Smuda v. Astrue

IN THE UNITED STATES DISRICT COURT
FOR THE DISTRICT OF NORTH DAKOTA
Ricky S., 	)
)
Plaintiff, 	) 	ORDER DENYING MOTION
) 	FOR REQUESTED RELIEF
v. 	)
)
Social Security Administration, 	) 	Case No.: 1:14-cv-00141
)
Defendant. 	)
On January 14, 2025, Plaintiff Ricky S. (“Plaintiff”) filed a motion to reopen the above-
captioned matter. (Doc No. 33). On January 17, 2025, the court denied Plaintiff’s motion finding
that “[i]f [Plaintiff] is taking issue with a decision issued by the Commissioner following remand,
his appropriate course of action would have been to exhaust his administrative remedies as outlined
by the Commissioner in the motion to remand and then appeal the Commissioner’s final decision
to the court.” (Doc. No. 34 at 3-4).
On May 30, 2025, Defendant Commissioner of Social Security (“Commissioner”) filed a
motion to reopen case and the Certified Administrative Record. (Doc. Nos. 36, 37). The
Commissioner contended that Plaintiff had a right to review the 2016 decision on remand without
the filing of a separate civil action, and requested the court reopen and reinstate the case so Plaintiff
could pursue his argument that a bankruptcy discharge granted to his mother, and representative
payee, absolved him of any obligation to reimburse the Social Security Administration for
overpayments it had made to him while he was imprisoned. The court granted the motion on June
23, 2025, ordering the parties to submit briefing detailing the overpayment and underpayment,
bankruptcy discharge, and any amount Plaintiff may still be owed or owe to the Social Security
Administration. (Doc. No. 39).
Case 1:14-cv-00141-CRH Document 43 Filed 11/05/25 Page 1 of 12

2
On July 9, 2025, Plaintiff filed a Motion for Requested Relief and supporting brief. (Doc.
Nos. 40, 42). On August 21, 2025, the Commissioner filed a response. (Doc. No. 41). This matter
is now ripe for the court’s review.
I. 	BACKGROUND
Plaintiff was deemed eligible to receive child’s insurance benefits under Title II of the
Social Security Act upon his father’s death since approximately 1974. (Doc. No. 37 at 258). When
Plaintiff attained the age of eighteen in 1984, the benefits terminated. (Id. at 172). However,
Plaintiff was again deemed eligible for child’s insurance benefits as a disabled adult child effective
in 1985 and has been continuously entitled to benefits since that time. (Id.).
Plaintiff has experienced several instances of incarceration or civil commitment throughout
his life. Specifically, Plaintiff has either been imprisoned or subject to civil commitment almost
continuously since his sexual assault conviction in 1987. (Doc. No. 41 at 2); see also In the Matter
of Commitment of Smuda, No. A21-0610, 2021 WL 5047496, at *2 (Minn. Ct. App. Nov. 1, 2021).
Plaintiff’s history includes two convictions for theft of a motor vehicle, two convictions for felony
assault on a correctional officer, and convictions relating to possession of stolen property, simple
assault, disorderly conduct, felony simple assault, gross sexual imposition, and gross sexual
imposition and aggravated assault. (Doc. No. 40 at 6). In 2004, upon completion of his sentences
for his stolen property and assault convictions, Plaintiff was civilly committed to the North Dakota
State Hospital as a sexually dangerous person. (Doc. No. 37 at 309). Plaintiff was again
incarcerated from 2011 through 2015 and then returned to the North Dakota State Hospital. (See
Id. at 11).
Plaintiff was released from the State hospital following a 2019 decision by the North
Dakota Supreme Court to terminate his civil commitment. Matter of R.A.S., 2019 ND 169, ¶ 12,
Case 1:14-cv-00141-CRH Document 43 Filed 11/05/25 Page 2 of 12

