Meagan Garland v. Jeffrey Ruhl, State of Missouri, Department of Social Services, Family Support Division , 455 S.W.3d 442 ( 2015 )

SUPREME COURT OF MISSOURI
en banc
MEAGAN GARLAND, )
)
Appellant, )
)
v. ) No. SC94230
)
JEFFREY RUHL, )
)
Respondent, )
)
STATE OF MISSOURI, )
DEPARTMENT OF SOCIAL SERVICES, )
FAMILY SUPPORT DIVISION, )
)
Respondent. )
APPEAL FROM THE CIRCUIT COURT OF ST. CHARLES COUNTY
The Honorable John P. Banas, Judge
Opinion issued February 3, 2015
The Family Support Division (“FSD”) entered an administrative child support
order in an action between Meagan Garland (“Mother”) and Jeffrey Ruhl (“Father”).
Mother sought judicial review of that order and, before that matter was decided, she and
Father settled on terms more favorable for Mother than the FSD order. After the trial
court entered judgment on the basis of the settlement terms, it dismissed Mother’s
petition for judicial review as moot. Mother then filed an application to have FSD pay
her attorney fees under section 536.087. 1 The trial court dismissed her application, and
this Court affirms.
Background
Before evaluating Mother’s claim for attorney fees under section 536.087, it is
necessary to review Missouri’s statutory scheme for child support enforcement and the
role FSD plays in that process. The obligation to provide for one’s children comes not
from statute but from common law. State v. Reed, 181 S.W.3d 567, 570 (Mo. banc 2006)
(“support of one’s children involves the discharge of one of the most basic
responsibilities that a person assumes as a member of society”). For this reason, “[e]very
parent has a legal obligation to provide for his or her children regardless of the existence
of a child support order.” Id. Each parent has a right to have the other parent’s support
obligation determined in a civil action and to have that obligation entered as a judgment
against the parent owing support.
In some cases, parental support is not provided (or not adequate) and the state
provides “public assistance” (as defined by section 454.460(12)) to help support the
child. Any parent who is absent from the home at the time the state provides this must
repay the state the amount of that assistance. § 454.465.1. This is called that parent’s
“state debt.” Id. If a parent with a state debt already has been ordered to pay support for
the child, the state is entitled to receive those support payments until the state debt is
1
Unless otherwise indicated, all statutory citations are to the Revised Statutes of Missouri, as
amended though the Cumulative Supplement 2013.
paid. § 454.465.1(1). 2 If there is no existing support order, FSD may issue a “notice and
finding of financial responsibility” (“NFFR”) pursuant to section 454.470. As its name
suggests, the NFFR serves only as notice of a proposed order to establish (among other
things) the amount of future support the parent must pay as well as the amount of the
state debt already accrued and the payment to be made toward that debt. § 454.470.1. If
either parent raises a timely objection that requires evidence to resolve, “a hearing shall
be held in the manner provided by section 454.475. If no timely written response and
request for hearing is received by the appropriate division office, the director may enter
an order in accordance with the [NFFR.]” § 454.470.4.
This process of allowing the state to recover assistance payments from absent
parents was enacted in response to, and in compliance with, federal legislation tying the
existence of such procedures to continued funding for various federal programs. See 42
U.S.C. §§ 651–669b (2012). See also Blessing v. Freestone, 520 U.S. 329, 345 (1997)
(“Title IV-D generally requires each participating State to establish a separate child
support enforcement unit ‘which meets such staffing and organizational requirements as
the Secretary may by regulation prescribe.’”) (quoting 42 U.S.C. § 654(3)). One of the
federal requirements for state child support enforcement schemes is that the state must
not only provide enforcement services for children receiving state assistance, but it must
2
In addition, if the child’s custodian has applied for state assistance under the Temporary
Assistance for Needy Families (“TANF”) program, the application itself “shall constitute an
assignment of support rights which shall take effect, by operation of law[.]” § 208.040.2(2),
RSMO Supp. 2014. See also § 454.410 (“Support rights assigned to the state shall constitute an
obligation owed to the state by the person responsible for providing such support”). If the
3
also provide the same level of services to “any other child, if an individual applies for
such services with respect to the child.” 42 U.S.C. § 654(4)(A)(11) (emphasis added).
