KATHY A. SURRATT-STATES, Chief United States Bankruptcy Judge
The matter before the Court is Plaintiffs Motion for Summary Judgment with Supporting Facts, Plaintiffs Memorandum of Law in Support of its Motion for Summary Judgment along with Declaration of Austin McDowell with exhibits, Defendants Response to Motion for Summary Judgment and Plaintiffs Reply to Debtor/Defendants Response to Plaintiffs Motion for Summary Judgment. The matter was taken under submission. Upon consideration of the record as a whole, the Court issues the following FINDINGS OF FACT:
The facts are not in dispute. On August 31, 2016, Debtor Sarah C. Evans (hereinafter Debtor) filed her Voluntary Petition for relief under Chapter 7 of the Bankruptcy Code. Plaintiffs Motion for Summary Judgment with Supporting Facts (hereinafter Plaintiffs Statement of Facts), ¶ 1. In Schedule E/F Debtor listed a debt owed to the Social Security Administration (hereinafter SSA) in the amount of $39,988.30. Debtors actual current overpayment debt is $35,567.69. Plaintiffs Statement of Facts, ¶ 2. On July 25, 2007, Debtor filed an application for Disability Insurance Benefits (hereinafter DIB) with the SSA. Plaintiffs Statement of Facts, ¶ 2. The DIB program provides for the payment of benefits to an insured individual who has contributed to the Social Security trust fund through the Social Security tax on her earnings. Plaintiffs Statement of Facts, ¶ 3. The benefits are made payable to individuals who prove through medical and other evidence that they are disabled, as defined by the Social Security Act, or unable to engage in any substantial gainful activity, by reason of medically determinable physical or mental impairment expected to result in death or which has lasted or can be expected to last, for a continuous period of at least 12 months. Plaintiffs Statement of Facts, ¶ 3. By filing a DIB application, Debtor agreed to a number of reporting responsibilities including notifying the SSA if Debtor returned to work as either an employee or self-employed person. Plaintiffs Statement of Facts, ¶ 4. During the interview process that occurs in connection with an application for DIB, the SSAs employee performing the interview explains the claimants reporting responsibilities, including the duty to report any return to work in order to avoid a benefits overpayment. Plaintiffs Statement of Facts, ¶ 4. In Debtors application summary, Debtor acknowledged that she agreed to notify [agency] of all events explained to me. Plaintiffs Statement of Facts, ¶ 4. Currently, the SSA has more than 60,000,000 total beneficiaries, and had anywhere from approximately 50,000,000 to 58,000,000 total beneficiaries between 2007 and 2013 of which 9,000,000 to 11,000,000 received DIB. Plaintiffs Statement of Facts, ¶ 4. For this reason, all disability beneficiaries are responsible for self-reporting their work activity to the SSA immediately and continue to be responsible for reporting their work activity immediately. Plaintiffs Statement of Facts, ¶ 4.
On November 11, 2007, the SSA notified Debtor that she was entitled to monthly disability benefits beginning June 2007. Plaintiffs Statement of Facts, ¶ 5. In its notice, dated November 11, 2007, the SSA informed Debtor that the decision to grant Debtor benefits was based on the information Debtor provided to the SSA and if this information changed, it could affect Debtors benefits. Plaintiffs Statement of Facts, ¶ 5. The SSAs notice referred Debtor to an attached pamphlet described Debtors duty to report information that might affect her benefits, including a need to inform the SSA if she started a job or became self-employed no matter how little [she] earn[ed]. Plaintiffs Statement of Facts, ¶ 5. The SSAs notice also warned Debtor that it was important to report to the SSA right away any changes that could affect her benefits eligibility. Plaintiffs Statement of Facts, ¶ 5. Shortly thereafter, the SSA began to pay DIB to Debtor. Plaintiffs Statement of Facts, ¶ 5.
In April 2011, the SSA contacted Debtor for information about any work she had done since she filed her application for DIB. Plaintiffs Statement of Facts, ¶ 6. The SSA contacted her because, for some beneficiaries, the SSA may review their cases from time to time to see if they remain eligible for benefits based on their medical condition. Plaintiffs Statement of Facts, ¶ 6. The SSA may also review information it receives from the Internal Revenue Service to see if any wages are appearing on the beneficiarys Social Security record. Plaintiffs Statement of Facts, ¶ 6. In this instance, earnings were appearing on Debtors Social Security record. Plaintiffs Statement of Facts, ¶ 6.
