Obert v. Colorado Dept. of Social Services

• Decision Date: 19 December 1988
• Docket Number: No. 87SC342,87SC342
• Citation: 766 P.2d 1186
• Parties: Kimberly A. OBERT, Petitioner, v. The COLORADO DEPARTMENT OF SOCIAL SERVICES, Respondent.
• Court: Colorado Supreme Court

Page 1186

766 P.2d 1186

Kimberly A. OBERT, Petitioner, v. The COLORADO DEPARTMENT OF SOCIAL SERVICES, Respondent.

No. 87SC342.

Supreme Court of Colorado.

Dec. 19, 1988.

As Modified on Denial of Rehearings

Jan. 17, 1989.

Bernard A. Poskus, Legal Aid Society of Metropolitan Denver, Inc., Denver, for petitioner.

Duane Woodard, Atty. Gen., Charles B. Howe, Deputy Atty. Gen., Richard H. Forman, Sol. Gen., Wade Livingston, First Asst. Atty. Gen., Vivianne Chaumont Oates, Asst. Atty. Gen., Denver, for respondent.

ERICKSON, Justice.

We granted certiorari to review Brown v. Department of Social Services, 746 P.2d 1379 (Colo.App.1987). ¹ The issue before us is whether the recipient of Aid to Families with Dependent Children (AFDC) benefits can seek to correct an "underpayment" of past benefits after the time has expired for filing an administrative appeal. The court of appeals concluded that the failure of petitioner to perfect a timely appeal of the declaration of benefits precluded review on appeal. However, correction of an underpayment may be made administratively beyond the time permitted for appellate review. Accordingly, we remand to the court of appeals with directions to return the case to the district court for remand to the state hearing officer for determination of whether there was an "underpayment" and for further proceedings consistent with County Letter 84-349-A and 9 Code Colo.Reg. 2503-1, § 3.800.5 (1988) (Correction of Underpayments).

I.

AFDC is a cooperative federal and state program of financial assistance to needy children and their families. See Title IV-A of the Social Security Act, 42 U.S.C. §§ 601 to 616 (1983 & Supp.1988). See generally Shea v. Vialpando, 416 U.S. 251, 253, 94 S.Ct. 1746, 1750, 40 L.Ed.2d 120 (1974). The federal program reimburses each participating state for a percentage of the funds it expends. 42 U.S.C. § 602 (1983 & Supp.1988). In return, states that elect to participate in the program must administer their assistance programs pursuant to state plans that conform to applicable federal statutes and regulations. The federal regulations are promulgated by the United States Department of Health and Human Services (HHS). Id.; see also Lukhard v. Reed, 481 U.S. 368, 107 S.Ct. 1807, 1810, 95 L.Ed.2d 328 (1987); Heckler v. Turner, 470 U.S. 184, 189, 105 S.Ct. 1138, 1141, 84 L.Ed.2d 138 (1985). Colorado has elected to participate in the AFDC program by enacting sections 26-2-101 to -132, 11 C.R.S. (1982 & 1988 Supp.). The Colorado Department of Social Services (Colorado Department) has promulgated regulations implementing the program. See 9 Code Colo.Reg. 2503-1, §§ 3.600 to 3.685 (1988). The Colorado Department oversees and administers the program, with the assistance of the county departments of social services (County Department). See §§ 26-2-104 to -108, 11 C.R.S. (1982 & 1988 Supp.).

The petitioner, Kimberly A. Obert, and her son, began receiving AFDC benefits in July 1982. ² On December 2, 1982, the County Department sent Obert an "Advance Notice of Denial, Reduction or Termination of Assistance" form letter that advised Obert of the termination of her benefits, effective January 1, 1983. The letter stated that "[y]ou [Obert] are ineligible for assistance because you have failed to provide a copy of [your son's] Social Security card." The notice also informed Obert of her right to a hearing to contest the County Department's decision, and reserved a specific time and place for the hearing. ³ Obert failed to appear at the hearing on December 13, 1982.

Instead of exercising her rights to administrative review, Obert reapplied for AFDC benefits in February 1983. She again admitted that her father provided her with food and shelter. On March 17, 1983, the County Department mailed Obert another "Advance Notice of Denial, Reduction or Termination of Assistance" and advised Obert that she was not eligible for assistance because of "excess resources." ⁴ The form letter again set out Obert's right to review and designated a hearing date of March 28, 1983. ⁵ Obert failed to appear at the county hearing.

