Fokina v. Colvin

Filing 13

ORDER Affirming the Commissioner's Final Decision and Dismissing the Case with Prejudice, by Judge Richard A Jones. (SWT) (Nancy A Berryhill added. Carolyn W. Colvin terminated.)

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1 2 3 4 5 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 6 7 VALENTINA P. FOKINA, 8 Case No. C16-1279-RAJ Plaintiff, 9 ORDER AFFIRMING THE COMMISSIONER’S FINAL DECISION AND DISMISSING THE CASE WITH PREJUDICE v. 10 NANCY A. BERRYHILL, Acting 1 11 Commissioner of Social Security, Defendant. 12 13 Valentina P. Fokina seeks review of the Administrative Law Judge’s (ALJ’s) decision 14 finding her ineligible to receive Supplemental Security Income (SSI) benefits paid between June 15 2009 and November 2012 due to excess resources. Tr. 29. Ms. Fokina contends the ALJ erred 16 by including an apartment in Russia (the Subject Property) as a countable resource for the 17 purposes of determining her eligibility for SSI benefits. Dkt. 10 at 6. As discussed below, the 18 Court AFFIRMS the Commissioner’s final decision and DISMISSES the case with prejudice. 19 BACKGROUND 20 21 1 Nancy A. Berryhill is now the Acting Commissioner of the Social Security Administration. Pursuant to Federal Rule of Civil Procedure 25(d), Nancy A. Berryhill is substituted for Carolyn W. Colvin as 22 defendant in this suit. The Clerk is directed to update the docket, and all future filings by the parties should reflect this change. 23 ORDER AFFIRMING THE COMMISSIONER’S FINAL DECISION AND DISMISSING THE CASE WITH PREJUDICE -1 1 In May 2009, Ms. Fokina applied for benefits, alleging disability as of October 1, 2008. 2 Tr. 25. Although the Social Security Administration (SSA) denied Ms. Fokina’s application, 3 ALJ Verrell Dethloff issued a decision March 25, 2011, finding her disabled. Tr. 51-55. On 4 August 12, 2012, Ms. Fokina submitted redetermination information for continued eligibility in 5 which she reported for the first time owning an apartment in Russia worth $20,000.00. Tr. 25, 6 66-69. SSA issued a notice informing Ms. Fokina she was not eligible for SSI because her 7 resources exceeded the maximum $2,000.00. Tr. 80-93. Ms. Fokina had been receiving benefits 8 from June 2009 until they were ceased in November 2012. Tr. 25. Ms. Fokina’s request for 9 reconsideration was denied at the agency level and she requested a hearing before an ALJ. Id. 10 ALJ Mary Gallagher Dilly conducted a hearing and on November 27, 2013, issued a decision 11 finding Ms. Fokina was not eligible to receive SSI benefits between June 2009 and November 12 2012 due to excess resources. Tr. 25-29. 2 The Appeals Council denied Ms. Fokina’s request for 13 review making the ALJ’s decision the Commissioner’s final decision. Tr. 6-9. 3 DISCUSSION 14 15 2 As the ALJ notes, the record also contains a Notice of Overpayment dated March 6, 2013, informing 16 Ms. Fokina she was overpaid $28,322.00 for the period of June 2009 to November 2012 due to excess resources above $2,000.00. Tr. 25, 107-109. While there is an overlapping issue between the 17 determination that Ms. Fokina was ineligible for SSI and the subsequent determination that she received an overpayment, the issue before ALJ Gallagher, and now before this Court, is only the eligibility 18 determination. Tr. 25-26. As the ALJ notes, the overpayment notice encompasses additional issues not 19 20 21 22 23 present in the eligibility determination including the specific balance, duration, and calculation of the overpayment amount. Id. The overpayment notice also permits the individual to request a waiver of the overpayment amount which, in turn, raises issues including fault, ability to repay and detrimental reliance. Id. It does appear that on August 30, 2013, Ms. Fokina applied for a waiver of the overpayment. Tr. 273276. Subsequent to ALJ Gallagher’s November 2013 decision, in or around May 2014, SSA found Ms. Fokina was not at fault in receiving the overpayment but denied her application for a waiver because it was determined she was employed and capable of repaying the overpayment. Tr. 278-279. A $25.00 per month rate of recovery was established. Id. In this action, Ms. Fokina only challenges the ALJ’s finding that she was ineligible to receive SSI benefits between June 2009 and November 2012, not the overpayment determination. Dkt. 10 at 5-6. 