F I L E D United States Court of Appeals Tenth Circuit UNITED STATES COURT OF APPEALS NOV 1 1999 FOR THE TENTH CIRCUIT PATRICK FISHER Clerk
JIMMY L. MORRIS,
Plaintiff-Appellant,
v. No. 99-7017 (D.C. No. CIV-98-183-S) KENNETH S. APFEL, Commissioner (E.D. Okla.) of Social Security,
Defendant-Appellee.
ORDER AND JUDGMENT *
Before BALDOCK , BARRETT , and McKAY , Circuit Judges.
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument.
* This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. The court generally disfavors the citation of orders and judgments; nevertheless, an order and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3. Claimant Jimmy L. Morris appeals from an order of the district court
affirming the Commissioner’s determination that he was not eligible for Social
Security disability benefits. The administrative law judge (ALJ) denied benefits at
step one, holding that claimant had engaged in substantial gainful activity
subsequent to the date he last met the insured status requirements. See Williams v.
Bowen , 844 F.2d 748, 750 (10th Cir. 1988). The Appeals Council denied review.
The district court adopted the recommendation of the magistrate judge affirming
the ALJ’s decision. On appeal, plaintiff argues the ALJ’s determination is not
supported by substantial evidence. We exercise jurisdiction pursuant to 28 U.S.C.
§ 1291 and 42 U.S.C. § 405(g), and we affirm.
“We review the [Commissioner’s] decision to determine whether [his]
factual findings are supported by substantial evidence in the record viewed as a
whole and whether [he] applied the correct legal standards. Substantial evidence
is such relevant evidence as a reasonable mind might accept as adequate to support
a conclusion.” Castellano v. Secretary of Health & Human Servs. , 26 F.3d 1027,
1028 (10th Cir. 1994) (citations and quotations omitted).
At step one of the sequential analysis, the claimant has the burden of
showing he is not performing substantial gainful activity. See 20 C.F.R.
§ 404.1571; Musgrave v. Sullivan , 966 F.2d 1371, 1376 (10th Cir. 1992) (claimant
has burden of proving disability); Fowler v. Bowen , 876 F.2d 1451, 1453 (10th
-2- Cir. 1989) (claimant engaged in substantial gainful activity will not be found
disabled no matter how severe his impairments). Substantial gainful activity is
work that is both substantial, i.e., involving “significant physical or mental
activities” even if done part-time or if the claimant does less, gets paid less, or has
less responsibility than when he worked before; and gainful, i.e., “work usually
done for pay or profit, whether or not a profit is realized.” 20 C.F.R. §
404.1572(a), (b). For a self-employed individual, “[s]upervisory, managerial,
advisory or other significant personal services” he or she performs may show that
individual is “able to do substantial gainful activity.” Id. § 404.1573(d).
Claimant alleges disability as of January 1, 1990. In order to recover
benefits, claimant must establish that he was disabled on June 30, 1990, the date
his status as an insured expired. In denying his application for benefits, the ALJ
determined that subsequent to the date he last met the insured status requirements,
claimant was self-employed in cattle farming and in a construction/truck
contracting business. Although claimant’s wife testified that she did most of the
work involved in the contracting business and a former employee testified that he
had dealt with claimant’s wife regarding job assignments, the ALJ found that
claimant had many years of experience in the construction and subcontracting
business and had been significantly involved.
-3- The claimant also testified that he had purchased twenty acres of farm land
and had between twelve and fifteen head of cattle in order to keep the grass down.
He testified that the cattle were “pretty well self taken care of,” R. Vol. II at 233,
but that, in the winter, he and his wife would use a small tractor to take hay to the
fields, see id. at 228. He testified that in 1994, he had someone pick up a number
of the cattle and take them to the stock yards where they were sold for
approximately $2,800. He claimed that he sold the cattle because he had more
than he needed for the grass he had. See id. at 229-30.
The ALJ found that claimant’s 1994 tax return indicated claimant’s
involvement in both businesses and showed gross income in excess of $100,000,
business expenses of $98,544, and a net profit of $2,968. His 1995 tax return
showed gross income of $14,576 with a net profit of $9,494. 1 The ALJ concluded
that although claimant’s wife may have been minimally involved in the operation
of the business, claimant was the “guiding force behind the business based on his
statements, his past experience in the business, and his tax returns.” R. Vol. II
at 18.
On appeal, claimant alleges that the ALJ’s dismissal of claimant’s testimony
that his wife solely ran the truck contracting business amounted to a finding of
1 The ALJ noted that the tax returns submitted by claimant were incomplete and the claimant did not comply with the ALJ’s request that he submit complete tax returns for the years 1992-1995. See R. Vol. II at 18.
