FSM SUPREME COURT TRIAL DIVISION

Cite as Alokao v. FSM Social Sec. Admin., 16 FSM Intrm. 271 (Kos. 2009)

[16 FSM Intrm 271]

CIVIL ACTION NO. 2007-2001

Decided: January 27, 2009

APPEARANCES:

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HEADNOTES

    When both parties submitted, in support of their respective positions, a substantial number of exhibits culled from the administrative record and the plaintiff’s last response included other exhibits, a motion for judgment on the pleadings will be treated as one for summary judgment and disposed of as provided in Rule 56. Alokoa v. FSM Social Sec. Admin., 16 FSM Intrm. 271, 276 (Kos. 2009).

    When the court reviews appeals from Social Security decisions, the findings of the Social Security Board as to the facts will be conclusive if supported by competent, material, and substantial evidence. Alokoa v. FSM Social Sec. Admin., 16 FSM Intrm. 271, 276 (Kos. 2009).

    Actual dependency upon the adoptive parent is a prerequisite for the adopted minor to receive surviving child Social Security benefits after the adoptive parent’s death. Alokoa v. FSM Social Sec. Admin., 16 FSM Intrm. 271, 276 n.2 (Kos. 2009).

    On an appeal from an FSM administrative agency, the court, under the Administrative Procedures Act, must hold unlawful and set aside agency actions and decisions found to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; or contrary to constitutional right, power, privilege, or immunity; or without substantial compliance with the procedures required by law. These Administrative Procedures Act provisions apply to all agency action unless Congress by law provides otherwise and it applies to the Social Security Administration appeals because no part of the Social Security Act provides otherwise. Alokoa v. FSM Social Sec. Admin., 16 FSM Intrm. 271, 276 (Kos. 2009).

    When a party’s summary judgment motion has been denied as a matter of law and it appears that the nonmoving party is entitled to judgment as a matter of law, the court may grant the nonmoving party summary judgment in the absence of a cross motion for summary judgment if the original movant has had an adequate opportunity to show that there is a genuine issue and that his nonmoving opponent is not entitled to judgment as a matter of law. Alokoa v. FSM Social Sec. Admin., 16 FSM Intrm. 271, 277 (Kos. 2009).

    A claims denial made before the due date to submit supporting documents is arbitrary and capricious and will be vacated by the court and remanded for further proceedings. Alokoa v. FSM Social Sec. Admin., 16 FSM Intrm. 271, 277 (Kos. 2009).

    Social Security does not have to wait 2½ years for claimants to supply supporting documentation for a benefits claim before it may rule on an application. Nor is Social Security to be at the mercy of claimants who promise supporting documents at some indefinite future date but fail to provide them with reasonable promptness. Alokoa v. FSM Social Sec. Admin., 16 FSM Intrm. 271, 277 (Kos. 2009).

    If it is determined that the father and mother lived in the same household as the grandfather and grandmother and that the father’s income was greater than the grandfather’s and the father contributed to the support of the household, Social Security would be completely justified in finding that there was no dependency by the grandsons upon the grandfather. Alokoa v. FSM Social Sec. Admin., 16 FSM Intrm. 271, 277 (Kos. 2009).

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COURT’S OPINION

MARTIN G. YINUG, Associate Justice:

    This comes before the court on the defendant’s Motion for Judgment on the Pleadings, filed on August 11, 2008, with supporting exhibits; Plaintiff’s Response to Motion for Judgment on the Pleadings, filed on August 18, 2008, with supporting exhibits; Defendant’s Reply to Plaintiff’s Response to Motion for Judgment on the Pleadings, filed on August 26, 2008; and Plaintiff’s Response to Motion for Judgment on the Pleadings and Memorandum of Law in Support of Plaintiff’s Opposition to Defendant’s Reply, filed on September 4, 2008, with supporting affidavit and exhibits.

I. Chronology

    In 1995, Takeo Alokoa, having reached 60 years of age, retired and began receiving FSM Social Security Administration ("Social Security") retirement benefits. By 2004, his benefits were $184.21 per month.

    On March 16, 1995, Takeo Alokoa’s son, Careston T. Alokoa, and Careston’s wife Tulpe C. Alokoa had a son named Nena Careston Alokoa, and on August 31, 2001, they had another son named Careston Careston Alokoa.