Obert filed a request for a hearing before the Colorado Department approximately twenty-two months after the termination of her benefits in December 1982. She asserted three claims: (1) the amount of the AFDC benefits and payments she received between July and December 1982 was less than the amount to which she was entitled; (2) that she was wrongfully terminated from AFDC benefits in December 1982 for failure to furnish her son's social security card; and (3) that she was wrongfully denied AFDC benefits when she reapplied in March 1983 because the County Department erroneously determined that she was ineligible for aid. A hearing was conducted before the state hearing officer on January 8, 1985. The hearing officer held that based on Obert's own admissions, Obert had actual notice of both the termination of her AFDC benefits and the denial of her reapplication for assistance. The officer concluded that Obert's right to appeal was foreclosed by her failure to appeal the adverse action within the ninety-day limitation pursuant to 9 Code Colo.Reg. 2503-1, § 3.850.11 (1981). ⁶

The hearing officer held that he did not have jurisdiction to consider the appeal on its merits and could not correct the underpayments and termination of AFDC and Medicaid assistance to Obert, and dismissed Obert's appeal.

Obert sought judicial review of the hearing officer's decision in the district court pursuant to section 24-4-106, 10A C.R.S. (1988). The district court found that there may be facts in the administrative record which support Obert's claims, but concluded that the hearing officer correctly held that he lacked jurisdiction to rule on the merits of Obert's appeal. Accordingly, the district court entered an order affirming the decision of the hearing officer. The court of appeals concluded that the "fact of underpayment must be established before it can be corrected" and held that no provision of law requires further hearings when a recipient fails to appeal an erroneous agency action within the time mandated by law. Brown, 746 P.2d 1379, 1381. Since Obert had an opportunity to appeal within ninety days, and failed to appeal, she lost her right to further appellate review. Brown, 746 P.2d 1379, 1381; see 45 C.F.R. § 205.10(a)(5)(iii) (1987); 9 Code Colo.Reg. 2503-1, § 3.850.11 (1981). She could not appeal by merely asserting a claim of underpayment of benefits after the ninety-day period expired. Brown, 746 P.2d 1379, 1381. We conclude that since Obert's first claim was for underpayment of AFDC benefits the error could be corrected administratively in accordance with County Letter 84-349-A and 9 Code Colo.Reg. 2503-1, § 3.800.5 (1988) (Correction of Underpayments). ⁷ Section 3.800.5--Correction of Underpayments--provides in pertinent part:

The county department must take prompt action to correct underpayments to current recipients and those who would be current recipients if the error causing the underpayment had not occurred. Underpayment means a financial assistance payment(s) received by or for an assistance unit which is less than the amount for which the assistance unit was eligible, or failure to issue a financial assistance payment to an eligible assistance unit if such payment should have been issued. When the possibility of an underpayment is discovered or brought to the attention of the county department, the income maintenance staff must:

a. record the date of the discovery;

b. investigate and verify the facts;

c. determine whether an underpayment has occurred.

When it is determined that an underpayment has occurred, the county department must take action to correct the payment. The two principal means of correction are

a. issue an additional warrant so that the payment and the authorization are in agreement;

b. issue a retroactive payment warrant when the authorization is incorrect.

(Emphasis added.)

II.

Obert claims that the broad statutory language authorizing AFDC, the federal regulations interpreting the statute, and the federal statute's legislative history all compel the conclusion that AFDC recipients or applicants may seek review of the Colorado Department's mistaken termination or denial of AFDC benefits at any time. We disagree.

The federal AFDC statutes require that the state plan must provide an opportunity for a fair hearing before the administering agency to any individual whose claim for AFDC is denied or not acted upon with reasonable promptness. 42 U.S.C. § 602(a)(4) (Supp.1988). Section 26-2-127, 11 C.R.S. (1982 & 1988 Supp.), parallels 42 U.S.C. § 602(a)(4) and grants an applicant or recipient the opportunity to appeal the Colorado Department's or County Department's decision to deny, suspend, terminate, or modify an AFDC award.

The HHS regulation addressing the fair hearing requirement states:

(a) State plan requirements. A state plan under title ... IV-A ... shall provide for a system of hearings under which:

(5) An opportunity for a hearing shall be granted to any applicant who requests a hearing because his or her claim for financial assistance ... is denied or is not acted upon with reasonable promptness, and to any recipient who is aggrieved by any agency action resulting in ... suspension, reduction, discontinuance, or termination of assistance ... [and]

(iii) The claimant shall be provided reasonable time, not to exceed 90 days, in which to appeal an agency action.

45 C.F.R. § 205.10 (1987) (emphasis added). The Colorado Department's regulations also require an aggrieved applicant or recipient to appeal an adverse action within ninety days. See 9 Code Colo.Reg. 2503-1, § 3.850.11 (1981).

The Colorado Department's time limits for the right to appeal an adverse AFDC decision conform to the federal statutes and regulations. ⁸ See 42 U.S.C. § 602; Lukhard, 107 S.Ct. at 1810; Heckler, 470 U.S. at 189, 105 S.Ct. at 1141. An aggrieved...