Black Bear Solutions, Inc. v. State Dep't of Educ.
| Decision Date | 15 January 2021 |
| Docket Number | 2190826 |
| Citation | 330 So.3d 840 |
| Parties | BLACK BEAR SOLUTIONS, INC., and Tony Diez v. STATE DEPARTMENT OF EDUCATION |
| Court | Alabama Court of Civil Appeals |
J. Evans Bailey and R. Brett Garrett of Rushton, Stakely, Johnston, & Garrett, P.A., Montgomery, for appellants.
J. Jason Swann, gen. counsel, and Terrie S. Morgan, James R. Ward III, and Darnell D. Coley, assoc. gen. counsel, Alabama State Department of Education, for appellee.
Black Bear Solutions, Inc., and Tony Diez appeal from a judgment of the Montgomery Circuit Court ("the trial court") affirming a decision of a hearing officer in support of the termination of their participation in the federal Child and Adult Care Food Program ("the CACFP"), which is administered in Alabama by the State Department of Education, and their disqualification from future participation in the CACFP. We affirm the trial court's judgment.
However, 7 C.F.R. § 226.6(k)(3) provides that the Department is prohibited from offering an administrative review of, among other things, a determination that an institution is seriously deficient, the disqualification of an institution (or a "responsible principal" or a "responsible individual" associated with a participating institution) from the CACFP, or the termination of a participating institution's agreement. "The request for administrative review must be submitted in writing not later than 15 days after the date the notice of action is received ...." 7 C.F.R. § 226.6(k)(5)(ii). According to 7 C.F.R. § 226.6(k)(5)(x), "[t]he determination made by the administrative review official is the final administrative determination to be afforded the institution and the responsible principals and responsible individuals."
In the present case, Black Bear Solutions, Inc., and its president, Tony Diez (hereinafter referred to collectively as "Black Bear"), contracted with the Department as a service provider under the CACFP. In a letter dated January 17, 2017, June B. Barrett, the coordinator of the CACFP for the Department, informed Black Bear, among other things, that, following an administrative review of Black Bear's participation in the CACFP, the Department had determined that Black Bear was "seriously deficient" in its operations under the CACFP and that correction of the identified deficiencies and documentation thereof was required to be completed within 30 days of the receipt of Barrett's letter. Barrett's letter also indicated that the deficiencies and disallowances identified had resulted in a total overclaim of $42,266.25, which amount was required to be paid to the Department, along with Black Bear's response outlining corrective action with regard to the identified deficiencies, and that unallowable costs in the amount of $26,466.87 were required to be refunded to the CACFP account within 30 days of Black Bear's receipt of the letter. Barrett informed Black Bear that it could appeal the determination of the overclaim, see 7 C.F.R. §§ 226.6(k)(2)(xi), but not the determination regarding the serious deficiency. See 7 C.F.R. § 226.6(k)(3)(ii).
In response to Barrett's letter, on January 25, 2017, Black Bear filed an "appeal" with the Department, challenging the Department's findings and demands resulting from the administrative review. On April 12, 2017, hearing officer Michael E. Meyer sent Black Bear a certified letter with the subject "final decision for administrative review appeal," informing Black Bear that administrative review was not available to challenge the Department's determination that a serious deficiency existed but that an institution, i.e., Black Bear Solutions, could seek review of "an administrative demand for the remittance of an overpayment and unallowable costs." See 7 C.F.R. §§ 226.6(k)(2)(viii) and (xi). Meyer stated, among other things, that, following a "thorough and deliberative review of the entire file," he had determined that remittance in the amount of $42,266.25 plus any applicable interest was due and payable to the Department, along with documented proof that unallowable costs of $26,466.87 had been refunded to the CACFP account. (C. 95). As to those issues, as discussed further below, Meyer's determination was final. See 7 C.F.R. § 226.6(k)(5)(x).
On April 18, 2017, Barrett sent to Black Bear a final request, informing Black Bear, among other things, that the balance of the overclaim and unallowable costs had not been paid within 30 days of her January 17, 2017, letter to Black Bear; that interest had begun to accrue; that failure to respond to a review could result in the termination of Black Bear's agreement and its disqualification from further participation in the CACFP; and that failure to provide a response within 5 days of the receipt of the final request would lead to a proposed termination of Black Bear's agreement and disqualification of Black Bear from further participation in the CACFP. In a letter dated April 28, 2017, and addressed to the Department, Black Bear's attorney asserted, among other things, that the CACFP "appeal process" failed to meet the minimum requirements necessary to preserve Black Bear's due-process rights and that there was no valid legal basis for the demands outlined by Barrett. Attached to the letter was a corrective-action plan that outlined Black Bear's response to the Department's findings resulting from the administrative review. On May 5, 2017, Barrett sent Black Bear a letter indicating that, after reviewing the documentation detailing the actions that had been taken by Black Bear to correct the serious deficiencies that had been identified by the Department, the Department had determined that Black Bear had not fully and permanently corrected the serious deficiencies that had been cited. Thus, the letter stated, the Department proposed to terminate Black Bear's agreement to participate in the CACFP and to disqualify Black Bear from future participation in the CACFP. Barrett stated that Black Bear was entitled to "appeal" the proposed termination and disqualification. See 7 C.F.R. §§ 226.6(k)(2)(iii) and (iv).
In a May 19, 2017, letter from Black Bear's attorney to Meyer, Black Bear communicated its intent to "appeal" the proposed termination and disqualification as well as the demand for the remittance of certain funds to the Department; Black Bear requested, among other things, an "inperson hearing of the appeal" and Meyer's recusal as hearing officer. Black Bear filed a separate motion before the Department, seeking Meyer's recusal and the appointment of an independent hearing officer. On October 13, 2017, hearing officer Amanda Bradley entered a final order noting that Meyer had recused himself and that the appeal had been assigned to her. Bradley stated in her order, in pertinent part:
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