Petition for Writ of Certiorari — Peggy Berg, Petitioner v. Social Security Administration

APPENDIX

i

APPENDIX

TABLE OF CONTENTS

Appendix A Opinion in the United States Court of

Appeals for the Seventh Circuit

(August 17, 2018) . . . . . . . . . . . . . App. 1

Appendix B Memorandum Decision, Order, and

Judgment in the United States

Bankruptcy Court, Western District of

Wisconsin

(June 15, 2017) . . . . . . . . . . . . . . App. 16

Appendix C Pretrial Statement in the United

States Bankruptcy Court, Western

District of Wisconsin

(February 17, 2017) . . . . . . . . . . App. 37

App. 1

APPENDIX A

IN THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

No. 17-2389

[Filed August 17, 2018]

________________________________

PEGGY BERG,

)

)

Plaintiff-Appellant,

)

)

v.

)

)

SOCIAL SECURITY ADMINISTRATION, )

)

Defendant-Appellee. )

________________________________ )

Appeal from the United States Bankruptcy Court for the

Western District of Wisconsin.

Nos. 3:14-BK-13435 & 3-16-00089-cjf —

Catherine J. Furay, Bankruptcy Judge.

_________________

ARGUED FEBRUARY 7, 2018 —

DECIDED AUGUST 17, 2018

_________________

Before BAUER, ROVNER, and SYKES, Circuit Judges.

ROVNER, Circuit Judge. Shortly before Peggy Berg

filed a petition for bankruptcy, the Social Security

Administration (“SSA” or “Agency”) reduced the

App. 2

payment of a back-award that it owed to her by the

amount of an earlier overpayment that Berg owed to

the Agency. Berg contested this setoff because it was

taken during the ninety-day period before the filing of

her bankruptcy petition. The bankruptcy court

concluded that SSA permissibly recovered $17,385 of

its overpayment but impermissibly improved its

position by $2,015, and ordered the Agency to return

that amount to Berg. This court granted a petition to

file a direct appeal from the bankruptcy court. We now

affirm the judgment of the bankruptcy court.

I.

The facts are undisputed. Berg began receiving

Social Security disability benefits in June 1994. In

2002, she returned to work. Although she notified the

Agency that she was working again, SSA continued to

pay her benefits until December 2003. The Agency

subsequently determined that it overpaid Berg in the

amount of $25,690. An administrative law judge

determined that Berg was without fault in incurring

this overpayment, but that SSA could nevertheless

recover the overpayment under the terms of the Social

Security Act. Based on Berg’s income and ability to

pay, the administrative law judge ordered her to repay

$24,000 to the Agency at a rate of $300 per month.

Berg did not appeal that decision and began making

payments.

Berg stopped working again on November 17, 2012

but continued to make regular, smaller payments

towards her SSA debt. In March 2014, Berg filed a new

application for disability benefits. Because of Berg’s age

and condition, SSA gave priority consideration to her

case and granted her application on July 15, 2014. The

App. 3

Agency determined that Berg met the criteria for

disability benefits as of November 17, 2012, the date

that she stopped working. Under the Social Security

Act and the applicable regulations, Berg’s benefits

began to accrue in May 2013, after a five month

waiting period, and became payable at the end of that

month.

By July 2014, Berg had reduced the debt that she

owed to the Agency to $19,400. In a Notice of Award

letter (“Notice”) dated July 30, 2014, the SSA informed

Berg that she was entitled to disability benefits

beginning in May 2013, and that she would receive her

first check in August 2014. According to the Notice,

Berg had accrued benefits at a rate of $1,440 per month

from May to November 2013, and at an increased rate

of $1,461 from December 2013 through July 2014, due

to a cost-of-living adjustment. Her accumulated

benefits from May 2013 through July 2014 totaled

$20,307. The Notice explained that the SSA would

deduct from that total the $19,400 that Berg still owed

from the Agency’s earlier overpayment. In early August

2014, Berg received a check for $907. The SSA

subsequently denied a request from Berg to reconsider

the Agency’s decision to recover its earlier overpayment

from her back-award.

On August 7, 2014, Berg filed a petition for

bankruptcy. She listed the $19,400 that the SSA

recovered from her as a setoff in her Statement of

Financial Affairs, and also included that same amount

as a possible asset subject to recovery in her schedules.

11 U.S.C. § 553. She then commenced an adversary

proceeding against the SSA under 11 U.S.C. §§ 553(b)

and 522(h), seeking recovery of the amount of back-

App. 4

benefits set off by the SSA. The bankruptcy court found

that the elements for setoff under the bankruptcy code

were present. Specifically, the SSA had a pre-petition

claim against Berg for return of its earlier

overpayment; SSA owed a pre-petition debt to Berg

because of the award of back-benefits; the obligations

were mutual; and both the claim and the debt were

valid and enforceable. 11 U.S.C. § 553(a); In re Doctors

Hosp. of Hyde Park, Inc., 337 F.3d 951, 955 (7th Cir.

2003) (setoffs are allowed when debts are mutual and

“the general rule is that mutuality is satisfied when the

offsetting obligations are held by the same parties in

the same capacity (that is, as obligor and obligee) and

are valid and enforceable, and (if the issue arises in

bankruptcy) both offsetting obligations arise either prepetition or post-petition, even if they arose at different

times out of different transactions.”).

The bankruptcy court noted that a trustee, or as

was the case here, a debtor acting under 11 U.S.C.

§ 522(h), may recover a setoff under 11 U.S.C.

§ 553(b)(1), to the extent that a creditor improved its

position within the ninety days preceding the debtor’s

filing of the bankruptcy petition. This ninety-day

preference test allows the trustee or debtor to recover

from the creditor the amount offset to the extent that

the insufficiency on the setoff date is less than the

insufficiency on the later of (a) ninety days before the

petition filing date, and (b) the first date on which

there was an insufficiency during the ninety days

immediately preceding the petition date.

“Insufficiency,” the court explained, is the amount by

which a creditor’s claim exceeds the amount of its debt.