3
930 N.W.2d 162, 165. In 2019, Plaintiff was civilly committed as a person with mental illness in
Minnesota. In the Matter of Commitment of Smuda, No. A21-0610, 2021 WL 5047496, at *3
(Minn. Ct. App. Nov. 1, 2021). In 2020, a Minnesota court issued an order civilly committing
Plaintiff as a sexually dangerous person and sexually psychopathic personality. Id. at *4. As of
August 2025, Plaintiff has remained civilly committed in Minnesota. Smuda v. Futchko, No. CV
25-1721 (JRT/JFD), 2025 WL 2205929, at *1 (D. Minn. Aug. 4, 2025).
As relevant here, Plaintiff’s mother, Linda S. (“Linda S.” or “mother”), filed a Chapter 7
bankruptcy case in Minnesota in February of 2011. (Doc. No. 37 at 152). She was granted
discharge under Chapter 7 in June 2011. (Id. at 150).
Meanwhile, the Appeals Council reviewed the Administrative Law Judge’s (“ALJ”)
determination that pursuant to the sexually dangerous inmate provisions of 42 U.S.C. §
402(x)(1)(A)(iii), Plaintiff was ineligible for benefits while confined at the North Dakota State
Hospital beginning in 2004. (Id. at 142). In its April 2011 decision, the Appeals Council
determined that the requirements for suspension of benefits under the sexually dangerous person
provisions were not met as the court had committed Plaintiff as a sexually dangerous person after
he had served sentences for crimes which did not have an element of sexual activity. (Id. at 144).
Accordingly, the Appeals Council found Plaintiff eligible for payments beginning in May 2004,
the first full month after completing his sentences for convictions of possession of stolen property
and assault. (Id. at 145). The Appeals Council further provided that Plaintiff’s overpayment was
to be recalculated, any past-due benefits released after applying any underpayment due to his
overpayment, and a determination was to be made as to whether his benefits were to be suspended
effective April 2011 due to his incarceration. (Id.).
Case 1:14-cv-00141-CRH Document 43 Filed 11/05/25 Page 3 of 12

4
Plaintiff filed a civil action in this Court in November of 2014. On March 19, 2015, the
Commissioner filed a Motion to Remand to Commissioner of the Social Security Administration
for a reconsidered determination regarding the calculation of Plaintiff’s child’s insurance benefits
based on the Appeal Council’s 2011 decision. (Doc. No. 22). On April 14, 2015, this Court
remanded the matter for further administrative action pursuant to sentence six of 42 U.S.C. §
405(g).
On May 16, 2015, the Social Security Administration (“Administration”) issued a Notice
of Reconsideration. (Doc. No. 37 at 215). The notice provided that Plaintiff was underpaid an
amount of $5,695.80 for the period from January 1985 through April 2015. (Id. at 234). However,
the underpayment could not be paid due to Plaintiff’s incarceration, and Plaintiff was advised to
contact the Administration when released. (Id. at 235). As to Plaintiff’s argument that he was owed
a 	larger 	underpayment 	because 	his 	mother 	filed 	for 	and 	was 	granted 	bankruptcy, 	the
Administration noted as follows:
Section 204 of the Social Security Act and implementing Regulations state that
when an overpayment is not recovered from the overpaid person, the overpayment
may be withheld from any other benefits payable on the same Social Security
record. If a person is the representative payee for the beneficiary, the representative
payee is personally liable for the overpaid funds as well as the beneficiary.
Therefore, the overpayment may be recovered from the beneficiary or the
representative payee. Both the beneficiary and the representative payee are liable
for repayment of the overpayment.
A Bankruptcy ruling applies only to the person who is the party to the Bankruptcy
action. Any person who is considered by Social Security to be jointly liable for an
overpayment is not covered by the Bankruptcy action.
You stated that you should receive all of the benefits for May 2004 through March
2011 because your mother received all of your previous payments and not you.
These payments are benefits for you and you are responsible for any benefits that
are received either by you or by someone on your behalf. You have stated that the
Bankruptcy filed by your mother allows you to be paid all of these back benefits.
However, this is not the case. You were not the petitioner in the Bankruptcy Court
action. Below are worksheets that show the disabled adult child payments for the
beginning [of] January 1985 to the present.
Case 1:14-cv-00141-CRH Document 43 Filed 11/05/25 Page 4 of 12

