In re Ryan W.

• Decision Date: 21 November 2012
• Docket Number: Sept. Term, 2011.,No. 1503,1503
• Citation: 207 Md.App. 698,56 A.3d 250
• Parties: In re RYAN W.
• Court: Court of Special Appeals of Maryland

207 Md.App. 698

56 A.3d 250

In re RYAN W.

No. 1503, Sept. Term, 2011.

Court of Special Appeals of Maryland.

Nov. 21, 2012.

Julia D. Benhardt (Hilma J. Munson, Douglas F. Gansler, Atty. Gen., on the brief) Baltimore, MD, for appellant.

Ramesh Kasarabada (Legal Aid Bureau, Inc., on the brief) Baltimore, MD, for appellee.

Panel: EYLER, DEBORAH S., WOODWARD, LAWRENCE F. RODOWSKY (Retired, Specially Assigned), JJ.

ON MOTION FOR RECONSIDERATION

EYLER, DEBORAH S., J.

This appeal concerns the right of a local department of social services acting as a representative payee for social security survivor benefits for a child committed to its care to use those benefits to reimburse itself for the cost of the child's care. The Baltimore City Department of Social Services (“the Department”), the appellant, acting as representative payee for Ryan W., the appellee, received $31,693.30 in Social Security Old Age, Survivor, and Disability Insurance (“OASDI”) benefits for Ryan. The Department applied all of those benefits to reimburse itself for a portion of the direct cost of foster care services it paid on Ryan's behalf over a three and one-half year period. By the end of that period, the direct costs of foster care services for Ryan totaled $233,305.51.

After the benefits were paid, Ryan filed a “motion to control conduct” in his Child In Need of Assistance (“CINA”) case, in the Circuit Court for Baltimore City, challenging the Department's application of his OASDI benefits. In the motion, Ryan asked the Juvenile Court to order the Department to “conserve” in a trust account the entire $31,693.30 in OASDI benefits it had received, to be used for his benefit when he leaves foster care.

After holding two hearings, the Juvenile Court ruled that the Department had violated Ryan's due process and equal protection rights by applying the OASDI benefits it had received on his behalf as it did; declared void two COMAR regulations purporting to authorize the Department's actions in this case; and found, as a matter of fact, that the OASDI benefits were not applied in a manner consistent with Ryan's best interests. The court granted the relief sought by Ryan, ordering the Department to place in a trust account, subject to court supervision, the full $31,693.30 in OASDI benefits it had received as Ryan's representative payee.

The Department noted an appeal, presenting three questions for review, which we have rephrased slightly:

I. Did the Department lawfully apply for and use Ryan's OASDI benefits for the cost of his foster care?

II. Does a Juvenile Court have authority to declare a Maryland regulation invalid, to supervise a local department of social services' activities as representative payee for a foster child's OASDI benefits, and to mandate the creation and funding of a trust account as a remedy for a local department's alleged prior misuse of those benefits?

III. Does sovereign immunity bar the Juvenile Court from ordering the Department to establish and maintain a trust account for Ryan with funds from the State Treasury?

In the proceedings below, counsel for the Department conceded that $8,075.32 in OASDI benefits that it received for Ryan should not have been used for the cost of Ryan's care, and had to be reimbursed by the Department to Ryan's Foster Care Trust Account. During the pendency of this appeal, in December 2011, the Department deposited $7,478.32 into Ryan's Foster Care Trust Account, to make up for the sum the Department had conceded it should not have used to reimburse itself for the cost of Ryan's care.¹

Ryan has moved to dismiss the appeal or, in the alternative, to strike certain portions of the Department's brief.

For the reasons to follow, we shall deny the motion to dismiss, reverse the order of the Juvenile Court, and direct the Juvenile Court to order the Department to deposit $660 in Ryan's Foster Care Trust Account. We also shall deny Ryan's motion to strike certain portions of the Department's brief.

STATUTORY AND REGULATORY FRAMEWORK

A. Old Age, Survivor, and Disability Insurance Benefits and Representative Payees

Title II of the Social Security Act, 42 U.S.C. 401 et seq., establishes the framework for OASDI, which is a cash benefit paid to elderly and disabled workers, and their survivors and dependents. In the instant case, we are concerned only with OASDI survivor's benefits. An unmarried child under the age of 18 (or 19 if attendingschool full time) who is a surviving dependent of a deceased parent is entitled to receive OASDI benefits if the deceased parent earned sufficient work credits during his or her lifetime. 42 U.S.C. § 402(d). The amount of the child's benefit is based on the earnings of the deceased parent. Id.