3 The rest of the procedural history is not relevant to the outcome of the case and is thus omitted. ORDER AFFIRMING THE COMMISSIONER’S FINAL DECISION AND DISMISSING THE CASE WITH PREJUDICE -2 1 Ms. Fokina argues the ALJ erred in finding the Subject Property was properly included as 2 a countable resource, thereby rendering her ineligible for SSI benefits. Dkt. 10 at 6. The Court 3 disagrees. 4 The Court may reverse an ALJ’s decision only if it is not supported by substantial 5 evidence or if the ALJ applied the wrong legal standard. See Molina v. Astrue, 674 F.3d 1104, 6 1110 (9th Cir. 2012). Even then, the Court will reverse the ALJ’s decision only if the claimant 7 demonstrates that the ALJ’s error was harmful. Id. An unmarried claimant is ineligible for SSI 8 if her resources exceed $2,000.00. 20 C.F.R. §416.1205. “Resources” includes any real property 9 “an individual (or spouse, if any) owns and could convert to cash to be used for his or her 10 support and maintenance.” 20 C.F.R. §416.1201(a). If the claimant “has the right, authority or 11 power to liquidate the property or his or her share of the property, it is considered a resource. If 12 a property right cannot be liquidated, the property will not be considered a resource of the 13 individual (or spouse).” 20 C.F.R. §416.1201(a)(1). 14 Here, substantial evidence supports the ALJ’s finding that the Subject Property was a 15 countable resource, thereby rendering Ms. Fokina ineligible to receive SSI during the period in 16 question. Tr. 25-29; see, e.g., Hong Jun Xun v. Colvin, 651 Fed.Appx. 658, 660 (9th Cir. 2016) 17 (unpublished) (substantial evidence supported the ALJ’s determination that the claimant did not 18 hold certain funds in trust for his brother and that the funds were properly considered a countable 19 resource in excess of the statutory maximum prescribed for SSI eligibility). Ms. Fokina does not 20 dispute that in 1996 she and her husband at the time, Aleksandr Fokin, purchased an apartment in 21 Belgorod, Russia (the Subject Property). Dkt. 10 at 2; Tr. 35. Ms. Fokina also does not dispute 22 that in 1998, she and Mr. Fokin executed a document entitled “Contract of Gift” (the Contract) 23 and by the terms of that document she “accept[ed] [the] gift” of the Subject Property from Mr. ORDER AFFIRMING THE COMMISSIONER’S FINAL DECISION AND DISMISSING THE CASE WITH PREJUDICE -3 1 Fokin. Tr. 157-158. The Contract indicates that the Subject Property was not “sold, gifted, [or] 2 promised to be gifted to a third party,” and that Ms. Fokina “acquire[d] rights for said property 3 from the moment of State Registration of the present Contract.” Id. The Contract further 4 “registered [Ms. Fokina] as an owner.” Id. Ms. Fokina also possesses a certificate from a 5 passport clerk listing the Subject Property as her “permanently registered residence” since 6 January 1997. Tr. 163. 7 Although she does not dispute the existence of the Contract, Ms. Fokina contends the 8 ALJ should not have considered the Subject Property a countable resource because 9 “circumstances beyond her control prevented her from returning to Russia and converting the 10 Subject Property to cash.” Dkt. 10 at 10. Specifically, Ms. Fokina indicates she is unable to 11 return to Russia due to fear of persecution. Id. Ms. Fokina testified generally that, although she 12 was Christian, because she had lived in a Muslim country (Kyrgyzstan), she received threats that 13 she should not move or go to Russia. Tr. 39-40. She also testified that her neighbors in Russia 14 had kidnapped and tortured her although it is unclear whether she attributes the motive for this to 15 the fact that she had lived in a Muslim country. Id. 16 The Court is not unsympathetic to Ms. Fokina’s circumstances. However, the ALJ 17 considered these same arguments in her decision and reasonably concluded that Ms. Fokina 18 retained the right, authority and power to liquidate the Subject Property. While Ms. Fokina may 19 certainly have good reasons for not wishing to return to Russia, as the ALJ points out, she 20 maintains a Russian passport with no travel restrictions to or from the country. 4 Tr. 27. 