    Takeo Alokoa died on March 27, 2004. On April 20, 2004, Takeo’s wife, Sra A. Alokoa applied for social security benefits for herself as the surviving spouse of retired wage-earner Takeo Alokoa and for Nena T. Alokoa and Careston T. Alokoa, Jr. (the grandsons), as surviving adopted children of Takeo Alokoa. A note was written on the application that stated, "supporting documents for adopted children not available at this time, will be provided when ready." Also on April 20, 2004, Social Security sent Sra T. Alokoa a "request for claim documents," that stated that "[t]he following information/documents are required to complete your claim for Social Security Benefits:" and listed "adoption decree/petition, school record, hospital record, census record, family record, and blue card" with the notation that they were sought "for adopted children." The request, labeled "First Request" gave her until May 31, 2004, to provide the requested documents. Sra Alokoa signed the request, acknowledging that the claim procedure as outlined on the form had been explained to her.

    In April, 2004, Sra T. Alokoa hired Micronesian Legal Services Corporation ("MLSC") to get court confirmation of the alleged customary adoption of the two grandchildren by her and Takeo Alokoa. Also, on April 6, 2004, Nena Careston Alokoa and Careston Careston Alokoa were issued birth certificates.

    On May 25, 2004, Social Security sent Sra A. Alokoa a letter denying the application for the surviving child benefits because there were "[n]o supporting documents of dependency." The letter also stated that any applications for benefits that were denied may be appealed to the Social Security Board of Trustees "within 60 calendar days of date of this notice." This denial was six days before the deadline set by the April 20, 2004 notice.

    On May 28, 2004, Social Security sent to Sra Alokoa, at the same address the May 25, 2004 denial was addressed, a letter welcoming her to Social Security with an enclosed check for benefits due her as a surviving spouse. Her benefits were $110.53 per month.

    On July 13, 2004, MLSC filed two petitions (Civ Nos. 93-04 and 94-04) on behalf of Sra Alokoa and the deceased Takeo Alokoa asking the Kosrae State Court to confirm customary adoptions by her and her deceased husband of their two grandsons and a change in their grandsons’ names. Hearings were held on August 20, 2004. On August 25, 2004, the Kosrae State Court entered two decrees confirming the customary adoptions of the two grandsons and changing their names from Nena Careston Alokoa and Careston Careston Alokoa to Nena Takeo Alokoa and Careston Takeo Alokoa, respectively. Each decree also stated,

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evidence presented, there are significant concerns that the subject minor has not been dependent upon the Petitioner and the late Takeo Alokoa since infancy, as the evidence presented actually support statutory adoption rather than customary adoption. Nonetheless it is with great reluctance that I granted confirmation of customary adoption in this matter.

    Decree Confirming Customary Adoption and Name Change at 2-3 (Civ. Nos. 93-04, 94-04, Aug. 25, 2004). Neither decree stated exactly when the customary adoption concerned started.

    On September 2, 2004, Social Security sent Sra Alokoa a second "request for claim documents," stating that "[t]he following information/documents are required to complete your claim for Social Security Benefits:" and listed "petition[s] # 93-04 & 94-04, school record, hospital record, etc. (Any document that will support dependency.)" The request form asked that she provide the documents by October 30, 2004. This request was also labeled "First Request." (This form, like the other document request forms, had four boxes which could be checked either: "First Request," "Second Request," "Third Request," or "Final Notice.") Sra Alokoa signed the request, acknowledging that the claim procedure as outlined on the form had been explained to her.

Sra Alokoa died on July 11, 2005.

    In 2006, the grandsons (11 year-old Nena and 5-year-old Careston) applied for social security numbers. Nena’s application listed his biological parents Tulpe and Careston as his parents, but those names were then crossed out and his grandparents listed as his parents. Nena signed his own application. On grandson Careston’s application, the grandparents were named as his parents.

    On March 3, 2006, Careston T. Alokoa (the father) applied for surviving child’s social security benefits for Nena T. Alokoa and Careston T. Alokoa, as the surviving adopted children of the late Takeo Alokoa and listed their [new] social security numbers. The claim form showed that father Careston T. Alokoa was employed at Kosrae Utility Corporation at $430 per month. Also on March 3, 2006, Social Security gave Careston T. Alokoa (the father) a "request for claim documents," stating that "[t]he following information/documents are required to complete your claim for Social Security Benefits:" and listed "appointment of guardian, decree of adoption # 93-04 & 94-04, census record, blue card for num." and asking that he provide the documents by "3/31/05" [sic]. This was a "first request." Careston T. Alokoa (the father) signed the request form, acknowledging that the outlined claim procedure had been explained to him.