Ordinarily, OASDI benefits are paid directly to the beneficiary. The Social Security Administration (“SSA”) may pay the benefits to a “representative payee,” however, if doing so will serve the interests of the beneficiary. 42 U.S.C. 405(j)(1)(A); 20 C.F.R. 404.2001 (SSA selects a representative payee if it is “in the interest of a beneficiary” to do so). Except in certain limited circumstances that do not apply here, when a beneficiary is under the age of eighteen, as is usually the case with beneficiaries of survivors' benefits, the SSA pays OASDI benefits to a representative payee. 20 C.F.R. 404.2010(b).²

SSA regulations provide that the SSA shall choose a representative payee who will best serve the interests of the beneficiary. The regulations establish an order of priority for selection of a representative payee for a minor child:

(1) A natural or adoptive parent who has custody of the beneficiary, or a guardian;

(2) A natural or adoptive parent who does not have custody of the beneficiary, but is contributing toward the beneficiary's support and is demonstrating strong concern for the beneficiary's well being;

(3) A natural or adoptive parent who does not have custody of the beneficiary and is not contributing toward his or her support but is demonstrating strong concern for the beneficiary's well being;

(4) A relative or stepparent who has custody of the beneficiary;

(5) A relative who does not have custody of the beneficiary but is contributing toward the beneficiary's support and is demonstrating concern for the beneficiary's well being;

(6) A relative or close friend who does not have custody of the beneficiary but is demonstrating concern for the beneficiary's well being; and

(7) An authorized social agency or custodial institution.

20 C.F.R. 404–2021(c) (emphasis added).

Once the SSA has selected a representative payee, it notifies the beneficiary in writing prior to issuance of the first benefit payment. 42 U.S.C. 405(j)(2)(E)(ii); 20 C.F.R. 404.2030(a). When the beneficiary is a minor child, however, the notice is directed to the child's legal guardian or legal representative. Id. The notice advises the beneficiary, inter alia, that he or she has a right to appeal the determination that representative payment is necessary and designation of the particular representative payee. Id.

The responsibilities of a representative payee are delineated by 20 C.F.R. 404.2035. That regulation provides, in pertinent part, that a representative payee shall “[u]se the benefits received on [ ] behalf [of a beneficiary] only for [the beneficiary's] use and benefit in a manner and for the purposes he or she determines, under the guidelines in this subpart, to be in [the beneficiary's] best interests.” 20 C.F.R. 404. 2035(a).

Pursuant to 20 C.F.R. 404.2040(a), payments made by a representative payee are for the “use and benefit” of the beneficiary if the benefits are “used for the beneficiary's current maintenance.” “Current maintenance includes cost incurred in obtaining food, shelter, clothing, medical care, and personal comfort items.” Id. The regulation provides the following illustration:

Example: An aged beneficiary is entitled to a monthly Social Security benefit of $400. Her son, who is her payee, disburses her benefits in the following manner:

+--------------------------------------------------------------------------+
                ¦    ¦Rent and utilities¦$200    ¦                                         ¦
                +----+------------------+--------+-----------------------------------------¦
                ¦    ¦Medical           ¦25      ¦                                         ¦
                +----+------------------+--------+-----------------------------------------¦
                ¦    ¦Food              ¦60      ¦                                         ¦
                +----+------------------+--------+-----------------------------------------¦
                ¦    ¦Clothing (coat)   ¦55      ¦                                         ¦
                +----+------------------+--------+-----------------------------------------¦
                ¦    ¦Savings           ¦30      ¦                                         ¦
                +----+------------------+--------+-----------------------------------------¦
                ¦    ¦Miscellaneous     ¦30      ¦                                         ¦
                +--------------------------------------------------------------------------+
                

The above expenditures would represent proper disbursements on behalf of the beneficiary.

The regulation further provides that, when a beneficiary is institutionalized “because of a mental or physical incapacity,” the “customary charges” of the institution may constitute “current maintenance.” Id. at (b). Expenditures for costs falling outside of those customary charges also would be allowed, however, even if the benefits would not otherwise cover the cost of the institution's charges.³

Finally, the regulation provides that a representative payee may not be required to use benefits to cover a debt of a beneficiary that arose prior to the date on which an OASDI payment was certified to the beneficiary. Id. at (d). For example, if a beneficiary receives a lump sum retroactive benefit payment certified in 2010, and that beneficiary had an outstanding bill for costs incurred in a nursing home in 2009, the representative payee must first...