Opinion
NO. 8733
June 24, 1983
APPEAL FROM FIRST CIRCUIT COURT HONORABLE TOSHIMI SODETANI, JUDGE.
LUM, C.J., NAKAMURA, PADGETT, HAYASHI, JJ., AND CIRCUIT JUDGE CHANG, ASSIGNED BY REASON OF VACANCY
Robert K. Richardson, Deputy Attorney General, for appellants.
Brenton Rogozen (Legal Aid Society of Hawaii) for appellees.
This is an appeal by the defendants-appellants from a judgment entered pursuant to an order granting summary judgment in favor of the plaintiffs-appellees. We reverse.
We begin by noting we are faced with a voluminous record brought up from the court below, consisting of three thick volumes. Because appellees' complaint did not contain a short and plain statement of their claim, as required by Rule 8(a)(1), HRCP, because over 200 pages of uncertified documents were attached to appellees' motion for summary judgment in violation of Rule 56(e), HRCP, and because appellees' counsel filed motions, such as a motion to strike appellants' notice of appeal over appellants' objection, which were clearly beyond the power of the trial court, and because the appellants' counsel responded in many instances in like manner, we have been faced with the burdensome task of attempting to separate the wheat from the chaff. We have found very little wheat and a great deal of chaff. It appears to us that the real issues in this case are relatively simple and straightforward and should have been so approached by counsel.
There are a plethora of procedural problems involved arising out of the way the respective counsel actually approached this case. We will not attempt to solve those problems in this opinion since they are not germane to the disposition of the judgment below. We would urge, however, that counsel, on remand, follow the Hawaii Rules of Civil Procedure and cooperate so as to present the court below, and, if this case should be returned on appeal again, this court, with an intelligible record.
We add that this is one of a series of cases involving the same counsel on both sides which are winding their way through the courts, several of which have reached us. From our examination of the records in those cases, counsel have pursued the same line of conduct in those cases that necessitated these comments in this case.
As near as we can tell from the record in this case, the individual plaintiff, Kiyomi Asada, was a recipient of Aid to Families with Dependent Children benefits. The appellants were state officials of the Department of Social Services and Housing responsible for paying those benefits. The Department had promulgated a regulation, being Hawaii Public Welfare Manual § 5007.06, which read as follows:
Day Care Payments
a. The amount of payment shall not exceed $100 a month tuition or basic fee per child for cash payments.
1. Exception: Day care payments in excess of $100 per month per child may be negotiated and allowed with approval by the Director to meet the needs of special groups of children or fees negotiated through Purchase of Service contracts.
2. Approval of cost over $100 for tuition or basic fee for cash payments for child care requires Branch supervisory approval.
b. Registration fees and supplies shall be provided as required by the facility. This may include a tuition deposit which can be applied to the child's last month's tuition, registration fees, costs for field trips or programs the child participates in as part of the facility's regular program, etc.
c. Transportation cost between the child's home and the day care facility. This includes HeadStart programs transportation costs if eligible under M.S. 5007.03.
d. If the recipient of service costs is agreeable but subsequently fails to secure a receipt of payment within the period for which payment was approved and made, payment beyond the period initially approved shall not be authorized.
Appellee Asada claimed that she had actual expenses in excess of $100 per month for tuition or basic fees for child care; that she was entitled to have her actual expenses taken into consideration in determining her need; that the effect of the quoted regulation was to limit the amount taken into consideration in determining her need to $100 per month per child and that, therefore, the regulation was contrary to Title 42 U.S.C. § 602(a)(7).
Appellants, on the contrary, contended that the regulation sets a $100 standard but gives an opportunity for the recipient to establish, to the social worker (Branch Supervisor) and, on appeal at a fair hearing pursuant to statute, that she reasonably needs more than $100 per month per child for the purpose of child care.
The court below granted appellees' motion for summary judgment on October 5, 1981, holding that:
. . . as a matter of law child care costs actually paid by working . . . [A.F.D.C.] recipients are a mandatory work expense under the Social Security Act, 42 U.S.C. § 602(a)(7) . . . [and] to the extent that Defendants do not pay the entire costs of the child care out of Title XX funds, Defendants must provide an A.F.D.C. work expense under 42 U.S.C. § 602(a)(7).
The court further ordered retroactive benefits for appellees, but reserved for a later time a decision on the period for which those benefits would be provided.
The court entered two additional orders on March 22, 1982. The first order established the period for which appellants were ordered to pay retroactive benefits to the appellees. The second order granted appellees' motion to join party plaintiff Tadaki. We do not pass on the correctness of either of those orders or of any other order not expressly dealt with in this opinion.
Appellants filed their notice of appeal of both the October 5, 1981 and March 22, 1982 orders on April 20, 1982. The court struck, over their objection, appellants' notice of appeal relating to the October 5, 1981 order as untimely, holding that that order was a final, appealable order. We disagree with that holding and action.
We have held that a decision reserving determination of benefits for a later time is not a final order. Hawaii Laborers Training Center v. Agsalud, 65 Haw. 257, 650 P.2d 574 (1982). Furthermore, we have previously construed Rule 54(b), HRCP, so that:
where the disposition of the case is embodied in several orders, no one of which embraces the entire controversy but collectively does so, "it is a necessary inference from Rule 54(b) that the orders collectively constitute a final judgment and . . . entry of the last of the series of orders gives a finality and appealability to all."