On June 6, 2011, in a Work Activity Report, Debtor stated that she worked for CVS Pharmacy from July 2010 through May 2011 as a customer service representative in the photo lab and as a cashier. Plaintiffs Statement of Facts, ¶ 7. During this time Debtor did not report her work for CVS Pharmacy to the SSA prior to the SSA contacting her about her case in 2011. Plaintiffs Statement of Facts, ¶ 7.
Debtor also worked as a cashier at a Home Depot store in 2009. Plaintiffs Statement of Facts, ¶ 8. Debtor also worked at Boscovs Department Store from about June 2009 to July 2010 in the home furnishings department and as a cashier. Plaintiffs Statement of Facts, ¶ 8. Debtor also worked at Claires Boutiques in 2009 as a cashier. Plaintiffs Statement of Facts, ¶ 8. Debtor worked as a manager for Hat World, a store at a shopping mall, in 2009. Plaintiffs Statement of Facts, ¶ 8. Debtor also worked for Verizon Wireless in 2007 and 2008. Plaintiffs Statement of Facts, ¶ 8. Debtor did not tell the SSA that she was working at any of these jobs at any time prior to the SSA contacting her about her work activity in 2011. Plaintiffs Statement of Facts, ¶ 8.
On June 6, 2011, the same day Debtor completed her Work Activity Report referred to above, Debtor started working at Sallie Mae as a customer service representative at a call center. Plaintiffs Statement of Facts, ¶ 9. Debtors work at Sallie Mae required discussing student loans with clients. Plaintiffs Statement of Facts, ¶ 9. Debtor did not report her work at Sallie Mae to the SSA until the SSA contacted Debtor about her case in 2013 and informed Debtor that earnings were showing up on Debtors Social Security Record. Plaintiffs Statement of Facts, ¶ 9. Debtor worked at Sallie Mae from June 2011 through February 2012. Plaintiffs Statement of Facts, ¶ 9. During or shortly after the time Debtor worked at Sallie Mae, Debtor also completed on-line college coursework and earned a medical assistant certificate. Plaintiffs Statement of Facts, ¶ 9.
In October of 2011, Debtor telephoned the SSA to report that she changed addresses. Plaintiffs Statement of Facts, ¶ 10. Debtor did not use this opportunity to report Debtors work activity that Debtor had performed since she stated receiving DIB, including the work at Sallie Mae Debtor was performing at the same time. Plaintiffs Statement of Facts, ¶ 10.
On December 3, 2011, the SSA sent Debtor a notice informing Debtor that because of her work activity she completed her nine-month trial work period. Plaintiffs Statement of Facts, ¶ 11. The trial work period is a nine-month period during which a DIB beneficiary may test her ability to work. Plaintiffs Statement of Facts, ¶ 11. It allows the beneficiary to earn an unlimited amount of money during those nine months while remaining eligible to receive DIB. Plaintiffs Statement of Facts, ¶ 11. If the beneficiarys work activity exceeds a certain amount in the tenth month, the beneficiary is deemed capable of performing substantial gainful activity, benefits will be suspended, and can potentially be terminated. Plaintiffs Statement of Facts, ¶ 11. Debtors trial work period ended in August 2008. Plaintiffs Statement of Facts, ¶ 11.
In its December 3, 2011 notice, the SSA also informed Debtor that because of Debtors work activity, Debtor had not been eligible to receive DIB in December 2008, June 2009 through July 2009, December 2009, October 2010 and December 2010. Plaintiffs Statement of Facts, ¶ 12. The notice also informed Debtor that she had received $9,134.30 too much in DIB due to Debtors work activity and that Debtor should repay the money. Plaintiffs Statement of Facts, ¶ 12. Furthermore, the notice also reminded Debtor of her responsibility to inform the SSA right away if Debtor returned to work or if Debtors job duties or pay changed. Plaintiffs Statement of Facts, ¶ 12. The SSAs notice also reminded Debtor that if Debtor failed to properly report such information to the SSA, Debtor might be overpaid again and have to repay any benefits Debtor was not due. Plaintiffs Statement of Facts, ¶ 12.
