Weiss v. INDIANA FSSA, 49A05-0002-CV-64.

• Citation: 741 N.E.2d 398
• Decision Date: 28 December 2000
• Docket Number: No. 49A05-0002-CV-64.,49A05-0002-CV-64.
• Parties: Wallace R. WEISS, Jr., Appellant-Petitioner, v. INDIANA FAMILY AND SOCIAL SERVICES ADMINISTRATION, DIVISION OF DISABILITY, AGING AND REHABILITATIVE SERVICES, Katherine Davis, in her Official Capacity as Secretary of the Family and Social Services Administration, and Debra M. Wilson, in her Official Capacity as Director of the Division of Disability, Aging and Rehabilitative Services, Appellees-Plaintiffs.
• Court: Court of Appeals of Indiana

741 N.E.2d 398

Wallace R. WEISS, Jr., Appellant-Petitioner, v. INDIANA FAMILY AND SOCIAL SERVICES ADMINISTRATION, DIVISION OF DISABILITY, AGING AND REHABILITATIVE SERVICES, Katherine Davis, in her Official Capacity as Secretary of the Family and Social Services Administration, and Debra M. Wilson, in her Official Capacity as Director of the Division of Disability, Aging and Rehabilitative Services, Appellees-Plaintiffs.

No. 49A05-0002-CV-64.

Court of Appeals of Indiana.

December 28, 2000.

Milo G. Gray, Jr., Debra J. Dial, Gary W. Ricks, Indiana Protection & Advocacy Services, Indianapolis, Indiana, Attorneys for Appellant.

Karen M. Freeman-Wilson, Attorney General of Indiana, Eileen Euzen, Deputy Attorney General, Indianapolis, Indiana, Attorneys For Appellees.

OPINION

BROOK, Judge

Case Summary

Appellant-petitioner Wallace R. Weiss, Jr. ("Weiss") appeals from the decision of the Indiana Family Social Services Administration ("the FSSA") finding him ineligible for Indiana vocational rehabilitation services. We affirm.¹

Issues

Weiss raises two issues for our review, which we restate as follows:

I. whether the FSSA is barred by administrative res judicata from determining Weiss's eligibility for services; and

II. whether the FSSA's decision was arbitrary and capricious.

Facts and Procedural History

Weiss is a fifty-three-year-old man with a hearing impediment. On September 22, 1993, while present in and a resident of Indiana, Weiss applied to the FSSA for vocational rehabilitation services. On October 28, 1993, the FSSA determined that Weiss was eligible for services because of his disabilities of bilateral hearing loss, adjustment disorder, and depression. Weiss worked with a vocational rehabilitation counselor and developed an Individualized Written Rehabilitation Plan ("IWRP") to identify his vocational goal of becoming a college professor of business and to determine the services necessary to achieve that goal.

Weiss attended Holy Cross College in South Bend, Indiana, and obtained an associate's degree in May 1994. He then took classes at Bethel College. During the spring of 1996, Weiss transferred to Arizona State University, where he took classes toward a bachelor's degree in finance. As provided in Weiss's IWRP, the FSSA provided funding for tuition, books, and supplies at Arizona State University. Such funding may not exceed the maximum allowable costs for Indiana in-state tuition. See Indiana Vocational Rehabilitation Services Policy and Procedures Manual, appendix B. After attending Arizona State for one year, Weiss became eligible for the Arizona in-state tuition rate. In the spring of 1997, Weiss claimed Arizona residency and qualified for the in-state tuition rate, which significantly reduced his costs.

On September 10, 1997, after learning that Weiss had qualified for Arizona in-state tuition, the FSSA notified Weiss that he would need to apply for Arizona vocational rehabilitation services under the comparable benefits rule of the Rehabilitation Act ("the Act"). See Rehabilitation Act of 1973, Pub.L. No. 93-112, 87 Stat. 355 (codified as amended at 29 U.S.C. §§ 701-797b (1998)). Weiss requested a hearing, which was held on December 1, 1997. One of the issues raised at the hearing was whether the FSSA correctly relied on the comparable benefits rule when it instructed Weiss to apply for Arizona vocational services. On December 3, 1997, the hearing officer, Constance Brown ("Brown"), found that the FSSA had incorrectly relied on the comparable benefits rule when it advised Weiss to seek services from Arizona. Brown also stated that "Mr. Weiss can rightfully expect to remain a client of Indiana Vocational Rehabilitation Services." Brown did not enter findings on Weiss's residency status. The director of the Division of Disability, Aging, and Rehabilitative Services, Debra Simmons Wilson ("Wilson"), adopted Brown's findings on December 23, 1997.