5
(Id. at 217). The Administration further provided a table documenting the amounts Plaintiff was
actually paid and the amounts he should have been paid from January 1985 through April 2015.
(Id.). In total, Plaintiff was paid $132,489.30 and should have been paid $138, 185.10. (Id. at 234).
As a result, Plaintiff was underpaid a total of $5,695.80 for the period of January 1985 through
April 2015. (Id.).
In May of 2015, Plaintiff requested a hearing before an ALJ. (Id. at 237-38). A hearing was
scheduled for April 27, 2016, before ALJ Denzel Busick. (See Id. at 281-86). ALJ Busick issued
a partially favorable opinion on June 21, 2016, wherein he found Plaintiff was overpaid $32,532.00
during periods of incarceration where he was ineligible to receive benefits. (Id. at 10). ALJ Busick
further determined that Plaintiff was underpaid benefits in the amount of $38,227.80 during his
time housed at the North Dakota State Hospital throughout much of 2007 to 2011, as he was not
“incarcerated” or “confined in a correctional institution” and so did not qualify for suspension of
benefits. (Id. at 10-11). ALJ Busick also concluded that after offsetting the overpayment with the
underpayment, Plaintiff was owed $5,695.80. (Id. at 11). Finally, Plaintiff argued the overpayment
was discharged due to his mother declaring bankruptcy and he was entitled to the full
underpayment amount. (Id.). However, ALJ Busick noted that as Plaintiff’s mother was his
representative payee, they shared joint and several liability for the overpayment debt, but because
the underpayment encompassed the entire overpayment and left an underpayment balance, he
would owe no additional funds. (Id.). Plaintiff did not file optional exceptions with the Appeals
Council, nor did the Appeals Council assume jurisdiction. (See Doc. No. 41 at 5). Accordingly,
the ALJ’s decision became the final decision of the Commissioner. (Id.).
On January 14, 2025, Plaintiff filed a motion to reopen his case in this Court and the motion
was denied. (Doc. Nos. 33-34). On May 30, 2025, the Commissioner filed a motion to reopen the
Case 1:14-cv-00141-CRH Document 43 Filed 11/05/25 Page 5 of 12

6
case as “[Plaintiff] has the right to review of the Commissioner’s June 2016 decision on remand
without the filing of a separate civil action.” (Doc. No. 36 at 3-4). On June 23, 2025, the court
granted the Commissioner’s motion and ordered the parties to submit briefing. (Doc. No. 39).
Plaintiff filed his brief on July 9, 2025, and the Commissioner’s brief was filed on August 21,
2025. (Doc. Nos. 40-41).
II. 	LEGAL STANDARD
The court reviews the Commissioner’s final decision pursuant to 42 U.S.C. § 405(g). Upon
reviewing the record, the court may affirm, modify, or reverse the Commissioner’s decision, with
or without remanding the case for hearing. 42 U.S.C. § 405(g). To affirm, the court must find
substantial evidence appearing in the record as a whole supports the Commissioner’s decision. Id.;
see also Cruse v. Bowen, 867 F.2d 1183, 1184 (8th Cir. 1989); Emerson v. Kijakazi, No. 1:18-CR-
146, 2022 WL 17403569, at *6 (D.N.D. Dec. 2, 2022).1 “Substantial evidence is less than a
preponderance of the evidence and is such relevant evidence as a reasonable mind would find
adequate to support the Commissioner’s conclusion.” Igo v. Colvin, 839 F.3d 724, 728 (8th Cir.
2016) (internal quotations omitted). “If, after reviewing the record, the court finds it is possible to
draw two inconsistent positions from the evidence and one of those positions represents the ALJ’s
findings, the court must affirm the ALJ’s decision.” Dols v. Saul, 931 F.3d 741, 744 (8th Cir. 2019)
(quoting Goff v. Barnhart, 421 F.3d 785, 789 (8th Cir. 2005)); see Igo, 839 F.3d at 728.
III. 	DISCUSSION
A. Overpayment Obligation
Plaintiff first asserts he was relieved of any obligation for overpayments incurred during
his incarceration. The Commissioner disagrees, contending Plaintiff was liable for overpayments.
1 The court is cognizant of the fact Emerson was incorrectly labeled as a criminal case. It shall be cited to as filed with
the noted error.
Case 1:14-cv-00141-CRH Document 43 Filed 11/05/25 Page 6 of 12

