Roggenbuck v. Soc. Sec. Admin. (In re Roggenbuck), Bankr. No. 16-30021
| Decision Date | 24 July 2018 |
| Docket Number | Bankr. No. 16-30021,Adv. No. 17-3001 |
| Parties | In re: DANIEL VERNON ROGGENBUCK, II SSN/ITIN xxx-xx-3330 and ROBIN KAY ROGGENBUCK SSN/ITIN xxx-xx-7861 Debtors. DANIEL VERNON ROGGENBUCK, II and ROBIN KAY ROGGENBUCK Plaintiffs v. SOCIAL SECURITY ADMINISTRATION Defendant. |
| Court | U.S. Bankruptcy Court — District of South Dakota |
The matter before the Court is Debtors-Plaintiffs Daniel Vernon Roggenbuck, II and Robin Kay Roggenbuck's Complaint to Determine Dischargeability of Debt. This is a core proceeding under 28 U.S.C. § 157(b)(2). Following the trial held April 20, 2018, the Court enters these findings of fact and conclusions of law pursuant to Fed.R.Bankr.P. 7052. For the reasons discussed below, Defendant Social Security Administration's pre-petition claim against Debtors-Plaintiffs is not excepted from discharge pursuant to 11 U.S.C. § 523(a)(3).
On August 4, 2009, Robin Kay Roggenbuck ("Roggenbuck") filed an application with the Social Security Administration ("SSA") on behalf of her and her husband Daniel Vernon Roggenbuck, II's minor child to receive Supplemental Security Income ("SSI"). The SSA provided Roggenbuck with an Application Summary for Supplemental Security Income dated August 13, 2009. Under the section entitled REPORTING RESPONSIBILITIES FOR SUPPLEMENTAL SECURITY INCOME, the application summary stated:
In addition, the application summary contained a section entitled HOW TO REPORT CHANGES FOR SUPPLEMENTAL SECURITY INCOME. That section provided (in relevant part):
You can make your reports by telephone at the telephone number shown or you may report in person or by mail at the address shown. . . . If you have any questions, we will be glad to help you. See "Changes to Report for Supplemental Security Income[."]
The next section, entitled CHANGES TO REPORT FOR SUPPLEMENTAL SECURITY INCOME, listed various matters the applicant agreed to report to SSA. One subsection provided (in pertinent part):
The SSA also gave Roggenbuck a Summary Statement of Income and Resources dated August 13, 2009. It contained paragraphs identical to the paragraphs from the Application Summary for Supplemental Security Income quoted above. Both the Application Summary for Supplemental Security Income and the Summary Statement of Income and Resources directed Roggenbuck to review the documents and advise SSA if she disagreed with any statement in either. Both documents also reminded Roggenbuck she had filed the application under penalty of perjury.
The SSA concluded the family, who was then living in Ohio, met the necessary income criteria and determined the Roggenbucks' child was eligible to receive SSI. SSA advised Roggenbuck of its decision by letter dated August 27, 2009. In the letter, SSA advised Roggenbuck, as the representative payee for their child, she was required to report to SSA if "income or resources for [their child] or members of [their child's] household change[.]" SSA enclosed with the letter two documents entitled Fact Sheet on SSI Federal Living Arrangement Categories and How Parents' Income and Resources Affect a Child's SSI. SSA provided similar information to Roggenbuck when SSA redetermined the child's eligibility in June 2010.
In the process of applying for and receiving SSI benefits on behalf of the Roggenbucks' child, Roggenbuck also received a pamphlet from SSA entitled What You Need To Know When You Get Supplemental Security Income (SSI). Therein, SSA stated SSI payments after the third monthly payment are "usually . . . based on your income from two months before." It also stated, Much of the remainder of the pamphlet explained what kind of changes to an SSI recipient's living or financial situations had to be reported and how to report those changes. The pamphlet said to report covered changes "within 10 days after the month it happens." The Court was unable to find in the pamphlet a provision advising recipients or their designated payee that an income report had to be filed monthly.