See 11 U.S.C. § 553(b)(2) (“‘insufficiency’ means

amount, if any, by which a claim against the debtor

App. 5

exceeds a mutual debt owing to the debtor by the

holder of such claim.”). The date ninety days prior to

Berg’s August 7, 2014 filing was May 9, 2014. The

court calculated that Berg’s total accrued disability

benefit as of May 9, 2014 was $17,385. That same day,

Berg owed the Agency $19,400. That meant that on

May 9, 2014, the insufficiency was $2,015. The court

then compared that amount with the insufficiency on

the date that the SSA took the setoff, July 30, 2014. By

then, Berg still owed the Agency $19,400, but the SSA

owed her $20,307. That meant that there was no

insufficiency on July 30, 2014 (because the SSA’s debt

to Berg was now larger than the amount that she owed

the SSA), and the SSA had improved its position in the

amount of $2,015 during the ninety-day preference

period. The court therefore concluded that the SSA was

entitled to keep $17,385 and ordered the Agency to

return $2,015 to Berg. Berg appealed.

II.

Although Berg moved under Federal Rule of Civil

Procedure 12(c) for judgment on the pleadings, the

parties submitted a pre-trial statement of stipulated

facts and the court relied on that statement in reaching

its judgment. This is akin to judgment under Federal

Rule of Civil Procedure 52(a). Marantz v. Permanente

Medical Group, Inc. Long Term Disability Plan, 687

F.3d 320, 327 (7th Cir. 2012) (when parties agree to

judgment based on stipulated facts, in effect, the court

is asked to decide the case as if there had been a bench

trial in which the evidence was the material gathered

in discovery, and the standard of review is governed by

Federal Rule of Civil Procedure 52(a)); Arlington LF,

LLC v. Arlington Hospitality, Inc., 637 F.3d 706, 717

App. 6

(7th Cir. 2011) (Federal Rule of Bankruptcy Procedure

7052 makes Federal Rule of Civil Procedure 52

applicable to adversarial bankruptcy proceedings). We

review the district court’s legal conclusions de novo and

any factual inferences that the court drew from the

stipulated facts as well as its application of the facts to

the law for clear error. Marantz, 687 F.3d at 327. See

also Lardas v. Grcic, 847 F.3d 561, 569 (7th Cir. 2017)

(after a bench trial on an adversary proceeding, we

review the bankruptcy court’s legal determinations de

novo and its findings of fact for clear error).

On appeal, Berg contends that there were no

benefits from which the SSA could take an offset until

the Agency issued the Notice of Award letter on July

30, 2014. According to Berg, before that Notice was

issued, she had no right to a back-award and the

benefits awarded therefore accrued on the day that the

Notice was issued and the setoff was taken. The

bankruptcy court erred, she contends, by treating the

back-benefits as accruing over time, month by month,

rather than as a lump sum on the date that the Agency

made the award, July 30, 2014. Berg also argues that

the case law supports her position, and that public

policy also favors treating the date of the Notice as the

date that her benefits accrued. If the benefits accrued

on July 30, 2014, Berg maintains, then the Agency

improved its position by the entire amount of the offset

during the ninety-day preference period and she would

be entitled to recoup $19,400. We conclude that Berg’s

interpretation of the law is incorrect.

The Social Security Act provides that a person who

has worked long enough, has paid taxes into the

system, and is “under a disability,” “shall be entitled to

App. 7

a disability insurance benefit (i) for each month

beginning with the first month after his waiting period

… in which he becomes so entitled to such insurance

benefits[.]” 42 U.S.C. § 423(a)(1) (emphasis added).

Section 423(c)(2) specifies a five-month waiting period

after the onset of disability before an eligible individual

may receive her first disability payment. Even then,

that individual does not become entitled to payment of

benefits for a particular month until she survives

through the last day of that month. 42 U.S.C. § 402(a).

The benefit for a particular month is paid on the third

day of the month after the benefits accrue. The parties

agree that Berg, who was disabled as of November 17,

2012, became entitled to receive disability payments as

of May 2013, a payment that would have been made in

the ordinary course on June 3, 2013.

The Social Security Act also provides that, when a

benefits recipient has been overpaid, “recovery shall be

made” by decreasing the benefit payments to which

that person may be entitled. 42 U.S.C. § 404(a). But

recovery from (or adjustments of payments to) a person

who is without fault in incurring the overpayment may

not occur if the “adjustment or recovery would defeat

the purpose of this subchapter or would be against

equity and good conscience.” 42 U.S.C. § 404(b)(1). See

also 20 C.F.R. §§ 404.507–509. At a time when Berg

had returned to work, an administrative law judge

determined both that recovery of the overpayment

would not defeat the purpose of the Social Security Act

and that recovery was not against equity and good

App. 8

conscience. The Agency thus was obligated to recover

the overpayment, and Berg did not appeal that ruling.1

The bankruptcy court correctly concluded that the

transaction at issue here met the elements of a setoff

under section 553 of the Bankruptcy Code. Under

section 553(a), the overpayment to Berg meant that the

Agency had a pre-petition claim against Berg; the

SSA’s award of back-benefits resulted in the Agency

owing a pre-petition debt to Berg; the obligations were

mutual; and both the claim and the debt were

enforceable. 11 U.S.C. § 553(a); Doctors Hospital, 337

F.3d at 955. “Although no federal right of setoff is

created by the Bankruptcy Code, 11 U.S.C. § 553(a)

provides that, with certain exceptions, whatever right

of setoff otherwise exists is preserved in bankruptcy.”

Citizens Bank of Maryland v. Strumpf, 516 U.S. 16, 18

(1995). The right of setoff, the Court explained, allows

entities to apply their mutual debts against each other

to avoid the pointless exercise of “making A pay B

when B owes A.” Citizens Bank, 516 U.S. at 18 (citing

Studley v. Boylston Nat’l Bank of Boston, 229 U.S. 523,

528 (1913)).

Section 553(b) sets the limits for a creditor’s right of

setoff during the ninety-day period prior to the filing of

a bankruptcy petition:

(1) Except with respect to a setoff of a kind

described in section 362(b)(6), 362(b)(7),

362(b)(17), 362(b)(27), 555, 556, 559, 560, 561,

365(h), 546(h), or 365(i)(2) of this title, if a

1

That decision is no longer subject to judicial review. 42 U.S.C.

§ 405(g).

App. 9

creditor offsets a mutual debt owing to the

debtor against a claim against the debtor on or

within 90 days before the date of the filing of the

petition, then the trustee may recover from such

creditor the amount so offset to the extent that

any insufficiency on the date of such setoff is

less than the insufficiency on the later of—

(A) 90 days before the date of the filing of the

petition; and

(B) the first date during the 90 days

immediately preceding the date of the filing of

the petition on which there is an insufficiency.

(2) In this subsection, “insufficiency” means

amount, if any, by which a claim against the

debtor exceeds a mutual debt owing to the

debtor by the holder of such claim.

