Hill v. Indiana Bd. of Public Welfare
| Decision Date | 09 May 1994 |
| Docket Number | No. 71A04-9303-CV-96,71A04-9303-CV-96 |
| Parties | Hazel HILL, Appellant-Petitioner, v. INDIANA BOARD OF PUBLIC WELFARE, et al., Appellees-Respondents. |
| Court | Indiana Appellate Court |
Kent Hull, Legal Services Program of Northern Indiana, Inc., South Bend, for appellant.
Pamela Carter, Atty. Gen., Wendy Stone Messer, Deputy Atty. Gen., Office of Atty. Gen., Indianapolis, for appellees.
Appellant-petitioner Hazel Hill ("Hill") appeals the trial court's affirmation of the Indiana Board of Public Welfare's ("agency") determination that she owed the agency $1,387.00 due to overpayment of food stamp benefits. We affirm.
Hill presents four issues for review:
I. Whether the agency's notice of overissuance of food stamp benefits gave Hill adequate procedural due process protections.
II. Whether the error resulting in the overissuance of food stamp benefits was properly categorized as inadvertent household error as defined in 7 C.F.R. § 273.18(a)(1).
III. Whether the agency's refusal to compromise the overissuance claim against Hill is supported by 7 C.F.R. § 273. (g)(4).
IV. Whether the agency properly collected the overissuance from Hill while also considering the possibility of collection from other household members.
Hill received a $1,387.00 overpayment of food stamp benefits made to her between December of 1986, and November of 1988. The overpayment was due to Hill's failure to report her daughter's employment earnings and her son's lump sum Social Security payment. The agency notified Hill of its overpayment via notices and repayment agreements dated January 24, 1989, and February 24, 1989. Hill took no action on the notices and did not sign a repayment agreement and her benefits were reduced without further notice. Hill then requested a fair hearing. An administrative hearing was conducted on May 17, 1989, and the Administrative Law Judge (ALJ) sustained the county agency's collection of the overissuance. Both the state agency board and the trial court affirmed the ALJ's decision. 1
The Food Stamp Act, 7 U.S.C. §§ 2011 et seq., established a federally-funded, state-administered program to improve nutrition in the diets of low-income households. 7 U.S.C. § 2011. In carrying out its duties under the Food Stamp Act, a state agency must adhere to regulations promulgated by the Secretary of the U.S. Department of Agriculture. 7 U.S.C. § 2013(c).
Federal regulations provide for the implementation of a system wherein state agencies issue food stamp coupons to "households," which may consist of single or multiple individuals. 7 C.F.R. § 273.1(a). If a household receives benefits in excess of its entitlement (an "overissuance"), the state agency is required to established a claim against the household. 7 C.F.R. § 273.18(a). Further, the agency must issue notice to the household of the action to recoup the overissuance. 7 C.F.R. § 273.18(d)(3).
Hill does not contest the fact that she received an overissuance of food stamps. However, she argues that the notice of overissuance was inadequate because it did not explain the reasons for the proposed reduction in benefits or the factors used to calculate and classify the error. Hill further contends that adequate notice should also include an explanation of Hill's right to contest the agency's action and the consequences of the available remedies. Additionally, the repayment agreement included an "acceleration clause" which purported to make the entire debt due immediately upon failure to make periodic payments, contrary to 7 C.F.R. § 273.18.
The agency contends that the notice conformed with the requirements of 7 C.F.R. § 273.18(d)(3) and that it contained sufficient information from which to assess the accuracy of the agency's decision and inform Hill of her options. The agency concedes that part of the repayment agreement does conflict with 7 C.F.R. § 273.18(g)(2)(ii), which states that if a household fails to make a scheduled payment, the household is entitled to notice advising of the missed payment and offering to renegotiate the schedule. However, the agency maintains it is irrelevant to this case because Hill did not sign a repayment agreement.
Under the Administrative Adjudication Act, Ind.Code § 4-21.5-5-14, this court's function in reviewing administrative action is limited. We will not reweigh the evidence or judge the credibility of witnesses and must accept the facts as found by the administrative body. Peabody Coal Company v. Indiana Department of Natural Resources (1992), Ind.App., 606 N.E.2d 1306, 1308. Similarly, an administrative agency's interpretation of a statute that the agency is charged with enforcing is entitled to great weight. Id. However, we need not accord such deference to an agency's legal conclusions if they are contrary to law. Id.
