United States District Court, D. New Mexico
MEMORANDUM OPINION AND ORDER 
KHALSA, UNITED STATES MAGISTRATE JUDGE
MATTER is before the Court on the Social Security
Administrative Record (Doc. 15) filed June 23, 2017, in
support of Plaintiff Armando Trevino Parraz, Jr.'s
(“Plaintiff”) Complaint (Doc. 1) seeking review
of the decision of Defendant Nancy A. Berryhill, Acting
Commissioner of the Social Security Administration,
(“Defendant” or “Commissioner”)
denying Plaintiff's claim for Title II disability
insurance benefits and Title XVI supplemental security income
benefits. On August 18, 2017, Plaintiff filed his Motion to
Reverse and Remand For A Rehearing With Supporting Memorandum
(“Motion”). (Doc. 18.) The Commissioner filed a
Response in opposition on October 19, 2017 (Doc. 19), and
Plaintiff filed a Reply on November 3, 2017. (Doc. 22.) The
Court has jurisdiction to review the Commissioner's final
decision under 42 U.S.C. §§ 405(g) and 1383(c).
Having meticulously reviewed the entire record and the
applicable law and being fully advised in the premises, the
Court finds the Motion is well taken and is
Background and Procedural Record
Armando Trevino Parraz, Jr. (“Mr. Parraz”)
alleges that he became disabled on July 24, 2012, at the age
of forty because of posttraumatic stress syndrome
(“PTSD”), major depressive disorder, and
generalized anxiety. (Tr. 232, 236, 267, 270.) Mr. Parraz
completed one year of college and has worked as a jewelry
vendor, warehouse door adjuster, call center customer and
sales associate, and grocery vendor. (Tr. 271, 278, 312-22.)
Mr. Parraz reported he stopped working on July 24, 2012, due
to his medical conditions. (Tr. 270.)
28, 2014, Mr. Parraz protectively filed an application for
Social Security Disability Insurance Benefits
(“DIB”) under Title II of the Social Security Act
(the “Act”), 42 U.S.C. § 401 et
seq. (Tr. 17, 232-35.) He also protectively filed an
application for Supplemental Security Income
(“SSI”) under Title XVI of the Act, 42 U.S.C.
§ 1381 et seq. (Tr. 17, 236-39.) Mr. Parraz's
applications were initially denied on February 10, 2015. (Tr.
84, 85, 86-96, 97-107, 142-45, 146-49.) They were denied
again at reconsideration on June 30, 2015. (Tr. 108, 109,
110-25, 126-41, 151-53, 154-56.) On August 26, 2015, Mr.
Parraz requested a hearing before an Administrative Law Judge
(“ALJ”). (Tr. 157-58.) The ALJ conducted a
hearing on August 10, 2016. (Tr. 41-83.) Mr. Parraz appeared
in person at the hearing with attorney representative Michael
Armstrong. (Id.) The ALJ took testimony from Mr.
Parraz (Tr. 45-76), and an impartial vocational expert
(“VE”), Thomas Greiner (Tr. 77-82). On September
29, 2016, ALJ Lillian Richter issued an unfavorable decision.
(Tr. 14-34.) On November 29, 2016, the Appeals Council issued
its decision denying Mr. Parraz's request for review and
upholding the ALJ's final decision. (Tr. 1-4.) On January
31, 2017, Mr. Parraz timely filed a Complaint seeking
judicial review of the Commissioner's final decision.
Disability Determination Process
individual is considered disabled if he is unable “to
engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which
can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than
12 months.” 42 U.S.C. § 423(d)(1)(A) (pertaining
to disability insurance benefits); see also 42
U.S.C. § 1382(a)(3)(A) (pertaining to supplemental
security income disability benefits for adult individuals).
The Social Security Commissioner has adopted the familiar
five-step sequential analysis to determine whether a person
satisfies the statutory criteria as follows:
(1) At step one, the ALJ must determine whether the claimant
is engaged in “substantial gainful
activity.” If the claimant is engaged in substantial
gainful activity, he is not disabled regardless of his
(2) At step two, the ALJ must determine the severity of the
claimed physical or mental impairment(s). If the claimant
does not have an impairment(s) or combination of impairments
that is severe and meets the duration requirement, he is not
(3) At step three, the ALJ must determine whether a
claimant's impairment(s) meets or equals in severity one
of the listings described in Appendix 1 of the regulations
and meets the duration requirement. If so, a claimant is
(4) If, however, the claimant's impairments do not meet
or equal in severity one of the listing described in Appendix
1 of the regulations, the ALJ must determine at step four
whether the claimant can perform his “past relevant
work.” Answering this question involves three phases.