-4- incredibility which was not supported by substantial evidence. He contends that
the ALJ failed to make the credibility analysis as required in Kepler v. Chater , 68
F.3d 387, 391 (10th Cir. 1995). We need not address this argument, however,
because, as claimant readily admits, the ALJ did not make a finding that claimant
was not credible. Instead, the ALJ concluded that claimant had not met his burden
of proving that he was not engaged in substantial gainful activity subsequent to
the date he last met the insured status requirements of the Social Security Act. In
reaching this conclusion, the ALJ appropriately considered claimant’s involvement
in the cattle farming and construction/truck contracting businesses, his mental and
physical contributions to these businesses, and his income from these businesses.
Next, claimant alleges that the ALJ did not perform an adequate legal
analysis of the regulations governing step one determinations. In order to
determine whether a self-employed claimant is performing substantial gainful
activity, the Commissioner examines the claimant's activities and their value to his
business, including (1) whether the claimant’s work activity in terms of “hours,
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F I L E D United States Court of Appeals Tenth Circuit UNITED STATES COURT OF APPEALS NOV 1 1999 FOR THE TENTH CIRCUIT PATRICK FISHER Clerk
JIMMY L. MORRIS,
Plaintiff-Appellant,
v. No. 99-7017 (D.C. No. CIV-98-183-S) KENNETH S. APFEL, Commissioner (E.D. Okla.) of Social Security,
Defendant-Appellee.
ORDER AND JUDGMENT *
Before BALDOCK , BARRETT , and McKAY , Circuit Judges.
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument.
* This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. The court generally disfavors the citation of orders and judgments; nevertheless, an order and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3. Claimant Jimmy L. Morris appeals from an order of the district court
affirming the Commissioner’s determination that he was not eligible for Social
Security disability benefits. The administrative law judge (ALJ) denied benefits at
step one, holding that claimant had engaged in substantial gainful activity
subsequent to the date he last met the insured status requirements. See Williams v.
Bowen , 844 F.2d 748, 750 (10th Cir. 1988). The Appeals Council denied review.
The district court adopted the recommendation of the magistrate judge affirming
the ALJ’s decision. On appeal, plaintiff argues the ALJ’s determination is not
supported by substantial evidence. We exercise jurisdiction pursuant to 28 U.S.C.
§ 1291 and 42 U.S.C. § 405(g), and we affirm.
“We review the [Commissioner’s] decision to determine whether [his]
factual findings are supported by substantial evidence in the record viewed as a
whole and whether [he] applied the correct legal standards. Substantial evidence
is such relevant evidence as a reasonable mind might accept as adequate to support
a conclusion.” Castellano v. Secretary of Health & Human Servs. , 26 F.3d 1027,
1028 (10th Cir. 1994) (citations and quotations omitted).
At step one of the sequential analysis, the claimant has the burden of
showing he is not performing substantial gainful activity. See 20 C.F.R.
§ 404.1571; Musgrave v. Sullivan , 966 F.2d 1371, 1376 (10th Cir. 1992) (claimant
has burden of proving disability); Fowler v. Bowen , 876 F.2d 1451, 1453 (10th
-2- Cir. 1989) (claimant engaged in substantial gainful activity will not be found
disabled no matter how severe his impairments). Substantial gainful activity is
work that is both substantial, i.e., involving “significant physical or mental
activities” even if done part-time or if the claimant does less, gets paid less, or has
less responsibility than when he worked before; and gainful, i.e., “work usually
done for pay or profit, whether or not a profit is realized.” 20 C.F.R. §
404.1572(a), (b). For a self-employed individual, “[s]upervisory, managerial,
advisory or other significant personal services” he or she performs may show that
individual is “able to do substantial gainful activity.” Id. § 404.1573(d).
Claimant alleges disability as of January 1, 1990. In order to recover
benefits, claimant must establish that he was disabled on June 30, 1990, the date
his status as an insured expired. In denying his application for benefits, the ALJ
determined that subsequent to the date he last met the insured status requirements,
claimant was self-employed in cattle farming and in a construction/truck
contracting business. Although claimant’s wife testified that she did most of the
work involved in the contracting business and a former employee testified that he
had dealt with claimant’s wife regarding job assignments, the ALJ found that
claimant had many years of experience in the construction and subcontracting
business and had been significantly involved.
-3- The claimant also testified that he had purchased twenty acres of farm land
and had between twelve and fifteen head of cattle in order to keep the grass down.