Island Holidays, Inc. v. Fitzgerald, 58 Haw. 552, 561, 574 P.2d 884, 890 (1978) (quoting City County of Honolulu v. Midkiff, 57 Haw. 273, 275, 554 P.2d 233, 234-35 (1976)). Moreover, as we interpret Rule 73(a), HRCP, the court can strike a notice of appeal in only two situations: where the parties agree to do so prior to the docketing of an appeal, and where the appellant moves, and gives notice of such motion, to strike the notice of appeal. Neither was the situation here. We thus hold that the circuit court exceeded its powers in striking the notice of appeal, and agree with appellants' contention that they timely and correctly appealed.
At oral argument, appellees' counsel reaffirmed that the appellees' position is that if there were two child care facilities, both equal in the care provided, and both equally convenient to Appellee Asada and one charged $100 per month per child while the other charged $300 per month per child, she had the right, as a matter of law under 42 U.S.C. § 602(a)(7), to send her child or children to the $300 a month facility and that the State would have to make up the difference, because so long as she actually expended the money and "any" child care expenditure was reasonably necessary to her earning income, she was entitled to have her actual expenses considered under the income maintenance program. In other words, her counsel contends that the statute gives her a blank check for child care expenses on the State's treasury.
Apparently, the appellants handle child care expenses by way of reimbursement by the social services unit involved rather than as a basis for determining need under the income maintenance program. At oral argument appellees appeared to be arguing that those expenses must be handled under income maintenance. So long as the net effect is the same, we think the appellants may handle the expenses either way.
Title 42 U.S.C. § 602(a)(7) reads in part as follows:
A State plan for aid and services to needy families with children must . . . provide that the State agency shall, in determining need, take into consideration . . . any expenses reasonably attributable to the earning of any such income; . . ..
The section just quoted was construed by the United States Supreme Court in Shea v. Vialpando, 416 U.S. 251, 94 S.Ct. 1746, 40 L.Ed.2d 120 (1974). In that case, the Supreme Court said at 416 U.S. 260:
By its terms, § 402(a)(7) [now § 602(a)(7)] requires the consideration of "any" reasonable work expenses in determining eligibility for AFDC assistance. In light of the evolution of the statute and the normal meaning of the term "any," we read this language as a congressional directive that no limitation, apart from that of reasonableness, may be placed upon the recognition of expenses attributable to the earning of income. . . .
(Emphasis supplied.)
In that case, the state of Colorado had fixed a maximum amount which could be considered in any case. In holding that maximum to violate the statute, the Supreme Court said:
It is, of course, not the adoption of a standardized work-expense allowance per se which we hold to be violative of § 402(a)(7) of the Act, but the fact that the standard used by Colorado is in effect a maximum or absolute limitation upon the recognition of such expenses. As the Court of Appeals correctly observed, a standard allowance would be permissible, and would substantially serve petitioners' interests in administrative efficiency, if it provided for individualized consideration of expenses in excess of the standard amount.
416 U.S. at 265.
Here, when a change in Appellee Asada's needs was proposed, she was notified and she had a "fair hearing" at which she was represented by counsel. At that hearing, one of the questions passed on was whether excess child care expenses were allowable as a work expense under "income maintenance." The hearing officer ruled that they were not, but that such excess child care expenses were a "social service item" which must be determined by the social services unit under § 5007.06, HPWM. The affidavit of Jane Okubo, appearing at pages 135-136 of Volume I of the circuit court record, reveals that Appellee Asada, after the fair hearing officer's decision, never filed a request with the social services unit for day care payments over $100 pursuant to § 5007.06, HPWM. Appellants contend that therefore the case should be dismissed because appellee did not exhaust her administrative remedies.
If, however, the appellees' complaint is construed as one for a judicial declaration that § 5007.06, HPWM, is an invalid agency rule, the action is expressly authorized under § 91-7, HRS. We will so construe it.
Appellees' position at oral argument was that § 5007.06, HPWM, allowed a payment in excess of $100 per month per child only if the recipient fell within the scope of the two exceptions set forth in paragraph (a)(1) of that section.
Appellants, on the other hand, contend that paragraph (a)(2) allows approval of costs over a $100 for tuition or basic fee for child care if such payments can be shown to be reasonable. The deposition of Jane Okubo in the record reflects that administratively, appellants are adhering to their construction of the rule. That construction seems to us to be reasonable. We accept and adopt it since it conforms the application of HPWM § 5007.06 to the requirements previously quoted from Shea, supra.
We hold that the test for allowing child care payments is the reasonableness thereof. Where an appropriate child care facility is available to a recipient at a charge equal to or less than the standard of $100 per month per child, the burden is on the recipient to show that the expense of sending the child or children to a more expensive facility is reasonable in the circumstances.
We further hold that § 5007.06, HPWM, creates a procedure whereby a recipient can have the reasonableness of her excess payments determined. If such payments are held to be reasonable, either at the administrative level, or at a fair hearing pursuant to § 346-12, HRS, the social services unit would be required to make those payments under the regulation and the statute.
Appellees protest that many members of the class did not receive adequate notice so as to permit them to initiate the procedures set forth under § 5007.06, HPWM, but that is not in the record before us, nor is the issue of lack of adequate notice raised by the pleadings. Certainly Appellee Asada did receive adequate notice.
Accordingly, the judgment below is reversed and the case remanded for further proceedings consistent herewith.