Section 273.18(d)(3) requires state agencies to develop a written demand letter for initiating collection of overissuances. The regulations require a demand letter to include a laundry list of information, including informing the household of the amount owed, the reason for the claim, the period of time the claim covers, any offset which reduces the claim, and how the household may pay the claim. 7 C.F.R. § 273.18(d)(3)(i). Additionally, the letter must notify the household that it may request a fair hearing on the amount of the claim. Id; Atkins v. Block, 472 U.S. 115, 124-25, 105 S.Ct. 2520, 2526-27, 86 L.Ed.2d 81 (1985). The letter must also advise the household of the availability of any individual or organization which provides free legal representation. 7 C.F.R. § 273.18(d)(3)(ii). Further, the letter must inform the household of the length of time it has to decide on a method of repayment and inform the agency of its decision, and that its allotment will automatically be reduced if the household fails to agree to make restitution. 7 C.F.R. § 273.18(d)(3)(iii). The demand letter must inform the household of the state agency's right to request renegotiation of any agreed upon repayment schedule in the event the household's economic circumstances change. 7 C.F.R. § 273.18(d)(3)(vii). Finally, the demand letter must provide a space for the household to indicate its preferred method of repayment and for the signature of a household member. 7 C.F.R. § 273.18(d)(3)(viii).
The purpose of such a notice under the due process clause is to apprise a household of an impending action, inform it about options and permit it adequate preparation for a hearing. See Memphis Light, Gas and Water Division v. Craft, 436 U.S. 1, 14, 98 S.Ct. 1554, 1562-63, 56 L.Ed.2d 30 (1978). Despite the fact that the right to procedural due process may have an incidental effect on the substance of the actions undertaken by the government agency, the procedural due process guarantee merely imposes upon the state a duty to follow a fair process of decision-making. Owen v. Lash, 682 F.2d 648, 652 (7th Cir., 1982) (retired Justice Potter Stewart sitting by designation). Therefore, any determination that government action violated procedural due process rights is a condemnation of the procedures employed and not an assessment of the propriety of the action itself. Id. We find the procedure and notice outlined by 7 C.F.R. § 273.18 adequate to preserve Hill's procedural due process rights.
In the instant case, the agency's notice of food stamp overissuance and the enclosed repayment agreement contained all of the elements contained in the regulations. 2 The letter contained the total amount of the overissuance, with a monthly breakdown which explained the time period involved and how the agency arrived at the figure and listed any applicable offset. It also listed repayment options, provided a form for Hill's response and informed her of the deadline for response, explained that she could request a fair hearing and listed the telephone number for free legal advise. Finally, it informed Hill that the agency would automatically reduce future food stamp allotments if she did not respond to the notice. Therefore, we also reject Hill's contentions that the notice did not explain the reasons for the proposed reduction or the factors used to calculate and classify the error.
However, as the agency concedes, the notice contained an error regarding Hill's minimum monthly repayment. The notice and repayment agreement incorrectly listed Hill's minimum monthly repayment as $38.53. The documents explained that the amount calculated was the higher of $10 or 10% of Hill's food stamp allotment. However, after the fair hearing held at Hill's request, the monthly repayment was adjusted to $10 per month. Although the notice contained an error, it explained how the figure was reached in accordance with the regulations so that Hill could easily do the math and find that the notice's figure was incorrect. Moreover, the fair hearing procedure in which Hill participated is designed to rectify such errors. The error did not make the notice inadequate.
The agency also admits that the repayment agreement contained an acceleration clause in violation of 7 C.F.R. § 273.18(g)(2), which provides that if a household fails to make a payment as established by a repayment agreement, the household is entitled to a notice advising it of the missed payment and offering the opportunity to renegotiate the agreement. Hill contends that this error denied her due process because it misinformed her of her rights. Although we agree that it was error to include the acceleration clause in the repayment agreement because it misstated Hill's rights regarding repayment, Hill was not harmed. She did not sign the repayment agreement and the agency did not attempt to collect the entire amount of the repayment. Instead, Hill requested and received a fair...
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