He testified that the cattle were “pretty well self taken care of,” R. Vol. II at 233,
but that, in the winter, he and his wife would use a small tractor to take hay to the
fields, see id. at 228. He testified that in 1994, he had someone pick up a number
of the cattle and take them to the stock yards where they were sold for
approximately $2,800. He claimed that he sold the cattle because he had more
than he needed for the grass he had. See id. at 229-30.
The ALJ found that claimant’s 1994 tax return indicated claimant’s
involvement in both businesses and showed gross income in excess of $100,000,
business expenses of $98,544, and a net profit of $2,968. His 1995 tax return
showed gross income of $14,576 with a net profit of $9,494. 1 The ALJ concluded
that although claimant’s wife may have been minimally involved in the operation
of the business, claimant was the “guiding force behind the business based on his
statements, his past experience in the business, and his tax returns.” R. Vol. II
at 18.
On appeal, claimant alleges that the ALJ’s dismissal of claimant’s testimony
that his wife solely ran the truck contracting business amounted to a finding of
1 The ALJ noted that the tax returns submitted by claimant were incomplete and the claimant did not comply with the ALJ’s request that he submit complete tax returns for the years 1992-1995. See R. Vol. II at 18.
-4- incredibility which was not supported by substantial evidence. He contends that
the ALJ failed to make the credibility analysis as required in Kepler v. Chater , 68
F.3d 387, 391 (10th Cir. 1995). We need not address this argument, however,
because, as claimant readily admits, the ALJ did not make a finding that claimant
was not credible. Instead, the ALJ concluded that claimant had not met his burden
of proving that he was not engaged in substantial gainful activity subsequent to
the date he last met the insured status requirements of the Social Security Act. In
reaching this conclusion, the ALJ appropriately considered claimant’s involvement
in the cattle farming and construction/truck contracting businesses, his mental and
physical contributions to these businesses, and his income from these businesses.
Next, claimant alleges that the ALJ did not perform an adequate legal
analysis of the regulations governing step one determinations. In order to
determine whether a self-employed claimant is performing substantial gainful
activity, the Commissioner examines the claimant's activities and their value to his
business, including (1) whether the claimant’s work activity in terms of “hours,
skills, energy output, efficiency, duties, and responsibilities, is comparable to that
of unimpaired individuals” in the same or a similar business; (2) if the work
activity is not comparable, whether, in terms of its value to the business, the
activity is worth [$500 per month]; or (3) whether the claimant provides “services
that are significant to the operation of business” and receives substantial income
-5- therefrom. See 20 C.F.R. § 404.1575(a). The Commissioner also considers
whether the claimant performs any “[s]upervisory, managerial, advisory or other
significant personal services.” Id. § 404.1573(d). Income alone is not
determinative, and the Commissioner will evaluate the claimant’s work activity
based on the value of claimant’s services to the business regardless of whether
claimant receives an immediate income. See id . § 404.1575(a).
In an attempt to more fully develop the record in this case, at the close
of claimant’s hearing, the ALJ requested that claimant submit his complete tax
returns for the years 1992-95. In so doing, the ALJ informed claimant that the
incomplete tax returns he had submitted were insufficient to support claimant’s
testimony, and could not support a favorable decision for claimant. See R. Vol. II
at 236. The record was held open for an additional forty-four days for submission
of these documents. Claimant did not submit the documents or request an
extension of time in which to do so.
The claimant bears the burden of proving he is not engaged in substantial
gainful activity. See Musgrave , 966 F.2d at 1376. The ALJ provided claimant
with ample opportunity to provide additional information the ALJ considered
crucial to a proper regulatory analysis of whether claimant was engaged in
substantial gainful activity. See R. Vol. II at 236. After claimant’s failure to
provide this information, he cannot now complain that the ALJ’s analysis was
-6- faulty. It is clear from our reading of the record that the ALJ’s analysis was as
thorough as possible with the information he was provided.
The ALJ’s decision clearly set forth the regulatory framework for
determining whether a claimant has engaged in substantial gainful activity. See id.
at 16. The ALJ discussed claimant’s testimony regarding his many years of
experience in the contracting business, the incomplete tax returns, and his finding
that claimant rendered significant mental and physical activities to the businesses.
We therefore determine that the ALJ reasonably concluded that subsequent to the
time he was last insured, June 30, 1990, claimant had been engaged in substantial
gainful activity, a conclusion that forecloses a finding of disability. See 20 C.F.R.
§ 404.1520(a), (b); SSR 88-25. This conclusion is supported by substantial
evidence.
Therefore, the judgment of the United States District Court for the Eastern
District of Oklahoma is AFFIRMED.
Entered for the Court
Monroe G. McKay Circuit Judge
-7-