Wonica v. SECRETARY OF DHHS, CV-90-1867.

• Decision Date: 19 September 1991
• Docket Number: No. CV-90-1867.,CV-90-1867.
• Citation: 792 F. Supp. 8
• Parties: Dennis WONICA, Plaintiff, v. SECRETARY OF The DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant.
• Court: U.S. District Court — Eastern District of New York

792 F. Supp. 8

Dennis WONICA, Plaintiff, v. SECRETARY OF The DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant.

No. CV-90-1867.

United States District Court, E.D. New York.

September 19, 1991.

Kevin Michael Elford, Staten Island, N.Y., for plaintiff.

Andrew J. Maloney, U.S. Atty., E.D.N.Y. by Michelle J. Ritholz, Brooklyn, N.Y., for defendant.

MEMORANDUM AND ORDER

SIFTON, District Judge.

This is a motion to review a final determination of the Secretary of Health and Human Services ordering cessation of Social Security benefits to the plaintiff. The record before the administrative agency establishes the following.

Plaintiff, Dennis Wonica, was found to be eligible for social security benefits due to a herniated lumbar disc as of October 1982. However, based on information received thereafter that the plaintiff had been receiving income in excess of $300 per month as a result of his work as a real estate sales agent, the Secretary ordered plaintiff's benefits terminated. At plaintiff's request, a hearing was held with respect to the termination before an administrative law judge at which plaintiff testified to the circumstances surrounding his "employment."

Plaintiff stated that his efforts on behalf of the real estate agency owned by his brother consisted of working one or two hours weekly on the telephone from his home taking listings from clients. Plaintiff testified that he did not solicit business or "show" houses for sale. When a home he listed was sold through the efforts of another agent, the plaintiff would share in the commission. In 1985 and 1986, plaintiff testified, he earned $7,635 and $30,646, the exact amount being somewhat unclear on this record. In any event, no one disputes that the commissions averaged more than $300 per month.

The ALJ determined the facts and resolved certain legal issues which I will deal with later in the opinion. The ALJ found, inter alia, that the plaintiff's testimony "lacked credibility at several points, with clear contradictions in facts and obviously self-serving statements, plus a general lack of candor beyond the elementary facts." Tr. p. 12. The ALJ held that, notwithstanding a lack of improvement in plaintiff's medical condition, "the claimant's work activity as a licensed real estate person with commissions from listings averaging over $300.00 a month constituted substantial gainful activity." Tr. p. 13. Plaintiff's benefits were accordingly terminated.

On April 4, 1990, the appeals council denied review of the ALJ's decision, thereby making the opinion a final determination. This action ensued.

DISCUSSION

The plaintiff raises three issues in this action, the first relating to the Secretary's factual findings; the second involves the defendant's alleged failure to follow its own regulations on reinstating benefits; and the third concerns the effect of administrative res judicata as establishing a right to uninterrupted benefits. I will deal with these issues separately.

Plaintiff's principal contention is that the ALJ's determination that benefits should cease in light of plaintiff's substantial gainful activity as a real estate agent was not supported by substantial evidence. Of course, a district court must accept the findings of the Secretary as "conclusive" unless they are not supported by "substantial evidence." 42 U.S.C. § 405(g). In Richardson v. Perales, 402 U.S. 389, 91 S.Ct. 1420, 28 L.Ed.2d 842 (1971), the Supreme Court held that "substantial evidence" means "`more than a mere scintilla ... i.e. such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.'" Id. at 401, 91 S.Ct. at 1427 (citations omitted). Thus, the standard of review of the ALJ's factual findings is quite deferential.

As a general matter, a person's benefits may be discontinued where the Secretary determines the person no longer disabled. 20 C.F.R. § 404.1520(b). This determination may rest on a finding that the claimant has performed "substantial gainful activity," 42 U.S.C. § 423(d)(4), as that phrase is defined by the Secretary. Under the regulation covering the years 1979-1989, where a claimant earns in excess of $300 per month, 20 C.F.R. § 404.1574(b)(2)(vi), a rebuttable presumption arises that the claimant is no longer "disabled" for the purpose of obtaining benefits.

Plaintiff argues that the Secretary's decision was not supported by "substantial evidence" because the presumption raised by the amount of money plaintiff earned was rebutted by evidence that plaintiff's medical condition had not changed since he was initially awarded benefits. In short, plaintiff contends that a person can rebut the presumption of "substantial gainful activity" by demonstrating an ongoing and severe medical condition. Plaintiff relies on Hanes v. Celebrezze, 337 F.2d 209 (4th Cir.1964).

Plaintiff's reliance on Hanes is misplaced. In Hedge v. Richardson, 458 F.2d 1065, 1067 (10th Cir.1972), the court held that "one of the purposes of the 1967 amendments to the Social Security Act was to overcome the effect of decisions like Hanes ... and to give the Secretary definite authority to specifically provide the amount of earnings which will amount to substantial gainful activity." The regulations promulgated by the Secretary pursuant to the 1967 amendments make clear that an ongoing medical condition is not regarded as an appropriate counterbalance to the presumption. In evaluating a disability, the regulations state that "if the work the claimant is doing is substantial gainful activity, we will find that the claimant is not disabled regardless of his/ her medical condition." 20 C.F.R. § 404.1520(b). What evidence of income demonstrates, absent appropriate rebuttal, is the lack of disabling effects of the illness, not that the illness or medical condition has itself altered.

Although the mere existence of a continuing and severe medical condition cannot rebut the presumption that a person earning more than the specified amount is performing "substantial gainful activity," the social security regulations do contemplate the Secretary considering "how well" a claimant does his or her work in determining whether or not "substantial gainful activity" has been performed. 20 C.F.R. § 404.1573(b). In particular, the regulation provides:

"If you are unable, because of your impairments, to do ordinary or simple tasks satisfactorily without more supervision or assistance than is usually given other people doing similar work, this may show that you are not working at the substantial gainful activity level."

Id. Thus, as some courts have put it, "the regulations as written and the case law construing these regulations define `substantial gainful activity' as consisting of two distinct, albeit interrelated, components: compensation and the substantiality of the activity itself." Patane v. Harris, 507 F.Supp. 115, 117 (E.D.N.Y.1981).

The plaintiff contends that the nature of the activity he engaged in, as he himself describes it, rebuts the presumption that his work constituted "substantial gainful activity." He points in particular to his testimony that he was not able to perform some tasks that other real estate agents performed such as showing houses to clients, meeting the public, and soliciting listings and instead spent only an hour or two taking phone calls at his home. Moreover, plaintiff noted that his income was "sporadic" and represented "profits" in the form of commissions rather than regular wages. Further, plaintiff draws attention to his testimony that his wife assisted him in performing the tasks he did.

This argument addresses itself to the requirement that in order to be found not disabled there must be evidence that there are available positions in the economy which the plaintiff can perform despite his disability. The ALJ took the fact that plaintiff was performing valuable work for which he was being paid as substantial evidence that plaintiff's arrangements with his brother were not unique in the real estate business. The ALJ found that "it has not been shown that such a practice is unknown in the trade, or that the claimant was paid on a different basis than other licensed salesperson(s)." Tr. p. 11. Plaintiff's argument that his income constituted sporadic profits does not establish his job as unique, as the ALJ found. "Sporadic payments for a listing resulting in a sale ... is common to real estate sales." Tr. at 13. The...