Opinion
Civil Action No. 03-4896.
September 24, 2004
Memorandum and Order
Background and Procedural History
Plaintiff Susan Worley has appealed the final decision of the Commissioner of Social Security (the Commissioner) denying the claim of her deceased son, Michael Mahncke, for disability insurance benefits (DIB) and supplemental security income (SSI) under Titles II and XVI, respectively, of the Social Security Act. Worley and the Commissioner both moved for summary judgment. The cross-motions were referred to a magistrate judge, who submitted a Report and Recommendation recommending that the court grant summary judgment for the Commissioner and deny summary judgment for Worley. The magistrate judge concluded that Worley lacks standing to prosecute a claim for benefits (Report and Recommendation at 12), and that even if she had standing, the decision of the ALJ was supported by substantial evidence (Report and Recommendation at 21). Worley filed objections to the magistrate judge's Report and Recommendation, and the Commissioner, in turn, filed a response to Worley's objections.
The original application for benefits in this case was filed on February 20, 2001 by decedent Michael Mahncke, who alleged disability dating back to December 15, 2000 due to lower back and leg pain. (Report and Recommendation at 2.). Mahncke's claim for benefits was initially denied, and he subsequently requested a hearing before an Administrative Law Judge (ALJ). Id. A hearing was held on August 7, 2002. Id. During the hearing, Mahncke, represented by counsel, testified along with a vocational expert (VE) and a medical expert (ME) by telephone. Id. On August 26, 2002, the ALJ issued a decision which concluded that Mahncke had a "severe" impairment that prevented him from performing his past work. Id. The ALJ also concluded, however, that Mahncke retained sufficient residual functional capacity to perform a significant range of light work. Id. Mahncke was thus denied benefits. Id. On September 21, 2002, Mahncke committed suicide. Id. The cause of death listed on his death certificate was carbon monoxide poisoning. Id. The ALJ's findings became the final decision of the Commissioner when the Appeals Council denied Worley's request for review on June 24, 2003. Id.
The reconsideration phase was eliminated because the Commissioner selected this case to test modifications to the disability determination process.
Discussion
In considering the magistrate judge's Report and Recommendation, Worley's objections to the Report, and the Commissioner's responses to Worley's objections, a threshold issue is whether Worley has standing to prosecute her deceased son's claim for benefits. If Worley does not have standing to pursue the claim, which is what the magistrate judge found, then the court need not reach the merits of the ALJ's decision in the case. The Commissioner argues that Worley, as Mahncke's mother, lacks standing with respect to both the SSI and DIB claims. (Defendant's Brief in Opposition to Plaintiff's Motion and in Support of Defendant's Motion for Summary Judgment.) Worley counters that any unpaid benefits owed to Mahncke at the time of his death are due and payable as a lump-sum to his estate or, alternatively, to his mother as next-of-kin. (Plaintiff's Reply Brief.)
The magistrate judge concluded that Worley lacks standing with respect to the SSI claim based upon 20 C.F.R § 416.542, which governs the disposition of underpayments of SSI benefits when the recipient is deceased. The regulation provides that if a recipient dies before all benefits due have been paid, the underpaid benefits are payable to the deceased recipient's qualified surviving spouse or to the natural or adoptive parents of the deceased, if the deceased was a disabled or blind child when the underpayment occurred. 20 C.F.R § 416.542(b). "Child" is a defined term in the regulations: "We consider you to be a child if — (a)(1) You are under 18 years old; or (2) You are under 22 years old and you are a student . . .; (b) You are not married; and (c) You are not the head of a household. 20 C.F.R. § 416.1856. Mahncke was 32 years old at the time of his death (Report and Recommendation at 1), and he was therefore not a child within the meaning of the regulations.
"Underpayments" are defined in § 416.536 to include "nonpayment, where payment was due but was not made." 20 C.F.R. § 416.536(a). Counsel for Worley asserts in her Reply Brief, without any supporting authority, that the case "has nothing to do with underpayments," but to the extent that Worley seeks to claim any unpaid benefits that may have been due her son, the case is by definition about underpayments.
