Cnty Dep't of Human Svcs. v. Monica Velarde & Michael Moore

The summaries of the Colorado Court of Appeals published opinions
constitute no part of the opinion of the division but have been prepared by
the division for the convenience of the reader. The summaries may not be
cited or relied upon as they are not the official language of the division.
Any discrepancy between the language in the summary and in the opinion
should be resolved in favor of the language in the opinion.
SUMMARY
February 25, 2021
2021COA25
No. 20CA0170, Arapahoe Cnty Dep’t of Human Svcs. v. Monica
Velarde & Michael Moore — Administrative Law — State
Administrative Procedure Act — Judicial Review
A division of this court of appeals concludes that a county
seeking to enforce an administrative Medicaid overpayment order
must comply with the timeframe in the Administrative Procedure
Act (APA). The APA requires the enforcement proceeding to be filed
within thirty-five days of the final agency action. § 24-4-106(4),
C.R.S. 2020. Here, the county filed suit over a decade after the
final agency action at issue.
Because the county’s suit failed to comply with the APA’s
required timeframe, the district court’s dismissal was proper.
Accordingly, the division affirms.
COLORADO COURT OF APPEALS 2021COA25
Court of Appeals No. 20CA0170
Arapahoe County District Court No. 19CV30255
Honorable Elizabeth Beebe Volz, Judge
Arapahoe County Department of Human Services,
Plaintiff-Appellant,
v.
Monica Velarde and Michael Moore,
Defendants-Appellees.
JUDGMENT AFFIRMED
Division A
Opinion by JUDGE FOX
Freyre and Lipinsky, JJ., concur
Announced February 25, 2021
Ron Carl, County Attorney, Annette M. Myrick, Assistant County Attorney,
Aurora, Colorado, for Plaintiff-Appellant
No Appearance for Defendants-Appellees
¶1 The Arapahoe County Department of Human Services (the
county) appeals the district court’s dismissal of its suit to recover
Medicaid overpayments to Monica Velarde and Michael Moore. The
county contends that (1) the court had subject matter jurisdiction
under the Administrative Procedure Act (APA), section 24-4-106,
C.R.S. 2020; and (2) the court abused its discretion by vacating its
entry of default. Because the district court lacked jurisdiction over
the county’s untimely effort to enforce, we affirm.
I. Background
¶2 The county seeks judgment for repayment of medical
assistance benefits totaling $79,591.17 — plus interest and
litigation fees — which Velarde and Moore, the father of Velarde’s
children, allegedly received for their children between September
2002 and July 2004. It claims that Velarde and Moore procured
the benefits fraudulently because Velarde, who applied for the
benefits, failed to report that she and Moore lived together and had
shared income.
¶3 The county sued on December 17, 2018, seeking to enforce a
February 26, 2008, administrative notice regarding the Medicaid
1
overpayments. After Velarde and Moore failed to answer the
county’s complaint and amended complaint, the clerk entered a
default under C.R.C.P. 55(a). When Velarde and Moore later
appeared at the hearing to determine the amount of judgment and
expressed their intent to defend, the court vacated the default.
¶4 The court later denied the county’s summary judgment motion
and dismissed the case because the county failed to seek
enforcement within the period prescribed by section 24-4-106(4).
The county now appeals.
II. Jurisdiction Over the County’s Enforcement Action
¶5 The county argues that the district court had subject matter
jurisdiction because section 24-4-106 does not limit the county’s
ability to pursue a judgment. We disagree.
A. Preservation and Standard of Review
¶6 The issue is preserved. We review questions of law,
jurisdiction, and statutory interpretation de novo. Tulips Invs., LLC
v. State ex rel. Suthers, 2015 CO 1, ¶ 11; Jefferson Cnty. Bd. of
Equalization v. Gerganoff, 241 P.3d 932, 935 (Colo. 2010); see also
2
Rinker v. Colina-Lee, 2019 COA 45, ¶ 26 (the merits of a sua sponte
ruling are subject to review on appeal, regardless of objections).
B. Statutory and Regulatory Framework
¶7 Medicaid is a joint federal-state program created by the Social
Security Act to provide care to those who cannot afford private
medical care. See 42 U.S.C. §§ 1396 to 1396w-5. If a state chooses
to participate in Medicaid, it must comply with applicable federal
requirements. Harris v. McRae, 448 U.S. 297, 301 (1980).