Missouri complies with this requirement through section 454.425, which provides
that FSD “shall render child support services authorized pursuant to this chapter to
persons who are not recipients of public assistance as well as to such recipients.”
Accordingly, FSD is authorized “[t]o provide services relating to ... the establishment,
modification and enforcement of child support obligations” when the absent parent owes
a state debt. § 454.400.2(14). But FSD also is authorized – indeed, required – to provide
these same services to any custodian requesting such services even though there is no
state debt and no part of the support payments will go to the state. § 454.425.
Father never owed a state debt for the child in this case because neither Mother
nor the child ever applied for or received “public assistance.” As a result, not only did
FSD not initiate this agency proceeding on its own accord pursuant to section 454.470, it
could not have done so. FSD had no authority to do anything until Mother applied for
child support enforcement services pursuant to section 454.425. Then, FSD acted as the
statutes required it to act. After collecting the relevant financial information from both
parents, FSD issued a NFFR stating the proposed rights and obligations of the parties.
The NFFR properly identified Mother as the “Petitioner” and Father as the “Respondent.”
Not only was FSD not a party, but it was the adjudicator.
child’s custodian receives a support payment from a parent owing a state debt after this
assignment, the custodian must remit the payment to FSD.
4
Under the proposed terms in the NFFR, Father would be obligated to enroll the
child in his employer’s health insurance plan and pay Mother $558 per month for the
child’s support. Father disagreed with the amount of the proposed support obligation
and, pursuant to section 454.470, requested a hearing. Before that hearing, Father offered
to pay Mother $500 per month in support. Mother refused that offer, however, and the
administrative hearing was held before the FSD hearing officer. Based on the evidence
submitted at this hearing, FSD entered an order requiring Father to enroll the child in his
employer’s health insurance plan and pay Mother $357 per month in child support.
Mother disagreed with the calculation of Father’s monthly support obligation and filed a
petition for judicial review of the FSD support order.
Before Mother’s petition for judicial review could be heard, Mother and Father
reached an agreement. They stipulated that Father’s support obligation would be $500
per month, that Mother would be obligated to enroll the child in health insurance through
her employer, and that both parties would pay their own court costs and attorney fees.
Mother and Father also agreed to have the trial court enter a support judgment on the
basis of their stipulation. They agreed this judgment would only take effect
prospectively, however. Because the judgment would not change the administrative
order ab initio, Mother and Father agreed that Father would not owe any support
arrearage. On February 27, 2012, the trial court granted the parties’ request and entered
judgment on the basis of the parties’ stipulation. The new terms became effective March
1, 2012. Because the new judgment made the validity of the superseded administrative
order moot, the trial court dismissed Mother’s petition for judicial review.
5
After the trial court entered the new support judgment and dismissed Mother’s
petition for judicial review, Mother filed an application for attorney fees under section
536.087. Her application claims she “prevailed” when the trial court superseded the FSD
order with a new (and more favorable) judgment and, because the administrative order
was not substantially justified, demanded that FSD pay her attorney fees. The trial court
dismissed Mother’s application for attorney fees, finding that she did not prevail on her
petition for judicial review because it (and the FSD order it challenged) became moot
when the parties agreed to – and the trial court entered – a superseding judgment. Mother
timely appealed this judgment.
Standard of Review
When a party applies for an award of attorney fees under section 536.087, the trial
court’s (or administrative agency’s) disposition of that application will be affirmed unless
it “was arbitrary and capricious, was unreasonable, was unsupported by competent and
substantial evidence, or was made contrary to law or in excess of the [trial] court’s …
jurisdiction.” § 536.087.7. Though the Court ordinarily will defer to findings of fact
based on the credibility of witnesses, the Court will review de novo any questions of law
raised by the application, including questions as to statutory interpretations. Stone v.
Missouri Dep’t of Health & Senior Servs., 350 S.W.3d 14, 20 (Mo. banc 2011).