11 U.S.C. § 553(b). In plain English—a commodity

rarely found in the Bankruptcy Code—this means that

a debtor like Berg2 may recover from a creditor like the

SSA an amount set off by the creditor in the ninety

days preceding the filing of the bankruptcy petition but

only to the extent that the creditor improved its

position during that ninety-day period. That, in turn,

depends on determining the difference between any

2

Section 522(h) of the Bankruptcy Code allows the debtor to

recover a setoff that is recoverable by the trustee under section 553

if the trustee does not herself attempt to recover it. 11 U.S.C.

§ 522(h). See also Lee v. Schweiker, 739 F.2d 870, 873 n.3 (3d Cir.

1984) (when the trustee does not pursue exempt assets, the assets

are of no benefit to the creditors, and the debtor is empowered to

intervene in the proceeding and pursue those assets).

App. 10

insufficiency in the Agency’s position ninety days

before the bankruptcy filing and its position on the date

of the setoff. Insufficiency, as the bankruptcy court

noted, is the “amount, if any, by which a claim against

the debtor [Berg] exceeds a mutual debt owing to the

debtor by the holder of such claim [the SSA].” 11 U.S.C.

§ 553(b)(2).

The parties seem to agree in principle on the

mathematical process that courts apply when

calculating the insufficiency. See, e.g., Braniff Airways,

Inc. v. Exxon Co., U.S.A., 814 F.2d 1030, 1040 (5th Cir.

1987). The dispute comes instead in determining when

SSA began to owe benefits to Berg. Although Berg

characterizes the issue as when the setoff occurred, the

real question is when Berg’s benefits began to accrue

after she filed her second application for disability

benefits. Berg asserts that she had no right to benefits

at all until the Agency determined in July 2014 that

she was entitled to benefits and was owed backbenefits. The back-benefits, Berg contends, accrued on

July 30, 2014 when the SSA issued the Notice

awarding the benefits. In her view, then, the SSA

improved its position by the entire $19,400 that it took

in setoff during the ninety-day preference period. The

SSA, on the other hand, contends that, although it did

not issue its Notice until July 2014, Berg was disabled

as of May 2013 and thus began to accrue benefits on a

monthly basis at that earlier date. Under that scenario,

the SSA improved its position by only $2,015 during

App. 11

the preference period, and that is the amount that

should be returned to Berg.3

In support of her argument that she had no benefits

from which to take an offset until the date of the Notice

awarding those benefits, Berg relies largely on an

unpublished decision from a bankruptcy court in North

Carolina. See In re Goodman, 2012 WL 529574 (Bankr.

E.D.N.C. Feb. 17, 2012). That court assumed without

analysis that the date of the award of back-benefits

governed the calculation of the insufficiency, treating

the date of the Agency’s decision to award back-benefits

as the date of accrual for the entire amount. The

bankruptcy court here rejected that case in favor of the

reasoning of the Third Circuit in Lee v. Schweiker, 739

F.2d 870 (3d Cir. 1984).

In Lee, the debtor was receiving monthly retirement

benefits from the Agency. One year, she engaged in

work that should have reduced her entitlement to

benefits but the Agency was unaware that she had

earned this income and continued to pay her

retirement benefits at the higher rate, resulting in an

overpayment of approximately $750. Lee reached an

agreement with SSA to repay the overpayment by

having the Agency reduce her monthly benefits by

3

In a footnote in its brief, the SSA states that, for the purposes of

this appeal, the Agency does not dispute the bankruptcy court’s

determination that Berg is entitled to recover $2,015 of the

$19,400 in back-benefits that the SSA took in offset. In the

bankruptcy court, the Agency took the position that it was entitled

to recover the entire $19,400 because there was nothing the SSA

could do in the ninety days pre-petition to improve its position. The

Agency apparently wishes to preserve that argument for future

cases but concedes the $2,015 calculation here.

App. 12

approximately $100 per month until the overpayment

was recovered. Lee then filed for bankruptcy but SSA

was not aware of the filing and continued to deduct

$100 per month from Lee’s benefit check. When the

trustee did not seek to recover the amounts deducted,

Lee filed an adversary proceeding to recover them

herself.

The court first concluded that, once a bankruptcy

petition is filed, “the income provided by Social

Security benefits should be protected by the automatic

stay,” and that the “right of SSA to recover pre-petition

debts should be subject to the limitations on setoff.”

739 F.2d at 876. The court was then faced with

calculating the insufficiency on the relevant dates, and

that, in turn, depended on when SSA owed the debtor

her benefits. The debtor asserted that, under the Social

Security Act, a recipient does not become entitled to

benefits for a particular month until she survives

through the last day of that month, and so the Agency

would owe her nothing on August 15 for the month of

August. 42 U.S.C. § 402(a). The court held that section

402(a) of the Social Security Act applied in the

bankruptcy context as well. 739 F.2d at 877. The court

then applied that provision to the debtor’s claim:

In order to accrue benefits, all the beneficiary

must do is survive; if the debtor survives, SSA

must pay. Under these circumstances, we

believe that all of the monthly benefits that

came due before the filing of the petition should

be considered obligations of SSA to the

beneficiary ninety days before the petition is

filed for the purposes of applying the

App. 13

“improvement in position” test, even though they

are not yet payable.

Lee, 739 F.2d at 877. In other words, the court found

that the “SSA would be obligated to Lee for three

months benefits … ninety days before the filing.” 739

F.2d at 877 n.13. Under the facts in Lee, that meant

that there was no insufficiency ninety days before the

filing but an “‘excess’ of debts to the debtor over claims

against the debtor.” Id. Because there had not been an

improvement in the SSA’s position in the ninety days

prior to the filing of the petition, the SSA was not

required to return the amounts recouped before the

petition was filed.

That understanding of Social Security benefits as

accruing as soon as the recipient survives the month

and is lawfully entitled to them is consistent with the

Bankruptcy Code’s concepts of “debt” and “claim” as

they are used in section 553(b)(2). We have noted that,

although the Bankruptcy Code does not specify when

a debtor incurs a debt, the Code’s definitions of “debt”

and “claim” aid our understanding. In re Energy Co-op,

Inc., 832 F.2d 997, 1001 (7th Cir. 1087). “The term

‘debt’ means liability on a claim.” 11 U.S.C. § 101(12).

The term “claim” is defined in relevant part as:

right to payment, whether or not such right is

reduced to judgment, liquidated, unliquidated,

fixed, contingent, matured, unmatured,

disputed, undisputed, legal, equitable, secured,

or unsecured[.]

