Binder & Binder, P.C. v. Astrue

848 F. Supp. 2d 230, 2012 WL 259936, 2012 U.S. Dist. LEXIS 10903
CourtDistrict Court, E.D. New York
DecidedJanuary 25, 2012
DocketNo. CV-11-0467 (SJF)
StatusPublished
Cited by4 cases

This text of 848 F. Supp. 2d 230 (Binder & Binder, P.C. v. Astrue) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Binder & Binder, P.C. v. Astrue, 848 F. Supp. 2d 230, 2012 WL 259936, 2012 U.S. Dist. LEXIS 10903 (E.D.N.Y. 2012).

Opinion

ORDER

FEUERSTEIN, District Judge.

Binder & Binder, P.C. (“plaintiff’) commenced this action against Michael K. As-[233]*233true (“defendant”), Commissioner of the Social Security Administration (“SSA”), seeking to recover attorney’s fees relating to its representation of a claimant for social security disability insurance (“DI”) benefits pursuant to Section 206 of the Social Security Act, 42 U.S.C. § 406. The parties now cross-move pursuant to Rule 56 of the Federal Rules of Civil Procedure for summary judgment. For the reasons set forth below, plaintiffs motion is granted in part and defendant’s cross motion is denied.

I. BACKGROUND

A. Factual Background

The following facts are undisputed, unless otherwise indicated:

On or about August 9, 2007, Gordon P. Landwirth (“Landwirth”) retained plaintiff to represent him with respect to his application for DI benefits and executed an agreement entitled, “Fees for Representation before the Social Security Administration” (“the Fee Agreement”). (Complaint [Compl.], If 5, Ex. A). Under the Fee Agreement, inter alia, if Landwirth was successful on his claim for DI benefits:

“at the initial stage, the reconsideration stage, or an initial administrative law judge hearing, a fee agreement will be submitted for approval to the [SSA], Under the fee agreement, the fees shall be the lesser of: a. twenty-five percent (25%) of the past due benefits awarded to [Landwirth] * * *, OR b. the maximum amount set by the Commissioner, pursuant to Section 406(a)(2)(A). This amount is currently five thousand three hundred dollars ($5,800.00), but is subject to adjustment by the Commissioner.”

(Compl., Ex. A). However, if Landwirth was successful on his claim only following a review by the Appeals Council, the Fee Agreement provided that “the fee petition system will be used,” pursuant to which “the fees charged by [plaintiff] will be twenty-five percent of all past-due benefits awarded.” (Id.) The Fee Agreement further provided, inter alia, that if it were invalidated by the SSA “for any reason,” plaintiff “will use the fee petition method.” (Id.)

By decision dated November 13, 2009, following an Appeals Council remand, Administrative Law Judge Mark Hecht (“the ALJ”) found Landwirth to be disabled as of November 1, 2005 and entitled to DI benefits. (T. 1-3, 6-12). By order dated November 13, 2009, the ALJ approved the Fee Agreement, “subject to the condition that the claim results in past-due benefits.” (T. 4-5).

On or about December 9, 2009, the SSA paid plaintiff a total of five thousand nine hundred seventeen dollars ($5,917.00), i.e., six thousand dollars ($6,000.00) minus a statutory assessment of eighty-three dollars ($83.00) imposed pursuant to 42 U.S.C. § 406(d), for the legal services it rendered to Landwirth during the SSA proceedings. (T. 13).

On March 20, 2010, the SSA’s Office of Central Operations (“OCO”) advised Landwirth, inter alia: (1) that he was awarded past-due benefits for the period between August 2006 through October 2009 in the total amount of sixty-five thousand five hundred eighty-eight dollars ($65,588.00); (2) that he would be receiving monthly benefits in the amount of one thousand six hundred sixty-two dollars ($1,662.00), as well as checks in the amount of (a) one thousand seven hundred seventy-two dollars and seventy cents ($1,772.70) for money due him through December 2009 and (b) sixty-one thousand three hundred sixty dollars and forty cents ($61,360.40) “because of an additional lump-sum payment;” (3) that the Fee Agreement between him [234]*234and plaintiff had been approved by the SSA; and (4) that six thousand dollars ($6,000.00) ■ had therefore been withheld from the past-due benefits award to pay plaintiff pursuant to the Fee Agreement and that the balance of the past-due benefits award would then be forwarded to Landwirth. (T. 14-16).

By order dated April 21, 2010, upon review of the Fee Agreement, Mark S. Sochaezewsjy (“Chief ALJ”), the Regional Chief ALJ for the SSA, invalidated the Fee Agreement on the basis that it did “not meet the statutory requirements of Sections 206(a)(2)(A) of the Social Security Act as amended by Section 5106(a) of the Omnibus Budget Reconciliation Act of 1990.” 1 (T. 18). In a letter to plaintiff dated that same day, the Chief ALJ explained that:

“the two-tier fee structure set forth in the [fee] agreement is invalid * * * [because it] states that the maximum fee of $5,300.00 applies only for representation before the [SSA]. Once the case is appealed [to] the Appeals Council level, the maximum will not [sic] longer apply. * * * Since the case was not favorable [to Landwirth] prior to the that [sic] appeal, the fee agreement is invalid under Section 206(a)(2)(A)(ii) of the Social Security Act, as the requirements set forth by that statute were not satisfied.”

(T. 17). Plaintiff was advised that it was “entitled to request a [legal] fee through the petition process;” that “[a]ll papers must be submitted to the New York Hearing Office if [it] wish[ed] to charge and collect a fee in this case;” and that the Chief ALJ’s order was not subject to further review. (T. 17).

By letter to the ALJ and petition, both dated July 8, 2010 and received by the SSA’s Office of Disability Adjudication and Review (“ODAR”) on July 22, 2010, plaintiff submitted a “Petition to Obtain Approval of a Fee” to the SSA, seeking a legal fee pursuant to 42 U.S.C. § 406(a) in the amount of eight thousand dollars ($8,000.00). (T. 33-41). In the letter to the ALJ, plaintiff noted, inter alia, “that 25% of the past due benefits awarded [Landwirth] * * * is $16,397.00. Although [Landwirth] agreed to pay 25%, [plaintiff] [was] reducing [its] fee to $8,000.00.” (T. 33).

On July 16, 2010, Landwirth filed a voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code, 11 U.S.C. § 101, et seq., in the United States Bankruptcy Court for the Southern District of New York (“the bankruptcy court”). (T. 21-29). Pursuant to the “Notice of Chapter 7 Bankruptcy Case, Meeting of Creditors, & Deadlines” (“Chapter 7 Notice”) issued by the bankruptcy court, potential creditors of Landwirth were notified, inter alia, that if they “believe[d] that [Landwirth] [was] not entitled to receive a discharge under Bankruptcy Code §§ 727(a) or that a debt owed to [them] [was] not dischargeable under Bankruptcy Code §§ 523(a)(2), (4), or (6), [they] must start a lawsuit by filing a complaint in the [235]*235bankruptcy clerk’s office by [October 12, 2010].” (T. 21-22). “Schedule F-Creditors Holding Unsecured Nonpriority Claims” (“Schedule F”) designated plaintiff as a creditor of Landwirth with respect to a disputed claim in an unknown amount, but did not provide plaintiffs address. (T. 25, 27).

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Cite This Page — Counsel Stack

Bluebook (online)
848 F. Supp. 2d 230, 2012 WL 259936, 2012 U.S. Dist. LEXIS 10903, Counsel Stack Legal Research, https://law.counselstack.com/opinion/binder-binder-pc-v-astrue-nyed-2012.