In re Ryan W.

• Decision Date: 26 September 2013
• Docket Number: No. 101,No. 95,95,101
• Parties: IN RE: RYAN W.
• Court: Court of Special Appeals of Maryland

IN RE: RYAN W.

No. 95

No. 101

COURT OF APPEALS OF MARYLAND

September Term, 2012

Filed: September 26, 2013

In Re Ryan W., No. 95, September Term, 2012, and In Re Ryan W., No. 101, September Term, 2012.

FAMILY LAW - JUVENILE COURT JURISDICTION - CHILDREN IN NEED OF ASSISTANCE (CINA) - RESOURCES OF CINA - FEDERAL OLD-AGE AND SURVIVOR'S DISABILITY INSURANCE (OASDI) BENEFITS - The juvenile court had no subject matter jurisdiction over a local department of social services' allocation of a foster child's federal OASDI benefits, where the department was appointed representative payee by the Social Security Administration and applied the funds to reimburse itself for current maintenance cost for the CINA.

FAMILY LAW - CHILDREN IN NEED OF ASSISTANCE - DUE PROCESS - NOTICE OF OASDI BENEFITS RECEIVED - The Department of Social Services, acting through a local branch, must notify at a minimum a foster child's CINA counsel whenever it applies to the Social Security Administration to be appointed representative payee for a child's federal OASDI benefits and whenever it receives those funds.

Circuit Court for Baltimore City

Case No. 802023006

Barbera, C.J.,

Harrell

Battaglia

Greene

Adkins

McDonald

^*Bell,

JJ.

Opinion by Harrell, J.

Adkins, J. and Bell, C.J., (ret.) dissent.

^* Bell, C.J., now retired, participated in the hearing and conference of this case while an active member of this Court; after being recalled pursuant to the Constitution, Article IV, Section 3A, he also participated in reaching the decision in this case.

These combined cases¹ arose initially from a 16 June 2011 order entered by the Circuit Court for Baltimore City, sitting as the juvenile court, directing the Baltimore City Department of Social Services ("the Department") to hold in a constructive trust funds the Department received, in its capacity as representative payee, from the Social Security Administration ("SSA") on behalf of Ryan W. ("Ryan"), a Child in Need of Assistance ("CINA"). Born on 26 February 1993, Ryan entered the care of the Department at age 9 after a 4 June 2002 determination by the Circuit Court that he was a CINA. That determination rested on allegations that his drug-addicted parents neglected Ryan and his siblings. Ryan's parents died while he was in foster care. The Department filed an application with the SSA to be appointed his representative payee for Old Age and Survivor's Disability Insurance ("OASDI") benefits to which Ryan was entitled following his parents' deaths. After being appointed as Ryan's representative payee by the SSA, the Department received his benefit payments and applied them to reimburse itself partially for the current cost of Ryan's foster care. Ryan challenged subsequently in the Circuit Court this allocation of his benefit funds by filing a pleading styled as a "motion to control conduct," alleging that the Department failed to make an individualized determination of what was in Ryan's best interests in the application of the proceeds and that the benefits should have been conserved instead for his use in transitioning by age out of foster care. The Circuit Court agreed with Ryan's contentions,leading to establishment of the constructive trust and subsequent appellate scrutiny of that judgment.

We conclude that, under the Social Security Act and the Family Law Article of the Maryland Code, a local department of social services, acting in the capacity as an institutional representative payee appointed by the Commissioner of the Social Security Administration, has discretion to apply a CINA foster child's OASDI benefits to reimburse the Department for its costs incurred for the child's current maintenance, but must provide notice to the child and/or his or her legal representative that the Department applied to the SSA and received such benefits on the child's behalf. Thus, we shall affirm in part and reverse in part the judgment of the Court of Special Appeals in No. 95 and reverse that court's judgment in No. 101.

