Anderson v. Iowa Dept. of Human Services

• Court: Iowa Supreme Court
• Writing for the Court: SCHULTZ
• Citation: Anderson v. Iowa Dept. of Human Services, 368 N.W.2d 104 (Iowa 1985)
• Decision Date: 22 May 1985
• Docket Number: No. 84-1116,84-1116
• Parties: Dolly ANDERSON, Appellant, v. IOWA DEPARTMENT OF HUMAN SERVICES, Appellee.

Page 104

368 N.W.2d 104

9 Soc.Sec.Rep.Ser. 957

Dolly ANDERSON, Appellant, v. IOWA DEPARTMENT OF HUMAN SERVICES, Appellee.

No. 84-1116.

Supreme Court of Iowa.

May 22, 1985.

Donna J. Henderson, Des Moines, for appellant.

Thomas J. Miller, Atty. Gen., and Eleanor E. Lynn, Asst. Atty. Gen., for appellee.

Considered by UHLENHOPP, P.J., and McCORMICK, LARSON, SCHULTZ and CARTER, JJ.

SCHULTZ, Justice.

The primary issue in this appeal is whether the intent of the parties in establishing a bank account in joint tenancy may be considered in determining the ownership of the account. Petitioner Dolly Anderson (Dolly) was denied medical assistance benefits for three months by the Department of Human Services ¹ because the assets in a joint bank account, held in the names of Dolly and her sisters, exceeded the minimum standard for eligibility for benefits. In its final decision, the agency adopted a hearing officer's legal conclusion that the intent of a party in establishing a joint account has no bearing on the ownership of the account; thus, the entire amount should be counted toward the resource limitation placed on an applicant for medical assistance. We disagree with this conclusion and reverse the district court ruling on judicial review which affirmed the agency action.

Dolly, age 60, lived with her two sisters, Dorothy and Doris. She suffered a stroke and was hospitalized from July 26 to December 23, 1982. In December, she applied for and became entitled to Supplemental Security Income (SSI) automatically making her eligible for medical assistance pursuant to Iowa Code section 249A.3(1)(a), which is also known as Title XIX or Medicaid. Applicants may receive medical assistance benefits for a retroactive three-month period if they are otherwise eligible. 498 Iowa Admin.Code § 76.5(1). One of the requirements for eligibility is that the applicant may not have resources that exceed $1500. 20 C.F.R. § 416.1205A (1983). Dolly was denied retroactive benefits because she was a joint tenant of a bank account along with her sisters, Dorothy and Doris.

Consistently throughout the administrative proceedings and on appeal Dolly has maintained that she did not own the joint bank account. Although she admitted that her name was on the account, she stated that it was not necessarily her money and that she had not made any deposits to the account. She had placed her previous earnings in a certificate which was depleted. An affidavit from Dorothy indicated that Dorothy opened the account and that at no time did either Dolly or Doris make deposits into the account. Dorothy stated that a joint account was established so her sisters could have access to the money in the event of her death. Doris also verified that the money in the account did not belong to Dolly. While Dolly's testimony demonstrated confusion regarding the bank accounts, she testified that "one purpose [for the joint account] was for the household purposes" and that she was entitled to write checks.

We deem it necessary to review the proposed decision by the hearing officer since the agency's final decision adopted it. The hearing officer rejected Dolly's contention that intent was the controlling factor in determining ownership of a joint bank account, concluding that intent "had no bearing on the availability of funds." Because Dolly could write checks, the hearing officer concluded the account was available to her. Additionally, the hearing officer concluded that, prior to December 1, Dolly was ineligible for SSI benefits based on information received from the Social Security Administration (SSA). The evidence indicates that a local Department worker inquired into Dolly's eligibility for SSI benefits by a phone call and later by a written informational request to the SSA. Although the worker received a response that Dolly was "over resources" during the three-month retroactive period, the record does not reflect, nor does the Department claim, that Dolly sought retroactive SSI benefits or that she had notice of or any input into the oral and written request for an advisory opinion. Finally, the hearing officer alluded to a decision of the Appeals Council of the SSA, offered into evidence by Dolly, which held contrary to the Department's policy concerning the intent of the parties in establishing joint accounts; however, beyond noting the discrepancy the hearing officer gave it no weight and adopted a contrary position.

