Coomer v. Barnhart

Filing 31

ORDER adopting 28 Report and Recommendations; denying 14 pla's Motion for Summary Judgment; granting 17 dft's Cross-Motion for Summary Judgment; sum jgm is awarded in favor of dft & against pla; ALJ decision affirmed; Clk Crt to enter jgm & close case. Signed by Judge Cindy K Jorgenson on 10/22/08.(KMF, )

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WO IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA N A N C Y COOMER, as Personal) Representative of the Estate and on Behalf) ) of Danny Coomer, Deceased, ) ) Plaintiff, ) ) vs. ) ) MICHAEL J. ASTRUE, ) Commissioner of the Social ) Security Administration, ) ) Defendant. ) No. CIV 06-629-TUC-CKJ ORDER On April 11, 2008, Magistrate Judge Jacqueline Marshall issued a Report and Recommendation [Doc. # 28] in which she recommended that Plaintiff's Motion for Summary Judgment [Doc. # 14] be denied and Defendant's Cross-Motion for Summary Judgment [Doc. # 17] be granted. On April 25, 2008, Plaintiff filed Objections to Report and Recommendation. Defendant has not filed a response. Magistrate Judge's Statement of the Procedural Background and Factual Assertions The Court accepts the procedural background as set forth in the Report and Recommendation. The Court accepts the facts as set forth by the magistrate judge except the Court finds that there was usually two employees working at the store during the week and one employee working at the store on the weekends, see Administrative Record ("AR"), p. 645A,Coomer hired the services of an accountant to prepare store taxes and a bookkeeper, Linda Franklin 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ( "Franklin"), to compute payroll. When Franklin took over the duty of preparing daily deposits in March of 1995, the store deposit records were in disarray. AR, p. 668. Standard of Review The findings of the Commissioner are meant to be conclusive, 42 U.S.C. 405(g), 1383(c)(3), and a decision to overturn a denial of benefits is appropriate only if the denial "is not supported by substantial evidence or [if the denial] is based on legal error." Matney v. Sullivan, 981 F2d 1016, 1019 (9th Cir. 1992), citations omitted; Massachi v. Astrue, 486 F.3d 1149 (9th Cir. 2007). "Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Parra v. Astrue, 481 F.3d 742, 746 (9th Cir. 2007). The standard is less than a "preponderance of the evidence" standard. Matney, 981 F.2d at 1019. Further, a denial of benefits is to be set aside if the Commissioner has failed to apply the proper legal standards in weighing the evidence even though the findings may be supported by substantial evidence. Frost v. Barnhart, 314 F.3d 359, 367 (9th Cir. 2002). Indeed, this Court must consider both evidence that supports, and evidence that detracts from, the conclusion of the Administrative Law Judge ("ALJ"). Frost, 314 F.3d at 366-67. Objections of Plaintiff The Administrative Law Judge ("ALJ") determined that Danny Coomer ("Coomer") had engaged in substantial gainful activity ("SGA") as the sole proprietor of a feed business. Plaintiff asserts that the ALJ erred in discounting or selectively reading evidence from other persons (i.e., Christopher Stump ("Stump"), Linda Franklin ("Franklin"), and vocational expert David P. Goguen, M.A., C.R.C. ("Goguen")) for a proper understanding of what constituted management of the business. Plaintiff also asserts that the ALJ misconstrued Coomer's testimony. Plaintiff asserts that the Report and Recommendation perpetuates these errors. -2- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Substantial Gainful Activity SGA is work done for pay or profit that involves significant physical or mental activities. 20 C.F.R. 404.1572(a)-(b). If a claimant is self-employed, the Commissioner is to consider the work activities the claimant performed and their value to the business to determine whether the claimant engaged in SGA. 20 C.F.R. 404.1575(a)(2). The regulations set forth three alternative tests for determining whether a person is engaged in SGA: Test one: You have engaged in substantial gainful activity if you render services that are significant to the operation of the business and receive a substantial income from the business . . . Test two: You have engaged in substantial gainful activity if your work activity, in terms of factors such as hours, skills, energy output, efficiency, duties, and responsibilities, is comparable to that of unimpaired individual in your community who are in the same or similar businesses as their means of livelihood. Test Three: You have engaged in substantial gainful activity if your work activity, although not comparable to that of unimpaired individuals, is clearly worth the amount shown in [the Commissioner's Earnings Guidelines] when considered in terms of its value to the business, or when compared to the salary that an owner would pay to an employee to do the work you are doing. 