RELEVANT STATUTORY AND REGULATORY CONTEXT

Social Security Act and Federal Regulations

In 1939, Congress added OASDI to the Social Security Act, 42 U.S.C. § 401 et seq., which provides for, among other things, monthly benefit payments to certain members of a deceased wage-earner's family. Astrue v. Capato ex rel. B.N.C., ___ U.S. ___, ___, 132 S. Ct. 2021, 2027, 182 L. Ed. 2d 887, 895 (2012). A dependent child who survives his wage-earning parent may be entitled to receive survivor's benefits if the child is unmarried and under the age of 18 (or 19 if attending school full time). 42 U.S.C. § 402(d). "An applicant qualifies for such benefits if [he or] she meets the Act's definition of 'child,' is unmarried, is below specified age limits (18 or 19) or is under a disabilitywhich began prior to age 22, and was dependent on the insured at the time of the insured's death." Astrue, ___ U.S. ___, ___, 132 S. Ct. at 2027, 182 L. Ed. 2d at 895 (citing 42 U.S.C. § 402(d)(1)). The wages earned by the deceased parent prior to his or her death determine the amount of the benefit. Id.

A representative payee may be appointed for a child entitled to OASDI benefits if the Commissioner of the SSA determines that the interests of the beneficiary will be served by doing so. 42 U.S.C. § 405(j)(1)(A). "[E]very beneficiary has the right to manage his or her own benefits. However, some beneficiaries due to a mental or physical condition or due to their youth may be unable to do so." 20 C.F.R. § 404.2001(b)(1) (emphasis added). Generally, a representative payee is appointed for child beneficiaries under the age of 18, unless the child "shows the ability to manage the benefits."² 20 C.F.R. § 404.2010(b).

The SSA aims to select "the person, agency, organization or institution that will best serve the interest of the beneficiary" when appointing a representative payee. 20 C.F.R. § 404.2020. In determining who will best serve the child's interests, the SSA considers:

(a) The relationship of the person to the beneficiary;

(b) The amount of interest that the person shows in the beneficiary;

(c) Any legal authority the person, agency, organization or institution has to act on behalf of the beneficiary;

(d) Whether the potential payee has custody of the beneficiary; and

(e) Whether the potential payee is in a position to know of and look after the needs of the beneficiary.

20 C.F.R. § 404.2020(a)-(e). The SSA prioritizes also categories of persons or entities whom the Administration prefers to appoint as a child's representative payee:

(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).

The SSA provides beneficiaries with written notice that the Administration will appoint a representative payee before the payee is appointed officially, 20 C.F.R. § 404.2030(a), and before certifying payment to the payee. 42 U.S.C. § 405(j)(2)(E)(ii). If the beneficiary is "under age 15, an unemancipated minor under the age of 18, or legally incompetent, [the] written notice goes to [the beneficiary's] legal guardian or legal representative." 42 U.S.C. § 405(j)(2)(E)(ii); 20 C.F.R. § 404.2030(a).

The notice required by statute must include language explaining a beneficiary's right to appeal the appointment of a particular entity as the representative payee. 42 U.S.C. § 405(j)(2)(E)(ii); 20 C.F.R. § 404.2030(a). SSA regulations explicitly provide for both administrative and judicial review of, among other things, "initial determinations" made by the agency. 20 C.F.R. § 404.902. "Initial determinations" are defined by regulation (somewhat circularly) as decisions made by the SSA which are subject to administrative and judicial review. 20 C.F.R. § 404.902. The SSA's decision of who will serve as an OASDI beneficiary's representative payee is listed as an example of an "initial determination" and is thus subject to both administrative and judicial review. 20 C.F.R. § 404.902(q).

Once appointed, a representative payee is required to use the benefit payments solely for the beneficiary's "use and benefit in a manner and for the purposes [the representative payee] determines . . . to be in [the beneficiary's] best interests." 20 C.F.R. § 404.2035(a). The SSA views costs associated with the beneficiary's "currentmaintenance" to be valid expenditures satisfying the requirement that benefit payments be applied "for the use and benefit" of the beneficiary and in line with his or her "best interests." 20 C.F.R. § 404.2040(a)(1). "Current maintenance includes cost[s] incurred in obtaining food, shelter, clothing, medical care, and personal comfort items." 20 C.F.R. § 404.2040(a)(1). For beneficiaries receiving institutional care because of a physical or mental disability, the definition of "current maintenance" expands to include "the customary charges made by the institution, as well as expenditures for those items which will aid in the beneficiary's recovery or release from the institution or expenses for personal needs which will improve the beneficiary's conditions while in the institution." 20 C.F.R. § 404.2040(b) (emphasis added). Past debts of the beneficiary that...