Winfrey v. Chater, 92 F.3d 1017, 1023 (10th Cir.
1996). First, the ALJ considers all of the relevant medical
and other evidence and determines what is “the most
[claimant] can still do despite [his physical and mental]
limitations.” 20 C.F.R. §§ 404.1545(a)(1),
416.945(a)(1). This is called the claimant's residual
functional capacity (“RFC”). Id.
§§ 404.1545(a)(3), 416.945(a)(3). Second, the ALJ
determines the physical and mental demands of claimant's
past work. Third, the ALJ determines whether, given
claimant's RFC, the claimant is capable of meeting those
demands. A claimant who is capable of returning to past
relevant work is not disabled.
(5) If the claimant does not have the RFC to perform his past
relevant work, the Commissioner, at step five, must show that
the claimant is able to perform other work in the national
economy, considering the claimant's RFC, age, education,
and work experience. If the Commissioner is unable to make
that showing, the claimant is deemed disabled. If, however,
the Commissioner is able to make the required showing, the
claimant is deemed not disabled.
See 20 C.F.R. § 404.1520(a)(4) (disability
insurance benefits); 20 C.F.R. § 416.920(a)(4)
(supplemental security income disability benefits);
Fischer-Ross v. Barnhart, 431 F.3d 729, 731 (10th
Cir. 2005); Grogan v. Barnhart, 399 F.3d 1257, 1261
(10th Cir. 2005). The claimant has the initial
burden of establishing a disability in the first four steps
of this analysis. Bowen v. Yuckert, 482 U.S. 137,
146, n.5, 107 S.Ct. 2287, 2294, n. 5, 96 L.Ed.2d 119 (1987).
The burden shifts to the Commissioner at step five to show
that the claimant is capable of performing work in the
national economy. Id. A finding that the claimant is
disabled or not disabled at any point in the five-step review
is conclusive and terminates the analysis. Casias v.
Sec'y of Health & Human Serv., 933 F.2d
799, 801 (10th Cir. 1991).
Standard of Review
Court must affirm the Commissioner's denial of social
security benefits unless (1) the decision is not supported by
“substantial evidence” or (2) the ALJ did not
apply the proper legal standards in reaching the decision. 42
U.S.C. § 405(g); Hamlin v. Barnhart, 365 F.3d
1208, 1214 (10th Cir. 2004); Langley v.
Barnhart, 373 F.3d 1116, 1118 (10th Cir.
2004); Casias, 933 F.2d at 800-01. In making these
determinations, the Court “neither reweigh[s] the
evidence nor substitute[s] [its] judgment for that of the
agency.'” Bowman v. Astrue, 511 F.3d 1270,
1272 (10th Cir. 2008). A decision is based on substantial
evidence where it is supported by “relevant evidence .
. . a reasonable mind might accept as adequate to support a
conclusion.” Langley, 373 F.3d at 1118. A
decision “is not based on substantial evidence if it is
overwhelmed by other evidence in the record[, ]”
Langley, 373 F.3d at 1118, or “constitutes
mere conclusion.” Musgrave v. Sullivan, 966
F.2d 1371, 1374 (10th Cir. 1992). The agency
decision must “provide this court with a sufficient
basis to determine that appropriate legal principles have
been followed.” Jensen v. Barnhart, 436 F.3d
1163, 1165 (10th Cir. 2005). Therefore, although
an ALJ is not required to discuss every piece of evidence,
“the record must demonstrate that the ALJ considered
all of the evidence, ” and “the [ALJ's]
reasons for finding a claimant not disabled” must be
“articulated with sufficient particularity.”
Clifton v. Chater, 79 F.3d 1007, 1009-10
(10th Cir. 1996).
made her decision that Mr. Parraz was not disabled at step
four of the sequential evaluation. (Tr. 31-32.) The ALJ,
however, also made alternative step five findings that based
on Mr. Parraz's age, education, work experience, RFC, and
the testimony of the VE, there were other jobs that exist in
significant numbers in the national economy that Mr. Parraz
could perform. (Tr. 32-33.) Specifically, the ALJ determined
that Mr. Parraz met the insured status requirements of the
Social Security Act through December 31, 2014, and that Mr.