21 Moreover, although Ms. Fokina claims she would have to return to Russia to sell the property, 22 4 The ALJ also notes that Ms. Fokina’s refugee status in the United States is related to events in 23 Tajikistan. Tr. 28 n. 2. ORDER AFFIRMING THE COMMISSIONER’S FINAL DECISION AND DISMISSING THE CASE WITH PREJUDICE -4 1 she presents no evidence that she has made any attempt to sell the property from the United 2 States, nor has she presented any evidence or articulated any concrete reasons why she would be 3 unable to do so. Tr. 40. As the ALJ points out, Ms. Fokina has continued to engage in Russian 4 transactions after leaving the country, including securing a divorce in 2011, and obtaining a 5 certificate of permanent residence status in 2013. Tr. 28. Under the circumstances, substantial 6 evidence supports the ALJ’s conclusion that Ms. Fokina retained the right, power and authority 7 to liquidate the Subject Property and that it was properly considered a countable asset. See 8 Orteza v. Shalala, 50 F.3d 748, 749 (9th Cir. 1995) (per curiam) (When the evidence before the 9 ALJ is “susceptible of more than one rational interpretation, the decision of the ALJ must be 10 upheld.”). 11 Ms. Fokina also argues the ALJ erred in finding “she had the legal ability to convert the 12 Subject Property to cash for her maintenance and support.” Dkt. 10 at 12. Specifically, Ms. 13 Fokina argues that she and her husband acquired the Subject Property to give to their daughter, 14 Oksana (a minor at the time) “once they could legally put the title in her name.” Id. at 13. 15 However, again, the ALJ considered this argument and reasonably rejected it. Specifically, the 16 ALJ notes that Oksana’s name does not appear on the title of the property and, despite what may 17 have been Ms. Fokina’s and Mr. Fokin’s original intent in purchasing the property, there is no 18 evidence that Ms. Fokina ever legally transferred ownership of the property to her daughter. Tr. 19 27-28. Moreover, the terms of the Contract transferring ownership to Ms. Fokina specifically 20 state that the Subject Property was not “sold, gifted, [or] promised to be gifted to a third party” 21 and that Ms. Fokina alone acquired rights to the property. Tr. 157-158. While, again, Ms. 22 Fokina may have good reasons for not wishing to liquidate the property (i.e., to retain it for her 23 daughter’s benefit), her argument fails to establish she lacks the right, authority or power to do so ORDER AFFIRMING THE COMMISSIONER’S FINAL DECISION AND DISMISSING THE CASE WITH PREJUDICE -5 1 and that the ALJ erred in including the Subject Property as a countable resource. 2 Ms. Fokina also contends the ALJ erred in failing to consider Russian law in determining 3 the legal effect of the transfer of the title from Mr. Fokin to Ms. Fokina, as well as Ms. Fokina’s 4 legal ability to convert the Subject Property to cash for her maintenance and support. Dkt. 10 at 5 14. Ms. Fokina fails to establish the ALJ made any error of law. The Court notes that it appears 6 Russian law recognizes donation contracts such as the Contract at issue wherein one party, the 7 donor, gratuitously transfers or promises the donee any object of value, and the donee in turn 8 agrees to accept and receive the thing of value. See 24 Loy. L.A. Int’l & Comp. L. Rev. 113, 157 9 (March 2002); C. Civ. Art. 572 (Russ.). 5 Ms. Fokina does not argue the Contract transferring 10 ownership to her was, in fact, invalid under Russian law, nor does she argue, much less cite to 11 any authority, demonstrating that she would be legally barred from liquidating the property under 12 Russian law for some other reason. Rather, Ms. Fokina’s argument is purely speculative. As 13 such, Ms. Fokina fails to establish the ALJ erred in concluding that she alone has retained 14 ownership of the Subject Property since 1998, as well as the right, power and authority to 15 liquidate that property. Tr. 28. 