Groseclose v. Bowen, 86-1479
| Citation | 809 F.2d 502 |
| Decision Date | 15 January 1987 |
| Docket Number | No. 86-1479,86-1479 |
| Parties | , Unempl.Ins.Rep. CCH 17,133 Hilbert F. GROSECLOSE, Appellant, v. Otis R. BOWEN, Secretary, United States Department of Health and Human Services, Appellee. |
| Court | United States Courts of Appeals. United States Court of Appeals (8th Circuit) |
Ernest L. Keathley, Jr., St. Louis, Mo., for appellant.
Wesley D. Wedemeyer, Asst. U.S. Atty., St. Louis, Mo., for appellee.
Before BOWMAN, Circuit Judge, FLOYD R. GIBSON, Senior Circuit Judge, and ARNOLD, * District Judge.
Hilbert Groseclose appeals from the district court's order granting summary judgment in favor of the Secretary of Health and Human Services. This case involves the recoupment of child's insurance benefits. The Secretary determined that Groseclose's daughter had been overpaid benefits. To recoup the overpayments, the Secretary withheld benefits due Groseclose. The Social Security Act authorizes the Secretary to recoup overpayments from a person who is without fault if recoupment would not be against equity and good conscience. In granting summary judgment for the Secretary, the district court concluded that substantial evidence supported the Secretary's finding that recoupment from Groseclose, who was without fault, would not be against equity and good conscience. On appeal Groseclose contends that the Secretary's interpretation of the phrase "equity and good conscience" is unreasonably narrow, and that recoupment in this case would be inconsistent with a proper interpretation of that phrase. We agree with Groseclose and reverse.
In September 1975, Groseclose filed applications for retirement insurance benefits and child's insurance benefits. The Social Security Administration determined that the applicants, Groseclose and his minor children, were entitled to benefits commencing in October 1974. In March 1979, however, the Administration notified Groseclose's daughter that she was no longer entitled to child's insurance benefits because she did not meet the requirement of full-time attendance at an educational institution. It was later determined that Groseclose's daughter was enrolled as a full-time student for only two months during the twenty-six month period from October 1976 through November 1978. Consequently, she was overpaid approximately $3,600. Instead of recovering the overpayments from Groseclose's daughter, the Administration sought to recoup the overpayments by withholding retirement insurance benefits due Groseclose.
The Social Security Act authorizes the Secretary to recoup overpaid benefits from the person who received the overpayments or from any other person whose wages or income were the basis of the payments to the overpaid person. 42 U.S.C. Sec. 404(a) (1982). The Secretary may not recoup overpayments, however, from "any person who is without fault if such adjustment or recovery would defeat the purpose of this subchapter or would be against equity and good conscience." 42 U.S.C. Sec. 404(b) (1982).
The Act is silent as to the meaning of the phrases "without fault," "defeat the purpose of this subchapter," and "against equity and good conscience." The Act does authorize the Secretary "to make rules and regulations and to establish procedures, not inconsistent with the provisions of this subchapter, which are necessary or appropriate to carry out such provisions." 42 U.S.C. Sec. 405(a) (1982). The regulations set forth the Secretary's interpretations of the phrases. A person is at fault if the overpayments were made as a result of his incorrect statement or his failure to furnish material information; the overpaid individual will also be at fault if he knowingly (knew or should have known) accepts an incorrect payment. 20 C.F.R. Sec. 404.507 (1986). Recoupment would defeat the purpose of the subchapter if it would "deprive a person of income required for ordinary and necessary living expenses." Id. Sec. 404.508(a). Recoupment would be against equity and good conscience if an individual, in reliance on the payments, "relinquished a valuable right * * * or changed his or her position for the worse * * * * In reaching such a determination, the individual's financial circumstances are irrelevant." Id. Sec. 404.509.
After being notified that the Administration would recoup the overpayments by withholding a portion of his retirement benefits, Groseclose requested and received a prerecoupment hearing. An administrative law judge found that Groseclose was without fault. The overpayments were not the result of an incorrect statement made by Groseclose, nor were they the result of a failure on his part to provide material information. Groseclose chose not to disclose his financial situation. Consequently, the ALJ could not determine whether recoupment would deprive Groseclose of income required for his living expenses. The ALJ found, therefore, that Groseclose failed to prove that recoupment would defeat the purpose of the subchapter. Finally, the ALJ found that recoupment would not be against equity and good conscience. The ALJ noted that Groseclose could not have relied detrimentally on the incorrect payment of benefits because the evidence demonstrated that Groseclose was unaware that his daughter was receiving benefits. Groseclose testified that he could not remember whether his daughter was enrolled in school during the time in question. His daughter did not live at home; she was living out of state at the time. The ALJ concluded that Groseclose did not relinquish a valuable right or change his position for the worse in reliance on the incorrect payments made to his daughter. 1 Consequently, the ALJ held that recoupment was proper in this case.
The Appeals Council affirmed and Groseclose sought review in federal district court. The district court granted summary judgment in favor of the Secretary, holding that the Secretary's decision to recoup the overpayments is supported by substantial evidence and that recoupment from a person who is without fault does not violate due process. This appeal followed.
On appeal, Groseclose argues that it would be against equity and good conscience to recover the overpayments from him. He did not receive the overpayments and he was not aware that his daughter had received them. In so arguing, Groseclose contends that the Secretary's interpretation of the phrase against equity and good conscience is invalid because it does not include the ordinary meaning of the phrase. Groseclose argues that it would be against the ordinary meaning of equity and good conscience to recoup overpayments from a person who, as in this case, is without fault, who did not receive the payments, and who was not aware that the overpaid person had received the payments. We agree. We hold that recovery in these circumstances would be contrary to a reasonable interpretation of "equity and good conscience."
We note at the outset that an agency's interpretation of the statute that it is charged with administering is entitled to considerable deference. Department of Social Services v. Bowen, 804 F.2d 1035, 1038 (8th Cir.1986) (citing Young v. Community Nutrition Institute, --- U.S. ----, 106 S.Ct. 2360, 2365, 90 L.Ed.2d 959 (1986)). In Young the Supreme Court stated:
Young, 106 S.Ct. at 2364 (quoting Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843-44, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984)). The Supreme Court has also stated, however, that " 'this...
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...§§ 1103, 1207.1, 1301.2, 1603.5 Gropp v. United Airlines, Inc., 817 F. Supp. 1558, 1561 (M.D. Fla. 1993), § 604.6 Groseclose v. Bowen , 809 F.2d 502 (8th Cir. 1987), § 410.7 Gross v. Heckler , 785 F.2d 1163, 1166 (4th Cir. 1986), §§ 301.3, 312.1 Grottoli v. Chater , Civ. A. No. 95-7274, 199......
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Table of cases
...§§ 1103, 1207.1, 1301.2, 1603.5 Gropp v. United Airlines, Inc., 817 F. Supp. 1558, 1561 (M.D. Fla. 1993), § 604.6 Groseclose v. Bowen , 809 F.2d 502 (8th Cir. 1987), § 410.7 Gross v. Heckler , 785 F.2d 1163, 1166 (4th Cir. 1986), §§ 301.3, 312.1 Grottoli v. Chater , Civ. A. No. 95-7274, 199......