United States of America v. Madigan

Filing 32

ORDER ADOPTING FINDINGS AND RECOMMENDATIONS. ; adopting Findings and Recommendations re 31 Findings and Recommendations.; granting 15 Motion for Partial Summary Judgment as to Count II of the Complaint. Signed by Judge Brian Morris on 7/11/2016. (SLL, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
BUTTE DIVISION

CV 15-19-BU-BMM

UNITED STATES OF AMERICA,
Plaintiff,
vs.

ORDER ADOPTING MAGISTRATE
JUDGE’S FINDINGS AND
RECOMMENDATIONS

BARBARA MADIGAN,
Defendants.

Defendant Barbara Madigan (“Madigan”) married Mark Phillips
(“Phillips”). Madigan and Phillips had a son, Steven Phillips (“Steven”), on
September 21, 1975. Phillips became ill with meningitis and developed disabilities
that continue to the present. Phillips fled the United States in 1979. Madigan
requested that the Circuit Court for Broward County, Florida declare Phillips dead.
The Florida court entered an order that declared Phillips dead as of November 5,
1984.
Madigan filed for surviving child benefits from the Social Security
Administration (“SSA”) one month after the Court declared Phillips dead. SSA
awarded benefits to Madigan on behalf of her minor child Steven. Steven collected
the SSA benefits once he turned 19 and no longer qualified as a full-time student.

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SSA determined Steven qualified for benefits based on Phillip’s death. Steven
continued to receive benefits based on Phillips’ work history until 2010.
Madigan learned that Phillips had not died by sometime in 2002. Madigan
failed to report this information to the SSA. Phillips was discovered living in Chile.
Phillips was repatriated to the United States in April 2010. The SSA notified
Steven in June 2010 that he did not qualify for surviving child benefits.
The SSA determined that Madigan received a total of $208,075.70 in
survivor benefits on Steven’s behalf. The United States moves for summary
judgment on the common law theory of payment by mistake (Count II). The
United States seeks judgment as a matter of law in the amount of $128,765.40.
This amount represents the $208,075.70 overpayment less the amount of SSA
benefits Steven could have received on his own record.
United States Magistrate Judge Jeremiah Lynch entered Findings and
Recommendations in this matter on June 24, 2016. (Doc. 31.) Judge Lynch
recommended that the Court grant the United States’s summary judgment motion
as to Count II of the Complaint. (Doc. 31 at 13.) Madigan filed no objections to
Judge Lynch’s Findings and Recommendations. When a party makes no
objections, the Court need not review de novo the proposed Findings and
Recommendations. Thomas v. Arn, 474 U.S. 140, 149-52 (1986). This Court will
review Judge Lynch’s Findings and Recommendations, however, for clear error.
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McDonnell Douglas Corp. v. Commodore Bus. Mach., Inc., 656 F.2d 1309, 1313
(9th Cir. 1981).
The Government can recover payments made by mistakes under a common
law cause of action without showing fault on the part of the recipient. U.S. v.
Mead, 426 F.2d 118, 124 (9th Cir. 1970); Fort Belknap Housing Dept. v. Office of
Public and Indian Housing, 726 F.3d 1099, 1105 (9th Cir. 2013). The Government
can recover payments it made “under an erroneous belief” that proved “material to
the decision to pay.” Mead, 426 F.2d at 124. Steven received payments on the
basis of his status as a surviving child of his allegedly deceased father. Madigan
acted as Steven’s representative payee and accepted surviving child benefits on his
behalf. The SSA based its mistaken payments on the belief that Phillips had died.
This fact proves material to its decision to pay surviving child benefits. Madigan’s
intent proves irrelevant. Recovery should be deemed appropriate even when
payments may have been received innocently. United States v. Bellilcci, 2008 WL
802367 (E.D. Cal. Mar. 26, 2008) (citing Mead, 426 F.2d at 124.)
The Ninth Circuit has recognized that a representative payee can be held
liable for overpayments. Evelyn v. Schweiker, 685 F.2d 351, 352 (9th Cir. 1982).
“The representative merely stands in the shoes of the beneficiary. Just as the
beneficiary could not keep the overpayment, neither can the representative payee.”
Id. The United States should be able to recover the “portion of the total payments”
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made by mistake where the SSA paid child survivor benefits to Madigan on
Steven’s behalf based on the erroneous and material belief that Phillips had died.
Mead, 426 F.3d at 124.
Accordingly, IT IS ORDERED that Magistrate Judge Lynch’s Findings and
Recommendations (Doc. 31) is ADOPTED in FULL. Plaintiff United States of
America’s Motion for Summary Judgment as to Count II of the Complaint is
GRANTED.
Dated this 11th day of July, 2016

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