The SSAs December 3, 2011 notice also advised Debtor that Debtor had been entitled to DIB from January 2009 through May 2009, August 2009 through November 2009, January 2010 through September 2010, and in November 2010, because Debtor had not performed substantial work during those months. Plaintiffs Statement of Facts, ¶ 13. At the time the SSA issued this notice the SSA was unaware that Debtor was working for Sallie Mae. Plaintiffs Statement of Facts, ¶ 13. Therefore, the notice also informed Debtor that Debtor remained eligible for DIB from January 2011 and thereafter because the information available to the SSA at the time indicated that Debtor was no longer performing substantial work. Plaintiffs Statement of Facts, ¶ 13.
After Debtors overpayment was assessed, the SSA began partially withholding Debtors DIB in order to recover for Debtors overpayment. Plaintiffs Statement of Facts, ¶ 14. After the SSA began partially withholding Debtors benefits, Debtor called the SSAs toll-free number and an SSA representative explained the cause of Debtors overpayment. Plaintiffs Statement of Facts, ¶ 14.
Debtor worked for Sallie Mae from June 2011 through February 2012. Plaintiffs Statement of Facts, ¶ 15. Debtor did not report any of this work activity until March 2013, after the SSA contacted Debtor regarding Debtors case. Plaintiffs Statement of Facts, ¶ 15. On August 11, 2013, the SSA sent Debtor a notice informing Debtor that, due to Debtors work activity, Debtors eligibility for benefits had ceased in December 2011. Plaintiffs Statement of Facts, ¶ 15. Because of Debtors previously unreported work activity, Debtor had been overpaid $39,988.30, which represented the remaining balance of Debtors first overpayment combined with the overpayment Debtor accrued as a result of Debtors work activity from December 2011 and thereafter. Plaintiffs Statement of Facts, ¶ 15.
On August 31, 2016, Debtor filed a Voluntary Petition under Chapter 7 of the Bankruptcy Code and listed the overpayment debt in her schedules. Plaintiffs Statement of Facts, ¶ 16. The United States of America, on behalf of its agency, the SSA (hereinafter Plaintiff) filed this Adversary Proceeding on November 28, 2016, seeking determination of the dischargeability of the overpayment debt. Plaintiff brings this Motion for Summary Judgment stating there is no genuine issue of material fact and as a matter of law Plaintiff is entitled to the relief requested; thus this Court should grant its motion for summary judgment and determine that the overpayment debt is nondischargeable. Debtor admits that the facts are not in dispute and argues that the issue in this case is whether Debtor deliberately and knowingly made false representations to the SSA over several years that the overpayment occurred. Debtor also argues that she did not have the mental ability to make such a decision to commit such acts or to fulfill the requirements to the SSA due to diagnosis of several mental disorders, being under the care of several physicians, taking multiple medications and having been hospitalized several times due to mental instability. Debtor also argues that she tried to commit suicide three times and was in an abusive relationship, which raises questions about Debtors mental capacity to consider her obligations to the SSA.
JURISDICTION
This Court has jurisdiction over the parties and subject matter of this proceeding under 28 U.S.C. §§ 151, 157, and 1334 (2016) and Local Rule 81-9.01(B) of the United States District Court for the Eastern District of Missouri. This is a core proceeding under 28 U.S.C. § 157(b)(2)(I) (2016). Venue is proper in this District under 28 U.S.C. § 1409(a) (2016).
CONCLUSIONS OF LAW
A motion for summary judgment proceeds under Rule 56 of the Federal Rules of Civil Procedure, made applicable in Bankruptcy proceedings by Rule 7056. In re Gardner , 220 B.R. 63, 64 (Bankr. E.D. Mo. 1998). Summary judgment is proper if the pleadings, the discovery and disclosure materials on file, and the affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. In re Allen , 520 B.R. 281 (Bankr. E.D. Mo 2014) (quoting Torgerson v. City of Rochester , 643 F.3d 1031, 1042 (8th Cir. 2011) ). The movant has the burden of showing that there is no genuine issue of material fact, and that it is entitled to judgment as a matter of law. Id. A genuine issue exists if the record taken as a whole would lead a rational trier of facts to find for the nonmovant. Id. (citing Ricci v. DeStefano , 557 U.S. 557, 586, 129 S.Ct. 2658, 2677, 174 L.Ed.2d 490 (2009) ). Once the movant satisfies that burden, the burden shifts to the nonmovant. Id. For the nonmovant to satisfy its burden it must do more than simply show some metaphysical doubt exists as to the material facts; the nonmovant must come forward with specific facts showing that there is a genuine issue for trial. Id. (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586-587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986) ). A court must view all facts in a light most favorable to the nonmovant, and the nonmovant must receive the benefit of all reasonable inferences drawn from the facts. Bank of America, N.A. v. Armstrong (In re Armstrong) , 498 B.R. 229, 233 (8th Cir. BAP 2013) (citing Williams v. Marlar (In re Marlar) , 252 B.R. 743, 750 (8th Cir. BAP 2000).
