Woodworth v. Bowen, Civ. A. No. 86-0750.
Decision Date | 10 August 1987 |
Docket Number | Civ. A. No. 86-0750. |
Citation | 679 F. Supp. 1194 |
Parties | John D. WOODWORTH, Plaintiff, v. Otis R. BOWEN, M.D., Secretary, Department of Health and Human Services, Defendant. |
Court | U.S. District Court — District of New Jersey |
C. Christopher Kilbride, Madnick, Milstein, Mason & Weber, Asbury Park, N.J., for plaintiff.
Thomas W. Greelish, U.S. Atty., Stephanie Ebers, Sp. Asst. U.S. Atty., Newark, N.J., and Annette H. Blum, Regional Atty., David Whitney, Asst. Regional Atty., Dept. of Health and Human Services, for defendant.
This is an action in which plaintiff seeks judicial review pursuant to § 205(g) of the Social Security Act ("Act"), as amended, 42 U.S.C. § 405(g), of a final determination of the Secretary of Health and Human Services ("Secretary") finding that the plaintiff's application for retirement insurance benefits was erroneously awarded and denying plaintiff's entitlement to a waiver of overpayment.
On April 1, 1983, the plaintiff, John Woodworth, filed an application for retirement insurance benefits (Tr. 53-56). The application was initially granted, however, on July 16, 1984, Woodworth was notified that he had been overpaid from April 1983 through January 1984 because he lacked sufficient quarters of coverage for entitlement to retirement insurance benefits (Tr. 70-71). On April 5, 1984, Woodworth filed a request for reconsideration of this determination, and upon reconsideration the determination was found to be correct (Tr. 64-69). Woodworth then filed a request for hearing on September 4, 1984 to review the determination denying benefits. The hearing was held before Administrative Law Judge Samuel J. Dantoni (hereinafter "ALJ"), (Tr. 23), who on April 29, 1985 issued a decision finding that Woodworth was not entitled to benefits for the period at issue and that he was overpaid benefits which could not be waived (Tr. 16-22). The decision of the ALJ became the final decision of the Secretary when the Appeals Council denied Woodworth's request for review on December 15, 1985 (Tr. 3-4). Woodworth then commenced this action on February 24, 1986, seeking a review of the Secretary's decision.
Woodworth, who was born on November 11, 1919 (Tr. 53), filed an application for retirement insurance benefits on April 1, 1983. To qualify for benefits, Woodworth needed thirty quarters of coverage for fully insured status (Tr. 18). In his application for benefits, Woodworth reported self-employment income in 1979 extending through 1982, which he claimed entitled him to quarters of coverage during these particular years. However, the Secretary found that, despite Woodworth's having reported self-employment income as a result of activities between 1979 and 1982, these activities were not self-employment and the monies represented as self-employment income could not be applied against the required quarters of coverage to render him fully insured within the meaning of the Act (Tr. 18).
Woodworth was a designer of mechanical and electrical systems with a background as an electrical engineer (Tr. 37). He had been employed by the United States Government and in 1977 retired with a pension (Tr. 37-38). Woodworth stated that in 1979 he formed a partnership with his son for the purpose of investing in real estate property.1 He indicated that the partnership owned an apartment house which produced gross rents of approximately $15,000.00,2 and a piece of property in Long Branch (Tr. 36).
Woodworth testified that in 1979 he began to operate a maintenance and repair business with the purpose of earning a profit. He added that he never hired any employees or subcontracted any work (Tr. 31). Thereafter, he would work on the buildings which were owned by the partnership. The other partner performed no substantial maintenance or repair work (Tr. 47-48).
The partners entered into an agreement whereby each partner would be responsible for contributing $200.00 per month for repair work on the two apartment buildings which were in poor condition when first acquired (Tr. 41). Woodworth also stated that the partnership would pay him at the rate of $12.00 per hour and that his earnings would be credited against the required $200.00 per month contribution for any hours he worked (Tr. 44). Woodworth testified that he would make a monthly computer summary of his hours (Tr. 45). He noted that rather than taking cash he would reinvest it in the partnership, thereby increasing his equity in the company (Tr. 39-40). He stated that he paid Social Security withholding based on the $12.00 per hour rate he charged the partnership. Woodworth added that he never received a check from the partnership which would indicate that he received wages for the maintenance work he performed, rather, the evidence which substantiated his receipt of wages were the partnership books, tax returns, and computerized records (Tr. 43).
Woodworth noted that it would have cost the partnership $4,000.00 to $5,000.00 per year to hire someone to complete the jobs he performed (Tr. 44). Woodworth worked approximately 10 hours per week and indicated that the partnership determined which jobs he would perform (Tr. 44). Woodworth stated that he reported between $1,500.00 and $2,000.00 per year on his self-employment tax return (Tr. 45-46). He further noted that when he reported partnership income, he took the work he performed as an expense. Id.
Woodworth stated that he entered the partnership with the intention of making a profit and that he went into the maintenance business with the same intention. He indicated that he also performed maintenance work for some of his neighbors, but instead of accepting monetary payment for the work he was taken out to dinner in exchange for the work he performed (Tr. 49).
Woodworth added that the partnership operated on a negative cash flow, (Tr. 42), and that for IRS purposes expenses such as electricity, gas, water, fuel, heating, maintenance and repairs were deducted from the property's income, thereby creating a loss (Tr. 42). He noted that the partnership profits were split evenly and when one of the buildings was sold and a profit was made, the profit was distributed equally between the parties (Tr. 48).
The Appeals Council summarily affirmed the ALJ's decision which denied Woodworth benefits, and found that the overpayment of benefits to Woodworth could not be waived. The ALJ after considering the evidence, stated:
It must therefore be concluded that the claimant was overpaid retirement insurance benefits, that the claimant lacked the required quarters of coverage in order to be entitled to retirement insurance benefits and that recovery of overpayment cannot be waived.
(Tr. 21). The ALJ noted the following with respect to the question of whether or not Woodworth was actually engaged in self-employment activities:
(Tr. 20).
The ALJ then made the following relevant findings:
To continue reading
Request your trial-
Brando v. Chater, Civil No. 95-3266.
...actual findings are supported by substantial evidence); Blalock v. Richardson, 483 F.2d 773, 775 (4th Cir.1972); Woodworth v. Bowen, 679 F.Supp. 1194, 1198 (D.N.J.1987), aff'd without op., 845 F.2d 1019 (3d Cir.1988); see also Consolo v. Federal Maritime Comm., 383 U.S. 607, 620, 86 S.Ct. 1......
-
Black & Decker Corp. v. American Standard Inc.
... ... Harkins, Secretary of State of State of Delaware, Defendants ... Civ. A. No. 88-50 LON ... United States District Court, D. Delaware ... ...
-
Woodworth v. Secretary of Health & Human Services
...of Health and Human Services NO. 87-5719 United States Court of Appeals, Third Circuit. MAR 25, 1988 Appeal From: D.N.J., Cowen, J., 679 F.Supp. 1194 ...