Parraz had not engaged in substantial gainful activity since
July 24, 2012. (Tr. 19-20.) She found that Mr. Parraz had
mental impairments variously diagnosed to include major
depressive disorder, recurrent, severe without psychotic
features; borderline personality traits; PTSD; mood disorder,
NOS; personality disorder with avoidant, dependent, and
histrionic traits; generalized anxiety disorder; dysthymia,
panic disorder with agoraphobia; and ADHD combined type. (Tr.
20.) The ALJ also found that Mr. Parraz had nonsevere
impairments of cannabis abuse disorder and obesity.
(Id.) The ALJ, however, determined that Mr.
Parraz's impairments did not meet or equal in severity
one the listings described in Appendix 1 of the regulations.
(Tr. 21-23.) As a result, the ALJ proceeded to step four and
found that Mr. Parraz had the residual functional capacity to
perform a full range of work at all exertional levels but
with the following nonexertional limitations:
the claimant can perform simple, routine, and repetitive
work; with occasional interaction with supervisors and
co-workers, and incidental interaction with the public. He
cannot perform work at an assembly line production pace or
perform work in tandem with other employees. He is limited to
making simple work related decisions in a workplace with few
changes in the routine work setting.
(Tr. 23.) The ALJ further concluded at step four that Mr.
Parraz was able to perform his past relevant work as a stock
clerk. (Tr. 31-32.) In the alternative, the ALJ determined at
step five that Mr. Parraz could perform work as a cuff
folder, DOT No. 685-687-014, and motor polarizer, DOT No.
715.687-090. (Tr. 32-33.)
arriving at her RFC finding, the ALJ relied primarily on
State agency nonexamining psychological consultant Diane
Hyde, Ph.D.'s assessment. (Tr. 28.) Dr. Hyde reviewed Mr.
Parraz's medical records and, on June 30, 2015, assessed
that (1) he could perform simple and some complex tasks with
routine supervision; (2) he could relate to others on a
superficial work basis; and (3) could adapt to a simple and
some complex work situation. (Tr. 138.) In according great
weight to Dr. Hyde's assessment, the ALJ also noted that
“more recent evidence supports additional
limitations.” (Tr. 28.) The more recent evidence
included functional assessments prepared by LPCC Jennifer
Webb and psychological consultant Esther Davis, Ph.D.
However, while the ALJ's RFC is more restrictive than Dr.
Hyde's assessed limitations, the ALJ did not adopt the
even more restrictive limitations assessed by LPCC Webb and
Parraz makes five arguments in support of remand as follows:
(1) the ALJ's decision does not include a
function-by-function assessment of Mr. Parraz's mental
limitations; (2) the ALJ failed to apply the correct legal
standard in evaluating Dr. Esther Davis's psychological
evaluation and opinion; (3) the ALJ failed to apply the
correct legal standard in evaluating LPCC Jennifer Webb's
assessment of Mr. Parraz's ability to do work related
mental activities; (4) the ALJ failed to resolve the conflict
between the VE's testimony and the DOT for the job of
stock clerk; and (5) the ALJ's step five findings are not
supported by substantial evidence because the number of jobs
the VE identified is not reliable. (Doc. 18 at 11-25.) For
the reasons discussed below, the Court finds that the ALJ
failed to properly evaluate LPCC Webb's assessment
pursuant to SSR 06-03p, and failed to properly evaluate Dr.
Esther Davis's psychological evaluation and assessment,
and remands on these grounds.
Jennifer Webb, LPCC
October 18, 2012, Mr. Parraz presented to Valencia Counseling
Services and saw LPCC Jennifer Webb on a referral from
UNMH. (Tr. 481-84, 487-98.) Mr. Parraz reported
his recent hospitalization at UNMH for suicidal ideation and
expressed feeling sad and hopeless. (Tr. 483, 487.) After
completing an initial evaluation, LPCC Webb indicated Axis I
diagnoses of Major Depressive Disorder Recurrent, Severe;
Anxiety Disorder, NOS; and Cannabis Abuse. (Tr. 483.) She
assessed a GAF score of 53. (Tr. 484.) LPCC Webb stated that
Mr. Parraz's condition showed a significant behavioral
and psychological syndrome or pattern that substantially or
materially impaired his ability to function. (Tr. 496.) LPCC
Webb noted that Mr. Parraz was open to treatment and would
attend individual counseling and obtain medication management
services. (Id.) LPCC Webb indicated that
Mr. Parraz would be discharged from treatment when he was
able to decrease his anxiety and depression by 50%.