7
The Commissioner may collect the overpayment of benefits as specified under 42 U.S.C.
§ 404(a).
With respect to payment to a person of more than the correct amount, the
Commissioner of Social Security shall decrease any payment under this subchapter
to which such overpaid person is entitled, or shall require such overpaid person or
his estate to refund the amount in excess of the correct amount, or shall decrease
any payment under this subchapter payable to his estate or to any other person on
the basis of the wages and self-employment income which were the basis of the
payments to such overpaid person, or shall obtain recovery by means of reduction
in tax refunds based on notice to the Secretary of the Treasury as permitted under
section 3720A of Title 31, or shall apply any combination of the foregoing.
42 U.S.C. § 404(a)(1)(A). Moreover, monthly benefits shall not be paid “to any individual for any
month ending with or during or beginning with or during a period of more than 30 days throughout
all of which such individual – (i) is confined in a jail, prison, or other penal institution or
correctional facility pursuant to his conviction of a criminal offense,” and “(iii) immediately upon
completion of confinement as described in clause (i) pursuant to conviction of a criminal offense
an element of which is sexual activity, is confined by court order in an institution at public expense
pursuant to a finding that the individual is a sexually dangerous person or a sexual predator or a
similar finding.” 42 U.S.C. § 402(x)(1)(A)(i),(iii).
Here, the record reflects Plaintiff was incarcerated for in excess of thirty continuous days
during each period of incarceration and was thus ineligible to receive benefits during that time as
dictated by 42 U.S.C. § 402(x)(1)(A)(i). However, the record also reveals that while Plaintiff was
ineligible for benefits during his periods of incarceration, he was incorrectly paid benefits when
benefits should have been suspended, and benefits were also inappropriately withheld during his
civil commitment when he was entitled to them. Notably, the Appeals Council determined that
Plaintiff did not meet the requirements for suspension of benefits under the sexually dangerous
person provisions of 42 U.S.C. § 402(x)(1)(A)(iii) at the time of his 2004 commitment as a sexually
Case 1:14-cv-00141-CRH Document 43 Filed 11/05/25 Page 7 of 12

8
dangerous person because Plaintiff’s underlying 2001 conviction2 did not contain an element of
sexual activity required for suspension of benefits. Because Plaintiff completed his sentence for
the conviction of gross sexual imposition in 1998 and was not immediately confined at the State
hospital upon completion of that sentence, but was confined to the State hospital upon completion
of a prison sentence for non-sexual offenses, Plaintiff did not qualify for suspension of benefits
upon his transition from incarceration to the North Dakota State Hospital from 2004 through 2011,
or since late 2015. (Doc. No. 37 at 10, 144).
Plaintiff incurred an overpayment of $32,532.00 from January 1984 through December
2015. (See Doc. No. 37 at 10). The regulations define an overpayment as follows:
An overpayment includes a payment in excess of the amount due under Title II of
the Act, a payment resulting from the failure to impose deductions or to suspend or
reduce benefits, a payment in an amount in excess of the amount to which the
individual is entitled, a payment resulting from the failure to terminate benefits, and
a payment where no amount is payable.
(Doc. No. 37 at 9); see also 20 C.F.R. § 404.501(a). Plaintiff incurred an overpayment after
receiving benefits during his incarceration when benefits should have been suspended. Pursuant to
42 U.S.C. § 404(a)(1)(A), as an overpaid person, the Administration was permitted to decrease
any payment to which Plaintiff was entitled or require Plaintiff to refund the amount in excess of
the correct amount. However, because benefits were to be withheld while Plaintiff was
incarcerated subject to 42 U.S.C. § 402(x)(1)(A)(i), but were not, and benefits were withheld
during his confinement to the North Dakota State Hospital when they should not have been, after
calculating the amount underpaid with the amount overpaid, the underpayment encompassed or
offset 	the 	entire 	overpayment, 	resulting 	in 	Plaintiff 	owing 	no 	additional 	money 	to 	the
Administration and leaving an underpayment balance of $5,695.80.
2 Plaintiff was incarcerated from 2001 through 2004 for convictions on charges of possession of stolen property and
assault. (See Doc. No. 37 at 144).
Case 1:14-cv-00141-CRH Document 43 Filed 11/05/25 Page 8 of 12