¶8 Colorado participates in Medicaid, § 25.5-5-101, C.R.S. 2020,
and the Colorado Department of Health Care Policy and Financing
(HCPF) and the Department of Human Services (DHS) administer
Colorado’s Medicaid program, exercising rulemaking authority
through the Medical Services Board (Board). The Board’s rules
govern program eligibility, scope, and administration. § 25.5-4-104,
C.R.S. 2020; § 25.5-4-205, C.R.S. 2020; see also Dep’t of Health
Care Policy & Fin. Reg. 8.540, 10 Code Colo. Regs. 2505-10; Dep’t
of Human Servs. Reg. 1.120, 9 Code Colo. Regs. 2501-1. HCPF,
DHS, and counties partner in determining benefit eligibility and
recovering erroneous payments. § 25.5-4-106, C.R.S. 2020; § 25.5-
3
1-118, C.R.S. 2020; Dep’t of Human Servs. Reg. 1.110, 9 Code Colo.
Regs. 2501-1 (DHS supervises county departments).
C. Analysis
¶9 The county had various legal remedies available to recover the
overpayment1 at issue, including but not limited to seeking to
enforce a final agency action, pursuing a wage garnishment,
intercepting other aid grants, and using the State Income Tax
Refund Intercept process.2 See Dep’t of Health Care Policy & Fin.
Reg. 8.065.2.21.C, 10 Code Colo. Regs. 2505-10; see also § 25.5-4-
305, C.R.S. 2020 (liability for false Medicaid claims); § 25.5-4-306,
1 An “overpayment” includes “any medical assistance payments . . .
paid on behalf of a recipient who was not lawfully entitled to receive
the benefits for which the payments were made[;] no recovery shall
be made where the overpayment occurred through no fault of the
recipient.” Dep’t of Health Care Policy & Fin. Reg. 8.065.1, 10 Code
Colo. Regs. 2505-10.
2 If the county had chosen a different remedy, it would, of course,
have had to abide by the statutory framework applicable to that
remedy. See, e.g., § 25.5-4-307, C.R.S. 2020 (limitation periods for
false Medicaid claims); § 26-2-133, C.R.S. 2020 (state income tax
intercept); § 13-80-103.5(1)(a), C.R.S. 2020 (six years to enforce a
judgment); see also § 26-2-128(4), C.R.S. 2020 (recognizing a
six-year limitation period for the execution of judgments involving
state debt). Even if a statute does not prescribe a period of
limitations, agencies are expected to institute enforcement
proceedings promptly. See, e.g., NLRB v. La Salle Hat Co., 105 F.2d
709, 710 (3d Cir. 1939); Nat’l Wildlife Fed’n v. Cotter Corp., 665 P.2d
598, 603 (Colo. 1983) (requiring action “within a reasonable time”).
4
C.R.S. 2020 (civil actions); § 25.5-4-307, C.R.S. 2020 (limitation
periods). The county chose to enforce its final agency action by
invoking APA section 24-4-106. Subsection 106(3) provides that
“[a]n action may be commenced in any court of competent
jurisdiction by or on behalf of an agency for judicial enforcement of
any final order of such agency.” As we explain below, having
elected that remedy, the county also had to comply with the
thirty-five-day time limit in the APA. § 24-4-106(4).
¶ 10 In determining the meaning of a statute, our primary goal is to
ascertain and give effect to the intent of the General Assembly.
Lewis v. Taylor, 2016 CO 48, ¶ 20. If possible, we must determine
that intent from the plain meaning of the statute, construing it as a
whole and giving effect to all its parts. Id. Our reading of the
statute reflects that subsection 106(2) allows judicial review in
response to a final agency action, and subsection 106(3) provides
that such review is available when the agency seeks to enforce a
final agency order. Construing the statute as a whole, we conclude
that subsection 106(4) limits the time to bring an action for judicial
review of “any agency action,” whether it be review of a final agency
action pursuant section 24-4-106(2) or review of a final agency
5
action in the course of an agency enforcement proceeding under
section 24-4-106(3). Nothing in the language or structure of the
statute exempts counties or DHS from subsection 106(4)’s time
limits.
¶ 11 The failure to seek enforcement within thirty-five days of the
date the action becomes effective, as subsection 106(4) requires,
deprives a court of jurisdiction to review the matter. Roosevelt
Tunnel, LLC v. Norton, 89 P.3d 427, 429 (Colo. App. 2003) (failure to
lodge a timely challenge deprived the court of jurisdiction to decide
the complaint on its merits); Allen Homesite Grp. v. Colo. Water
Quality Control Comm’n, 19 P.3d 32, 34 (Colo. App. 2000) (timely
filing is a jurisdictional prerequisite to judicial review under the
APA). Thus, the county’s complaint invoking the APA, if filed after
the thirty-five-day period in section 24-4-106(4), was subject to
dismissal and that dismissal must be upheld on review. Cheney v.