11 U.S.C. § 101(5)(A). Under the Social Security Act, as

the Third Circuit pointed out in Lee, a beneficiary has

a right to payment of benefits as soon as the

App. 14

beneficiary survives to the end of the month that the

beneficiary is eligible for benefits.4 Under the

Bankruptcy Code, it does not matter if that right to

payment is “reduced to judgment, liquidated,

unliquidated, fixed, contingent, matured, unmatured,

disputed, undisputed, legal, equitable, secured, or

unsecured.” The claim, and therefore the debt, accrue

as soon as there is a right to benefits, a date

determined in this instance by the Social Security Act

itself.

When Berg filed an application for disability

benefits in March 2014, she created an unliquidated,

contingent claim against the SSA that related back to

the (then undetermined) date that she became entitled

to benefits. That date was later determined to be May

2013, and neither party disputes that the SSA

accurately calculated the amount of the back-award

(starting on that date) in its Notice. The bankruptcy

court thus correctly calculated the accrual of Berg’s

benefits as occurring on the dates that she had a right

to benefits, or the last day of each month that she was

eligible for benefits and survived to the end of the

month. On May 9, 2014, the date that was ninety days

prior to the filing of the petition, that amount was

$17,385. Because Berg then owed the Agency $19,400,

the insufficiency on May 9, 2014 was $2,015. On July

30, 2014, the date the SSA took the setoff, Berg still

owed the Agency $19,400, but the SSA owed her

4

Lee was receiving retirement benefits under 42 U.S.C. § 401 et

seq., and Berg was receiving disability benefits under 42 U.S.C.

§ 423(a), but in either case the recipient must survive to the end of

an eligible month to be entitled to payment of benefits for that

month. 42 U.S.C. § 402.

App. 15

$20,307. That meant that there was no insufficiency on

July 30, 2014, and the SSA had improved its position in

the amount of $2,015 during the ninety-day preference

period. That is the amount that Berg may now recover.

There is no basis in policy to conclude otherwise.

First, section 553 does not bar setoffs entirely but

simply prevents a creditor from improving its position

during the ninety-day pre-petition period. This limit on

setoffs was imposed in order to allow the trustee to

recover setoffs that improved the position of one

creditor at the expense of all the others during the

ninety-day period prior to bankruptcy. Matter of

Prescott, 805 F.2d 719, 730 (7th Cir. 1986). As the

Third Circuit explained in Lee, Congress was concerned

that creditors, primarily banks that had mutual

accounts with debtors, would anticipate the filing of a

bankruptcy petition and attempt to secure an

advantage for themselves by decreasing an

insufficiency to the detriment of other creditors. Lee,

739 F.3d at 877. That same concern does not apply to

the Agency’s recovery of overpayments because neither

the debtor nor the SSA can do anything to increase the

amount of benefits that will accrue during the ninetyday pre-petition period. Essentially, neither party can

manipulate the process to the detriment of other

creditors. Recognizing the creation of SSA’s contingent

debt to Berg on the date when Berg became entitled to

disability benefits (and accruing it monthly thereafter)

rather than using the arbitrary date that the Agency

issued its administrative decision is consistent with

both the Social Security Act and the Bankruptcy Code.

AFFIRMED.

App. 16

APPENDIX B

UNITED STATES BANKRUPTCY COURT

WESTERN DISTRICT OF WISCONSIN

[Filed June 15, 2017]

Case Number: 14-13435-7

__________________________

In re:

)

)

GERALD W. BERG and

)

PEGGY A. BERG,

)

)

Debtors.

)

__________________________ )

Adversary Number: 16-89

__________________________

PEGGY A. BERG,

)

)

Plaintiff,

)

)

v.

)

)

SOCIAL SECURITY

)

ADMINISTRATION,

)

)

Defendant.

)

__________________________ )

MEMORANDUM DECISION

This matter is before the Court on the motion of

Plaintiff Peggy A. Berg (“Berg”) for judgment on the

App. 17

pleadings pursuant to Fed. R. Civ. P. 12(c), made

applicable to bankruptcy proceedings through Fed. R.

Bankr. P. 7012(b). To decide this motion, the following

facts alleged or presented by agreement of the parties

are recited. For the reasons set forth below, the Court

concludes the Social Security Administration’s

insufficiency position decreased during the 90 days

prior to Berg’s bankruptcy filing in the amount of

$2,015.00. Accordingly, Berg is entitled to that amount.

FACTS

Peggy A. Berg filed a voluntary Chapter 13 petition

under title 11 of the Bankruptcy Code on August 7,

2014. She moved to convert her case to a Chapter 7 on

September 8, 2014. The Court entered a final decree on

January 21, 2015. On August 4, 2016, Berg filed a

motion to reopen her bankruptcy case. On November

15, 2016, she filed the present adversary complaint

seeking to unwind the Social Security Administration’s

prepetition setoff of her social security disability

benefits.

Berg received disability insurance benefits from the

Social Security Administration (the “SSA”) from June

1994 through December 2003. She became re-employed

in 2002. Despite having notified the SSA of her return

to employment, it continued to pay and Berg retained

benefits until the benefits were terminated in

December 2003. This resulted in an overpayment of

$25,690.00.

The SSA determined Berg was without fault in

causing or accepting the overpayment (20 C.F.R.

404.507(c)). Nonetheless, it also determined that

recovery of the overpayment would not be inequitable.

App. 18

She did not appeal the determination. A payment plan

was established for payment at the rate of $300.00 per

month. Berg made payments for a period and reduced

the overpayment to $19,400.00 as of July 2014.

Berg stopped working on November 17, 2012. In

March 2014, she filed another application for disability

benefits with a protective filing date of January 2014.

On July 15, 2014, the SSA granted the application. It

determined that she met the criteria for disability as of

November 17, 2012. Under the regulations, she was

entitled to receive benefits beginning in May 2013. The

SSA’s Notice of Award letter dated July 30, 2014,

explained the benefits, their accrual rate, and

adjustments for cost of living. The Award letter also

told Berg that the SSA determined it would use

$19,400.00 of the accrued benefits to pay off the

remaining overpayment. The SSA kept and applied

$19,400.00 of back benefits and sent a payment of

$907.00 to Berg for July 2014.1 Full benefit payments

commenced in August 2014.

