Stevens by Stevens v. Indiana Dept. of Public Welfare

• Decision Date: 31 January 1991
• Docket Number: No. 49A04-9002-CV-98,49A04-9002-CV-98
• Citation: 566 N.E.2d 544
• Parties: Connie STEVENS, by her legal guardian Anna STEVENS, Appellant, (Petitioner Below), v. INDIANA DEPARTMENT OF PUBLIC WELFARE; Indiana State Department of Public Welfare; Suzanne Magnant, in her official capacity as Administrator of the Indiana State Department of Public Welfare, Appellees, (Plaintiff Below).
• Court: Indiana Appellate Court

Page 544

566 N.E.2d 544

Connie STEVENS, by her legal guardian Anna STEVENS Appellant, (Petitioner Below), v. INDIANA DEPARTMENT OF PUBLIC WELFARE; Indiana State Department of Public Welfare; Suzanne Magnant, in her official capacity as Administrator of the Indiana State Department of Public Welfare, Appellees, (Plaintiff Below).

No. 49A04-9002-CV-98.

Court of Appeals of Indiana Fourth District.

Jan. 31, 1991.

Opinion on Denial of Rehearing

April 25, 1991.

Dawn Howell and Kenneth J. Falk, Legal Services Organization of Indiana, Inc., Indianapolis, for appellant.

Linley E. Pearson, Atty. Gen. and Gordon E. White, Jr., Deputy Atty. Gen., Indianapolis, for appellees.

CHEZEM, Judge.

Case Summary

Appellant/Petitioner, Connie Stevens (Connie), by her legal guardian, Anna Stevens (Anna), appeals the trial court's dismissal of her claim against Appellees/Respondents, Marion County Department of Public Welfare, Indiana State Department of Public Welfare (DPW), and Suzanne Magnant (Appellees), for six thousand six hundred and ninety-one dollars (6,691.00) in nursing home bills. We reverse.

Issue

Whether the trial court erred in dismissing this action on the grounds it did not present a cause of action.

Facts

Connie is mentally retarded and Anna is her legal guardian. She is a recipient of Medicaid which pays for her care and treatment. Connie was a resident of North Willow Center, an Intermediate Care Facility for the Mentally Retarded (ICF/MR), until January 7, 1988. Due to injuries she received from other patients at North Willow, Connie was moved to Eagle Valley and then to Country Trace Home, both Intermediate Care Facilities (ICFs).

In June 1988, a Pre-Admissions Multidisciplinary Team (Team) reviewed Connie's placement and concluded that her injuries had healed sufficiently to have her returned to an ICF/MR. However, at this time there was no ICF/MR placement available. Connie claims the Team told her that her Medicaid benefits to the ICF would terminate on June 30, 1988. Connie remained in the ICF until late November of 1988 when a bed at an ICF/MR opened up. During that time, six thousand six hundred ninety-one dollars ($6,691.00) in nursing home fees accrued. Medicaid refuses to pay for the ICF treatment if it has been determined that the patient should be in an ICF/MR, even if no space is available. However, the nursing home has not demanded payment from Connie or her guardian.

Connie appealed the termination of payments to the nursing home. The denial of benefits was sustained at an administrative hearing by the DPW. On appeal, the State Board of Public Welfare affirmed the decision of the administrative law judge. Connie filed her Petition of Judicial Review/Class Action Complaint for Declaratory and Injunctive Relief on May 5, 1989. The action was brought pursuant to 42 U.S.C.1983 and as a class action pursuant to Indiana Trial Rule 23(B)(2). Connie defined the class as including:

All past, present, and future Indiana recipients of Medicaid who have been or will be denied reimbursement for placement because the placement is deemed to be an inappropriate level of care, even though the appropriate level of care is not available.

Connie's claim asserts the policy denying Medicaid to recipients living in inappropriate levels of care when appropriate levels are not available "violates the Social Security Act, 42 U.S.C. 1396(a), et seq. and is irrational, arbitrary and capricious and in violation of the Due Process Clause of the United States Constitution." On November 9, 1989, the trial court granted Appellees' Motion to Dismiss finding that this action did not present a controversy. Connie now appeals.

Discussion and Decision

Connie correctly states the standard of review for the granting of a motion to dismiss. "[F]or the purpose of considering the motion to dismiss, all facts in the complaint must be taken as true." Sanders v. Stewart (1973), 157 Ind.App. 74, 298 N.E.2d 509, 510. "Moreover, every reasonable inference and intendment must be drawn in his favor from the alleged facts." Van Bronckhorst v. Taube (1976), 168 Ind.App. 132, 341 N.E.2d 791, 792.