Analysis
Under the “American rule,” orders requiring one party to pay another party’s
attorney fees or other expenses ordinarily are not permitted unless the parties’ contract or
a statute authorizes the court to make such an award. Berry v. Volkswagen Grp. of Am.,
6
Inc., 397 S.W.3d 425, 431 (Mo. banc 2013); Essex Contracting, Inc. v. Jefferson Cnty.,
277 S.W.3d 647, 657 (Mo. banc 2009). Even when a statute allows a court to award
attorney fees, the doctrine of sovereign immunity prohibits Missouri courts from ordering
the state to do so unless the legislature specifically waives that immunity. Richardson v.
State Highway & Transp. Comm’n, 863 S.W.2d 876, 882 (Mo. banc 1993).
Section 536.087 provides such a waiver under specified circumstances, and such waivers
are to be strictly construed. Id.
Section 536.087 waives sovereign immunity only “for unjustified positions by
state agencies in contested administrative cases.” Id. (emphasis added). It provides:
A party who prevails in an agency proceeding or civil action arising
therefrom, brought by or against the state, shall be awarded those
reasonable fees and expenses incurred by that party in the civil action or
agency proceeding, unless the court or agency finds that the position of the
state was substantially justified or that special circumstances make an
award unjust.
§ 536.087.1 (emphasis added). Accordingly, a court (or agency) may order a state
agency to pay a non-governmental party’s attorney fees only if the applicant shows:
(1) that the applicant and the state agency were adversarial parties in an “agency
proceeding” brought by or against the state; (2) that the state agency asserted an
erroneous position in that “agency proceeding;” and (3) that the non-governmental party
prevailed against the agency’s position, either in the agency proceeding or in a civil
action arising from it. 3 Mother’s application failed to establish these elements.
3
The applicant must also allege that the state’s position was not substantially justified.
§ 536.087.3. Once the applicant establishes the first three elements, however, the burden of
persuasion shifts to the state to demonstrate that its position was substantially justified.
7
1. The “agency proceeding” here was not brought by or against FSD
FSD had no authority to insert itself into the issue of Mother’s and Father’s rights
and obligations concerning the support of their child until Mother requested FSD to
provide child support enforcement services to her under section 454.425. As required by
statute, FSD issued a NFFR and – when Father objected – FSD held a hearing and
received evidence before issuing its decision and order. The agency proceeding was
between Mother and Father. FSD was not a party, it was the adjudicator.
Mother does not contend that FSD was a party to the agency proceeding itself.
Instead, she contends that FSD was a party to her petition for judicial review and that this
petition was “a civil action arising out of” the agency proceeding. According to Mother,
this is sufficient to make FSD liable for her attorney fees under section 536.087.
Mother’s reading of section 536.087 is incorrect.
There is ample evidence that the legislature intended for section 536.087 to apply
only if the state is a party to the “agency proceeding.” First, the definition of “agency
proceeding” specifically requires that it be “an adversary proceeding in a contested case
pursuant to this chapter in which the state is represented by counsel.” § 536.085(1)
(emphasis added). Parties can be “represented by counsel,” not adjudicators. 4 Second,
Greenbriar Hills Country Club v. Dir. of Revenue, 47 S.W.3d 346, 354 (Mo. banc 2001). The
question of substantial justification does not arise in this case because Mother’s application fails
to establish the three threshold elements.
4
Mother cites Washington v. Jones, 154 S.W.3d 346, 349 (Mo. App. 2004) (citing Div. of Child
Sup. Enf. v. Grimes, 998 S.W.2d 807, 810 (Mo. App. 1999), in support of her argument that the
definition in section 536.085(1) was met in this case because counsel appeared on behalf of FSD
in the circuit court after she named FSD one of the respondents to her petition for judicial
review. This argument fails, however, because the plain of language of section 536.085(1)
8
the purpose of section 536.087 is to encourage state agencies to ensure that the positions
they take in agency proceedings are substantially justified. Only parties, however, can
take “positions.” If section 536.087 had been intended to apply to every agency decision,
it would have used the word “decisions” and not “positions.” Finally, the statute provides
that the “fact that the state has lost the agency proceeding or civil action creates no legal
presumption that its position was not substantially justified.” § 536.087.3 (emphasis
added). The state cannot have “lost the agency proceeding” unless it was a party to the
agency proceeding.