Berg filed bankruptcy on August 7, 2014. She

identified the $19,400.00 as a possible asset subject to

recovery in her schedules. She also disclosed it as a

setoff in her Statement of Financial Affairs. Berg

commenced this adversary proceeding seeking recovery

of the amount of back benefits set off by the SSA. The

basis for her claims are 11 U.S.C. §§ 553(b) and 522(h).

The parties have stipulated the relevant facts are

undisputed. The Court has jurisdiction pursuant to 28

1

This amount represented the monthly benefit remaining for July

2014 after deduction of the prior overpayment from the accrued

benefits.

App. 19

U.S.C. §§ 1334(a) and 157(a). This is a core proceeding

under 28 U.S.C. §§ 157(b)(2)(A), (I), and (O).

ARGUMENTS

The parties agree the transaction at issue is a setoff

governed by 11 U.S.C. § 553(b). They disagree on the

extent to which section 553(b) unwinds that

transaction.

The SSA argues the offset of benefits was not

inequitable. It points out the SSA cannot waive

recovery of overpayments except in narrow

circumstances that are inapplicable in this case. It

argues the statutory preservation of setoff supports the

application of accrued benefits against the

overpayment. It contends it did not improve its position

or, alternatively, the only possible improvement was

$1,163.00 representing a change in position between

May 9, 2014,2 and July 30, 2014.

Berg argues the offset of accrued benefits against

the overpayment occurred within 90 days of the

petition date and would have been recoverable by a

trustee under section 553. Further, she asserts there

was no “mutual debt” within the 90 days and that the

SSA improved its position. In her response, it is clear

what Berg does not argue:

2

(1)

the SSA did not overpay her;

(2)

the amount of overpayment was incorrectly

calculated;

May 9 is the 90th day.

App. 20

(3)

the amount of accrued benefits that were set

off were incorrectly calculated;

(4)

that, in the absence of a bankruptcy, there

would have been a right of setoff.

The parties frame the issues as (1) whether the

SSA’s actions qualify as a setoff under section 553, and

(2) whether, notwithstanding the provisions of section

553, the rights are constrained by section 522 and thus

recoverable.

STANDARD

A motion for judgment on the pleadings is subject to

the same standard as a motion to dismiss under Rule

12(b)(6). Federal Sign v. Fultz (In re Fultz), 232 B.R.

709, 716 (Bankr. N.D. Ill. 1999). The Court “may not

look beyond the pleadings, and all uncontested

allegations to which the parties had an opportunity to

respond are taken as true.” Alexander v. City of

Chicago, 994 F.2d 333, 335 (7th Cir. 1993). Therefore,

we must determine whether the complaint states “a

claim to relief that is plausible on its face.” Bell Atl.

Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955,

167 L. Ed. 2d 929 (2007). “A claim has facial

plausibility when the plaintiff pleads factual content

that allows the court to draw the reasonable inference

that the defendant is liable for the misconduct alleged.”

Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937,

173 L.Ed.2d 868 (2009). All well-pleaded factual

allegations in Berg’s complaint are taken as true, and

all reasonable inferences from the facts are drawn in

favor of the non-movant. Chicago Bldg. Design, P.C. v.

Mongolian House, Inc., 770 F.3d 610, 612 (7th Cir.

App. 21

2014); see also Golden v. Gibrick, 561 B.R. 470, 473

(Bankr. N.D. Ill. 2016). There are no contested facts.

APPLICABLE STATUTES

To resolve this case, the meaning of various statutes

must be considered.

Section 553(a) recognizes a creditor’s right to offset

a mutual debt and provides:

(a) Except as otherwise provided . . . title [11]

does not affect any right of a creditor to offset a

mutual debt owing by such creditor to the debtor

that arose before the commencement of the case

under this title against a claim of such creditor

against the debtor that arose before the

commencement of the case, except to the extent

that-(1) the claim of such creditor against the

debtor is disallowed;

...

(3) the debt owed to the debtor by such

creditor was incurred by such creditor-(A) after 90 days before the date of the

filing of the petition;

(B) while the debtor was insolvent; and

....

Section 553(b) restricts a creditor’s right to offset a

mutual debt and reads:

App. 22

(b)(1) Except with respect to a setoff of a kind

described in section 362(b)(6), 362(b)(7),

362(b)(17), 362(b)(27), 555, 556, 559, 560, 561,

365(h), 546(h), or 365(i)(2) of this title, if a

creditor offsets a mutual debt owing to the

debtor against a claim against the debtor on or

within 90 days before the date of the filing of the

petition, then the trustee may recover from such

creditor the amount so offset to the extent that

any insufficiency on the date of such setoff is

less than the insufficiency on the later of—

(A) 90 days before the date of the filing of

the petition; and

(B) the first date during the 90 days

immediately preceding the date of the filing of

the petition on which there is an insufficiency.

(b)(2) In this subsection, “insufficiency”

means amount, if any, by which a claim against

the debtor exceeds a mutual debt owing to the

debtor by the holder of such claim.

Section 522(h) provides:

(h) The debtor may avoid a transfer of

property of the debtor or recover a setoff to the

extent that the debtor could have exempted such

property under subsection (g)(1) of this section if

the trustee had avoided such transfer, if—

(1) such transfer is . . . recoverable by the

trustee under section 553 of this title; and

(2) the trustee does not attempt to avoid

such transfer.

App. 23

The Court must also consider the statute that

requires the SSA to reduce, by offset, an individual’s

disability benefits when the individual has been

overpaid. The authority of the SSA to address

overpayments is in 42 U.S.C. §§ 404 and 1383. It

permits the SSA to adjust future payments when there

has been a past overpayment or underpayment. See 42

U.S.C. § 1383(b).

DISCUSSION

Generally, a creditor has a right to setoff under the

Bankruptcy Code where four conditions are present:

“‘(1) the creditor holds a ‘claim’ against the debtor that

arose before the commencement of the case; (2) the

creditor owes a ‘debt’ to the debtor that also arose

before the commencement of the case; (3) the claim and

debt are ‘mutual’; and (4) the claim and debt are each

valid and enforceable.’” St. Francis Physician Network

v. Rush Prudential HMO (In re St. Francis Physician

Network), 213 B.R. 710, 715 (Bankr. N.D. Ill. 1997)

(quoting 5 Collier on Bankruptcy ¶ 553.01 (15th ed.

Revised)). Each element is present in this case.

