Lay v. Commissioner of Social Security

635 F. App'x 301
CourtCourt of Appeals for the Sixth Circuit
DecidedJanuary 6, 2016
DocketNo. 15-5664
StatusPublished
Cited by2 cases

This text of 635 F. App'x 301 (Lay v. Commissioner of Social Security) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lay v. Commissioner of Social Security, 635 F. App'x 301 (6th Cir. 2016).

Opinion

COOK, Circuit Judge.

This appeal considers whether the district court abused its discretion in granting the Commissioner of Social Security’s motion for relief from judgment reducing the attorney’s-fee award to Wolodymyr Cy-briwsky for his work on behalf of Bennie R. Lay, Jr. Cybriwsky’s representation of Lay resulted in the Social Security Administration (SSA) finding Lay disabled from June 28, 2000, to January 3, 2012, Realizing that the original amount of past-due benefits used to calculate Cybriwsky’s attorney’s fees included benefits from a previous period of disability in which Lay had counsel other than Cybriwsky, the Commissioner moved under Federal Rule of Civil Procedure 60(b)(1) to reduce the attorney’s fees award. The district court granted that motion, and Cybriwsky filed a motion to reconsider under Federal Rule of Civil Procedure 59(e), which the district court denied. Cybriwsky appeals both decisions, and we AFFIRM.

I.

This case involves two separate findings of disability in Lay’s favor. The first followed various administrative proceedings and covered a closed period from July 1, 1997, to June 27, 2000 (Disability Decision 1). Disability Decision 1 resulted in SSA’s paying Lay $21,220 and his then attorney, Walter Olin, $4,000~for a total payout of $25,220.

Lay’s second favorable disability finding followed protracted administrative review. As relevant here, that decision came on the heels of a remand to SSA after Lay filed a complaint in the district court. Upon remand, an Administrative Law Judge (ALJ) considered whether Lay’s disability continued after June 27, 2000, and found that it did, giving him a second finding of disability covering June 28, 2000, to January 3, 2012 (Disability Decision 2). The district court entered judgment in favor of Lay upon the Commissioner’s request following Disability Decision 2.

The parties initially agreed that Lay’s past-due benefits under Disability Decision 2 totaled $160,326.30. Cybriwsky moved for attorney’s fees under 42 U.S.C. § 406(b)(1)(A), and the district court awarded him' the statutory maximum of 25%-$40,081.57. Later, the district court awarded Cybriwsky another $13,986.25 in attorney’s fees for the benefits he procured for Lay’s children stemming from Disability Decision 2. To date, SSA has paid Cybriwsky $49,627.25 in attorney’s fees to satisfy these awards

Later, SSA realized that it included benefits for periods not covered by Disability Decision 2 when it calculated Lay’s past-due benefits owed under that decision. The Commissioner moved under Rule 60(b)(1) for relief from the judgment awarding Cybriwsky attorney’s fees for his representation resulting in Disability Decision 2, explaining that SSA erroneously included benefits already paid to Lay under Disability Decision 1 and that the court should recalculate attorney’s fees using the corrected past-due benefit amount. Accepting the Commissioner’s explanation of the SSA’s error, the district court granted the motion, reasoning that allowing the current fee award to stand would give Cybriwsky both a windfall from Lay’s double recovery and pay him fees for work he had not performed. Using the corrected past-due benefit calculation to determine attorney’s fees, the district court ordered that “no further sums are due” because SSA had already paid Cybriwsky $49,-627.25 — more than the corrected $45,627.25 it owed him.

Cybriwsky moved for reconsideration under Rule 59(e) arguing that the original past-due benefit calculation properly in-[303]*303eluded the past-due benefits awarded pursuant to Disability Decision 1. The district court denied that motion relying on the same grounds it used to alter the judgment and also found that the ALJ left Disability Decision 1 undisturbed in making Disability Decision 2. Cybriwsky appeals the orders granting the Commissioner’s motion to modify and denying his motion to reconsider.

IÍ.

A. Subject-Matter Jurisdiction

Cybriwsky argues that the district court lacked subject-matter jurisdiction to modify its attorney’s-fee award stemming from Disability Decision 2 because modifying that award recalculated Lay’s past-due benefits without SSA’s exhausting the administrative process. He relies on Pohlmeyer v. Secretary of Health & Human Services, 939 F.2d 318 (6th Cir.1991), to show that a district court lacks jurisdiction to order the Secretary of Health and Human Services to adjust a benefit award when a claimant fails to exhaust administrative remedies. We review questions of subject-matter jurisdiction de novo. Gaye v. Lynch, 788 F.3d 519, 525 (6th Cir.2015).

As the Commissioner correctly observes, in granting the motion to modify, the district court merely corrected an error in the amount of past-due benefits used to calculate Cybriwsky’s attomey’s-fee award. The district court made no change to the past-due benefits awarded Lay. Moreover, Social Security regulations make clear that “[djetermining the fee that may be charged or received” by an attorney is not an initial determination subject to exhaustion requirements. See 20 C.F.R. § 404.903(f). Because the district court altered only its order regarding attorney’s fees — it ordered no recalculation of Lay’s past-due benefits — it had subject-matter jurisdiction, and we thus, consider the merits of this appeal.

B. The Order Reducing Attorney’s Fees

We review orders granting relief under Rule 60(b) for abuse of discretion, Ford Motor Co. v. Mustangs Unlimited, Inc., 487 F.3d 465, 468 (6th Cir.2007) (citation omitted), and reverse only if we have a “definite and firm conviction that the trial court committed a clear error of judgment,” id. (quoting Blue Diamond Coal Co. v. Trs. of UMWA Combined Benefit Fund, 249 F.3d 519, 524 (6th Cir.2001)). We also review denials under Rule 59(e) for abuse of discretion. Betts v. Costco Wholesale Corp., 558 F.3d 461, 467 (6th Cir.2009) (citation omitted).

In support of reversal Cybriwsky argues that he is, in fact; entitled to fees from the period covered by Disability Decision 1 because when the district court remanded the case for further administrative review, that order reopened Disability Decision 1 thereby entitling him to fees upon the favorable finding. He cites the ALJ’s decision stating “[Lay] has been disabled ... since July 1, 1997” .to support his contention that Disability Decision 2 included the period covered by Disability Decision 1.

But review of the ALJ’s decision issued after remand demonstrates that that decision covers only the period after Disability Decision 1.

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635 F. App'x 301, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lay-v-commissioner-of-social-security-ca6-2016.