The trial court stated in its entry granting the Motion to Dismiss:

Apparently, as of this time, Medicaid benefits were denied with respect to Plaintiff's stay at an Intermediate Care Facility (ICF); however, Plaintiff has not alleged that she paid any bills for her care at that ICF or that any claim has been made against her with respect to those charges. If the ICF proceeds against Defendants for said charges rather than Plaintiff, then the court cannot see what harm has occurred to Plaintiff. Until some claim has been made with respect to Plaintiff regarding her stay at the ICF, this court believes that said case is premature.

Although the trial court dismissed the action on the grounds it did not present a controversy, Appellees set forth other grounds on which they believe the trial court could have properly dismissed the case even if a controversy existed. These are:

1. Connie failed to join the Department of Health and Human Services (DHHS), an indispensable party.

2. Connie's claims for injunctive and declaratory relief are not appropriate forms of relief at the judicial review process.

3. A class action is not appropriate on the judicial review level.

4. The appellees are not proper defendants for a Sec. 1983 action.

On appellate review the trial court's judgment can be sustained on any theory or basis found in the Record. Havert v. Caldwell (1983), Ind., 452 N.E.2d 154. However, no grounds set forth by the Appellees justify dismissal of this case.

In considering these issues, we first determine that the DHHS is not an indispensable party. 42 C.F.R. 431.243, entitled "Parties in cases involving an eligibility determination," states:

If the hearing involves an issue of eligibility and the Medicaid agency is not responsible for eligibility determinations, the agency that is responsible for determining eligibility must participate in the hearing.

Here, the Medicaid agency was responsible for determining eligibility; thus DHHS was not required to be joined. Appellant's concern that the DHHS will discover that payments have been made contrary to federal mandate and recoup the amount of federal share payments from the state government can be addressed through court order. If the state governing agency is acting on a court order, the DHHS cannot recoup. Also, Connie is not contesting the Federal Medicaid program; she is contesting the DPW's policy which terminates a person from the Medicaid Program for being in an inappropriate placement when an appropriate placement is not available. Finally, the remedy for non-joinder is not dismissal. See T.R. 19(A) and T.R. 21(A).

The Appellees next assert that injunctive and declaratory relief are not appropriate forms of relief in a judicial review of an administrative act. This assertion is misplaced. The Sec. 1983 action brought by Connie seeking injunctive and declaratory relief was brought as a separate claim from the judicial review claim. Appellees cite New Trend Beauty School v. Indiana State Board of Culturist Examiners (1988), Ind.App., 518 N.E.2d 1101, to assert that Connie's claims, although partially brought under Sec. 1983, are limited by the Administrative Adjudication Act (AAA) which contains no provision for an award of injunctive and declaratory relief. We disagree. New Trend is factually distinguishable from the present case. In New Trend, plaintiff had not yet exhausted her administrative remedies as Connie has here. Upon exhaustion of those remedies, the plaintiff still had the right to come back and file a new claim under Sec. 1983 and join it with her review of the administrative decision. See Ind. Trial Rule 18(A). Failure of one claim does not exhaust the other. However, as under New Trend, you cannot join one claim to the other when one of the claims has not completed the administrative adjudication process. We see no reason that Connie could not bring a separate claim under Sec. 1983. ¹ This discussion is also dispositive of the Appellees' assertion that a class action is not appropriate when requesting judicial review because she raised it as a new claim with the review of her administrative hearing. A class action cannot be brought under the AAA, but here, Connie is bringing it in as part of her Sec. 1983 claim.

Appellees lastly assert that they are not proper defendants for a Sec. 1983 action because Connie has not shown that they have violated the U.S. Constitution or federal law, and neither the Marion County Department of Welfare nor Suzanne Magnant are "persons" as defined in Sec. 1983. Connie does not have to show a violation of the Constitution or federal law; she must simply assert it and the trier of fact will determine any violation. Connie has challenged the Appellees' application of a federal law, 42 U.S.C. Sec. 1396a et seq., with ample specificity. T.R. 8(A)(1) calls for a short and plain statement of the claim showing that the pleader is entitled to relief, with which Connie has complied. Also, we believe that Suzanne Magnant is a "person" under Sec. 1983. We agree with Connie's assertion that, although in a damage case a state official or the state itself cannot be considered "persons" under Sec. 1983 (See Will v. Michigan Department of State Police (1989), 491 U.S. 58, 109 S.Ct. 2304, 105 L.Ed.2d 45), a state official when sued for injunctive relief in his or her official capacity, is a "person" under Sec. 1983.

Since the city is not a 'person' within the meaning of Sec. 1983, (citations omitted) this court is without jurisdiction to assess damages under Sec. 1983 against the defendants in their official capacities which are intended to be satisfied out of the public treasury and this claim will be dismissed. A different case results with respect to the injunctive relief sought against all five defendants in their official capacities. Under...