The regulation further provides that "no benefits may be paid to the estate of any underpaid recipient" or to any survivor other than a qualified surviving spouse or the parent of a disabled or blind child. 20 C.F.R. § 416.542(b)(4). As the magistrate judge wrote in her recommendation, there is no case law in the Third Circuit interpreting or applying this regulation, but it seems clear from the face of the regulation and the facts of this case that Worley is not among the limited class of survivors who are entitled to recover underpaid SSI benefits on behalf of a deceased recipient.
The answer to the question of Worley's standing to recover DIB payments on account of her deceased son is less clear. The parties analyzed Worley's standing to receive DIB benefits under 20 C.F.R § 404.339, a section somewhat misleadingly captioned "Who is entitled to mother's or father's benefits." This provision in actuality applies not to the mother or father of a deceased recipient, but to the widow or widower of a deceased recipient who has the recipient's dependent child in his or her care. 20 C.F.R § 404.339. Clearly, the provision does not apply to Worley.
§ 404.339 Who is entitled to mother's or father's benefits. You may be entitled as the widow or widower to mother's or father's benefits on the earnings record of someone who was fully or currently insured when he or she died. You are entitled to these benefits if —
(a) You are the widow or widower of the insured and meet the conditions described in § 404.335 (a)(1);
(b) You apply for these benefits; or you were entitled to wife's benefits for the month before the insured died;
(c) You are unmarried;
(d) You are not entitled to widow's or widower's benefits, or to an old-age benefit that is equal to or larger than the full mother's or father's benefit; and
(e) You have in your care the insured's child who is entitled to child's benefits and he or she is under 16 years old or is disabled. Sections 404.348 and 404.349 describe when a child is in your care.
A related provision that appears more germane to the facts of this case is 20 C.F.R § 404.370, which allows, under certain circumstances, for a surviving parent to receive payments based on the earnings record of a son or daughter who has died and was fully insured. Among the other requirements of the section, the parent must be at least 62 years old, must not have married since the insured person died, and must have been receiving at least one half of his or her support from the insured person at the time the insured person died. 20 C.F.R. § 404.370. It is unclear from the record whether Worley meets the requirements for parent's benefits under § 404.370, or, indeed, whether she is even arguing that she is entitled to such benefits. Although it appears very unlikely that Worley can successfully establish these criteria (especially that of receiving one half of her support from Mahncke), I will give her an opportunity to do so.
§ 404.370 Who is entitled to parent's benefits. You may be entitled to parent's benefits on the earnings record of someone who has died and was fully insured. You are entitled to these benefits if all the following conditions are met:
(a) You are related to the insured person as his or her parent in one of the ways described in § 404.374.
(b) You are at least 62 years old.
(c) You have not married since the insured person died.
(d) You apply.
(e) You are not entitled to an old-age benefit equal to or larger than the parent's benefit amount.
(f) You were receiving at least one-half of your support from the insured at the time he or she died, or at the beginning of any period of disability he or she had that continued up to death. See § 404.366(b) for a definition of one-half support. If you were receiving one-half of your support from the insured at the time of the insured's death, you must give us proof of this support within 2 years of the insured's death. If you were receiving one-half of your support from the insured at the time his or her period of disability began, you must give us proof of this support within 2 years of the month in which the insured filed his or her application for the period of disability. You must file the evidence of support even though you may not be eligible for parent's benefits until a later time. There are two exceptions to the 2-year filing requirement . . .
Worley has expressly claimed that she is entitled to any DIB benefits to which Mahncke "was entitled . . . from the time he became disabled until his death." (Brief in Support of Plaintiff's Objections to Report and Recommendation.) These allegedly accrued-but-unpaid benefits appear to be covered by 20 C.F.R § 404.503, and they are distinct from any parent's benefits to which Worley might claim entitlement under § 404.370. 20 C.F.R § 404.503(b) sets out an order of priority for the payment of a deceased recipient's underpaid disability benefits to surviving parties. Neither Worley nor the Commissioner has made any argument with respect to Worley's eligibility under 20 C.F.R § 404.503 or its impact on Worley's standing to pursue Mahncke's appeal. I will give them an opportunity to do so.
§ 404.503 Underpayments. Underpayments will be adjusted as follows:
(a) Individual underpaid is living. . . .
(b) Individual dies before adjustment of underpayment. If an individual to whom an underpayment is due dies before receiving payment or negotiating a check or checks representing such payment, such underpayment will be distributed to the living person (or persons) in the highest order of priority as follows:
(1) The deceased individual's surviving spouse . . .
