United States District Court, N.D. Alabama, Middle Division
BEVERLY D. HUNT, Plaintiff,
SOCIAL SECURITY ADMINISTRATION, Commissioner, Defendant.
MEMORANDUM OPINION 
G. CORNELIUS, U.S. MAGISTRATE JUDGE
plaintiff, Beverly D. Hunt, filed this matter pursuant to 42
U.S.C. Â§ 405(g), seeking review of a final decision of the
Commissioner of Social Security ordering the offset of
disability benefits due to a lump-sum workersâ compensation
settlement. (Doc. 1). The plaintiff timely pursued and
exhausted her administrative remedies, and the Commissionerâs
decision is ripe for review. For the reasons explained below,
the Commissionerâs decision is due to be reversed and
remanded to recalculate the offset.
plaintiff injured her back while working at Wal-Mart in 2006.
(R. 182). The plaintiff filed a workers’ compensation
claim in the Circuit Court of Marshall County, Alabama, in
which she was represented by G. Douglas Benson. (R. 58, 68).
Benson negotiated a $30, 000 lump-sum payment to settle the
workers’ compensation claim during mediation. (R. 210).
The Circuit Court set the settlement hearing for August 21,
2008. (See R. 58, 64-68). Because Benson had another
hearing set for that date, he arranged for another attorney,
Parker Edminston, to cover the settlement hearing. (R. 58,
68, 218). Although Benson regularly handled workers’
compensation and Social Security disability cases, Edminston
did not. (R. 218, 221).
counsel prepared the settlement agreement (“Settlement
Agreement”) and a proposed order for the settlement
hearing with the Circuit Court. (R. 58, 68, 218-19).
Immediately following the August 21, 2008 settlement hearing,
the Circuit Court entered an order approving the Settlement
Agreement. (R. 64-67). Neither the Settlement Agreement nor
the Circuit Court’s order included any language
specifying that the lump-sum settlement would be amortized
over the plaintiff’s lifetime. (Id.). Benson
apparently did not review the Circuit Court’s Order or
the Settlement Agreement until 2011, as explained below.
in May 2007, the plaintiff had also filed for Social Security
Disability Insurance Benefits (“DIB”).
(See R. 176). After the denial of DIB at the initial
level, the plaintiff requested a hearing before an
Administrative Law Judge (“ALJ”). (See
id.). During the hearing at which the plaintiff was
represented by a non-attorney, Patrick Potter,  the ALJ heard
testimony that the plaintiff had suffered herniated discs at
¶ 4, L5, and S1, causing debilitating pain. (R. 182).
Initial conservative treatment was unsuccessful, and the
plaintiff eventually underwent posterior lumbar interbody
fusion surgery. (R. 182-91). The plaintiff testified the
surgery had not alleviated her back pain and that her daily
activities were extremely limited, even with opioid pain
medication and muscle relaxers, which she took multiple times
each day. (Id.). After hearing this evidence, the
ALJ found the plaintiff’s testimony to be credible and
supported by the medical records; he described the plaintiff
as suffering from “failed back syndrome.” (R.
193). At the close of the hearing, the ALJ issued a fully
favorable bench ruling, finding the plaintiff was disabled.
(Id. at 193-94).
January 24, 2011, the Social Security Administration
(“SSA”) sent the plaintiff a letter explaining
that, due to the workers’ compensation settlement, the
amount of her monthly DIB would be reduced from $625 to $104.
(R. 17-19; see R. 21, 74). At this point, the
plaintiff got in touch with Benson, and he reviewed the
Settlement Agreement and the Circuit Court’s order for
the first time. (R. 219). Upon this review, Benson realized
the Settlement Agreement did not include language amortizing
the lump-sum payment over the plaintiff’s lifetime. (R.
226). Because Benson was not licensed to practice law at the
time, the plaintiff hired a new lawyer, who is also her
counsel in the instant appeal. (R. 227).
February 24, 2011, the plaintiff filed an unopposed motion
for relief from judgment with the Circuit Court. (R. 73-74).
