Bloodsaw v. Sullivan

783 F. Supp. 227, 1992 U.S. Dist. LEXIS 770, 1992 WL 25138
CourtDistrict Court, E.D. Pennsylvania
DecidedJanuary 24, 1992
DocketCiv. A. No. 90-6977
StatusPublished
Cited by1 cases

This text of 783 F. Supp. 227 (Bloodsaw v. Sullivan) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bloodsaw v. Sullivan, 783 F. Supp. 227, 1992 U.S. Dist. LEXIS 770, 1992 WL 25138 (E.D. Pa. 1992).

Opinion

MEMORANDUM AND ORDER

HUTTON, District Judge.

This is an action pursuant to 42 U.S.C. §§ 405(g) and 1883(c)(3) to review a final decision of the Secretary of Health and Human Services (the “Secretary”) who reduced plaintiff’s supplemental security income (“SSI”) payments. The parties have filed cross-motions for summary judgment. On December 10, 1991, Chief U.S. Magistrate Judge Tullio Gene Leomporra filed his Report and Recommendation concluding that summary judgment should be granted in favor of the Secretary. The plaintiff has filed objections to the Report and Recommendation. For the following reasons, the Report and Recommendation will be APPROVED and ADOPTED.

BACKGROUND

Plaintiff filed an application for SSI benefits on March 10, 1987, and was found to be disabled by the Secretary on August 11, 1988. The Secretary was then required to consider, based on the plaintiff’s income, whether she was eligible for benefits and if so, in what amount. Under the regulations anything a person receives that can be used to meet his or her needs for food, clothing, or shelter can be income. Income that is not received as cash is referred to in the Code as in-kind income.1 Such income [228]*228can be either earned or unearned. 20 C.F.R. § 416.1104.

In his Report and Recommendation the Magistrate Judge found that the Secretary applied 20 C.F.R. § 416.1140 in determining that the plaintiff was receiving in-kind support because she lived in a house owned by her son and paid him rent which was less than the fair market rental value of the property. The Report and Recommendation rejects the plaintiff’s argument that her son actually pays nothing for her shelter since the rent he charges the plaintiff is offset by his expenses. Thus, plaintiff argues, she meets an exception to the rule under § 416.1140(a)(2)(ii) since the “actual amount someone else pays” for her shelter is not only lower than the presumed value, but amounts to zero and, thus her benefits should not be reduced by any amount.

In rejecting the plaintiffs argument, the Magistrate Judge noted that the Third Circuit and three other circuit courts have upheld the application of the presumed value rule to situations where SSI recipients were living in separate dwellings owned by relatives for which the claimants paid less than the fair market rent. (Report and Recommendation at 7) (citing Nunemaker v. Sec. HEW USA, 679 F.2d 328 (3d Cir.1982); Usher v. Schweiker, 666 F.2d 652 (1st Cir.1981); Kimmes v. Harris, 647 F.2d 1028 (10th Cir.1980), cert. denied, 454 U.S. 898, 102 S.Ct. 400, 70 L.Ed.2d 214 (1981); Antonioli v. Harris, 624 F.2d 78 (9th Cir.1980)). The Magistrate Judge noted that in each of these cases rent below the fair market rent of a property was found to be in-kind support for SSI purposes.

In the present Objections to the Report and Recommendation, the plaintiff argues that the cases relied upon by the Magistrate Judge deal with a superseded regulation. The four cases cited in the Report and Recommendation deal with 20 C.F.R. § 416.1125 (1980) which was superseded by § 416.1140. Plaintiff argues that § 416.-1125 did not provide the exception now contained in § 416.1140(a)(2)(ii). Thus, plaintiff argues that the issue is one of first impression in this circuit. The Secretary maintains that the interpretation of 20 C.F.R. § 416.1140(a)(2)(ii) is reasonable and is entitled to deference.

DISCUSSION

In the Third Circuit case, Nunemaker v. Sec. HEW USA, 679 F.2d at 328, the SSI recipient was living in a mobile home owned by her daughter for which she paid $50.00 a month. The Secretary determined that the fair rental value of the dwelling was $150.00 per month. The accuracy of the fair rental value was not disputed. The Secretary determine the claimant received a rental subsidy of $100.00 per month. The Secretary reduced the claimant’s benefits.

Nunemaker dealt with 20 C.F.R. § 416.-1125(d) (1980). Section 416.1125(d) provided in relevant part:

(d) Valuation of support and maintenance for individuals in household situations. When an eligible individual ... lives in a household (i.e., is not in an institution) ... any support and maintenance received in kind but not received in lieu of cash wages ... is unearned income. In such cases effective with payments for December 1974, the maximum value of such support and maintenance is presumed to be at two-thirds of the applicable payment standard; i.e., the value is presumed to be one-third of the payment standard.... This presumption will be applied in determining the benefits unless it is rebutted by the individual’s establishing that the current market value of such support and maintenance, less any payment he makes therefor, is lower [229]*229than the presumed value. This rule will apply in the following circumstances:
* * * * * *
(2) When an eligible individual ... lives in his own household, including a commercial establishment, and receives support and maintenance in kind.

Nunemaker, 679 F.2d at 329 n. 1. Usher v. Schweiker, 666 F.2d at 652; Kimmes v. Harris, 647 F.2d at 1028; and Antonioli v. Harris, 624 F.2d at 78, also dealt with this provision.

This section was superseded by amendment on July 22,1987. The current version of 20 C.F.R. § 416.1140 contains the following relevant exception to the presumed value rule:

(2) The presumed value rule allows you [the recipient] to show that your in-kind support and maintenance is not equal to the presumed value. We will not use the presumed value if you show us that—
(ii) The actual amount someone else pays for food, clothing, or shelter is lower than the presumed value.

20 C.F.R. § 416.1140(a)(2)(ii). Thus, the plaintiff is correct in stating that the four cases cited in the Report and Recommendation do not deal with the 20 C.F.R. § 416.-1140.2

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Related

Bloodsaw (Cotella) v. Sullivan (Louis)
977 F.2d 567 (Third Circuit, 1992)

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Bluebook (online)
783 F. Supp. 227, 1992 U.S. Dist. LEXIS 770, 1992 WL 25138, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bloodsaw-v-sullivan-paed-1992.