    Also on March 3, 2006, the Kosrae branch of the Statistics Office wrote to the Social Security Kosrae branch office stating that the "late Takeo Alokoa’s household was enumerated during the 2000 FSM Census Population and Housing. This household has a total of 9 members. Nena K. Alokoa was among the members. He’s known as a grandson to the head of the household as indicated in the 2000 FSM Census enumeration." Attached to the letter is part of the census form which lists the nine household members. Among the nine listed are Takeo Alokoa [grandfather], Sra Alokoa [grandmother], Kareston Alokoa [father], Tulpe Alokoa [mother], Nena Alokoa [grandson], and four other persons with the surname Alokoa. (Grandson Careston was not listed since he was not yet born.)

    In March, 2006, father Careston Alokoa hired MLSC to represent him in getting a court order granting him guardianship of his sons. On August 29, 2006, the Kosrae State Court issued two orders

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of guardianship appointing Tulpe and Careston T. Alokoa as guardians for minors Nena T. Alokoa and Careston T. Alokoa (their natural sons).

    On September 13, 2006, the Kosrae branch office forwarded Careston T. Alokoa’s March 3, 2006 claim with the supporting documents that had been provided up until then. On September 26, 2006, Social Security sent Careston T. Alokoa a letter denying the surviving children benefits claim on the ground that the "[d]enial decision of May 25, 2004 [wa]s final after 60 days."

    In October, 2006, Careston T. Alokoa hired MLSC to pursue an appeal of the Social Security Administrator’s September 26, 2006 decision. On November 17, 2006, MLSC wrote to the Social Security Board seeking review of that decision. On December 8, 2006, counsel for Social Security wrote a letter to MLSC stating that the Board had referred the matter to him and that any further review of the claim was time-barred by the 60-day limitation period. Sixty days later, on February 6, 2007, this suit was filed as an appeal from the December 8, 2006 Social Security decision.

II. Parties’ Positions

    Movant Social Security asserts that it is entitled to judgment because Careston T. Alokoa’s March 3, 2006 claim is for the same children and on the same basis as Sra Alokoa’s April 20, 2004 claim that had been denied on May 25, 2004 and that any further review of that denial is time-barred. Social Security asserts that the only difference between Sra Alokoa’s 2004 claim and Careston Alokoa’s 2006 claim is that between the two claims Sra Alokoa obtained Kosrae State Court customary adoption and name change decrees. Social Security contends that the state court decrees do not support the relief requested in that the facts before the state court indicated that the minors had not been dependent upon Takeo Alokoa and Sra Alokoa and that they appeared to grant the confirmation only out of sympathy for the petitioner.

    The plaintiff contends that this action is not time-barred because, in his view, the May 25, 2004 benefits denial was ineffective since the supporting documents had not yet been provided so that once they were provided by the plaintiff in September, 2006, the September 26, 2006 denial was the only effective denial of the original April, 2004 benefits claims. The plaintiff further contends that the April 2004 application was not complete until September 5, 2006, since the April 2004 application stated that its supporting documents were not available and would be provided when ready and because all the supporting documents were not ready until September, 2006. The plaintiff asserts that Sra Alokoa always considered the April 2004 application as an ongoing process. The plaintiff also notes that the May 25, 2004 denial was issued before the original due date for submission of the supporting documents. The plaintiff asks that the court remand the matter with instructions that the Social Security Administrator rule on the merits of whether the grandsons were dependent on the late Takeo Alokoa, thus granting them their dues process rights for an opportunity to be heard.

    In its Reply, Social Security challenges the plaintiff’s suggestion that Sra Alokoa did not have notice of the May 25, 2004 denial and asserts that the plaintiff should have been aware of the notice because MLSC was Sra’s counsel at the time. Social Security again noted that the State Court confirmation decrees do not support the relief requested since the state court questioned whether there was any actual dependency and also notes that if an appeal of the May 25, 2004 denial had been timely made, the state court decrees would have been available for the Social Security Board’ use.

    The plaintiff responded to Social Security’s reply with internal MLSC documents showing that Sra Alokoa had hired them to represent her in the adoption proceedings and not for the Social Security benefits claims and thus contends that Social Security’s assertion that MLSC represented Sra Alokoa on the grandsons’ benefits claims violated FSM Civil Procedure Rule 11 (but stops short of asking for

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Rule 11 sanctions). The plaintiff contends that the Social Security Administrator made the May 25, 2004 denial on an incomplete application and that the Administrator should be bound by the acts of his agents, the Kosrae branch office, in giving Sra Alokoa time to complete the application by supplying supporting documents for her grandsons’ benefit claims. The basis for this point is his assumption that the April 2004 application was filled out by a Social Security employee who was the one who wrote that the supporting documents would be supplied when ready.

