Manning v. Astrue

• Decision Date: 20 December 2007
• Docket Number: No. 06-7127.,06-7127.
• Citation: 510 F.3d 1246
• Parties: Janet C. MANNING, Plaintiff-Appellant, v. Michael J. ASTRUE,<SMALL><SUP>*</SUP></SMALL> Commissioner, Social Security Administration, Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

510 F.3d 1246

Janet C. MANNING, Plaintiff-Appellant, v. Michael J. ASTRUE,^* Commissioner, Social Security Administration, Defendant-Appellee.

No. 06-7127.

United States Court of Appeals, Tenth Circuit.

December 20, 2007.

Submitted on the briefs:^**

Richmond J. Brownson, Timothy M. White, Tulsa, OK, for Plaintiff-Appellant.

Peter D. Keisler, Assistant Attorney General; William Kanter, Michael E. Robinson, Attorneys, Appellate Staff, Civil Division, Department of Justice, Washington, D.C. (Sheldon J. Sperling, United States Attorney, Muskogee, OK, of Counsel) for Defendant-Appellee.

Before HENRY and ANDERSON, Circuit Judges, and BRORBY, Senior Circuit Judge.

ANDERSON, Circuit Judge.

Janet C. Manning appeals the district court's denial of a Fed.R.Civ.P. 60 motion requesting that the court either set aside an administrative offset to an award of attorney's fees the court made to her under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(d), or, alternatively, amend the fee order to award the EAJA fees to her counsel. The very narrow issues before us on appeal are (1) whether the EAJA attorney's fees award should have been paid to Ms. Manning or to her attorney in the first instance and (2) if the fees were properly paid to Ms. Manning, are those fees subject to administrative offset under the Debt Collection Improvement Act of 1996, 31 U.S.C. § 3716, for student loan debts owed by Ms. Manning to the United States Department of Education. Because we conclude the district court properly made the attorney's fees award to Ms. Manning and that award was subject to administrative offset for her unpaid student loan debts, we affirm.

BACKGROUND

The district court¹ reversed the Commissioner's denial of supplemental security income (SSI) benefits to Ms. Manning and remanded for further proceedings. Ms. Manning then moved in that court for an award of attorney's fees to her counsel of $5,958.30 under the EAJA. The Commissioner did not object, and the district court awarded the fees, ordering payment to Ms. Manning as the prevailing party. In addition, the court ordered that if Ms. Manning's attorney were awarded any fees pursuant to 42 U.S.C. § 406(b)(1), which permits payment of fees to an attorney out of past due benefits, the attorney must refund the smaller amount to her pursuant to Weakley v. Bowen, 803 F.2d 575, 580 (10th Cir.1986).

Thereafter, the Social Security Office of the General Counsel notified Ms. Mannings' attorney that the district court had ordered the Social Security Administration to pay attorney's fees in the amount of $5,958.30 under the EAJA and that he would "soon receive a check payable to Janet C. Manning and Timothy White and Associates c/o Richmond Brownson, in accordance with the [district court's order]." Aplt.App. at 58. Counsel, however, received a United States treasury check made payable to "Janet Manning c/o Timothy White & Associates" in the amount of $3,992.18. Id. at 59. Under the authority of the Debt Collection Improvement Act of 1996, the United States had administratively offset the EAJA award by $1,966.12, an amount Ms. Manning owed to the United States Department of Education on an outstanding school loan debt.²

Ms. Manning's counsel then moved the district court, on his own behalf, either to set aside the alleged wrongful administrative offset or to correct, under Fed. R.Civ.P. 60(a), the alleged clerical error of awarding attorney's fees directly to Ms. Manning rather than to her attorney. Aplt.App. at 38. Counsel argued that the offset should be set aside because (1) EAJA fees are income to counsel; (2) the Debt Collection Improvement Act permits administrative offset from disability benefits, but does not specifically mention administrative offset from EAJA fees; (3) counsel has a de facto lien against the fees that should receive priority over any claim by the government; and (4) under Weakley, 803 F.2d at 580, if a claimant later receives disability benefits resulting in the claimant's attorney being awarded fees under § 406(b)(1), then the attorney must refund the smaller of the EAJA or the § 406(b)(1) fees to the claimant, thereby suggesting that the intent of the EAJA is to compensate counsel.