Accordingly, Mother’s application fails to establish a valid claim for attorney fees
under section 536.087 because she fails to establish that both she and FSD were
adversarial parties in an “agency proceeding.”
2. The FSD administrative support order was not a “position”
Mother contends that she is entitled to have FSD pay her attorney fees because the
administrative support order entered by FSD was a “position” that lacked substantial
justification. This is incorrect. An administrative decision rendered in the role of
adjudicator does not constitute a “position” as that term is used throughout section
536.087. The purpose of this attorney fees provision is not to ensure the accuracy of the
decisions rendered by administrative tribunals. That purpose is served by the
constitutional requirement that administrative decisions be subject to judicial review. See
Mo. Const. art. V, § 18.
requires that the state be represented “in a contested case pursuant to this chapter,” not in a
subsequent judicial review proceeding.
9
Instead, the purpose of section 536.087 is to police the positions asserted against
non-governmental parties in agency proceedings to ensure that “during such agency
proceeding the position of the state was substantially justified[.]” § 536.087.2. A
decision by an administrative official acting as the adjudicator in a contested case is not
the same as – and cannot constitute – a position asserted “during such agency
proceeding” by an attorney representing the state agency. The Missouri Constitution
protects private parties from errors by the former by guaranteeing judicial review. The
purpose of section 536.087 is to protect such parties from overreaching by the latter by
requiring the agency to pay the non-governmental party’s attorney fees when the
agency’s position is not substantially justified. 5
Accordingly, Mother’s attorney fee application fails because the “position” she
challenges is not an agency “position;” it is an agency decision. Section 536.087 applies
to the former, but not the latter. Cf In re StephenC. Perry, 882 F.2d 534, 540 (1st Cir.
1989) (construing the federal attorney fees statute on which section 536.087 is based and
5
In Greenbriar Hills, this Court stated that the purpose of section 536.087 is “to require
agencies to carefully scrutinize agency and court proceedings and to increase accountability of
the administrative agencies.” Greenbriar Hills, 47 S.W.3d at 358. Mother contends that this
means section 536.087 can be used to make FSD – as the adjudicator in an administrative
contested case – pay her attorney fees because FSD’s decision was altered by agreement on
judicial review. Mother’s argument is refuted by the caption of the Court’s opinion in that case.
In Greenbriar Hills, even though it was the Administrative Hearing Commission’s decision
which this Court had earlier reversed, the Court ordered the taxpayer’s fees and expenses to be
paid by the Director of Revenue – not the AHC – because it was the Director’s position, as a
party to the agency proceeding, that was not substantially justified. Id. at 349-50. See Geriatric
Nursing Facility, Inc. v. Dept. of Soc. Svcs., 693 S.W.2d 206, 209 (Mo. App. 1985) (AHC is
“simply a hearing officer who exercises the same role as any administrative hearing officer
authorized to hear contested cases within an agency”).
10
holding that an administrative adjudicator cannot be liable for attorney fees even if its
decision is incorrect).
3. Mother did not “prevail against” FSD
Section 536.087 only applies if a private party prevails against a position taken by
the state as a party in an agency proceeding. When an agency participates in the
proceeding solely as the adjudicator, it is not a “party” and its decision is not a “position.”
Accordingly, Mother’s application for attorney fees fails to meet either of these elements.
Even if she could have satisfied these elements, however, Mother’s application still fails
to show that she “prevailed against” FSD.
Section 563.087 only requires the state to pay a private party’s attorney fees when
that “party … prevails in an agency proceeding or civil action arising therefrom[.]” The
term “prevails” is defined to mean that the applicant “obtains a favorable order, decision,
judgment, or dismissal in a civil action or agency proceeding.” § 536.085(3). In order
for a dismissal to be a “favorable … dismissal,” the private party has to succeed in having
all or part of the state’s claim dismissed, either at the agency level or in a civil action
arising out of the agency proceeding. Even if Mother’s application met the other
requirements of section 536.087, it fails to show that she “prevailed” because it was
Mother’s claim (i.e., her petition for judicial review) that was dismissed.
