SC Administrative Law Court Decisions

This case is before the Administrative Law Judge Division (ALJD) as an appeal of a decision rendered by a Hearing Officer of the Department of Health and Human Services (DHHS). Ms. Price appealed a determination by the Cherokee County Department of Social Services (DSS) that she was ineligible for Medicaid benefits during August of 1996 because the joint income of Ms. Price and her husband during that month exceeded the applicable limit for a couple. A "fair hearing" was conducted on August 7, 1997.

Ms. Price's contends that her husband was not a member of her household in August of 1996 due to the fact that they were separated Therefore she argues that her husband's income should not have been considered in determining her eligibility and that she should have been evaluated upon her individual income for August 1996.

DHHS Hearing Officer Lester Bockow issued his written decision on October 21, 1997, in which he agreed with DSS that Ms. Price's income exceeded the applicable eligibility limit in August of 1996. Ms. Price appealed that decision to the ALJD and a hearing was held in Columbia, South Carolina on April 8, 1998. She asserted the Hearing Officer's decision was not supported by the evidence in the record. Upon consideration of the briefs and oral arguments and review of the applicable law, the ruling of the Hearing Officer is hereby affirmed.

This case is before the ALJD as an appeal of an agency action. As such, the ALJD sits in an appellate capacity under the Administrative Procedures Act (APA), rather than as an independent finder of fact. In South Carolina, the provisions of the Administrative Procedures Act -- specifically S.C. Code Ann. §1-23-380(A)(6) -- govern the reasons an appellate body may reverse or modify an agency decision. This section states:

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.

S.C. Code Ann. § 1-23-380(A)(6) (Supp. 1997).

A decision is supported by "substantial evidence" when the record as a whole allows reasonable minds to reach the same conclusion reached by the agency. Bilton v. Best Western Royal Motor Lodge, 282 S.C. 634, 321 S.E.2d 63 (Ct. App. 1984). The well-settled case law in this state has also interpreted the rule to mean that a decision will not be set aside simply because reasonable minds may differ on the judgment. Lark v. Bi-Lo, 276 S.C. 130, 276 S.E.2d 304 (1981). The fact that the record, when considered as a whole, presents the possibility of drawing two inconsistent conclusions from the evidence does not prevent the agency's finding from being supported by substantial evidence. Waters v. South Carolina Land Resources Conservation Comm'n, 321 S.C. 219, 467 S.E.2d 913 (1996); Grant v. South Carolina Coastal Council, 319 S.C. 348, 461 S.E.2d 388 (1995); Palmetto Alliance, Inc. v. South Carolina Public Service Comm'n, 282 S.C. 430, 319 S.E.2d 695 (1984).

In applying the substantial evidence rule, the factual findings of the administrative agency are presumed to be correct. Rodney v. Michelin Tire Co., 320 S.C. 515, 466 S.E.2d 357 (1996), citing Kearse v. State Health and Human Services Finance Comm'n, 318 S.C. 198, 456 S.E.2d 892 (1995). Furthermore, the reviewing court is prohibited from substituting its judgment for that of the agency as to the weight of the evidence on questions of fact. Grant v. South Carolina Coastal Council, 319 S.C. 348, 461 S.E.2d 388 (1995), citing Gibson v. Florence Country Club, 282 S.C. 384, 318 S.E.2d 365 (1984). Finally, the party challenging an agency action has the burden of proving convincingly that the agency's decision is unsupported by substantial evidence. Waters v. South Carolina Land Resources Conservation Comm'n, 321 S.C. 219, 467 S.E.2d 913 (1996), citing Hamm v. AT&T, 302 S.C. 210, 394 S.E.2d 842 (1994).

The record contains conflicting evidence regarding the separation date of the Prices. However, there is substantial evidence in the record to support the decision of the Hearing Officer. Petitioner's sister, in setting forth a timetable of events, wrote that Mr. Price did not leave until the end of August, after Ms. Price returned from her stay in the hospital. During Ms. Price's hospitalization in the middle of August, she was unaware of whether Mr. Price was in the house or not, and he did visit her in the hospital. Ms. Price also admits her memory of those events may be somewhat unclear because of her condition. This evidence, even though there is contradictory evidence, is sufficient to support the finding of the Hearing Officer that Mr. Price was in the household during the month of August.