In September 2010, Roggenbuck reported to SSA that the family had moved to Virginia. In July 2011, she reported to SSA they had moved to North Dakota. In October 2012, she reported to SSA the family had moved to South Dakota. Roggenbuck made household income reports via "pay stubs" to the SSA office in South Dakota for September through December 2011, January through May 2012, November and December 2012, January and February 2013, September and October 2013, and April 2014. The SSA received these pay stubs in batches every few months and issued Roggenbuck receipts. Though the testimony was not entirely clear, it appears when Roggenbuck mailed pay stubs to the South Dakota SSA office, she included with them a cover sheet created and provided by SSA. The cover sheet advised Roggenbuck, among other things: to "[m]ail paystubs as soon as possible after the last payday of the month"; "[a]ny change affecting SSI benefits must be reported TIMELY to the Huron Social Office [sic] by the 10th day following the end of the month in which the change occurred"; and to report any "[c]hanges in the AMOUNT of income you already receive, including changes in wages received due to changes in hourly pay, hours worked, etc. (emphasis in original)."1
On June 12, 2014, SSA received from Roggenbuck pay stubs for April 2014. SSA did not receive any other reports from Roggenbuck in 2014. On January 2, 2015, SSA received from Roggenbuck two pay stubs for November 2014, one pay stub dated December 16, 2014, and another dated January 2, 2015. On both the December 16, 2014 and the January 2, 2015 pay stubs, Roggenbuck made a handwritten note indicating Daniel Roggenbuck had started a new job. SSA did not receive any more income reports from Roggenbuck in 2015 or in the first six months of 2016.2 Thus, from May 2014 through June 2016, Roggenbuck only self-reported income information twice: the April 2014 pay stubs on June 12, 2014 and the November and December 2014 and January 2, 2015 pay stubs on January 2, 2015.3
The Roggenbucks filed a chapter 7 petition in bankruptcy on June 27, 2016. They did not schedule SSA as a creditor. The deadline for a creditor to seek a determination that its claim was excepted from discharge because it arose from fraud, as provided by 11 U.S.C. § 523(a)(2), (4), and (6) and § 523(c), was October 11, 2016.
In July 2016, SSA initiated a review to determine whether the Roggenbucks' child was still eligible to receive SSI. The Roggenbucks' file was selected for review by SSA's computer system. As part of this review process, SSA employee LaurieWalter testified SSA looks at an SSI recipient's income and family living situation beginning from two years preceding the review to the current time. Thus, as part of this two-year look-back, SSA requested and Roggenbuck provided, on July 29, 2016, pay stubs for May 20144-because the May 2014 income would determine the SSI paid in July 2014-through July 2016. After its receipt of these pay stubs, SSA concluded it had overpaid a total of $6,757.93 in SSI for the Roggenbucks' child for August 2014 to August 2016, excluding March 2016. SSA notified Roggenbuck of its conclusion on September 14, 2016.
Utilizing an SSA form, Roggenbuck requested a waiver, claiming the overpayment was not her fault because she had timely provided income information to SSA. The form was dated October 2, 2016. Roggenbuck did not mention her and her husband's bankruptcy case in this document. Though she stated on this form SSA had not properly recorded income information she had previously provided to SSA, Roggenbuck did not produce any additional receipts for income reports she had made to SSA that SSA had not already recorded before SSA initiated its review in July 2016.5
SSA finalized its overpayment decision on January 18, 2017 after Roggenbuck did not keep an appointment for a personal conference regarding the overpayment and Roggenbuck's waiver request. Roggenbuck did not appeal SSA's final decision. The overpayment that accrued before the Roggenbucks filed bankruptcy was$6,282.39. The Roggenbucks have not reimbursed SSA for any of the overpayment.
No creditor, including SSA, timely sought a determination of the dischargeability of a claim. The Roggenbucks received a discharge of debts on October 12, 2016.
In the Roggenbucks' chapter 7 bankruptcy case, the trustee did not find any nonexempt assets to liquidate to pay creditors' claims, so creditors were never asked to file a proof of claim. The Bankruptcy Clerk closed the Roggenbucks' bankruptcy case on November 15, 2016.
A few months later, the Roggenbucks commenced this...
To continue reading
Request your trial