Legal Decisions: Adoption Assistance

CASE NO. 31042

DEPT. NO 1

IN THE FOURTH JUDICIAL DISTRICT COURT OF THE STATE OF NEVADA, IN AND FOR THE COUNTY OF ELKO

GARRY, BETH and MILTON ALSDORF, PETITIONERS

DEPARTMENT OF HUMAN RESOURCES, DIVISION OF CHILD AND FAMILY SERVICES, RESPONDENT

ORDER FOR REMAND

This matter came before the Court on the 10th day of May, 2000.  Petitioners were represented by Lisa K. Mendez, Esq. Respondent was represented by Charles Hilsabeck, Deputy Attorney General, Human Resource Division.  The Court, having reviewed the documents on file herein and having heard the arguments of counsel, deems itself fully advised in the premises.  The Court finds that due to the conduct of the Department of Human Resources, Division of Child and Family Services, the decision of the Hearing 21 Officer is REVERSED and this case is REMANDED for further proceedings consistent herewith.

The Court accepts the Findings of Fact of the Hearing Officer in the document dated August 27, 23 1999, except for the finding that the Alsdorfs were advised of the availability of adoption subsidies and as set forth below.  During the hearing on this Petition for Judicial Review, the State informed the Court that it was their position that they had not informed the Alsdorfs of the availability of adoption subsidies.  The Court does not accept the Conclusions of Law which appear in the Hearing Officer’s Findings of Fact.

The minor children were placed for adoption in the home of the Petitioners, Garry-Beth Alsdorf and Milton Alsdorf, in January, 1987.  At that time, the Petitioners inquired about obtaining adoption subsidies for the minor children due to mental health problems.  The Petitioners were told that no subsidies were available. It was not until July, 1998, that the Division admitted that the children were eligible for Title IV E subsidies prior to or at the time of the placement.  The adoption was finalized in September, 1987.  Despite the representation that no subsidies were available the Petitioners continued to investigate the availability of adoption subsidies.

In November, 1997, upon the advice of a social worker employed with the Division of Child and Family Services, Petitioners wrote a formal letter to Respondent seeking adoption subsidies.  Nine months later, Petitioners received an application.  Petitioners promptly completed the application and returned it to Respondent.  Respondent approved the application in June of 1998.

Petitioners filed a Petition for Judicial Review on October 20, 1998, based upon the failure of the Division to address the issue of whether Petitioners were entitled to retroactive benefits.  This Court issued an Order for Limited Remand for Supplementary Proceedings and ordered that this issue be heard.  A hearing took place on July 16, 1999.  Upon the conclusion of the hearing the Hearing Officer denied retroactive benefits based on Respondent's policy and practice of not paying such benefits.  No individualized consideration was given to the Alsdorfs' request for retroactive benefits.  Thereafter Petitioners filed the instant Petition for Judicial Review.  The State opposed the Petition and this matter was submitted to the Court for decision.

NRS 233B.135(3) provides that the reviewing court shall not substitute its judgment for that of the agency as to the weight of evidence on a question of fact.  The court may remand or affirm the final decision or set it aside in whole or in part if substantial rights of the petitioner have been prejudiced because the final decision of the agency is: (a) in violation of constitutional or statutory provisions; (b) in excess of the statutory authority of the agency; (c) made upon unlawful procedure; (d) affected by other error of law; (e) clearly erroneous in view of the reliable, probative and substantial evidence on the whole record; or (f) arbitrary or capricious or characterized by abuse of discretion.  In the instant case, the Court has determined that the decision of the agency is in violation of constitutional or statutory provision; affected by other error of law; clearly erroneous in view of the reliable, probative and substantive evidence on the whole record; and arbitrary or capricious or characterized by abuse of discretion.

It is clear from the record that these children were eligible for adoption subsidies at the time of the adoption.  It is equally clear that the State did not provide such benefits, or notice thereof to the adoptive parents.  During the hearing on this Petition for Judicial Review, the attorney for the State informed the Court that it was the State's position that they had not informed the Alsdorfs of the availability of adoption subsidies. 

In Ferdinand v. Department for Children and Their Families, 768 Fed.Supp. 401 (R.I. 1991), the court, relying on C.F.R. Section 1356.40(f), held that the state has an affirmative duty to fully explain all available adoption assistance programs so that the adoptive parents can make an informed decision.  In this case, the State failed to advise the Alsdorfs of the assistance programs.  As in Ferdinand, there is no mention in the agency's file that assistance programs were explained or offered to the Alsdorfs at the time the children were placed in their home or when the adoption was finalized.  In fact, at the time of the adoption, the Alsdorfs asked whether there was financial assistance available and were told, "no."  The Alsdorfs discovered the availability of such programs through a local social worker, after having again been told by the State that financial assistance was not available.  In November, 1997, the Alsdorfs began writing to Wanda Scott, Department Head of Adoption for the Division requesting assistance.  They did not receive an application until July, 1998.  (See also, 42 U.S.C. § 673, ACF-PIQ-92-02).

The State argues that the Ferdinand case was decided in 1991 and therefore is not applicable to the instant adoption which took place in 1987.  However, in 1983, U.S. Department of Health and Human Services guideline ACYF-PA-83-5 was in effect and stated that "State agencies have a responsibility to make information available on the eligibility requirements and benefits under each program so that an informed choice can be made."  Therefore, the State's argument is not well taken.  It is clear that the State had a duty to inform the adoptive parents of the subsidy programs available to a special needs adoption for the reasons set forth in the Ferdinand case and ACYF-PA-83-5.