One particularly key piece of evidence is a divorce complaint filed by Ms. Price. However, it is unclear whether the divorce complaint was ever actually entered into evidence at the hearing below. It is not clearly marked as an exhibit, nor was it packaged with the other exhibits. The transcript contains the following exchange at the hearing:

Burgess (DSS): " . . . I'd like to make a motion that all the documentation be entered into the record."

Bockow (Hearing Officer): "Okay. . . ."

All the documentation was entered into the record "without objection." Later in the hearing, Ms. Price refers to a TRO that is the beginning of the divorce which was entered into the record. That evidence is clearly marked as an exhibit but did not contain the divorce complaint itself. It is therefore unclear whether the complaint was in the documentation or whether the Department is arguing the content of the complaint outside of the record of the hearing.

Regardless, this Court may take judicial notice of the complaint. Judicial notice may be taken when the accuracy of the evidence is capable of verification by reference to available sources of indisputable reliability. Masters v. Rodgers Dev. Group, 283 S.C. 251, 321 S.E.2d 194 (Ct. App. 1984). Appellate courts are generally reluctant to take notice of adjudicative facts because the adverse facts may prejudice the other party. Masters v. Rodgers Dev. Group, 283 S.C. 251, 321 S.E.2d 194 (Ct. App. 1984). However, in the instant case, the evidence is in the form of a sworn and filed court document by the Petitioner and offers no unfair prejudice to either party. It is the Petitioner's own sworn statement and is used by the Department in its argument that the separation occurred in August. It is highly relevant and probative concerning the central issue in this case -- whether an error was committed concerning the separation date of the Price household.

The findings of the Hearing Officer simply conclude Mr. Price was a member of the household during August. Because the policy as understood by the Department caseworkers was that the income for the entire month of August must be counted, a specific date was not necessary. This point, however, was in error and may be reversed here under S.C. Code Ann. § 1-23-380(A)(6)(d), allowing an appellate reversal for a decision affected by an error of law.

Ms. Price's sworn statement contained in her verified complaint filed with the Cherokee County Family Court specifically represented to that court that "the parties [Joe Ann Price and Richard Price] resided together in the same household until August 20, 1996 . . . " (emphasis added) (Para. 3 of complaint in Case No. 96-DR-11-704, Price v. Price, filed August 30, 1996). This sworn statement was submitted to the family court by Ms. Price within days after the incident in question occurred -- at a time when the chronology of events was surely the most fresh in her mind. It can therefore be established that August 20 is the date when Richard Price no longer was a member of Ms. Price's household.

The South Carolina Department of Social Services Medicaid Policy and Procedures Manual states in section 2515.03 that: "Income is projected based on the amount received in the past four weeks, if this amount is representative of the applicant's income. If the income is from weekly, biweekly earnings, etc., consider the number of pay periods in the budget period in projecting the income." (emphasis added).

In essence, income should be counted on a week-by-week basis if the information is available. While there is substantial evidence to support the finding the separation occurred in August, in light of section 2515.03, the Hearing Officer's determination lacks specificity. Considering the new evidence supporting the Hearing Officer's decision and clarifying the exactness of the separation of the household date, and applying the policies and procedures of Medicaid determination, Richard Price's wages after August 20 should not be counted toward the eligibility determination because he was no longer a part of the household. Under the Department's own policy the income determinations are made weekly when available, as the data clearly was in this case. That policy is obviously the fair and practical approach. Since the core issue in these types of cases revolves around financial need, an exact and accurate determination of actual income should be used when available. A contrary interpretation could result in an individual determination being made based on phantom income, and That is the case before this Court.

The evidence in this case documented the wages of Richard Price on a per week basis for the month of August. Correcting for the Department's error and recalculating the income, however, still leaves the Petitioner with an income of $966.67 -- slightly above the established qualifying sum of $864.00. The error, therefore, is not reversible as it would have no material effect on the disposition of the case.

At best, this is a case in which reasonable minds could reach differing conclusions. But even under such circumstances, the Hearing Officer's decision must be affirmed because sufficient evidence exists in the record to support his finding that Mr. Price left the household in August of 1996, and the error in the application of the policy will not change the result. The fact that another reasonable person may reach the opposite result is not enough to warrant a reversal.

For the foregoing reasons, the October 21, 1997 Order of the Department of Health and Human Services in this matter is affirmed.

AND IT IS SO ORDERED.

______________________________________

Judge Ralph King Anderson, III

Administrative Law Judge

April 22, 1998

Columbia, South Carolina