1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 ROBERT M. ARONOVSKY, Case No. 19-cv-02356-VKD

9 Plaintiff,

ORDER RE CROSS-MOTIONS FOR

10 v. SUMMARY JUDGMENT

11 ANDREW M. SAUL, Re: Dkt. Nos. 23, 25 Defendant. 12

13 14 Plaintiff Robert Aronovsky appeals a final decision by the Commissioner of Social 15 Security (“Commissioner”)1 finding that he was ineligible for continued receipt of Supplemental 16 Security Income (“SSI”) for a three-year period based on a transfer of resources that the 17 Commissioner determined was made for less than fair market value.2 The parties have filed cross- 18 motions for summary judgment, and the matter was submitted without oral argument. Upon 19 consideration of the moving and responding papers, the relevant evidence of record, and for the 20 reasons set forth below, Mr. Aronovsky’s motion for summary judgment is denied, and the 21 Commissioner’s cross-motion for summary judgment is granted.3 22 23 24 1 Pursuant to Fed. R. Civ. P. 25(d), Andrew M. Saul is substituted for his predecessor, Nancy A. 25 Berryhill.

26 2 Mr. Aronovsky also receives disability benefits under Title II of the Social Security Act, 42 U.S.C. § 423, which are not at issue in the present appeal. 27 1 I. BACKGROUND 2 Since 1987, Mr. Aronovsky has been receiving SSI benefits under Title XVI of the Social 3 Security Act (“Act”), 42 U.S.C. § 1381, et seq. In October 2015, Mr. Aronovsky, along with his 4 two brothers, received an inheritance from a deceased relative. The facts underlying this appeal 5 are largely undisputed, and with respect to Mr. Aronovsky’s transfer of his inheritance, the parties 6 appear to agree that the administrative law judge (“ALJ”) correctly summarized the facts as 7 follows:

8 In October 2015, the claimant and his brothers, Stephen Aronovsky and Ken Aronovsky[,] inherited $160,000.00 each from the 9 distribution of The Aronovsky Family Trust. (Exhibit 1, 8, 10, Testimony). On October 29, 2015, the claimant withdrew 10 $159,800.00 from his checking account and transferred it to a joint account held by Stephen and Ken. (Exhibit 1/6, 11). The claimant 11 and his brothers, Steve and Ken[,] live in a house owned by their mother, Joan Green. (8, Testimony)[.] Ken is the claimant’s 12 appointed representative payee, and his brothers take care of him and their mother. (Exhibit 8, Testimony)[.] The claimant and his 13 brothers used their inheritance to pay off $401,889.27 of debt owed on the house, in which they live with their mother. (Exhibit 1/15-19, 14 8). 15 AR 10, 12-30, 71-72, 75-76B, 130; Dkt. No. 23 at 4; Dkt. No. 25 at 2. 16 On March 15, 2017, the Social Security Administration (“SSA”) notified Mr. Aronovsky 17 that beginning November 1, 2015 through October 1, 2018, he was deemed ineligible for SSI 18 payments “due to a transfer of your resource for less than it[s] fair market value.” AR 77. Mr. 19 Aronovsky’s request for reconsideration was denied. AR 85-88. Mr. Aronovsky then requested a 20 hearing with an ALJ, which was held on February 1, 2018. AR 127-145. On March 27, 2018 the 21 ALJ issued a decision, noting that a period of ineligibility for SSI benefits applies to transfers of a 22 resource for less than fair market value, unless a recognized exception applies. AR 10. The ALJ 23 concluded that Mr. Aronovsky was ineligible for SSI benefits during the three-year period in 24 question because he “used $159,800.00 of his $160,000.00 inheritance to pay part of his mother’s 25 outstanding mortgage,” but “[Mr. Aronovsky] did not have ownership interest in the house and did 26 not obtain any ownership interest.” AR 11. 27 The Appeals Council denied Mr. Aronovsky’s request for review of the ALJ’s decision. 1 II. LEGAL STANDARD 2 Pursuant to 42 U.S.C. § 405(g), this Court has the authority to review the Commissioner’s 3 decision to deny benefits. The Commissioner’s decision will be disturbed only if it is not 4 supported by substantial evidence or if it is based upon the application of improper legal 5 standards. Morgan v. Comm’r of Soc. Sec. Admin., 169 F.3d 595, 599 (9th Cir. 1999); Moncada v. 6 Chater, 60 F.3d 521, 523 (9th Cir. 1995). In this context, the term “substantial evidence” means 7 “more than a mere scintilla but less than a preponderance—it is such relevant evidence that a 8 reasonable mind might accept as adequate to support the conclusion.” Moncada, 60 F.3d at 523; 9 see also Drouin v. Sullivan, 966 F.2d 1255, 1257 (9th Cir. 1992). When determining whether 10 substantial evidence exists to support the Commissioner’s decision, the Court examines the 11 administrative record as a whole, considering adverse as well as supporting evidence. Drouin, 966 12 F.2d at 1257; Hammock v. Bowen, 879 F.2d 498, 501 (9th Cir. 1989). Where evidence exists to 13 support more than one rational interpretation, the Court must defer to the decision of the 14 Commissioner. Moncada, 60 F.3d at 523; Drouin, 966 F.2d at 1258. 15 III. DISCUSSION 16 SSI benefits are available only to persons who are aged, blind, or disabled, with income or 17 resources less than amounts prescribed by the Act. See 20 C.F.R. §§ 416.1100, 416.1205(c). To 18 be eligible for SSI, an individual such as Mr. Aronovsky is limited to $2,000 in resources. See 42 19 U.S.C. § 1382(a)(3)(B); 20 C.F.R. § 416.1205(c); see also 20 C.F.R. § 416.1201(a) (stating that 20 “resource means cash or other liquid assets or any real or personal property that an individual (or 21 spouse, if any) owns and could convert to cash to be used for his or her support and 22 maintenance.”). An inheritance generally is considered income that counts against SSI. See 42 23 U.S.C. § 1382a (providing that “income” includes both earned and unearned income); 20 C.F.R. 24 § 416.1121(g) (listing an inheritance as unearned income).4 25 26 4 An exception is made for inheritance sums that “are used to pay the expenses of the deceased’s 27 last illness and burial,” as defined by regulation. 20 C.F.R. §416.1121(g). There is no indication 1 The SSA’s Program Operations Manual System (“POMS”)5 provides for a period of 2 ineligibility for SSI, up to 36 months, for an individual who transfers resources for less than fair 3 market value. See POMS SI 01150.110; see also POMS SI 01150.007 (stating that giving away 4 cash to another person or using cash to buy something for another person are transfers that may 5 trigger a period of ineligibility for transferring a resource for less than fair market value, unless a 6 recognized exception applies). Relevant to the present appeal, Mr. Aronovsky points out that the 7 Act provides that a claimant shall not be deemed ineligible for benefits where there is a 8 “satisfactory showing” made in accordance with the Commissioner’s regulations that the resources 9 in question were transferred “exclusively for a purpose other than to qualify for benefits”: 10 An individual shall not be ineligible for benefits under this 11 subchapter by reason of the application of this paragraph to a disposal of resources by the individual or the spouse of the 12 individual, to the extent that . . . a satisfactory showing is made to the Commissioner of Social Security (in accordance with regulations 13 promulgated by the Commissioner) that . . . the resources were transferred exclusively for a purpose other than to qualify for 14 benefits under this subchapter. 15 42 U.S.C. § 1382b(c)(1)(C)(iii)(II); see also Dkt. No. 23 at 5.6 The Commissioner’s regulations 16 provide that a transfer of resources for less than fair market value gives rise to a presumption that 17 the transfer was made for the purpose of establishing eligibility for SSI, which may be rebutted 18 where the claimant provides “convincing evidence” that the resource was transferred exclusively 19 for some other reason: 20 5 Although the POMS “does not impose judicially enforceable duties on either this court or the 21 ALJ,’” Kennedy v. Colvin, 738 F.3d 1172, 1177 (9th Cir. 2013) (quoting Carillo-Years v. Astrue, 671 F.3d 731, 735 (9th Cir. 2011)), the Court cites the POMS here for context regarding the SSA’s 22 consideration of transfers of resources.