20 C.F.R. 404.1575(a)(2)(i)-(iii). Under test one, services are considered significant to a business that involves more than one person "if [the claimant] contribute[s] more than half the total time required for the management of the business, or [the claimant] render[s] management services for more than 45 hours a month regardless of the total management time required by the business." 20 C.F.R. 404.1575(b)(1). Vocational Expert Evidence Plaintiff asserts that the ALJ erred in failing to consider the uncontradicted report of vocational expert Goguen. Goguen analyzed what constituted "management of the business" in connection with Coomer's feed store by reviewing testimony, affidavits, and the Dictionary of Occupational Titles ("DOT"). Plaintiff asserts that 20 C.F.R. 404.1566(d) indicates the Commissioner takes administrative notice of the reliability of job data -3- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 information in the DOT. Plaintiff argues that the DOT cannot be summarily dismissed and that vocational expert testimony must be considered. Lester v. Chater, 81 F.3d 821, 830-31 (9th Cir. 1995). That regulation states: (d) Administrative notice of job data. When we determine that unskilled, sedentary, light, and medium jobs exist in the national economy (in significant numbers either in the region where you live or in several regions of the county), we will take administrative notice of reliable job information available from various governmental and other publications. For example, we will take notice of -(1) Dictionary of Occupational Titles, published by the Department of Labor ***** 20 C.F.R. 404.1566(d)(1). The "for example" language of the C.F.R. implies that administrative notice of reliable job information will be taken, but that information may be taken from various sources, including those listed as examples. At least one other court has found that the Commissioner may take notice of the DOT. See McBurrows v. Commissioner of Social Security, 928 F.Supp. 724, 728 (E.D.Mich. 1996). Further, the Ninth Circuit has stated that the "Secretary may rely on the general job categories of the Dictionary, with its supplementary Selected Characteristics, as presumptively applicable to a claimant's prior work. Villa v. Heckler, 797 F.2d 704, 798 (9th Cir. 1986). Although Villa did not address whether the Commissioner shall or may consider the DOT, it did state that the Commissioner was not required to rely on the DOT. In this case, the ALJ considered the plain and simple meaning of the word "management" in assigning a meaning to its use in the regulations. The ALJ considered Goguen's memorandum and determined that little weight should be afforded to the memorandum because it relied heavily on Stump's statements, which were vague and ambiguous, that contradicted Coomer's testimony. In other words, the ALJ considered the DOT as set forth in the memorandum yet determined it was entitled to little weight. The ALJ determined that Coomer's testimony, given, at a time closer to the time of the events, was more probative. Plaintiff further asserts that 20 C.F.R. 404.1560(b)(2) notes that the Commissioner will consider the DOT and vocational expert testimony in determining whether a claimant -4- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 can perform his past work. However, the issue before the ALJ was not whether Coomer could perform his past work, but whether he was engaged in SGA. The Court finds that the ALJ was not required to consider the DOT. Nonetheless, the ALJ did consider the DOT as set forth in Goguen's memorandum and determined it was entitled to little weight. Additionally, the Court notes that the ALJ set forth the reasons for giving the memorandum little weight. The Court finds there is substantial evidence to support the ALJ's conclusion to afford the memorandum little weight. Furthermore, the ALJ's consideration is not based on legal error. Consideration of the Evidence as a Whole Plaintiff asserts that the ALJ erred by failing to consider the evidence as a whole. Day v. Weinberger, 522 F.2d 1154, 1156 (9th Cir. 1975), see also 20 C.F.R. 404.1520(a)(3) ("We will consider all evidence in your case record when we make a determination or decision whether you are disabled."). Plaintiff asserts that the ALJ needed to consider evidence from lay witnesses regarding the management activities at the feed store. The ALJ stated: The claimant was the sole proprietor of his feed business which accounted for substantial income to him. He performed all management duties, including hiring and paying employees, ordering feed to replenish his stock, paying bills, banking, keeping records, setting prices, hiring an accountant, setting the hours of operation, and the overall supervision of employees, who worked fairly independently. Administrative Record, pp. 574-75. The ALJ further stated: [The claimant's ex-wife] confirmed that the employees