SC Administrative Law Court Decisions

This matter is before the Administrative Law Judge Division pursuant to the appeal of Selina Walker from a decision of the Fair Hearing Committee of the South Carolina Department of Social Services (DSS). That decision discontinued Appellant's welfare benefits on the ground that she failed to provide documentation of either the equity value of non-homestead property or her attempts to sell the property. A hearing was conducted on October 18, 2001, at the Administrative Law Judge Division in Columbia, South Carolina, at which time the parties presented oral arguments.

An appeal before the ALJD is governed by the review criteria of S.C. Code Ann. § 1-23-380(A)(6) (Supp. 2000). See S.C. Code Ann. § 1-23-380(B) (Supp. 2000) (where an ALJ is directed to conduct a review "in the same manner prescribed in [§ 1-23-380](A)."). Section 1-23-380(A)(6) establishes the following criteria:

The court shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. The court may affirm the decision of the agency or remand the case for further proceedings. The court may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions or decisions are:

(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 or clearly unwarranted exercise of discretion.

Here, Appellant argues a reversal of the Fair Hearing Committee's decision is required under (e) and (f) and that her benefits should be retroactively reinstated. In the alternative, Appellant argues that this matter should be remanded to the Board for reopening of her case to give her an opportunity to obtain the appropriate documentation.

For the reasons stated herein, the decision of the Fair Hearing Committee is reversed and the case is remanded to allow Appellant an opportunity to submit the necessary documentation.

A. Background facts

Appellant applied for Family Independence (FI) benefits in June 2000 and her application was approved. During the annual review of benefits in January, 2001, DSS discovered that Appellant owned non-homestead property in Darlington County. Based on a review of Darlington County tax records, DSS assigned to the property a value of $7,650, which was above the $2,500 resource limit for eligibility to receive public assistance. After Appellant received notification from DSS that her welfare benefits would be discontinued, she requested a Fair Hearing, which was conducted on April 20, 2001. In the interim, Andrea Ridge, the FI supervisor at the Aiken County Department of Social Services, telephoned Appellant to explain the status of the case. During the conversation, Appellant requested Ms. Ridge's assistance in obtaining information on the actual equity in her Darlington County property. Ms. Ridge stated that she could not assist Appellant because she did not have enough information. At some point in time after that conversation, DSS staff received the payment book for Appellant's mortgage on the property, but apparently no further efforts were made to assist Appellant in obtaining information. (Transcript, page 18, line 358 - page 19, line 391).

During the Fair Hearing, the hearing officer would not accept the documents that Appellant submitted which were proffered to show her good faith efforts to sell her non-exempt property. Although these documents were neither notarized nor on business letterhead, they were signed by individuals and included telephone numbers where these individuals could be reached for verification. When Appellant questioned the hearing officer as to her submission of more acceptable documentation after the hearing, the hearing officer indicated that she could do so, but gave Appellant no other specific instructions as to where to submit the documents or a specific deadline within which to submit them. (Transcript, page 13, lines 260-272). Later in the course of the hearing, the hearing officer indicated that she was going to let the Fair Hearing Committee recommend what further course of action to take and whether to accept further verification. (Transcript, page 23, lines 467-472).

At the conclusion of the hearing, the hearing officer stated nothing about holding the record open for additional documentation. Further, the hearing officer did not include the documentation submitted by Appellant at the hearing as a proffer of evidence for the Fair Hearing Committee to consider. On May 8, 2001, less than three weeks after the hearing, the Fair Hearing Committee issued a Final Administrative Decision on Appellant's case without the benefit of any documentation of Appellant's good faith efforts to sell her property or the actual equity in the property, not even the additional information which the hearing officer advised Appellant she could submit. The decision concluded that Appellant failed to prove any indebtedness on the Darlington County property, and therefore, the tax value of the property was properly used in the determination of Appellant's resources. The Fair Hearing Committee further concluded that Appellant failed to provide evidence of a good faith effort to sell the property, and therefore, Appellant's countable resources exceeded the limit for eligibility for public assistance. This appeal followed.

B. Applicable Law

1. Eligibility for Family Independence

To be eligible for Family Independence benefits, the total combined value of the applicant's real and personal property cannot exceed twenty-five hundred dollars in equity value. 27 S.C. Code Ann. Regs. 114-1140(C) (Supp. 2000) (emphasis added). Certain resources are not counted toward this twenty-five hundred dollar limit. Id. They include, but are not limited to, the applicant's home and its contiguous property and real property which the family is making a good faith effort to sell. Id. The Department defines a "good faith effort" as agreeing to sell the property at the current market value and putting the property up for sale in the area where it commands a market. Id.

2. Fair Hearing requirements

In the fair hearing process, the case manager has the responsibility to assist the applicant in submitting the appeal and preparing the case, if necessary. SC/DSS-Family Independence Policy Manual, Chapter R, Topic 02. Further, the hearing officer is responsible for allowing additional time, if necessary, for the applicant to obtain more information bearing on the issues. SC/DSS-Family Independence Policy Manual, Chapter R, Topic 08, Section C-8. Nothing in this section or the section setting forth the responsibilities of the Fair Hearing Committee (Topic 09) permits the hearing officer to defer to the Fair Hearing Committee regarding the allowance of additional time to submit more information. Thus, the hearing officer must make the determination on whether it is necessary to allow the applicant additional time to submit more information on the issues.

C. Law applied to facts

The record does not indicate that DSS staff made adequate efforts to assist Appellant in collecting current information on the equity in her Darlington County property after receiving Appellant's mortgage payment book, which presumably would have contact information regarding the mortgagee. Moreover, the record indicates that it was necessary for Appellant to have additional time after the Fair Hearing to obtain more information bearing on the issues and that she was denied a meaningful opportunity to do so. The hearing officer would not accept the documents that Appellant submitted during the hearing which were proffered to show Appellant's good faith efforts to sell her non-exempt property. While the hearing officer indicated that Appellant could submit more acceptable documentation after the hearing, she gave Appellant no other specific instructions as to where to submit the documents or a specific deadline within which to submit them. Further, the hearing officer did not include the documentation submitted by Appellant at the hearing as a proffer of evidence for the Fair Hearing Committee to consider. Less than three weeks later, the Fair Hearing Committee issued a decision on Appellant's case without the benefit of any documentation of Appellant's good faith efforts to sell her property or the actual equity in the property, not even the additional information which the hearing officer advised Appellant she could submit.

Under these circumstances, Appellant was denied a meaningful opportunity to show her good faith efforts to sell her non-homestead property and the actual equity value of the property. The hearing officer and DSS staff failed to adequately meet their responsibilities as set forth in the Family Independence Manual. Therefore, the hearing officer abused her discretion and the Fair Hearing Committee reached an erroneous conclusion based on an incomplete record. ⁽¹⁾ Cf. Ex parte Rayer, 340 S.C. 192, 530 S.E.2d 397 (Ct. App. 2000) (reversing decision where DSS failed to follow its own regulations and procedures regarding foster care disputes).

The Order of the DSS Fair Hearing Committee is reversed. The case is remanded to allow Appellant to submit information concerning her equity in the Darlington County property and her good faith efforts to sell the property. DSS shall make reasonable efforts to assist Appellant in submitting this information in accordance with the requirements of Chapter R of the Family Independence Manual.

AND IT IS SO ORDERED.

____________________________

RAY N. STEVENS

Administrative Law Judge

Dated: November 1, 2001

Columbia, South Carolina

1. The Final Administrative Decision indicates that the hearing officer served as one of three members of the Fair Hearing Committee.