notes indicate that LPCC Webb counseled Mr. Parraz from
October 2012 through January 2016, and referred him for
psychiatric evaluation and medication management to CNS Carol
Lynn Hunter and NP Carol Mills. (Tr. 481-98, 501-06, 512-19,
522-29, 530-40, 634-48, 650, 653-58.) On July 24, 2014, LPCC
Webb prepared a “To Whom It May Concern” letter
and stated that Mr. Parraz had been in individual counseling
with her “for over a year.” (Tr. 546.) She stated
therein that Mr. Parraz had been diagnosed with PTSD,
depression and anxiety, and that he struggled with anxiety
and other symptoms on a daily basis. (Id.) On June
22, 2015, LPCC Webb prepared a Third-Party Adult Function
Report on Mr. Parraz's behalf and reported, inter
alia, that anxiety made it difficult for Mr. Parraz to
stay in one place and made him very irritable; depression
made Mr. Parraz want to isolate and not to want to be around
people or leave his house; flashbacks to past traumas were
easily triggered; he does not sleep well; he required his
family's help for personal care and taking medications;
his activities were limited to simple meal preparation and
minimal chores; he was unable to complete tasks without an
outside person reminding him; and his concentration was a
problem because he forgets and is easily distracted. (Tr.
January 25, 2016, after treating Mr. Parraz for three years,
LPCC Webb prepared a Medical Assessment of Ability To Do
Work-Related Activities (Mental) on Mr. Parraz's behalf.
(Tr. 660-61.) She assessed that Mr. Parraz had slight
limitations in his ability to (1) remember locations and
work-like procedures; (2) understand and remember very short
and simple instructions; (3) carry out very short and simple
instructions; (4) perform activities within a schedule,
maintain regular attendance and be punctual within customary
tolerance; (5) sustain an ordinary routine without special
supervision; (6) make simple-work-related decisions; (7) ask
simple questions or request assistance; (8) maintain socially
appropriate behavior and adhere to basic standards of
neatness and cleanliness; and (9) be aware of normal hazards
and take adequate precautions. (Id.) She assessed he
had moderate limitations in his ability to (1)
understand and remember detailed instructions; (2) carry out
detailed instructions; (3) maintain attention and
concentration for extended periods of time; (4) interact
appropriately with the general public; (5) respond
appropriately to changes in the work place; and (6) set
realistic goals or make plans independently of others.
(Id.) She assessed that Mr. Parraz had marked
limitations in his ability to (1) work in coordination
with/or proximity to others without being distracted by them;
(2) complete a normal workday and workweek without
interruptions from psychological based symptoms and to
perform at a consistent pace without unreasonable number and
length of rest periods; (3) accept instructions and respond
appropriately to criticism from supervisors; (4) get along
with co-workers or peers without distracting them or
exhibiting behavioral extremes; and (5) travel in unfamiliar
places or use public transportation. (Id.)
Webb also determined that the severity of Mr. Parraz's
anxiety and depression met the criteria of Listings 12.04
Affective Disorders and 12.06 Anxiety-Related Disorders. (Tr.
accorded little weight to LPCC Webb's functional
assessment of Mr. Parraz's ability to do work related
mental activities. (Tr. 27.) In so doing, the ALJ explained
that LPCC Webb was not an “examining or treating
source.” (Id.) She also explained that LPCC
Webb's assessment was not supported by her observations
and notes. (Id.) Specifically, the ALJ explained
that LPCC Webb noted that Mr. Parraz's mental impairments
were stable, the he believed cannabis helped his condition,
that he had some close friends and was close with his
immediate family, that counseling was helpful, and that his
mood was improved with medication. (Id.) Finally,
the ALJ explained that LPCC Webb's assessment that Mr.
Parraz had marked limitations in traveling to unfamiliar
places was inconsistent with the record because the record
supported that Mr. Parraz was capable of driving himself to
his counseling appointments. (Id.)
Parraz argues that LPCC Webb's extensive treatment
provided her with a longitudinal picture of his impairments,
and that her assessment largely concurred with other evidence
in the record. (Doc. 18 at 18-19.) He also argues that the
ALJ's explanation for discounting LPCC Webb's
assessment amounts to speculation, and that the ALJ failed to
point to specific contradictory medical evidence to support
her findings. (Id. at 19-20.) The Commissioner
contends that the ALJ considered LPCC ...