In the instant case, the Court is not just dealing with the failure of the Division to notify the Alsdorfs that assistance may be available under CFR § 1356.40, the Court must address the fact that the agency misrepresented the availability of adoption subsidies to the Alsdorfs from 1987 through July, 1998.1  The State's main argument appears to be that there was no statute in effect at the time which required the State to give adoptive families notice of the availability of adoption subsidies.  The State seems to overlook the issue of the misrepresentation to the Alsdorfs of the existence of such subsidies and the delay in responding to their requests for assistance.  The State's response appears to be that it is their policy to deny any and all requests for retroactive benefits.  In response to questioning by the Court the State asserted that there was no remedy for a hypothetical bad faith misrepresentation concerning the existence of adoption subsidies.  If anD when the adoptive parents discovered that adoption subsidies were in fact available, the only benefit the State would pay would be adoption benefits from the time of the approval of the application.

The State claims that whether they approve the award of retroactive benefits is discretionary and that this discretion is solely vested in the State.  However, if the State's policy is to deny all requests for retroactive benefits regardless of the facts underlying the request, they have failed to exercise their discretion in this regard.  The Court considers this policy driven refusal to exercise discretion as an abuse of discretion.

In Falline v. GNVL Corp., 107 Nev. 1004 (1991), footnote 3, the Supreme Court stated: "An abuse of discretion necessarily involves at least two factors: (1) the authority to exercise judgment or discretion in acting or refusing to act on a given matter; and (2) a lack of justification for the act or inaction decided upon."  In administrative Law, Schwartz, 1976, abuse of discretion is defined as:

" (1) improper purpose; (2) erroneous and extraneous considerations; (3) erroneous legal or factual foundation; (4) failure to consider relevant considerations; (5) inaction or delay; and (6) departure from established precedents or practice."

In the instant case, neither the State nor the Hearing Officer reviewed or seriously considered the underlying facts and circumstances in this case when deciding not to award retroactive benefits.  The State abused its discretion by failing to exercise that discretion and consider the facts of this case.

The Court believes that the policy implemented by the State in denying all claims for retroactive benefits without considering the underlying facts of a case, is a denial of due process and is in violation of the Constitutions of the United States and the State of Nevada.  State, Dept Mtr. Vehicles v. Vezeris, 102 Nev. 232, 236, (citing Mathews v. Eldridge, 424 U.S. 319, 335, 96 S.Ct. 893, 903, 47 L.Ed.2d 18 (1976); Minton v. Board of Medical Examiners, 110 Nev, 1060 (1994).

Failure to afford due process resulted in denial of fair hearing.  It is duty of all administrative boards and commissions before issuance of orders to hold fair and open hearings and to give notice so that all interested parties may have opportunity to be heard and that rudiments of fair play required by U.S. Fourteenth Amendment can be observed.  See NRS 23313.060; Checker, Inc. v. Public Serv. Comm'n, 84 Nev. 623 (1968), citing Gibbens Co. v. Archie, 92 Nev. 234 (1976); Bivins Constr. v. State Contractors' Bd ,107 Nev. 281 (1991); State Bd of Equalization v. Sierra Pac. Power Co. 97 Nev. 461 (1981).   The policy of the State to deny all claims for retroactive benefits violates the requirement for a fair hearing.  Hearings are not meant to be partisan, with the agency pitted against the individual. Pundy v. Dept. Of Professional Regulation, 570 N.E.2d 458 (111. 1991).  Here the agency did not perform its function.  The facts were irrelevant given the policy of the State.  When adjudicatory proceedings reach a predetermined end, they are only fair in form.  Administrative Law, Schwartz, 1976.

There appears to be no dispute that these children were eligible for adoption subsidy benefits at the time they were placed in the home of the Alsdorfs in January, 1987.  From the record, it is also obvious that the agency did not inform the Alsdorfs that benefits were available at the time of the placement or finalization of the adoption.  The record further reveals that the State denied the existence of the availability of the benefits when the Alsdorfs continued to inquire throughout the term of the adoption.  Finally, when the Alsdorfs discovered the existence of the benefits and attempted to procure them, it took the State seven months to respond to the request, which it granted.  The Court believes that by finally granting the adoption benefits 11 years after the placement of the children with the Alsdorfs, the State acknowledged their failures in this adoption.  It would therefore appear that if the agency had seriously considered the facts and equities in this case, instead of relying on the "automatic denial policy," and exercised its discretion in this case, the Alsdorfs would have been seriously considered for an award of retroactive benefits.  It would appear to the Court that the Alsdorfs are seeking approximately $48,000 in retroactive benefits.  An agency denial should be based upon a reasoned and documented exercise of discretion capable of meaningful judicial review.

Courts are empowered to reverse or modify an agency's decision if the aggrieved party has been prejudiced by administrative findings, inferences, conclusions or decisions that are, inter alia, affected by error of law, clear error in view of the reliable, probative and substantial evidence of record or an abuse or clearly unwarranted exercise of discretion.  Dredge v. State ex reL, Dept. of 105 Nev. 39 (1989); NRS 233B.140(5)(d), (e) and (f).

Based upon the foregoing,

IT IS HEREBY ORDERED that the decision of the Hearings Officer is REVERSED.

IT IS FURTHER ORDERED that this case is remanded to the Hearings Officer to determine whether the facts in this case justify the award of retroactive benefits to the Petitioners, commencing in January,

SO ORDERED this 6^th day of July, 2000.

Footnotes

1 In July, 1998, the Division recommended that the application for adoption subsidy be granted because "the children in question appeared to have met special needs criteria prior to adoption based on their status as a sibling group for three."  The Division further recommended that payment of the subsidy would be effective July 13, 1998.