Here, Plaintiff met the burden of proof as required by filing Plaintiffs Motion for Summary Judgment with Supporting Facts, Plaintiffs Memorandum of Law in Support of its Motion for Summary Judgment along with Declaration of Austin McDowell with exhibits. Debtor filed Defendants Response to Motion for Summary Judgment but did not raise any issues of material fact. The remaining issue to be determined by the Court is whether the evidence, when presented in a light most favorable to Debtor, entitles Plaintiff to judgment as a matter of law.
Under section 523(a)(2)(A), a debtor cannot obtain a discharge from any debt for money, property, services ... to the extent obtained by-false pretenses, a false representation, or actual fraud, other than a statement respecting the debtors or an insiders financial condition[.] 11 U.S.C. Section 523(a)(2)(A) (2016). Exceptions to discharge under § 523(a) are to be strictly and narrowly construed against the creditor and liberally in favor of the debtor to facilitate the debtors fresh start. In re Sulier , 541 B.R. 867, 877 (Bankr. D. Minn. 2015) (citing In re Thompson , 686 F.3d 940, 944 (8th Cir. 2012) (citations omitted) ). Section 523(a)(2)(A) provides three distinct, but often intermingled, bas[e]s for nondischargeability: false pretenses, a false representation or actual fraud. In re C.R. Fields , III, 544 B.R. 156, 172 (Bankr. E.D. Ark. 2016) (citation omitted).
To prevail under section 523(a)(2)(A), a creditor must prove the following elements by a preponderance of the evidence:
1. The debtor made a representation.
2. The debtor knew the representation was false at the time it was made.
3. The representation was deliberately made for the purpose of deceiving the creditor.
4. The creditor justifiably relied on the representation.
5. The creditor sustained the alleged loss as the proximate result of the representation having been made.
In re Days , 540 B.R. 423, 428 (Bankr. E.D. Mo. 2015) (citing In re Maurer , 256 B.R. 495, 500 (8th Cir. BAP 2000) ; Grogan v. Garner , 498 U.S. 279, 286-87, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991) ).
A direct misrepresentation includes oral or written assertions and any other conduct that amounts to an assertion not in accordance with the truth. In re Sulier , 541 B.R. 867, 878 (Bankr. D. Minn. 2015) (quoting In re Moen , 238 B.R. 785, 791 (8th Cir. BAP 1999) ). A representation that is made under circumstances where a debtor should have known of the falsity is one made with reckless disregard for the truth satisfies the knowledge requirement. In re Sulier , 541 B.R. at 879 (quoting In re Moen , 238 B.R. 785, 791 (8th Cir. BAP 1999) ). Further, [i]n assessing a debtors knowledge of the falsity of the representation ..., the Court must consider the knowledge or experience of the debtor. In re Moen , 238 B.R. 785, 791 (8th Cir. BAP 1999) (quoting In re Duggan , 169 B.R. 318, 324 (Bankr. E.D.N.Y. 1994) ). The intent element of § 523(a)(2)(A) does not require a finding of malevolence or personal ill-will; all it requires is a showing of an intent to induce the creditor to rely and act on the misrepresentations in question. In re Swan , 156 B.R. 618, 623 n. 6 (Bankr.D.Minn.1993) (citing In re Hunter , 771 F.2d 1126, 1129 (8th Cir.1985) ). Whether a creditor justifiably relies on a representation depends on the qualities and characteristics of the particular [creditor], and the circumstances of the particular case. In re Days , 540 B.R. 423, 429 (Bankr. E.D. Mo. 2015) (quoting Field v. Mans , 516 U.S. 59, 71, 116 S.Ct. 437, 444, 133 L.Ed.2d 351 (1995) ).