Mother contends that, even though her petition for judicial review was dismissed,
she nevertheless “prevailed” against FSD because the dismissal resulted from a favorable
settlement. Mother’s argument fails because the favorable settlement she obtained was
not at the expense of – in fact, it had nothing to do with – FSD. The agreement between
11
Mother and Father concerned only their rights and obligations, not the rights and
obligations of FSD. By the same token, the superseding judgment that the trial court
entered at the request of Mother and Father – like the administrative order entered by
FSD – addressed only the rights and obligations of Mother and Father, not those of FSD.
Accordingly, if Mother obtained a favorable settlement in this case, she obtained it from
Father, not FSD.
It should be noted that, even though the elements of section 536.087 constitute
separate and independent requirements that every applicant must meet before the state
will be required to pay her attorney fees, the reasons Mother’s application cannot satisfy
any of these three elements are related. Her dispute was with Father, her settlement was
with Father, and both the administrative order and the superseding judgment concerned
only her rights and obligations and those of Father. But, rather than bring a paternity,
custody and support action against Father on her own in circuit court, Mother pursued an
administrative remedy and requested that FSD assist her. But even though it was with
FSD’s assistance, Mother initiated this agency proceeding; it was solely between her and
Father. FSD was not a party, and it did not represent Mother. Not only did FSD have no
interest (direct or indirect) in the outcome of Mother’s claim, it was required by law to
decide that claim (subject only to judicial review).
The administrative support order FSD entered established only the rights and
obligations of Mother and Father. It did not benefit or harm FSD. When Mother sought
judicial review of FSD’s administrative support order, FSD had nothing to gain or lose
from that review. FSD had no more interest in Mother’s petition for judicial review than
12
a trial court has when a party appeals a final judgment. Mother’s unilateral decision to
name FSD (in addition to Father) as a respondent to her petition for judicial review did
not give FSD an interest to advance or protect in that action. 6
When Mother and Father negotiated to alter their respective rights and obligations
from those established in the FSD order, FSD had no more interest to assert or protect in
those negotiations than a trial court would have when parties settle a case on appeal. The
settlement that resulted from these negotiations was between Mother and Father. It
altered only their rights and obligations. This is why FSD’s approval of the settlement
was not required. Even if FSD’s approval had been given, such approval would be
6
Mother’s right to petition for judicial review is governed by section 454.475.5, which provides
that a “parent … adversely affected by such decision may obtain judicial review pursuant to
sections 536.100 to 536.140, RSMo, by filing a petition for review in the circuit court of proper
venue.” Nothing in section 454.475.5 – or in sections 536.100 to 536.140, to which section
454.475.5 refers – requires Mother to name FSD as a respondent to her petition for judicial
review. In fact, these statutes draw a sharp distinction between the agency which authored the
decision under review and the “parties” who were before that agency at the administrative level.
See § 536.110.2 (summons shall not issue, but “copies of the petition shall be delivered to the
agency and to each party of record in the proceedings before the agency”) (emphasis added);
536.130.1(2) (administrative record may consist of a “statement of the case, agreed to by all
parties and approved as correct by the agency”) (emphasis added); § 536.130.3 (if any “party
fails or refuses to agree to the correctness of a record, the agency shall decide as to its
correctness”). See also Rule 100.02 (when an aggrieved party appeals a judgment entered on a
petition for judicial review, the “party filing the petition for review or notice of appeal shall be
known as the appellant and the adverse party as the respondent” (emphasis added). The
authority of the court to affirm, reverse, or modify the agency’s decision – or to order the agency
to reconsider that decision and/or take any other action the court deems proper – comes from
section 536.140.5 and article V, section 18, of the Missouri Constitution. It does not depend on
whether the petitioner names the agency as a “party” in its petition for judicial review. See
Geriatric Nursing Facility, 693 S.W.2d at 209 (the administrative adjudicator in a contested case
“has no role as a ‘party’” during judicial review because it “is the agency and outside party who
contend for their respective positions. From the decision, either the agency or the affected party
may appeal, and the [administrative adjudicator] has no part in that review”).
13
gratuitous because the settlement did not affect FSD or the legal relationship between that
agency and Mother or Father.