Dissatisfied with the decision of the hearing officer, Dolly unsuccessfully requested an agency review of the proposed decision and then filed a petition for judicial review, pursuant to Iowa Code section 17A.19, in district court. In her petition Dolly maintained that the Department of Human Services had disregarded the policy of the SSA which considers the intent of the parties in examining a joint bank account situation for an SSI eligibility determination and that the decision of the Department was not supported by substantial evidence. In its ruling the district court did not address the correctness of the hearing officer's conclusion that the intent of the party in establishing a joint account has no bearing on the availability of funds, basing its ruling on a determination that there was substantial evidence to support the decision of the agency. The district court, in a finding of fact, found that the Department had contacted the SSA for a ruling on Dolly's status and was advised that she would not be eligible for SSI benefits.

Initially we discuss pertinent principles involving judicial review. The district court when ruling in judicial review cases is acting in an appellate capacity to correct errors of law as specified in Iowa Code section 17A.19(8). Osborne v. Iowa Natural Resources Council, 336 N.W.2d 745, 748 (Iowa 1983). Subsection 17A.19(8) in pertinent part provides:

The court shall reverse, modify, or grant any other appropriate relief from the agency action ... if substantial rights of the petitioner have been prejudiced because the agency action is:

....

e. Affected by other error of law;

f. In a contested case, unsupported by substantial evidence in the record made before the agency when that record is viewed as a whole....

On appeal, we determine whether the district court correctly applied the law. Osborne, 336 N.W.2d at 748. If the district court found one issue dispositive and did not address the other issues, we can scrutinize all issues in reviewing the rulings. Id.

Although appellant has presented diverse arguments and positions, the common thread of her argument concerns the correctness of the legal conclusion of the agency that the intent of the parties has no bearing on the ownership of a joint bank account. The district court did not address this issue; it decided the case on its determination that substantial evidence supported the agency's determination. If the agency erred in its conclusion of law, however, its fact-findings concerning Dolly's eligibility would also be affected. Reversal and remand to the agency for a fact-finding anew under the correct legal principles would be required. McSpadden v. Big Ben Coal Co., 288 N.W.2d 181, 192-93 (Iowa 1980).

Dolly's first argument raises the question of whether deference should be given the policies of the SSA or the Department. She claims that the Department is bound by the policy determinations of the SSA and correctly points out that the hearing officer's decision noted the discrepancy between the two agencies in their treatment of joint bank accounts. Dolly had placed into evidence a decision of the SSA Appeals Council which stated as follows:

The Appeals Council has adopted the policy that the intent of the parties will be considered in determining ownership of the funds in a joint bank account and that where one party is added to the account merely for convenience purposes and survivor rights, the entire balance will be charged to the other party.

The hearing officer determined that the Department's policy was contrary, citing a Department employee's manual which states that if co-owners can withdraw the funds, the entirety is counted toward the resources limitation regardless of ownership. Dolly urges that the hearing officer erred by adopting the policy stated in the employee's manual. The Department did not respond to this argument directly, but took the position that there was substantial evidence of the SSA position in the record as shown by the SSA's answers to the Department's inquiries concerning whether Dolly met eligibility requirements for SSI.

The declared purpose of the Medicaid program under Title XIX of the Social Security Act is to furnish "medical assistance on behalf of ... disabled individuals, whose income and resources are insufficient to meet the cost of necessary medical services...." 42 U.S.C. § 1396 (1982). Participation in this cooperative federal-state program is voluntary, but once a state chooses to participate, it must comply with federal statutory requirements. Harris v. McRae, 448 U.S. 297, 301, 100 S.Ct. 2671, 2680, 65 L.Ed.2d 784, 794 (1980). As indicated in the hearing officer's decision and the briefs of the parties, the Social Security Act and the SSI regulations do not address specifically the treatment of joint bank accounts. Likewise, the parties do not claim, nor do we find, any Department rule formally adopted concerning this question. Thus, we are left with the question of whether the policy of either the federal or the state government can be determined by a single administrative decision or by an interpretive rule found in an employee's manual which has not been adopted formally as an agency rule.

A decision of the SSA Appeals Council does not set the policy of the Department. Countless cases are heard by the Appeals Council and the rulings are subject to further review by the federal courts. Undoubtedly, this ruling by a panel of the Appeals Council provides excellent perspective concerning...