Turning to the first element, the SSA must hold a

prepetition claim against Berg. A claim is a right to

payment, whether or not such right is reduced to

judgment, liquidated, unliquidated, fixed, contingent,

matured, unmatured, disputed, undisputed, legal,

equitable, secured, or unsecured. 11 U.S.C. § 101(5).

The SSA held a prepetition claim against Berg based

on its overpayment of disability benefits. That claim

was determined in December 2003. Thus, the SSA held

a prepetition claim against Berg.

App. 24

Next, the SSA must owe a prepetition debt to Berg.

A debt is liability on a claim. 11 U.S.C. § 101(12). The

SSA owed a prepetition debt to Berg under her 2014

disability application. While the amount of the debt

was not liquidated until the determination in July

2014, there was nonetheless a debt because there was

a right to payment on an unliquidated, contingent

claim when she filed the application in March 2014.

Berg filed her disability application approximately

159 days before the petition date. While the SSA’s

amount of the debt was determined a mere 23 days

before the petition date, the entitlement to payments

dated back to November 17, 2012 S 263 days before the

petition date. There was, indisputably, a debt owed

prepetition by the SSA to Berg.

The Court now turns to whether the obligations

owed by the parties are mutual. Mutuality is

established “when the offsetting obligations are held by

the same parties in the same capacity (that is, as

obligor and obligee) and are valid and enforceable . . . .”

Meyer Med. Physicians Grp., Ltd. v. Health Care Serv.

Corp., 385 F.3d 1039, 1041 (7th Cir. 2004) (citations

omitted). These offsetting obligations may arise either

prepetition or postpetition and may arise out of

separate transactions. Id. Simply put, “[m]utuality

requires that the debt in question be owed in the same

right and between the same parties standing in the

same capacity” regardless of the debt’s character. Id.

(citations omitted).

The SSA and Berg held mutual obligations in the

same capacity as obligor and obligee. As described, in

December 2003, the SSA determined it overpaid Berg

disability benefits of $25,690.00, and in 2009 an

App. 25

administrative law judge adjusted that amount to

$24,000.00, which Berg reduced to $19,400.00. On July

15, 2014, the SSA granted Berg’s application and

determined she was disabled as that term is defined

under the Social Security Act since November 17, 2012,

and entitled to receive $20,307.00 in disability

insurance benefits. Thus, the parties and their

respective capacities have not changed.

Finally, there is no dispute over whether the claim

and debt are each valid and enforceable. Thus, the

Court finds the elements for setoff are present.

However, that does not end the Court’s inquiry.

Section 553(b) of the Bankruptcy Code restricts a

creditor’s ability to exercise its right of setoff within the

90-day period prior to a debtor’s bankruptcy filing.

Section 553(b) reads:

(1) Except with respect to a setoff of a kind

described in section 362(b)(6), 362(b)(7),

362(b)(17), 362(b)(27), 555, 556, 559, 560, 561,

365(h), 546(h), or 365(i)(2) of this title, if a

creditor offsets a mutual debt owing to the

debtor against a claim against the debtor on or

within 90 days before the date of the filing of the

petition, then the trustee may recover from such

creditor the amount so offset to the extent that

any insufficiency on the date of such setoff is

less than the insufficiency on the later of—

(A) 90 days before the date of the filing of

the petition; and

(B) the first date during the 90 days

immediately preceding the date of the filing of

the petition on which there is an insufficiency.

App. 26

(2) In this subsection, “insufficiency” means

amount, if any, by which a claim against the

debtor exceeds a mutual debt owing to the

debtor by the holder of such claim.

To begin, a trustee, or as is the case here, a debtor

acting under 11 U.S.C. § 522(h), may recover a setoff

under 11 U.S.C. § 553(b)(1) to the extent the creditor

improved its position within the 90-day period

preceding the debtor’s bankruptcy filing. As provided

under section 553(b)(1), a trustee may recover the

amount offset to the extent that any insufficiency on

the setoff date is less than the insufficiency on the later

of (A) 90 days before the petition date, and (B) the first

date during the 90 days immediately preceding the

petition date on which there is an insufficiency.

Section 553(b)(1) directs the Court to look at two

separate dates to determine whether the SSA improved

its position relative to other creditors during the 90-day

period prior to Berg’s bankruptcy. This calculation

proceeds in four steps, and is “strictly mathematical.”

See 5 Collier on Bankruptcy ¶ 553.09[2][a] (16th ed.);

Braniff Airways v. Exxon Co., 814 F.2d 1030, 1040 (5th

Cir. 1987).

First, section 553(b)(1) requires the Court to

determine the SSA’s setoff position 90 days prior to

Berg’s filing. To calculate the SSA’s position, the Court

must compare the SSA’s claim with its debt, and

calculate the extent to which its claim exceeds the

amount of the debt, i.e., its “insufficiency.”

“Insufficiency” is defined under section 553(b)(2) as the

amount by which a creditor’s claim exceeds the amount

of its debt. 11 U.S.C. § 553(b)(2).

App. 27

As described, Berg filed a Chapter 7 petition on

August 7, 2014. Ninety days prior to that date is May

9, 2014. In its Notice of Award letter dated July 30,

2014, the SSA informed Berg she was eligible to receive

disability benefits relating back to November 17, 2012.

The Award letter stated Berg’s benefits were subject to

a five-month waiting period prior to receipt and

explained benefits accrued since May 2013. Under 42

U.S.C. § 402(a) and 20 C.F.R. § 404.302(b)(4), disability

insurance benefits are not paid until the recipient

survives through the last day of the month. By

illustration, benefits that accrue for the month of

November are not paid until December, and so forth.

Relevant here, according to Berg’s Award letter, the

SSA calculated her award of back benefits as follows:

Between May 2013 and November 2013, her benefits

accrued at $1,440.30 per month for a subtotal of

$10,080.00. In December 2013, there was a cost of

living adjustment to $1,461.90. Accordingly, between

December 2013 and July 2014, the back benefits were

$1,461.90 per month for a subtotal during that time of

$10,227.00. Together, the SSA determined Berg had

accrued benefits of $20,307.00 between May 2013 and

July 2014. Because section 553(b) instructs the Court

to determine the insufficiency on May 9, 2014, I must

determine Berg’s accrued benefits for that particular

date keeping in mind the May 2014 benefits were not

accrued and payable until the first week of June 2014.