9
B. Bankruptcy Discharge
Plaintiff next argues that because his mother declared bankruptcy, the overpayment was
discharged, leaving him entitled to the entire underpayment. The Commissioner maintains that
Plaintiff is not entitled to the entire underpayment as the bankruptcy discharge did not extinguish
his obligation to repay the overpayments.
Under the Bankruptcy Code, a discharge:
(1) voids any judgment at any time obtained, to the extent that such judgment is a
determination of the personal liability of the debtor with respect to any debt
discharged under section 727, 944, 1141, 1228, or 1328 of this title, whether or not
discharge of such debt is waived;
(2) operates as an injunction against the commencement or continuation of an
action, the employment of process, or an act, to collect, recover or offset any such
debt as a personal liability of the debtor, whether or not discharge of such debt is
waived; and
(3) operates as an injunction against the commencement or continuation of an
action, the employment of process, or an act, to collect or recover from, or offset
against, property of the debtor….
11 U.S.C. § 524(a)(1)-(3). The Bankruptcy Code further provides that “[e]xcept as provided in
subsection (a)(3) of this section, discharge of a debt of the debtor does not affect the liability of
any other entity on, or the property of any other entity for, such debt.” 11 U.S.C. § 524(e).
The Administration’s Program Operations Manual (“POMS”) further dictates joint and
several liability for overpayment recovery. Joint and several liability is defined as “the equal
responsibility (shared liability) for repayment of an overpayment by two or more people.” POMS
GN 02205.007(A). Joint and several liability is presumed when making an overpayment
determination. POMS GN 02205.007(D). In situations where a debtor who filed for bankruptcy is
a representative payee, collection activity for the debtor’s personal debts is halted, but continues
for the beneficiary who did not file for bankruptcy. POMS GN 02215.185(E). When a debtor who
is jointly liable for an overpayment files for bankruptcy, collection activity is not stopped for any
other jointly liable individual or from those who have not filed for bankruptcy. (Id.). This is further
Case 1:14-cv-00141-CRH Document 43 Filed 11/05/25 Page 9 of 12

10
supported by regulations on liability for Title II overpayment recovery, wherein “[s]ection 204(a)
of the Social Security Act provides that an overpaid person (whether or not he or she still received
benefits), his or her representative payee, and any other person receiving benefits on the overpaid
person’s earnings record are liable (responsible) for repayment of an overpayment.” POMS GN
02205.001(A).
This is a situation where Plaintiff and his mother, acting as Plaintiff’s representative payee,
were jointly and severally liable for the overpayment amount.3 While Plaintiff’s mother did receive
a bankruptcy discharge, Plaintiff remains obligated to repay the overpayments as he was not a
debtor in the bankruptcy action. (See Doc. No. 37 at 150) (“Linda [S.] is granted a discharge under
section 727 of title 11, United States Code, (the Bankruptcy Code).”). As previously noted,
although Plaintiff’s representative payee, his mother, filed for and was granted a bankruptcy
discharge, under the applicable regulations, Plaintiff’s responsibility was not halted as he did not
file for bankruptcy, and he remained liable for the overpayments.
To the extent Plaintiff also argues the Administration was paid twice for the same
overpayment, once by his mother and once by himself, the record does not support such an
assertion. The record provides that in early 2011, Linda S. notified the Administration that she was
filing for bankruptcy. (Doc. No. 37 at 175). Later that same year, the Administration notified Linda
S. that she was no longer liable for Plaintiff’s overpayment of $67,102.00 as it had been recovered
by Plaintiff, and she was due an underpayment of $459.00. (Id.). Linda S.’s debt was discharged
through 	the 	bankruptcy 	proceeding 	sometime 	thereafter. 	(Id. 	at 	176). 	Consequently, 	the
3 The Court notes that the Administration identifies Linda S. as a contingently liable beneficiary. (See Doc. No. 37 at
172). “Any person receiving benefits on the same earnings record as the overpaid person is contingently liable for
recovery of the overpayment. Contingent liability is imposing the responsibility for repayment of an overpayment on
another person entitled on the same record when we are unable to recover from the primarily responsible person(s).”
POMS GN 02205.005(A). Here, while Linda S. is contingently liable as both she and Plaintiff were receiving benefits
on the same earnings record, she also acted as Plaintiff’s representative payee, which opens the door for joint and
several liability.
Case 1:14-cv-00141-CRH Document 43 Filed 11/05/25 Page 10 of 12