In addition to filing the motion, counsel contacted the Department of Education to resolve this matter administratively. The Department initially indicated that it was in the process of refunding the offset monies. Aplt.App. at 63. Later, however, the Department changed course and determined it would not refund the offset. After efforts to resolve the matter administratively failed, the Commissioner stipulated that the district court's order should be corrected to award attorney's fees to Ms. Manning's attorney. The court declined to honor the stipulation, however. The court first decided that the motion should have been made pursuant to Rule 60(b)(1), rather than Rule 60(a), because there was no clerical error as the court had intended to award attorney's fees to Ms. Manning, the prevailing party, and not to her attorney. Construing the motion as filed under Rule 60(b)(1), the court denied relief, finding that under the clear language of 28 U.S.C. § 2412(d)(1)(A), the EAJA payment was properly made to Ms. Manning, the prevailing party, and not to her attorney. The court reasoned that to ignore the clear statutory language and to award fees directly to Ms. Manning's attorney to circumvent the offset would

summarily decide [unresolved] disputes not properly before the Court: (i) whether the United States may legally assert an offset against fees awarded to the Plaintiff under the EAJA; (ii) whether the Plaintiff's attorney has an enforceable lien on the EAJA fee award arising out of his contract with the Plaintiff; and, (iii) whether any attorney's lien has priority over the government's right of offset.

Aplt App. at 76-77 (citation omitted). Ms. Manning appealed.

ANALYSIS

I. What is the Scope of this Appeal?

In this section, we set forth the issues that are the basis for this appeal and discuss why we are not addressing other issues raised on appeal by Ms. Manning. As indicated above, we confine our disposition to the following two issues: (1) whether attorney's fees under the EAJA are payable to Ms. Manning or to her attorney and (2) if the attorney's fees are payable to Ms. Manning, whether the fees may be offset under the Debt Collection Improvement Act for an outstanding student loan debt owed by Ms. Manning to the Department of Education. The first issue was raised in the district court by Ms. Manning and later by her counsel on his own behalf and by his own motion. The district court as indicated above, addressed this issue, ruling on it adversely to counsel. The second issue was not ruled on by the district court. Ms. Manning raises the issue on appeal, however, and the Commissioner responds, arguing that any EAJA award to Ms. Manning is subject to offset. While technically we could avoid deciding this issue because it was not ruled on by the district court, we choose to consider it for two reasons: (1) because the district court held that the fee award was to Ms. Manning as the prevailing party, the court effectively held that the debt could be offset and (2) the first and second issues are intertwined, making it advisable to address the second issue.

Ms. Manning also argues on appeal that counsel "probably" has an enforceable lien on the EAJA fee award with priority over the government. Aplt. Br. at 26. This argument was not adequately raised or briefed in the district court and was not ruled on by that court. Due to the insufficient development in the district court, the lack of an adequate record on appeal, and the lack of a district court ruling, we do not address any issue concerning an attorney's lien. Specifically, we decline to address whether an attorney's lien attached to the award of attorney's fees; if a lien attached, how that lien attached; how to enforce an attached attorney's lien; how to collect on the attorney's lien; or whether a lien would have priority.³

II. Are the EAJA Attorney's Fees Payable to Ms. Manning or to Her Attorney?

Ms. Manning does not dispute the district court's finding that her motion was properly filed under Rule 60(b). We review the denial of Rule 60(b) relief for an abuse of discretion. See Zurich N. Am. v. Matrix Serv., Inc., 426 F.3d 1281, 1289 (10th Cir.2005). Under Rule 60(b)(1), a court may relieve a party from an order based on "mistake, inadvertence, surprise, or excusable neglect." Fed.R.Civ.P. 60(b)(1). A "mistake" may occur if the district court made a substantive mistake of law in its order. Yapp v. Excel Corp., 186 F.3d 1222, 1231 (10th Cir.1999).

Applying these standards, we conclude that there was no mistake warranting Rule 60(b)(1) relief, and, therefore, the district court did not abuse its discretion in denying Ms. Manning's motion. In reaching this conclusion, we first look to the EAJA statute.

When interpreting the language of a statute, the starting point is always the language of the statute itself. If the language is clear and unambiguous, the plain meaning of the statute controls. A statute is ambiguous when it is capable of being understood by reasonably well-informed persons in two or more different senses.

McGraw v. Barnhart, 450 F.3d 493, 498 (10th Cir.2006) (quotation omitted).

The EAJA statute provides that "a court shall award to a prevailing party other than the United States fees and other expenses . . . incurred by that party in any civil action . . ., including proceedings for judicial review of agency action, brought by or against the United States . . ., unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust." 28 U.S.C. § 2412(d)(1)(A) (emphasis added). As the district court found, this statutory language clearly provides that the prevailing party, who incurred the attorney's...