On January 5, 1998, less than two weeks later, the FSSA sent another letter to Weiss notifying him that he was no longer eligible for Indiana vocational rehabilitation services because he was a resident of Arizona. The FSSA informed Weiss that it would continue to pay for his current school term to allow him the opportunity to apply for Arizona vocational rehabilitation services. Weiss appealed that determination based on his belief that the issue of eligibility had already been decided in the prior hearing, and a hearing was held by Paul A. De Prez ("De Prez") on March 23, 1998. The issue at the second hearing was whether the FSSA had correctly determined that Weiss was no longer eligible for Indiana vocational rehabilitation services because he was no longer a resident of or present in Indiana. On March 25, 1998, De Prez concluded that Weiss was a resident of Arizona and therefore was not eligible for Indiana services. Weiss submitted objections and requested review by the FSSA. On May 14, 1998, Wilson adopted De Prez's findings.

On June 12, 1998, Weiss filed a petition for judicial review in the Marion Superior Court. On January 14, 2000, the court issued its findings of fact, conclusions of law, and judgment, upholding the final agency order. This appeal now ensues.

Discussion and Decision

Weiss contends that the FSSA's decision finding him ineligible for services was precluded by administrative res judicata. Specifically, he argues that the FSSA had ample opportunity to litigate the issue of eligibility in the first hearing. He also asserts that the decision was arbitrary and capricious. In particular, Weiss contends that he was not informed that he would become ineligible for Indiana vocational rehabilitation benefits if he qualified for in-state tuition rates in Arizona.

In response, the FSSA argues that administrative res judicata does not apply because the two hearings decided different issues. The first hearing was limited to the issue of whether Weiss was required to seek comparable benefits. The second hearing decided the issue of Weiss's eligibility for Indiana vocational rehabilitation services. Thus, argues the FSSA, the issue of eligibility was not litigated in the first hearing, and administrative res judicata does not apply. The FSSA also contends that the decision determining that Weiss was ineligible for services was not arbitrary and capricious. Rather, the FSSA argues that the decision was reasonable because Indiana is not required to provide vocational rehabilitation services to an individual who is not present in or a resident of Indiana.

Standard of Review

Proceedings before the FSSA and judicial review thereof are governed by the Administrative Orders and Procedures Act. See IND.CODE § 4-21.5. In reviewing an administrative agency's decision, we are limited to a consideration of "whether the decision is supported by substantial evidence, whether it was arbitrary and capricious, and whether it was in contravention of constitutional, statutory, or legal principles." Indiana Family & Social Servs. Admin. v. Hospitality House of Bedford, 704 N.E.2d 1050, 1059-60 (Ind.Ct. App.1998) (citation omitted). We neither redetermine the facts found by the agency nor substitute our judgment for that of the agency. State Bd. of Registration for Prof'l Eng'rs v. Eberenz, 723 N.E.2d 422, 430 (Ind.2000). Rather, "we read the record in the light most favorable to the administrative proceedings, and we do not disturb the [agency]'s conclusion so long as there is substantial evidence to support that determination." Regester v. Indiana State Bd. of Nursing, 703 N.E.2d 147, 151 (Ind.1998).

I. Administrative Res Judicata²

Weiss asserts that the FSSA's decision finding him ineligible for services is barred by administrative res judicata. In particular, he contends that a prior hearing decided the issue in his favor and that, therefore, the FSSA should have been precluded from re-litigating the issue in the second hearing. When determining whether administrative res judicata (claim preclusion) applies, we examine whether (1) the issues sought to be estopped were within the statutory jurisdiction of the agency; (2) the agency was acting in a judicial capacity; (3) both parties had a fair opportunity to litigate the issues; and (4) the decision of the administrative tribunal could be appealed to a judicial tribunal. Watson Rural Water Co. v. Indiana Cities Water Corp., 540 N.E.2d 131, 135 (Ind.Ct. App.1989), trans. denied. Res judicata precludes relitigation not only of matters conclusively decided in a previous action, but also ones that a party could have litigated. Wedel v. American Elec. Power Serv. Corp., 681 N.E.2d 1122, 1131 (Ind.Ct. App.1997), trans. denied. "The test generally applied when determining whether a suit is barred by claim preclusion is `whether identical evidence will support the issues involved in both actions.'" Bojrab v. John Carr Agency, 597 N.E.2d 376, 378 (Ind.Ct.App.1992) (citation omitted). Given the unique nature of administrative proceedings, however, the doctrine of res judicata "`should be qualified or relaxed to whatever extent is desirable for making it a proper and useful tool for administrative justice.'" South Bend Fed'n of Teachers v. National Educ. Ass'n—South Bend, 180 Ind.App. 299, 316, 389 N.E.2d 23, 34 (1979) (quoting 2 K. DAVIS, ADMINISTRATIVE LAW TREATISE §§ 18.01, 18.04).

The issue before the FSSA at the first hearing was whether Weiss was required to apply for vocational rehabilitation services from Arizona under the comparable benefits rule. See 34 C.F.R. § 361.53 (1999). The FSSA argued that because Weiss resided in Arizona, he would be required to seek comparable benefits from Arizona. The rule provides:

(a) The State plan must assure that

(1) Prior to providing any vocational rehabilitation services to an eligible individual, or to members of the individual's family, except those services listed in paragraph (b) of this section, the State unit shall determine whether comparable

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