If Mother’s interpretation of section 536.087 prevailed here, FSD would be liable
for attorney fees every time an administrative child support order is not affirmed in every
respect on judicial review. But FSD’s exposure would not be limited to cases in which
the courts determined that FSD’s administrative order was incorrect. Under Mother’s
construction, FSD would be required to pay attorney fees every time the parents agree to
alter the administrative order during judicial review. In fact, FSD could even be liable to
both parents for their attorney fees if their settlement gave each of them some relief from
the FSD order (e.g., by decreasing a father’s support obligation but shifting his obligation
to provide health insurance to the mother).
Accordingly, for the reasons set forth in this opinion, the Court rejects Mother’s
construction and holds that attorney fees are properly awarded under section 536.087
only if the non-governmental applicant shows that she and a state agency were
adversarial parties in an agency proceeding brought by or against the state, that the state
agency asserted an erroneous position in this agency proceeding, that the applicant
prevailed against the agency’s position (either in the agency proceeding or in a civil
action arising from it), and that the state agency fails to show that its position was
substantially justified.
14
Conclusion
For the reasons set forth above, the trial court’s judgment dismissing Mother’s
attorney fee application under section 536.087 is affirmed. 7
________________________________
Paul C. Wilson, Judge
Russell, C.J., Breckenridge, Fischer, Stith, and
Draper, JJ., concur; Teitelman, J., dissents in
separate opinion filed.
7
Mother moved to strike portions of the state’s brief (or, in the alternative, for leave to file an
amended or supplemental brief) on the ground that the state violated Rule 83.08 by making
arguments in this Court that it did not make in the court of appeals. This motion is denied. The
word “claim” in Rule 83.03 is synonymous with the phrase “claim of reversible error” in Rule
84.04(d). Under Rule 84.04, this Court only reviews matters properly asserted in the appellant’s
points relied on. When this Court grants transfer of an appeal after briefing in the court of
appeals, Rule 83.03 prohibits the appellant from asserting claims of reversible error in this Court
that were not asserted in the court of appeals. A respondent, on the other hand, is “entitled to
advance any argument here in support of the judgment.” Rouner v. Wise, 446 S.W.3d 242, 249,
(Mo. banc 2014) (quotation marks omitted). See also Rule 84.04(f) (respondent may raise
“additional arguments in support of the judgment that are not raised by the [appellant’s] points
relied on”).
15
SUPREME COURT OF MISSOURI
en banc
MEAGAN GARLAND, )
)
Appellant, )
)
v. ) No. SC94230
)
JEFFREY RUHL, )
)
Respondent, )
)
STATE OF MISSOURI, )
DEPARTMENT OF SOCIAL SERVICES, )
FAMILY SUPPORT DIVISION, )
)
Respondent. )
DISSENTING OPINION
I respectfully dissent. Section 536.087.1 provides that the prevailing party in “an
agency proceeding or civil action arising therefrom, brought by or against the State, shall
be” awarded attorney fees. The principal opinion holds that Mother is not entitled to
attorney fees because the underlying agency proceeding was a child support dispute
between Mother and Father and, as such, was not brought “by or against” FSD. While
FSD may not have been a party to the underlying agency proceeding, FSD is a party to
Mother’s petition for judicial review of the FSD child support order. Further, Mother’s
1
petition for review was necessitated by FSD’s award of insufficient child support.
Consequently, FSD is a party to the civil action arising from the underlying agency
proceeding and should be liable for attorney fees if Mother can demonstrate that she is a
prevailing party and that FSD’s position was not substantially justified.
In the civil action for review of the FSD child support order, FSD took the position
that its child support order was justified. Prior to judicial resolution of this issue, Mother
and Father entered a settlement in which Father agreed to pay more child support than the
amount ordered by FSD. The court approved the settlement. This Court has held that a
party can prevail by obtaining a favorable settlement. Greenbriar Hills Country Club, v.
Dir. Of Revenue, 47 S.W.3d 346, 353 (Mo. banc 2001). Mother’s settlement for a more
generous child support award means that she was a prevailing party within the meaning
of section 536.087. For these reasons, I would reverse the trial court’s decision
dismissing Mother’s claim for attorney fees and remand the case for further proceedings.
_________________________________
RICHARD B. TEITELMAN, JUDGE
2