III. Motion for Judgment on the Pleadings

    Social Security moves for judgment on the pleadings and Alokoa opposes. Both parties submitted, in support of their respective positions, a substantial number of exhibits culled from the administrative record and Alokoa’s last response includes other exhibits. "If, on a motion for judgment on the pleadings, matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56." FSM Civ. R. 12(c); cf. Richmond Wholesale Meat Co. v. George, 11 FSM Intrm. 86, 88 (Kos. 2002).

IV. Analysis

    Alokoa seeks review of the previous Social Security decisions denying surviving children benefits for minors Nena T. Alokoa and Careston T. Alokoa and asks that the court remand the matter for the Social Security Administrator to rule on what he now asserts is the surviving children’s completed application. When the court reviews appeals from Social Security decisions, "[t]he findings of the Board as to the facts, if supported by competent, material, and substantial evidence, shall be conclusive." 53 F.S.M.C. 708. The only fact determined by the Social Security Board is that on May 25, 2004, there were no supporting documents of dependency. That fact is conclusive. It, however, is not dispositive.

    That factual determination was made six days before the May 31, 2004 due date set by the April 20, 2004 first request for claim documents. A second "first request" for claim documents set October 30, 2004, as the due date to provide claim documents. There were no second, third, or (fourth and) final requests made for supporting documents. The court therefore concludes that the May 25, 2004 denial was premature and capricious and thus a denial of due process since it was made before the first due date to submit supporting documents.

    On an appeal from an FSM administrative agency, the court, under the Administrative Procedures Act, must "hold unlawful and set aside agency actions and decisions found to be: (i) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (ii) contrary to constitutional right, power, privilege, or immunity; . . . [or] (iv) without substantial compliance with the procedures required by law . . . ." 17 F.S.M.C. 111(3)(b). These Administrative Procedures Act provisions "apply to all agency action unless Congress shall by law hereafter provide otherwise." 17 F.S.M.C. 113. It therefore applies to the Social Security Administration because no part of the Social Security Act provides otherwise.

    Since the May 25, 2004 denial, upon which the December 8, and September 26, 2006 denials rely for preclusive effect, was arbitrary and capricious, Social Security’s summary judgment motion

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must be denied. When a party’s motion for summary judgment has been denied as a matter of law and it appears that the nonmoving party is entitled to judgment as a matter of law, the court may grant summary judgment to the nonmoving party in the absence of a cross motion for summary judgment if the original movant has had an adequate opportunity to show that there is a genuine issue and that his nonmoving opponent is not entitled to judgment as a matter of law. Western Sales Trading Co. (Phils) v. B & J Corp., 14 FSM Intrm. 423, 425 (Chk. 2006); Phillip v. Marianas Ins. Co., 12 FSM Intrm. 464, 470 (Pon. 2004); Truk Continental Hotel, Inc. v. Chuuk, 6 FSM Intrm. 310, 311 (Chk. 1994).

    Accordingly, the factual chronology being undisputed and the plaintiff thus being entitled to a remand as a matter of law, the plaintiff will be granted summary judgment and the matter remanded to the Social Security Administration for it rule on the merits of the application for surviving children benefits for minors Nena T. Alokoa and Careston T. Alokoa. This holding must not be read to mean that Social Security must wait the 2½ years it supposedly took in this case to supply supporting documentation for a benefits claim before it may rule on an application. Nor is Social Security to be at the mercy of claimants who promise supporting documents at some indefinite future date but fail to provide them with reasonable promptness. The court only holds that a claims denial made before the due date to submit supporting documents is arbitrary and capricious and will be vacated by the court and remanded for further proceedings.

    As a matter of guidance to the parties, if, on remand, it is determined that the father and mother lived in the same household as the grandfather and grandmother and that the father’s income was greater than the grandfather’s and the father contributed to the support of the household, Social Security would be completely justified in finding that there was no dependency by the grandsons upon the grandfather.

V. Conclusion

    Accordingly, this matter is remanded to the Federated States of Micronesia Social Security Administration for the Administrator of that agency to rule on the merits of the application for surviving children benefits for minors Nena T. Alokoa and Careston T. Alokoa.

Foot Notes:

1.This document is attached to Alokoa’s September 4, 2008 Memorandum of Law as Exhibit 3. For some reason, it does not appear in the court’s copy of the Social Security record.

2.Actual dependency upon the adoptive parent is a prerequisite for the adopted minor to receive surviving child Social Security benefits after the adoptive parent’s death.

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