Baker v. Dep't of Mental Health for State

• Decision Date: 01 October 2013
• Docket Number: No. WD 75423.,WD 75423.
• Citation: 408 S.W.3d 228
• Parties: Emily BAKER, Respondent, v. DEPARTMENT OF MENTAL HEALTH for the State of Missouri, Appellant.
• Court: Missouri Court of Appeals

408 S.W.3d 228

Emily BAKER, Respondent,

v.DEPARTMENT OF MENTAL HEALTH for the State of Missouri, Appellant.

No. WD 75423.

Missouri Court of Appeals, Western District.

June 25, 2013.

Motion for Rehearing and/or Transfer to Supreme Court Denied July 30, 2013.

Application for Transfer Denied Oct. 1, 2013.

D. Ryan Taylor, Kansas City, MO, for appellant.

Jonathan D. McQuilkin, Columbia, MO, for respondent.

Before Division Three: JOSEPH M. ELLIS, Presiding Judge, LISA WHITE HARDWICK, Judge and CYNTHIA L. MARTIN, Judge.

CYNTHIA L. MARTIN, Judge.

The Department of Mental Health (“DMH”) appeals the circuit court's judgment awarding attorney fees and expenses in the amount of $21,683.01 to Emily Baker (“Baker”) as a prevailing party pursuant to section 536.087. ¹ Baker successfully appealed DMH's decision to place Baker on the employee disqualification list for allegedly abusing a consumer and class II neglect (the “Underlying Action”). DMH argues that the circuit court committed legal error in finding that DMH's position in the Underlying Action was not substantially justified. DMH alternatively argues that the circuit court erred in awarding Baker attorney fees at a rate in excess of the statutorily prescribed rate of $75 per hour.

We affirm in part, but reverse the amount of the award, and remand for recalculation of the award and for calculation of Baker's reasonable fees and expenses incurred in connection with this appeal.

Factual and Procedural History ²

Baker worked at the Marshall Habilitation Center as a client attendant trainee providing care to consumers. K.T. was a consumer suffering from numerous communicative and mental disorders. On February 10, 2007, K.T. had a tantrum in which she knocked her medication and juice out of an employee's hands, and threw herself onto the floor. K.T. kicked and screamed, and refused to get up. Employees often used water as a less invasive means of controlling K.T.'s outbursts. Consequently, as the tantrum escalated, Baker retrieved a half-full pitcher of water and poured it onto K.T. while another employeeheld K.T.'s wrists and straddled her. Baker then refilled the pitcher, and a co-worker threatened to pour more water on K.T. if she did not cooperate. K.T.'s behavior subsided.

DMH subsequently charged Baker with physically abusing K.T. by mistreating or maltreating her in a brutal or inhumane manner. In a separate incident also on February 10, 2007, Baker witnessed another co-worker refer to a different consumer as “you bitch” after the consumer pinched or hit Baker's co-worker. DMH charged Baker with class II neglect for her failure to report this statement.

Following these incidents and a subsequent investigation, Karen Moss (“Moss”), DMH's acting superintendent, sent Baker a letter finding that she had committed physical abuse and class II neglect. Baker requested a meeting with Moss to provide additional facts regarding the incidents. After this meeting, Moss sent Baker a second letter, substantiating the preliminary charges, terminating her as a probationary employee, and directing that her name be placed on the DMH's employee disqualification list.

Baker appealed this finding. Following a hearing, an administrative law judge issued an opinion upholding the charges of physical abuse and neglect. Baker appealed that decision to the circuit court, but the case was remanded for rehearing because the recording equipment had failed during the administrative hearing. On remand, another administrative law judge substantiated the findings of one count of physical abuse and one count of class II neglect. Baker again appealed to the circuit court. The circuit court reversed the findings of physical abuse and class II neglect, and ordered that Baker's name be removed from the employee disqualification list. DMH appealed.

We affirmed the circuit court's judgment reversing the DMH's decision in Baker v. Department of Mental Health, 344 S.W.3d 751 (Mo.App. W.D.2011). While that appeal was pending, Baker filed a motion for attorney's fees and expenses in the circuit court pursuant to section 536.087, which permits a party who prevails in an agency proceeding or civil action, or on judicial review of an agency proceeding, to recover reasonable fees and expenses “unless ... the position of the state was substantially justified or ... special circumstances make an award unjust.” Section 536.087.1 and .2. After our decision in Baker became final, the circuit court conducted an evidentiary hearing, and then entered its judgment granting Baker's motion for attorney fees and expenses pursuant to section 536.087. DMH appeals.

