to the true nature of ownership" (Tr. 732) of the business; that plaintiff did not make inquiry "and therefore under the law of estoppel may not avail himself of an estoppel to deny the continuing existence of the partnership even in an action against the partners" (Tr. 732); that plaintiff was not insured because the required number of quarters of coverage were lacking; that neither plaintiff nor his wife were entitled to old age insurance benefits; and that the recovery of the overpayment to plaintiff and his wife for all months from October 1956 through May 1959, in the amount of $5,021.30, may not be waived and recovery of that amount would not be inequitable, unconscionable, or defeat the purpose of Title II of the Social Security Act.
On September 24, 1966, plaintiff filed his exceptions and objections to the Hearing Examiner's findings of fact and conclusions of law as set forth in the recommended decision and requested the opportunity to appear before the Appeals Council for an oral argument. Oral arguments in this cause were held on December 16, 1966. On March 3, 1967, the decision of the Appeals Council was entered.
The Appeals Council properly decided that the Hearing Examiner had erred in finding against the plaintiff on the ground of the inapplicable legal standard of lack of estoppel. Nevertheless, on the family employment issue the Appeals Council erroneously found that plaintiff had "implied notice" in February 1955 of the dissolution of the partnership. (Tr. 643).
Thereafter, on April 28, 1967, plaintiff filed in this Court a "Petition For Review." On June 29, 1967, defendant filed a motion for summary judgment with suggestions in support thereof, and the plaintiff filed suggestions in opposition to the motion.
The principal disputed...
To continue reading
Request your trial
-
Fenix v. Finch
...two reversals by the district court of rulings by the Secretary, Fenix v. Celebrezze, 243 F.Supp. 816 (W.D.Mo.1965); Fenix v. Celebrezze, 289 F.Supp. 758 (W.D.Mo.1968). After the second remand to the Secretary, he computed the amount of past-due benefits recovered as a result of court proce......
- Kipka v. Chicago & Northwestern Railway Company
-
LeMay Bank & Trust Co. v. Lawrence, 49712
...be given directly, or delivered through some channels that the law recognizes as legitimate means of communication. Fenix v. Celebrezze, 289 F.Supp. 758, 766 (W.D.Mo.1968). In the case before us, the evidence does not support a finding that notice of dissolution was "brought home" to Lemay ......