(2) The child or children of the deceased individual . . .
(3) The parent or parents of the deceased individual, entitled to a monthly benefit on the basis of the same earnings record as was the deceased individual for the month in which such individual died (if more than one such parent, in equal shares to each such parent). For this purpose, the definition of "parent" in § 404.374 includes the parent(s) of any deceased individual who was entitled to benefits under title II of the Act.
(4) The surviving spouse of the deceased individual . . .
(5) The child or children of the deceased individual . . .
(6) The parent or parents of the deceased individual, who do not qualify under paragraph (b)(3) of this section (if more than one such parent, in equal shares to each such parent). For this purpose, the definition of "parent" in § 404.374 includes the parent(s) of any deceased individual who was entitled to benefits under title II of the Act.
(7) The legal representative of the estate of the deceased individual as defined in paragraph (d) of this section . . .
Two sub-sections of § 404.503(b)-(b)(3) and (b)(6)-apply on their face to parents of an individual to whom an underpayment is due. A third sub-section, § 404.503(b)(7), applies to the legal representative of the estate of the deceased individual. "Underpayment" is defined in § 404.501 to include "nonpayment where some amount of such benefits was payable."
A third type of DIB payment raised by the parties in the case is the lump-sum death payment of $255, payable under conditions enumerated in 20 C.F.R § 404.392. The magistrate judge correctly concluded that this provision, which cites back to the erroneously applied 20 C.F.R § 404.339, does not apply to Worley, and that Worley therefore does not have standing to recover any lump-sum death payment under 20 C.F.R § 404.392.
§ 404.392 Who is entitled to the lump-sum death payment when there is no widow(er) who was living in the same household.
(a) General. If the insured individual is not survived by a widow(er) who meets the requirements of § 404.391, the lump-sum death payment shall be paid as follows:
(1) To a person who is entitled (or would have been entitled had a timely application been filed) to widow's or widower's benefits (as described in § 404.335) or mother's or father's benefits (as described in § 404.339) on the work record of the deceased worker for the month of that worker's death; . . .
Conclusion
In conclusion, the magistrate judge correctly concluded that Worley lacks standing to recover any SSI benefits that may have been due to Mahncke at the time of his death. 20 C.F.R. § 416.542(b)(4). She also correctly concluded that Worley is not entitled to recover any DIB mother's benefits, 20 C.F.R. § 404.339, or a DIB lump-sum death payment, 20 C.F.R. § 404.392. The question of Worley's standing to recover DIB payments, in the form of either parent's benefits under 20 C.F.R § 404.370 or underpayments under 20 C.F.R § 404.503, is neither raised nor settled by the parties' briefs or the magistrate judge's Report and Recommendation. Given that an answer to the procedural question of Worley's standing must precede substantive consideration of the merits of her appeal, I will give plaintiff the opportunity to brief the applicability of 20 C.F.R § 404.370 and 20 C.F.R § 404.503 to the issue of Worley's standing to appeal the denial of DIB payments, and I will give defendant, of course, the opportunity to respond.
ORDER
AND NOW, this ____ day of September, 2004, upon consideration of the parties' cross-motions for summary judgment, and after review of the report and recommendation of the United States Magistrate Judge, the objections of the plaintiff thereto and the reply of the Commissioner, IT IS HEREBY ORDERED that:1. The report and recommendation is Approved and Adopted in substantial part as set forth in the foregoing memorandum.
2. Plaintiff's motion for summary judgment is DENIED.
3. The defendant Commissioner's motion for summary judgment is GRANTED as to plaintiff's claims for SSI benefits based on 20 C.F.R. § 416.542 and a lump sum death payment based on 20 C.F.R. § 404.392.
4. If she so elects, plaintiff may file a brief on or before October 9, 2004 addressing the applicability of 20 C.F.R. § 404.370 and 20 C.F.R. § 404.503 to the issue of plaintiff's standing to prosecute a claim for benefits owed on account of decedent's alleged disability. If plaintiff files such a brief the Commissioner may file a responsive brief on or before October 23, 2004.
5. In the event that plaintiff does not file a further brief, judgment will be entered affirming the decision of the Commissioner without further notice to the parties.