The first and second element under section 523(a)(2)(A) is whether Debtor made a representation and that the representation was false when made. Debtor applied for DIB on July 25, 2007 and began receiving benefits in November 2007. In Debtors application for DIB, Debtor made written assertions attesting that Debtor was disabled, as defined by the Social Security Act, or unable to engage in any substantial gainful activity, and thus entitled to disability benefits. Further, as a part of the DIB application process, Debtor participated in an interview where Debtor orally represented her inability to work and her disability status. Debtor was aware that the SSAs decision to award Debtor disability benefits was based on Debtors representations in her application and interview, and an ongoing requirement to report any changes in her work status or information relevant to her benefits application. Here, Debtor contends that she did not know her representations were false at the time they were made. Debtor states to the Court that Debtor suffered from mental disorders during the time Debtor received benefits. It is Debtors contention that she did not have the mental capacity to know her representations were false at the time Debtor made them. Even if the Court were to take Debtors health into consideration, Debtor only made statements and did not produce any evidence. Through her conduct Debtor demonstrated a reckless disregard by failing to accurately report her employment status. Debtor knew that her benefit award was based on the accuracy of Debtor reporting and any omission would constitute a misrepresentation. This information was made clear in the initial 2007 notice of benefits award and pamphlet that stated that Debtor must inform the SSA if she started a job or became self-employed no matter how little [she] earn[ed]. Further, Debtor knew that she needed to update her address yet did not advise the SSA during the call that her work status had changed. The Court finds Debtors actions to be contradictory to her contention that she did not have the mental capacity to update the SSA with her work status. Therefore, the Court finds element one and two are satisfied.
The third element that must be proven is whether Debtors representation was made for the purpose of deceiving the SSA. Debtor argues that she was hospitalized due to suicide attempts and mental problems and was not in the right state of mind to deceive the SSA. Debtor argues that Debtor did not intend to deceive the SSA the entire five years that she received benefits. Plaintiff argues that Debtor manifested the requisite intent to deceive when Debtor failed to report her work activity and continued to receive benefits for which Debtor was not entitled. Plaintiff argues Debtor knew that she was required to report any changes if they were to occur during the time she received DIB. In opposition, Debtor again contends that she was mentally unstable during the period for which she received DIB and did not have the requisite intent to deceive the SSA. To the contrary, Plaintiff argues that Debtor was reminded of her reporting duties throughout the years she received benefits. Further, Plaintiff argues that during this time Debtor worked at various jobs, completing on-line college level coursework and earned a medical assistant certificate. This Court does not agree with Debtors argument that Debtors alleged mental problems had negative implications on Debtors ability to accurately report her work status. The Court finds that Debtors conduct, through Debtors omissions, demonstrated intent to deceive the SSA into providing benefits for which Debtor was not entitled. If Debtor truly intended not to deceive the SSA, Debtor would have notified the SSA of changes in her work status and abided by the reporting requirements necessary to receive benefits under the program, just as she contacted the SSA for other issues regarding her DIB. Thus, element three is satisfied.
The fourth element is whether the SSA reasonably relied on Debtors representation. Here, Debtor made representations both orally and written to the SSA in regards to her work status. The SSA relied on Debtors representations as to her work status and disability to determine the benefits Debtor would receive. Debtor did not report the changes in her work status throughout the five years that she was in the program. Even so, the SSA was not required to investigate her work status unless there were warning signals that would indicate that Debtor was deceiving the SSA. It is clear that the SSA relies on benefit program participants to self-report to maintain the accuracy of its records and avoid overpayment. The Court agrees with Plaintiffs argument that it would be burdensome for the SSA to investigate the millions of benefit recipients who participate in the program. The Court finds that it was reasonable for the SSA to rely on Debtors representations and thus, element four is satisfied.
The fifth element is whether the SSA sustained an actual loss. Here, the SSA paid benefits in excess of $35,567.69 due to Debtors false representation of her work status. Debtor does not dispute that she owes this amount in overpayment due to her failure to accurately report her work status. This Court agrees that the SSA would not have sustained such a monetary loss but for Debtors misrepresentations. Thus, the Court finds that element five is satisfied.
Therefore, Plaintiff is entitled to judgment as a matter of law. By separate Order, Plaintiffs Motion for Summary Judgment will be granted and the debt owed by Debtor to the SSA in the amount of $35,567. 69 will be excepted from discharge.