23 6 Section § 1382b also provides that an individual will not be deemed ineligible for benefits in situations involving transfers of title to a home or transfers to a spouse or trust. 42 U.S.C. 24 § 1382(c)(1)(C)(i), (ii). Neither of those situations applies here. Mr. Aronovsky has presented no argument regarding other portions of § 1382b(c)(1)(C)(iii), which provide an exception based on 25 evidence that “the individual who disposed of the resources intended to dispose of the resources either at fair market value, or for other valuable consideration” or where “all resources transferred 26 for less than fair market value have been returned to the transferor.” Id. § 1382b(c)(1)(C)(iii)(I), (III). Although the Act also provides an exception where “the Commissioner determines, under 27 procedures established by the Commissioner, that the denial of eligibility would work an undue 1 (e) Presumption that resource was transferred to establish SSI or 2 Medicaid eligibility. Transfer of a resource for less than fair market value is presumed to have been made for the purpose of establishing 3 SSI or Medicaid eligibility unless the individual (or eligible spouse) furnishes convincing evidence that the resource was transferred 4 exclusively for some other reason. Convincing evidence may be pertinent documentary or non-documentary evidence which shows, 5 for example, that the transfer was ordered by a court, or that at the time of transfer the individual could not have anticipated becoming 6 eligible due to the existence of other circumstances which would have precluded eligibility. The burden of rebutting the presumption 7 that a resource was transferred to establish SSI or Medicaid eligibility rests with the individual (or eligible spouse). 8 9 20 C.F.R. § 416.1246(e). The SSA’s POMS further provide that “[i]f the individual had some 10 other purpose for transferring the resource, but an expectation of establishing or maintaining SSI 11 eligibility was also a factor, the period of ineligibility would apply.” POMS SI 01150.125(B). 12 Mr. Aronovsky argues that his transfer of funds was made for a purpose other than 13 maintaining SSI eligibility—namely, to make a mortgage payment and avoid foreclosure of his 14 mother’s home where he lives with his family. The ALJ found that “[t]he record supports the 15 testimony at the hearing and the statements in the record that the claimant used $159,800.00 of his 16 $160,000.00 inheritance to pay part of his mother’s outstanding mortgage.” AR 11. She further 17 credited Stephen Aronovsky’s testimony and Ken Aronovsky’s statements regarding Mr. 18 Aronovsky’s and his family’s communal living arrangements, noting that Mr. Aronovksy is a 19 “sympathetic individual” who “continues to rely on his family for support.” Id. 20 Nevertheless, the ALJ found “no legal basis to circumvent the provisions of [42 U.S.C. 21 § 1382b]” regarding transfers for less than fair market value where Mr. Aronovsky obtained no 22 ownership interest in the property. Id. In reaching that conclusion, the ALJ rejected Mr. 23 Aronovsky’s arguments, based on POMS SI ATL 01110.516, that he established an equitable life 24 estate in the property. AR 11. The ALJ reasoned that the cited POMS applies in the Atlanta, 25 Georgia region, and not in California, and that Mr. Aronovksy’s circumstances do not meet the 26 requirements of that POM in any event. Id. Mr. Aronovsky does not appear to challenge that 27 conclusion and has provided this Court with no argument or any basis to find that the ALJ’s 1 Mr. Aronovsky instead contends that the ALJ misconstrued 42 U.S.C. § 1382b and 2 determined that the three-year penalty applied based solely on a transfer of resources for less than 3 market value, without considering that the transfer was made for a reason other than maintaining 4 SSI eligibility. Here, Mr. Aronovksy argues that because “the ALJ specifically determined that 5 [he] ‘used $159,800.00 of his $160,000.00 inheritance to pay part of his mother’s outstanding 6 mortgage,’ the ALJ should have realized that the assessed penalty should not apply because the 7 resource was transferred for a purpose other than maintaining SSI eligibility.” Dkt. No. 23 at 5 8 (quoting AR 11). As discussed above, however, § 1382b together with the Commissioner’s 9 regulations require “convincing evidence” demonstrating that the transfer in question was made 10 “exclusively” for a reason other than maintaining SSI eligibility. See 42 U.S.C. 11 § 1382b(c)(1)(C)(iii)(II); 20 C.F.R. § 416.1246(e). The SSA’s POMS suggests that such evidence 12 includes proof that the subject transfer was not within the individual’s control; that the individual 13 could not have anticipated SSI eligibility at the time of the transfer; that there was an unexpected 14 loss of other resources or income which would have precluded SSI eligibility; or that at the time of 15 the transfer, the transferred resource would have been an excluded resource under the SSI rules. 16 POMS SI 01150.125(C). Mr. Aronovsky has pointed to no such evidence in the record. Having 17 reviewed the record, the Court finds that the ALJ’s decision is supported by substantial evidence. 18 Hearing testimony by Stephen Aronovsky, for example, indicates that not all of Mr. Aronovsky’s 19 $159,800.00 was needed for the mortgage payment, and that the remainder of his funds was used 20 “for expenses, property taxes, maintenance of the house, things like that,” although the particular 21 expenses and amounts paid were not specified. AR 141; see also AR 31-68. On this record, and 22 in view of the applicable standard of review, this Court cannot find that the ALJ erred in 23 concluding that the imposition of a three-year period of ineligibility was appropriate. 24 IV. CONCLUSION 25 Based on the foregoing, the Court denies Mr. Aronovsky’s motion for summary judgment 26 and grants the Commissioner’s motion for summary judgment. The Clerk shall enter judgment

27 1 accordingly and close this file. 2 IT IS SO ORDERED. 3 Dated: September 30, 2020 4

VIRGINIA K. DEMARCH

6 United States Magistrate Judge 7 8 9 10 11 12

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