Berg’s accrued benefits from May 2013 through April

2014 total $17,385.00. This is the total accrued as of

May 9, 2014. On that same day, Berg owed the SSA

App. 28

$19,400.00.3 Netting $19,400.00 against $17,385.00, on

May 9 there existed an insufficiency of $2,015.00

Step two applies only when there is no insufficiency

on the ninetieth day prior to filing, which is not the

case here. Step three directs the Court to determine the

later to occur between (1) any insufficiency existing on

the ninetieth day and (b) any insufficiency existing on

the first day during the 90 days preceding the petition

date, which includes the ninetieth day. 11 U.S.C.

§§ 553(b)(1)(A) and (B); see also Collier, supra,

¶ 553.09[2][a]. Here, there existed an insufficiency of

$2,015.00 on the ninetieth day prior to Berg’s

bankruptcy petition. Thus, the Court will use that day

as its initial reference point to compare whether on the

setoff date the SSA decreased its insufficiency.

Under step four, the Court compares the SSA’s

insufficiency on the ninetieth day with its insufficiency

on the date of setoff. On the setoff date of July 30, 2014,

no insufficiency existed. Berg owed the SSA $19,400.00

and the SSA owed Berg an accrued amount of

$20,307.00. Using the accrual date instead of the date

of payment more accurately reflects how the SSA

calculates an individual’s benefits. Thus, on July 30,

2014, the SSA’s insufficiency was zero, resulting in a

change of position of $2,015.00.

In applying section 553(b)’s improvement-inposition test, it is critical to remember that section

553(b) instructs the Court to look only at two dates:

(1) the date of the first insufficiency during the 90 days

3

While the SSA states in its Brief that Berg owed it $19,425.00 on

May 9, the stipulated facts do not mention that amount.

App. 29

prior to the petition date, and (2) the date of the actual

prepetition setoff. Susan V. Kelley, Ginsburg & Martin

on Bankruptcy, § 8.06[E] (5th Ed. Supp. 2016). “What

happens between those two dates, or before or after

them, is irrelevant.” Id.

Section 553(b) applies even if no insufficiency exists

on the actual setoff date. See Braniff Airways, 814 F.2d

at 1040 n.12. In that case, the Fifth Circuit reasoned

that a creditor could certainly argue that section 553(b)

does not apply when no insufficiency exists on the

actual setoff date because the statute’s plain language

refers only to a comparison of the insufficiencies on

both dates. However, the court declined to adopt this

argument. Id. And since neither the SSA nor Berg has

made a similar argument, this Court will not address

that argument here.

In essence, this case is similar to a setoff

illustration provided by Collier:

Suppose a bank had a claim against a debtor for

$15,000. At 90 days before the commencement of

debtor’s bankruptcy case, the debtor had $10,000

on deposit with the bank. The “insufficiency” at

90 days was thus $5,000. On the 89th day, the

debtor deposited $5,000, resulting in a balance

of $15,000 and an insufficiency of zero. At 30

days before the commencement of the debtor’s

bankruptcy case, the bank offset the entire

deposit against its claim. In calculating any

recoverable improvement, section 553(b)

requires use of the later of the insufficiency at 90

days before the petition date and the first date

on which there was any insufficiency during the

90 day period, in this case the insufficiency on

App. 30

the [ninetieth] day was $5,000. Because the

insufficiency at the time of setoff (zero) was less

than the insufficiency at 90 days prior to filing

($5,000), the bank improved its position by

($5,000), but the bank may keep $10,000 from

its setoff ($15,000 less the $5,000 recovered by

the trustee).

5 Collier, supra, ¶ 553.09[2][b] (emphasis same).

Upon receipt of the SSA’s Award letter, on the

ninetieth day prior to Berg’s filing, the SSA owed Berg

$17,385.00 and Berg owed the SSA $19,400.00, creating

an insufficiency of $2,015.00. On the actual day of

setoff, the SSA’s debt to Berg exceeded its claim

against her reducing the insufficiency to zero, which is

less than the insufficiency 90 days prior to her filing.

Thus, the SSA improved its position by $2,015.00.

Nonetheless, the SSA contends that under no

circumstances could it inequitably improve its position

in the 90 days before Berg’s bankruptcy filing. The SSA

argues under Lee v. Schweiker, 739 F.2d 870 (3d Cir.

1984), that Congress’s concern that banks would

foresee a debtor’s bankruptcy was imminent and

“scramble to secure a better position for themselves by

decreasing the ‘insufficiency,’ to the detriment of other

creditors” does not apply because neither the SSA nor

Berg can do anything to increase the amount of

benefits that will accrue in the 90 days before the

petition date. See id. at 877. As such, the SSA contends

that it properly recovered the $19,400.00 in overpaid

benefits.

This position overlooks the “purely mathematical”

application of section 553(b) noted by the SSA and a

App. 31

variety of courts applying section 553. See Braniff

Airways, Inc., 814 F.2d at 1040; Damas v. United

States (In re Damas), 504 B.R. 290, 294-95 (Bankr. D.

Mass. 2014) (concluding debtor could not recover offset

of social security payments because there was no

decrease in the SSA’s insufficiency position); In re Bass

Mechanical Contractors, Inc., 88 B.R. 201, 203 n.2

(Bankr. W.D. Ark. 1988). Accordingly, considerations of

a creditor’s intent or equity do not factor into the

analysis.

Berg cites In re Goodman, Case No. 11-02760-8JRL, 2012 Bankr. LEXIS 546 (Bankr. E.D.N.C. Feb. 17,

2012), for the proposition that an insufficiency did not

exist on the ninetieth day because the SSA did not

determine Berg was eligible to receive benefits until

the actual date of setoff of July 30, 2014. As a result,

section 553(b) instructs the Court to look to the first

date upon which an insufficiency occurred, which was

simultaneously the setoff date. Thus, according to Berg,

the SSA’s position improved between the date the

insufficiency arose and the date of setoff, entitling her

to recover the full setoff amount. However, this Court

finds the Third Circuit’s reasoning in Lee instructive.

The court in Lee looked to when the benefits accrued as

opposed to when the SSA’s obligation to pay arose. See

Lee, 739 F.2d at 877. Here, on the ninetieth day before

filing her petition, Berg had accrued disability benefits

in the amount of $17,385.00, which created an

insufficiency of $2,015.00. Berg continued to accrue

benefits up to and through the actual setoff date of July

30, 2014. On that date, no insufficiency existed. When

comparing the two dates, the SSA improved its position

by $2,015.00 between May 9, 2014, and July 30, 2014.