Standard of Review

When fees and expenses are awarded to a prevailing party pursuant to section 536.087, our standard of review is described in section 536.087.7 as follows:

The reviewing or appellate court's determination on any judicial review or appeal heard under this subsection shall be based solely on the record made before the agency or court below. The court may modify, reverse or reverse and remand the determination of fees and other expenses if the court finds that the award or failure to make an award of fees and other expenses, or the calculation of the amount of the award, was arbitrary and capricious, was unreasonable, was unsupported by competent and substantial evidence, or was made contrary to law or in excess of the court's or agency's jurisdiction.

Whether an award of fees and expenses is supported by competent and substantial evidence is judged by examining the record as a whole. Oakes v. Mo. Dept. of Mental Health, 254 S.W.3d 153, 157 (Mo.App. E.D.2008) (citing Hampton v. Big Boy Steel Erection, 121 S.W.3d 220, 222 (Mo. banc 2003)). “The evidence is not viewed in the light most favorable to the [ ] decision.” ³Stone v. Mo. Dept. of Health and Senior Services, 350 S.W.3d 14, 20 (Mo. banc 2011) (citing Hampton, 121 S.W.3d at 223).

Whether an award of fees and expenses pursuant to section 536.087 was made contrary to law or in excess of the court's or agency's jurisdiction or authority raises a question of law we review de novo. Sanders v. Hatcher, 341 S.W.3d 762, 766 (Mo.App. W.D.2011).

Analysis

Point I

In its first point on appeal, DMH asserts that the circuit court committed legal error when it determined that DMH was not substantially justified in its action against Baker. DMH argues that the circuit court was required as a matter of law, but failed, to consider and make written findings about: (i) whether DMH acted in good faith; (ii) how the facts appeared to DMH at the time it initiated its action; and (iii) the thoroughness of DMH's investigation. DMH also argues that by failing to consider these required factors, the circuit court violated section 536.087.3 and based its determination solely on the fact that Baker prevailed in the Underlying Action. We disagree.

(i) The trial court was not required to consider or make written findings on the factors identified by DMH

A prevailing party in an agency proceeding or civil action brought by or against the state is entitled to seek an award of reasonable fees and expenses incurred in the agency proceeding or civil action “unless the court or agency finds that the position of the state was substantially justified[.]” Section 536.087.1 (emphasis added). Similarly, a prevailing party in an action for judicial review of an agency proceeding is entitled to seek an award of reasonable fees and expenses incurred during the agency proceeding “unless the court finds that during such agency proceeding the position of the state was substantially justified[.]” Section 536.087.2 (emphasis added).

“ ‘The intent of [section 536.087] is to require agencies to carefully scrutinize agency and court proceedings and to increase accountability of the administrative agencies.’ ” Sanders, 341 S.W.3d at 766 (citation omitted). “The statute ‘was designed to relieve the financial burden a private party would face in challenging abusive or unreasonable government actions.’ ” Id. (citation omitted).

Here, Baker did not prevail in the initial agency proceeding brought by DMH before the administrative law judge. She did prevail, however, in her actions for judicial review both before the circuit court and in this court. Thus, her request for an award of reasonable fees and expenses implicates section 536.087.2. Pursuant to the plain language of section 536.087.2, Baker is entitled to an award for her reasonable fees and expenses unless DMH's position was substantially justified.

Though “substantial justification” is determinative of a prevailing party's right to recover fees and expenses under section 536.087, the legislature did not define the term. “Missouri courts have interpreted the term ‘substantially justified’ to mean there must be ‘reasonable basis both in law and fact’ for the government's action.” Greenbriar Hills Country Club v. Dir. of Revenue, 47 S.W.3d 346, 354 (Mo. banc 2001) (citations omitted). An agency's action must be clearly reasonable not just marginally reasonable. Dishman v. Joseph, 14 S.W.3d 709, 717 (Mo.App. W.D.2000) (emphasis added). “The burden is on the [government] to establish substantial justification [.]” Greenbriar, 47 S.W.3d at 354.

DMH argues that in determining whether government action had a “reasonable basis in law and in fact,” three factors must be evaluated as a matter of law: (i) the agency's good faith; (ii) how the facts appeared to the agency at the time it initiated its action; and (iii) the thoroughness of the agency's investigation. DMH effectively argues that an agency cannot be found to lack substantial justification unless the agency acted in bad faith in light of the facts before it and following a deficient investigation. DMH cites no authority for this proposition.

Certainly, we have recognized the general relevance of the factors identified by DMH. In Pulliam v. State, 96 S.W.3d 904, 907 (Mo.App. W.D.2003), we held that “[i]n reaching a fee decision, the...