operated fairly independently at work, but she did not contradict the claimant's testimony that he had the responsibility for such management decisions as hiring employees, paying the bills, setting the hours of operation, hiring the accountant, and approving all tax filings. Similarly, the affidavit of Christopher Stump does not contradict the claimant in this respect . . . Mr. Stump, who worked as store manager from August 1994 to August 1996, opined that such "management" tasks included closing the cash register at night, determining changes to standard orders, and arranging for changes to the employees' schedules. He does not say, however, that employees could do such things as hire and fire themselves, set their own wages, determine the retail prices, adjust the hours of operation, and withdraw funds from the business's accounts at will. . . -5- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Similarly, the affidavit of former employee Linda Franklin (Exhibit B55) [indicates that she] worked as a bookkeeper for the claimant from March 1995 to March 1997. Id., at 575-76. The ALJ considered the management activities conducted by Coomer. The ALJ also considered the activities of the employees. In arguing that the accountant and bookkeeper performed payroll, tax, and bank deposit preparation, Plaintiff does not provide any authority that these activities are managerial rather than clerical. Contrary to Plaintiff's assertion, the ALJ considered the evidence as a whole, but clearly did not accept Plaintiff's argument that certain functions completed by employees were managerial in nature. The ALJ's conclusion that Coomer engaged in SGA by rendering services that were significant to the business and by receiving a substantial income from the business, 20 C.F.R. 404.1575(a)(1), is supported by substantial evidence and is not based on legal error. Summary Dismissal of Coomer's Medical Impairments Plaintiff argues that the ALJ failed to consider that Coomer's medical impairments affected Coomer's ability to consistently be involved with the business. However, the regulations provide that "[i]f you are doing [SGA], we will find that you are not disabled." 20 C.F.R. 404.1520(a)(4)(I). Indeed, the Ninth Circuit has stated that "if a beneficiary is engaged in SGA he is no longer entitled to benefits." Katz v. Sec'y of Health & Human Services, 972 F.2d 290, 293 (9th Cir. 1992). Plaintiff has provided no authority for her assertion that the medical condition should be considered in determining whether a claimant is engaged in SGA. Moreover, Plaintiff's objection is based on Coomer being confined to a hospital or his home for extended periods of time in which, Plaintiff asserts that management functions were performed by others. Coomer had approximately two Chrohn's disease related episodes that required hospitalizations per year. See AR, p. 85. The evidence establishes that Coomer was not able to be present in the store for periods of time. See e.g., AR, p. 668. However, this -6- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 fails to establish that Coomer did not hire and pay employees, order the feed to replenish the stock, set the prices, set the hours of operation, and supervise the employees who worked fairly independently. Although the affidavit of Franklin indicates that Franklin would pay bills, make bank deposits and maintain the books, Plaintiff has not presented any authority that these functions were managerial as opposed to clerical. The Court notes that the DOT indicates that reconciling cash with receipts is a managerial function. See Plaintiff's MSJ, p. 9. Nonetheless, as discussed by the magistrate judge, the majority of the managerial functions set forth in the DOT were performed by Coomer or did not need to be performed by anyone. The ALJ noted that Franklin did not spend even close to 45 hours a month working at the business. However, the ALJ considered that Franklin did not state that employees were permitted to hire and fire, set wages, determine retail prices, etc. In other words, the ALJ was considering the managerial functions conducted by Coomer rather than the amount of time he expended in performing those functions. The Court finds that substantial evidence supports the ALJ's determination that Coomer engaged in SGA under test one of 20 C.F.R. 404.1575(a)(2)(i), Accordingly, after an independent review, IT IS ORDERED: 1. 2. 3. 4. 5. 6. The Report and Recommendation [Doc. # 28] is ADOPTED; Plaintiff's Motion for Summary Judgment [Doc. # 14] is DENIED; Defendant's Cross-Motion for Summary Judgment [Doc. # 17] is GRANTED; Summary judgment is awarded in favor of Defendant and against Plaintiff; The decision of the ALJ is AFFIRMED; The Clerk of the Court shall enter judgment in this case and shall then close its file in this matter. DATED this 22nd day of October, 2008. -7-

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