App. 32

In summary, on July 30, 2014, Berg owed the SSA

$19,400.00. On that same day, the SSA owed Berg

$20,307.00, and set off Berg’s debt of $19,400.00

against her back benefits of $20,307.00, issuing her a

check for $907.00. Using the accrual method, on the

ninetieth day (May 9, 2014) prior to filing her

bankruptcy, Berg had accrued back benefits of

$17,385.00, but owed the SSA $19,400.00. Netting

$19,400.00 against $17,385.00, on May 9 there existed

an insufficiency of $2,015.00. Between these two dates,

the SSA improved its position in the amount of

$2,015.00. Accordingly, Berg is entitled to recover

$2,015.00. The SSA is entitled to retain $17,385.00.

CONCLUSION

For the foregoing reasons, judgment on the

pleadings is granted in favor of Plaintiff Peggy A. Berg

in the amount of $2,015.00. The Defendant, Social

Security Administration, is entitled to retain

$17,385.00 of the amount offset.

This decision shall constitute findings of fact and

conclusions of law pursuant to Bankruptcy Rule 7052

and Rule 52 of the Federal Rules of Civil Procedure.

A separate order consistent with this decision will

be entered.

Dated: June 15, 2017

BY THE COURT:

/s/Catherine J. Furay

Hon. Catherine J. Furay

U.S. Bankruptcy Judge

App. 33

THIS ORDER IS SIGNED AND ENTERED.

Dated: June 15, 2017

/s/Catherine J. Furay

Hon. Catherine J. Furay

United States Bankruptcy Judge

UNITED STATES BANKRUPTCY COURT

WESTERN DISTRICT OF WISCONSIN

[Filed June 15, 2017]

Case Number: 14-13435-7

__________________________

In re:

)

)

GERALD W. BERG and

)

PEGGY A. BERG,

)

)

Debtors.

)

__________________________ )

Adversary Number: 16-89

__________________________

PEGGY A. BERG,

)

)

Plaintiff,

)

)

v.

)

)

SOCIAL SECURITY

)

App. 34

ADMINISTRATION,

)

)

Defendant.

)

__________________________ )

ORDER

The Court has today entered its Memorandum

Decision in this adversary proceeding. Accordingly,

IT IS ORDERED that the Plaintiff’s motion for

judgment on the pleadings is granted, and judgment

consistent with the decision shall be entered.

App. 35

THIS ORDER IS SIGNED AND ENTERED.

Dated: June 15, 2017

/s/Catherine J. Furay

Hon. Catherine J. Furay

United States Bankruptcy Judge

UNITED STATES BANKRUPTCY COURT

WESTERN DISTRICT OF WISCONSIN

[Filed June 15, 2017]

Case Number: 14-13435-7

__________________________

In re:

)

)

GERALD W. BERG and

)

PEGGY A. BERG,

)

)

Debtors.

)

__________________________ )

Adversary Number: 16-89

__________________________

PEGGY A. BERG,

)

)

Plaintiff,

)

)

v.

)

)

SOCIAL SECURITY

)

App. 36

ADMINISTRATION,

)

)

Defendant.

)

__________________________ )

JUDGMENT

This proceeding having come before the Court on a

motion by Plaintiff for judgment on the pleadings, and

the Court having issued its decision this date, it is

hereby ORDERED:

1. Judgment is entered in favor of Plaintiff Peggy

A. Berg in the amount of $2,015.00.

2. Each party shall bear its own fees and costs.

App. 37

APPENDIX C

UNITED STATES BANKRUPTCY COURT

WESTERN DISTRICT OF WISCONSIN

Bankr. Case No. 3:14-bk-13435

Chapter 7

Adversary Case No. 3–16–00089–cjf

[Filed February 7, 2017]

______________________________________

In re Gerald W. Berg and Peggy A. Berg )

)

Peggy A. Berg,

)

)

Plaintiff,

)

)

v.

)

)

Social Security Administration,

)

)

Defendant.

)

______________________________________ )

PRETRIAL STATEMENT

The parties by their respective undersigned

attorneys submit this joint document pursuant to the

Court’s Preliminary Pretrial Order (Dkt. #9). The

parties’ attorneys conferred via telephone around 10:00

AM on February 2, 2017, and via email and a voicemail

that day. Berg’s attorney, Kyle Hanson, submits this

order after having received approval from attorneys for

App. 38

the Social Security Administration (SSA), Julie Bentz

and Richard Humphrey.

The facts in this case are undisputed. The only

dispute is the legal effect of those facts, and so all that

is needed is legal argument for the Court to make its

determination.

SSA paid Berg benefits from June 1994 through

December 2003, although Berg notified SSA of her reemployment in mid 2002. That resulted in an

overpayment of $25,690.60 as of December 2003;

pursuant to a payment plan, Berg paid that debt down

to $19,400 as of July 2014. Berg petitioned for

bankruptcy relief on August 7, 2014. Berg made a

separate claim for benefits in the first half of 2014, and

SSA awarded Berg forward benefits (that are not at

issue) plus $20,307 in back-paid benefits – but SSA did

not pay that full amount, but rather subtracted the

prior debt of $19,400, paying the difference of $907.

The question present is whether or not SSA owes

Berg that $19,400. Was the debt discharged pursuant

to the Court’s Chapter 7 discharge order entered

January 9, 2015? Do Sections 553(b) and 522(h) apply

to allow Berg to recover that insufficiency setoff, or do

those provisions not apply in this situation? Berg

asserts that she is entitled to recover that $19,400. SSA

asserts that it was entitled to take that setoff.

The parties stipulate to the following briefing

schedule: (1) Berg submits a motion for judgment on

the pleadings by February 22, 2017; (2) SSA responds

by March 15, 2017; and (3) Berg submits any Reply by

March 29, 2017. The parties do not think oral

argument is necessary at this time.

App. 39

Respectfully Submitted:

/s/ Kyle Hanson

Kyle Hanson | Hanson Law Group LLP

Attorneys for Plaintiff Peggy Berg

1000 Hart Road Suite 300

Barrington, IL 60010

kylehanson@hansonlawgrp.com

(847) 282 0003

Agreed:

Attorneys for SSA

/s/ Richard Humphrey

Assistant United States Attorney

United States Attorney’s Office

Western District of Wisconsin

222 West Washington Avenue, Suite 700

Madison, WI 53703

Phone: (608) 264-5158

richard.humphrey@usdoj.gov

/s/ Julie Bentz

Assistant Regional Counsel

200 West Adams, 30th floor

Chicago, Illinois 60606

877 800 7578 x19107

630 941 8904

julie.bentz@ssa.gov