United States v. Smith
Decision Date | 03 August 1973 |
Docket Number | No. 72-1657.,72-1657. |
Citation | 482 F.2d 1120 |
Parties | UNITED STATES of America, Appellee, v. Lawrence P. SMITH et al., Appellants. |
Court | U.S. Court of Appeals — Eighth Circuit |
Edward L. Simmons, Kansas City, Mo., for appellants.
Paul Anthony White, Asst. U. S. Atty., Kansas City, Mo., for appellee.
Before LAY and STEPHENSON, Circuit Judges, and TALBOT SMITH,* Senior District Judge.
The matter before us involves Social Security payments. Specifically it is a suit by the government for the return of an alleged overpayment of disability insurance benefits paid pursuant to the provisions of Title II of the Social Security Act, as amended, 42 U.S.C. § 423 et seq. It is a case of first impression. Neither the diligence of counsel nor our own independent research has disclosed precise prior precedent.
We will note at the outset that the recovery of overpayments to indigent, or semi-indigent, beneficiaries poses unique problems, particularly to the chancellor, arising out of the fact, among others, that such recipients are rarely in a position to make restitution of substantial funds, mistakenly or erroneously paid them, without suffering severe hardship.1 Thus it is that we find in the Social Security Act, in 42 U.S.C. § 404, a section relating to "Overpayments and underpayments" providing, in part, that there shall not be recovery back by the United States from "any person who is without fault if such adjustment or recovery would defeat the purpose of this sub-chapter or would be against equity and good conscience."2
In May of 1962 defendant Lawrence P. Smith filed an application for Disability Insurance Benefits based on an alleged physical impairment. He asserted blindness in one eye and multiple sclerosis. Upon the showings made and under the applicable statutes, disability payments were awarded, effective February, 1962. These benefits, however, were stopped on March 25, 1968 upon the ground that Mr. Smith had returned to work. Thereafter he was informed that he had been overpaid for the period May 1, 1964 through March, 1968.3 Mr. Smith requested reconsideration, as a result of which the original determination was affirmed and repayment requested. A hearing before a Hearing Examiner was thereafter requested, and held in St. Joseph, Missouri, at which hearing defendant Lawrence Smith appeared in person, with counsel. The issues before the Hearing Examiner were whether the claimant's disability continued, and, if not, whether overpayments had been made and in what, if any, amounts, and whether recovery of the overpayments would defeat the purpose of 42 U.S.C. § 404(b), or be against equity and good conscience. The Hearing Examiner's decision was adverse to the defendants4 and formed the basis for the government's motion in the District Court for summary judgment. Further administrative appeals were sought by the defendants, but were without rulings favorable to them, and the judicial review5 available to claimants was not sought. There the matter rested until the filing of this action by the United States in August, 1971.
In the suit filed, and before us, the government, as plaintiff, brings action against defendant Lawrence Smith, his wife Virginia, individually and as fiduciary for the minor children,6 alleging an indebtedness to the government arising out of the aforedescribed overpayments in the sum of $13,673. Defendants' answers denied the debt, and set up waiver and estoppel, as well as other defenses, against the government. Plaintiff thereupon brought a motion for summary judgment, asserting that no judicial review of the Secretary's decision had been sought by defendants and that "By virtue of the doctrine of res judicata, the issues of whether or not an overpayment was made, and if so, the amount of the overpayment, are not open to controversy." Defendants, in opposition, urged that the facts relied upon by the plaintiff were without support in the record ; that the provisions of § 405,7 relating to procedures to be followed by claimants in making claims against the government, had no application to the case at bar, since they were making no claim, but rather were being sued for a debt owed as parties-defendant ; and, in substance, that "this case should be reopened under Section 404.9588 and in the interest of justice." The District Court's ruling was the grant of the government's motion for summary judgment.
See, also, Davis, Administrative Law Treatise, § 18.02, et seq., and cases there cited.
Although application of the doctrine of res judicata to administrative decisions does, indeed, serve a useful purpose in preventing the relitigation of issues properly determined administratively10 it is not, where applicable, applied with the same rigidity as its judicial counterpart. "Practical reasons may exist for refusing to apply it,"11 held the court in Grose v. Cohen, 406 F.2d 823 (4th Cir. 1969), and, continuing, Particularly appropriate are such considerations to the case before us, requiring, as we have noted, that the government shall not recover an overpayment "if such recovery . . . would be against equity and good conscience."12
But however guarded the application of the doctrine of administrative res judicata generally, its application in the case at bar is specified in the regulations of the agency before us. These, it is clear, do not demand administrative finality. The matter was the subject of extensive examination in Leviner v. Richardson, 443 F.2d 1338 (4th Cir. 1971), the court pointing out that 20 C.F.R. § 404.957 permits an administrative determination to be reopened within four years after the date of notice thereof "upon a finding of good cause for reopening,"13 and that "good cause" included, inter alia, error in the determination or decision apparent on the face of the evidence on which it is based.14
The Leviner court also held that although the regulation We agree.
The government, in support of its position, cites to us a number of cases assertedly holding that where judicial review is not sought by a claimant within the time prescribed by 42 U.S.C. § 405, "the adverse decision of the Agency is final and is res judicata." e. g., Gardner v. Moon, 360 F.2d 556 (8th Cir. 1966). Whatever may be the dimensions of "res judicata" in this situation, which we will not explore, such cases are not in point on any issue before us. We do not have a claimant seeking judicial review under the act. On the contrary we have the government, as plaintiff, seeking to reduce a debt to judgment and thereafter to collect, presumably by the usual process of levy and execution. In this situation, as we noted in Burrow v. Finch, 431 F.2d 486, 491, n. 5 (8th Cir. 1970), "Where the Secretary asserts the claim of overpayment by reason of `fault' under § 404(b) . . . there is no logical reason why the party asserting the claim should not bear the traditional burden of proving it," and proving it, by a party moving for summary...
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..., 910 F.2d 509, 514 (8th Cir. 1990), 8th-08 United States v. Rubin, 97 F.3d 373, 376 (9th Cir. 1996), § 702.5 United States v. Smith, 482 F.2d 1120, 1124 (8th Cir. 1973), § 410.4 United States v. Thornburg, 82 F.3d 886, 890 (9th Cir. 1996), § 601.2 United States v. Utah Constr. & Mining Co.......
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Table of cases
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