16 Ms. Fokina further argues the ALJ erred in considering the Subject Property a countable 17 resource because evidence shows litigation would be required in order to force a sale of the 18 Subject Property. Dkt. 10 at 14-17. Ms. Fokina contends the ALJ failed to follow the SSA’s 19 Program Operations Manual System (POMS) SI 01120.010.C which provides that “[w]hen there 20 is a legal bar to sale of property (e.g., if a co-owner legally blocks sale of jointly-owned 21 property), we do not require an individual to undertake litigation in order to accomplish sale or 22 5 The Civil Code of the Russian Federation Article 572, translated text available at 23 ORDER AFFIRMING THE COMMISSIONER’S FINAL DECISION AND DISMISSING THE CASE WITH PREJUDICE -6 1 access.” POMS SI 01120.010.C. The Ninth Circuit has held that POMS may be “entitled to 2 respect ... to the extent it provides a persuasive interpretation of an ambiguous regulation” but 3 “does not impose judicially enforceable duties on either this court or the ALJ.” Kennedy v. 4 Colvin, 738 F.3d 1172, 1177 (9th Cir. 2013) (internal citation and quotation marks omitted). 5 However, Ms. Fokina offers no evidence, beyond speculative arguments, that litigation would be 6 required to liquidate the Subject Property. Ms. Fokina makes the conclusory assertion that when 7 her marriage dissolved, her ex-husband, Mr. Fokin, became a tenant in common of the Subject 8 Property and, therefore owns an undivided one-half interest in that property. Dkt. 10 at 14. 9 However, Ms. Fokina cites no evidence demonstrating Mr. Fokin retained any interest in the 10 Subject Property nor does she cite to any law supporting this contention. Furthermore, this 11 argument is contrary to the terms of the Contract indicating Mr. Fokin transferred ownership of 12 the property to Ms. Fokina alone. Tr. 157-158. Mr. Fokin submitted an affidavit indicating that 13 he and Ms. Fokina originally purchased the Subject Property for their daughter. Tr. 154. 14 However, Mr. Fokin does not state he believes that either he or his daughter retains any legal 15 ownership interest in the property, or that Ms. Fokina would not have the legal right to sell the 16 property. Id. Mr. Fokin also does not indicate he would initiate litigation in an attempt to block 17 or oppose Ms. Fokina’s sale of the Subject Property. Id. Ms. Fokina fails to point to any 18 evidence, beyond speculation, indicating there is a legal bar to sale of the property, or that 19 litigation would be required to sell the property. Accordingly, she fails to establish error. 20 Finally, Ms. Fokina contends that “the record does not support a finding that [she] would 21 realize an amount greater than the resource limit, after legal fees, costs, and other expenses 22 associated with selling the Subject Property, which is located in another country, are deducted.” 23 Dkt. 10 at 16-17. If illiquid property such as land cannot be converted into cash in twenty days, ORDER AFFIRMING THE COMMISSIONER’S FINAL DECISION AND DISMISSING THE CASE WITH PREJUDICE -7 1 it “is valued at the price the property can reasonably be expected to sell for on the open market in 2 the particular geographic area involved; minus … any encumbrances.” 20 C.F.R. 3 §416.1202(c)(2)(i)-(ii). Here, Ms. Fokina herself indicates that the property is worth $20,000.00 4 and that there are no encumbrances. Tr. 37. Even if it were proper for the Court to consider 5 expenses associated with the sale, Ms. Fokina presents no evidence, other than speculation, that 6 expenses would deplete the profit from the sale of a $20,000.00 property such that she would 7 receive less than the resource limit. Accordingly, the Court cannot find the ALJ was 8 unreasonable in concluding the Subject Property was a countable resource that exceeds the 9 resource limit allowable to qualify for SSI. 10 In sum, the ALJ reasonably concluded that Ms. Fokina alone has retained ownership of 11 the Subject Property since 1998, that she has retained the right, power and authority to liquidate 12 that property, and that the property constituted an excess resource rendering her ineligible to 13 receive SSI benefits. Tr. 27. CONCLUSION 14 15 For the foregoing reasons, the Commissioner’s final decision is AFFIRMED and this 16 case is DISMISSED with prejudice. 17 DATED this 23rd day of August, 2017. 18 19 A 20 21 The Honorable Richard A. Jones United States District Judge 22 23 ORDER AFFIRMING THE COMMISSIONER’S FINAL DECISION AND DISMISSING THE CASE WITH PREJUDICE -8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 ORDER AFFIRMING THE COMMISSIONER’S FINAL DECISION AND DISMISSING THE CASE WITH PREJUDICE -9

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