In addition to including the facts concerning the settlement
hearing and the negotiation of the Settlement Agreement, the
motion explained: (1) the parties intended to include
language amortizing the lump-sum workers’ compensation
settlement over the Plaintiff’s lifetime; (2) the
amortization language was not included in the Settlement
Agreement the defendant prepared. (Id.). The motion
asked the court to relieve the plaintiff “from the
onerous effects of the” original order adopting the
Settlement Agreement, “by amending its order to
accurately reflect the agreement of the parties.”
(Id. at 74).
April 7, 2011, the Circuit Court granted the
plaintiff’s motion for relief from judgment and entered
an amended order (“Amended Order”), explaining
the lump-sum the plaintiff would receive, after deducting
attorney fees and expenses, was $22, 896.77. (R. 76). The
Amended Order also incorporated the following language:
The $22, 896.77 to be paid under this settlement shall be
paid without commutation of interest and shall represent the
compromise agreement that the employee’s life
expectancy of 2, 429.96 weeks forward from the date of the
original agreement dated August 21, 2008 and that the
settlement herein reached represents the payment of, to wit:
$9.42 per week over the 2, 429.96 week period of life
expectancy of the employee. Plaintiff was, at the time of the
settlement on August 21, 2008, a 34 year old female. The
Alabama Standard Mortality Table predicts that a 34 year old
female will have 46.73 years to live. Fifty-two  weeks per
year at 46.73 years equals 2429.96 weeks.
(R. 76). After reviewing the Circuit Court’s Amended
Order, the SSA denied the plaintiff’s request for
reconsideration and stated it would continue to use the
Circuit Court’s original order to calculate her DIB.
(R. 52-54, 88-89).
plaintiff requested a hearing before an ALJ, which took place
on July 21, 2016. (R. 93, 197-234). Benson and the plaintiff
testified as witnesses during the hearing. (R. 195-234). The
ALJ affirmed the agency’s denial of reconsideration in
a decision issued on October 26, 2016; this decision is the
subject of the instant appeal. (R. 13-16). In general terms,
the ALJ concluded: (1) applying the terms of the Amended
Order would circumvent the offset provisions of 42 U.S.C.
§ 424(a); and (2) under Social Security Ruling
(“SSR”) 97-3, the terms of the Amended Order were
not binding on the SSA. (R. 15-16). After exhausting her
administrative remedies, the instant appeal followed.
STANDARD OF REVIEW
court's role in reviewing claims brought under the Social
Security Act is a narrow one. The scope of its review is
limited to determining (1) whether there is substantial
evidence in the record as a whole to support the findings of
the Commissioner, and (2) whether the correct legal standards
were applied. See Stone v. Comm’r of Soc.
Sec., 544 F.App'x 839, 841 (11th Cir. 2013) (citing
Crawford v. Comm’r of Soc. Sec., 363 F.3d
1155, 1158 (11th Cir. 2004)). A court gives deference to the
factual findings of the Commissioner, provided those findings
are supported by substantial evidence but applies close
scrutiny to the legal conclusions. See Miles v.
Chater, 84 F.3d 1397, 1400 (11th Cir. 1996).
a court may not decide facts, weigh evidence, or substitute
its judgment for that of the Commissioner. Dyer v.
Barnhart, 395 F.3d 1206, 1210 (11th Cir. 2005) (quoting
Phillips v. Barnhart, 357 F.3d 1232, 1240 n.8 (11th
Cir. 2004)). “The substantial evidence standard permits
administrative decision makers to act with considerable
latitude, and ‘the possibility of drawing two
inconsistent conclusions from the evidence does not prevent
an administrative agency’s finding from being supported
by substantial evidence.’” Parker v.
Bowen, 793 F.2d 1177, 1181 (11th Cir. 1986) (Gibson, J.,
dissenting) (quoting Consolo v. Fed. Mar.
Comm'n, 383 U.S. 607, 620 (1966)). Indeed, even if a
court finds that the proof preponderates ...