11
Administration did not collect the same overpayment twice, and Plaintiff remained liable for the
overpayments collected by the Administration.
C. Owed Benefits
Finally, Plaintiff contends he is owed full benefits from 2004 until 2011, plus interest and
taxes. Plaintiff specifically alleges he is owed $72,964.00, the $67,102.00 overpayment plus the
$5,694 underpayment, plus taxes and interest for a total of $85,000. He also requests “three times
the amount accidently to law.” (See Doc. No. 40 at 1).
Plaintiff does not cite any authority which authorizes the payment of interest and taxes on
his requested payment. Moreover, although Plaintiff asserts he is entitled to $85,000, he does not
provide argument as to how or why the Administration’s month-by-month comparison of the
amounts 	paid 	versus 	the 	amounts 	owed 	were 	incorrect, 	beyond 	his 	allegation 	that 	a
“Representative Mary” told him he was entitled to payments. (See Doc. No. 40 at 1). In calculating
Plaintiff’s overpayment amount, the Administration documented the amount Plaintiff was actually
paid and the amounts Plaintiff should have been paid per month from January 1985 through April
2015. (See Doc. No. 37 at 217-34). The Plaintiff does not put forth any evidence that the
Administration erred in its calculation and the Court is not inclined to make such a finding.
It is also worth noting that although Plaintiff argues the Administration was given
permission to take his benefits to pay back overpayments, the focus of the proceedings was on
whether Plaintiff was entitled to benefits during his time incarcerated and civilly committed, not
on the issue of bankruptcy. As noted in its decision, “[t]he issue before the Appeals Council is
whether the claimant is not eligible for payments beginning April 2004 based on the sexually
dangerous 	inmate 	provisions 	of 	Section 	202(x)(1)(A)(iii) 	of 	the 	Act 	(42 	U.S.C. 	§
402(x)(1)(A)(iii)).” (Doc. No. 37 at 142). This was further reiterated in ALJ Busick’s 2016
Case 1:14-cv-00141-CRH Document 43 Filed 11/05/25 Page 11 of 12

12
decision. (See Id. at 9) (“The issue is whether the claimant has been overpaid or underpaid benefits
under section 204(A)(1)(A) of the Social Security Act (Act).”). ALJ Busick found that because
Plaintiff was erroneously paid benefits when they should have been suspended, and benefits were
withheld 	when 	he 	was 	eligible 	to 	receive 	them, 	after 	offsetting 	the 	overpayments 	and
underpayments, Plaintiff was entitled to an underpayment of $5,695.80. (Id. at 11). As a final note,
ALJ Busick did not find the overpayment was discharged because while Plaintiff and his mother
had joint and several liability for the overpayment debt prior to his mother’s bankruptcy discharge,
Plaintiff continued to have liability for the overpayment amount, and at no time was there
information provided that indicated a discharge of Plaintiff’s debts occurred at the time of his
mother’s discharge or at any other date since then. (Id.). Accordingly, while Plaintiff is entitled to
the $5,695.80 underpayment, he is not entitled to “full benefits” from 2004 through 2011 or interest
and taxes on said benefits.
IV. 	CONCLUSION
For the reasons articulated above, Plaintiff’s Motion for Requested Relief (Doc. No. 42) is
DENIED, and the decision of the Commissioner is AFFIRMED.
IT IS SO ORDERED.
Dated this 5th day of November, 2025.
/s/ Clare R. Hochhalter
Clare R. Hochhalter, Magistrate Judge
United States District Court
Case 1:14-cv-00141-CRH Document 43 Filed 11/05/25 Page 12 of 12