Colo. Mined Land Reclamation Bd., 826 P.2d 367, 368 (Colo. App.
1991).
¶ 12 We next consider when the county’s order became final,
triggering the thirty-five days for the county to seek enforcement
under the APA regime. Peabody Sage Creek Mining, LLC v. Colo.
6
Dep’t of Pub. Health & Env’t, Water Quality Control Div., 2020 COA
127, ¶ 20 (recognizing that final agency action “must ‘(1) mark the
consummation of the agency’s decision-making process and not be
merely tentative or interlocutory in nature, and (2) constitute an
action by which rights or obligations have been determined or from
which legal consequences will flow” (quoting Doe 1 v. Colo. Dep’t of
Pub. Health & Env’t, 2019 CO 92, ¶ 38)); see also Dep’t of Human
Servs. Reg. 3.850, 9 Code Colo. Regs. 2503-8. As relevant here, the
county provided notice of an adverse action — that Velarde had
received an overpayment of Medicaid benefits — on February 26,
2008. The applicable regulatory framework then allowed for
additional administrative review consisting of (1) a county
conference or a state-level fair hearing; (2) review by the Office of
Appeals (OA), resulting in a final agency decision; and (3) judicial
review. Id. at Reg. 3.840 (dispute resolution process); id. at Reg.
3.850.11 (aggrieved party has ninety days from the notice to invoke
a state-level appeal); id. at Reg. 3.850.72 (OA review); id. at Reg.
3.850.75 (judicial review within thirty-five days after the final
agency decision becomes effective); see also Dep’t of Health Care
Policy & Fin. Reg. 8.057, 10 Code Colo. Regs. 2505-10 (agency
7
review process); 42 C.F.R. § 431.210 (2019) (federal requirements).
The conclusion of this process yields a final agency action subject to
judicial review by the aggrieved party or judicial enforcement by the
agency.
¶ 13 The record indicates, as the county represents on appeal, that
Velarde did not avail herself of the formal administrative process.3
Velarde is therefore unable to challenge the substance of the
agency’s decision, having failed to exhaust available administrative
remedies. Thomas v. Fed. Deposit Ins. Corp., 255 P.3d 1073, 1077
(Colo. 2001); see also Peabody Sage Creek Mining, ¶ 10 (dismissal is
not an adjudication on the merits; it results because the court lacks
the power to hear the claim). But contrary to the county’s
argument, the APA also prescribed a timeframe within which the
agency could seek to enforce its administrative order. § 24-4-
106(4).
3 The record is unclear regarding whether Velarde or Moore invoked
informal administrative processes. Although the timing is not
apparent from the record, the county appears to have implemented
a payback process, but it is unclear whether that process related to
the other benefits which are not contested in this appeal or the
Medicaid benefits at issue.
8
¶ 14 The district court properly concluded that it lacked
jurisdiction to consider the county’s attempt to enforce the agency’s
February 26, 2008, notice because the county failed to file within
thirty-five days of when the agency’s notice was deemed final.
Although the county’s briefing does not identify precisely when the
agency’s overpayment notice became a final agency order, it seeks
to enforce the February 26, 2008, notice. Per the applicable
regulations, Velarde had ninety days to initiate a challenge to the
overpayment notice to seek enforcement under the APA. Velarde’s
time to challenge thus ended on May 26, 2008, when the
overpayment notice became final, and the county had thirty-five
days from then to file an enforcement action. Peabody Sage Creek
Mining, ¶ 20. The thirty-five days ran out on June 30, 2008. The
county did not seek enforcement until December 17, 2018, well
beyond the APA’s timeframe. Therefore, the district court lacked
jurisdiction to entertain the county’s requested relief and properly
dismissed the county’s complaint. § 24-4-106(3) and (4); see also
McGihon v. Cave, 2016 COA 78, ¶ 12 (recognizing judicial
enforcement by or on behalf of an agency); Sterling Ethanol, LLC v.
9
Colo. Air Quality Control Comm’n, 2017 COA 26, ¶ 8 (recognizing the
thirty-five-day deadline after an agency action becomes effective).
¶ 15 On appeal, the county baldly asserts, without citing to
controlling authority, that no “timeframe is imposed on a county
department pursuing a judgment.” See Vallagio at Inverness
Residential Condo. Ass’n, Inc. v. Metro. Homes, Inc., 2017 CO 69,
¶¶ 39-40 (we do not consider undeveloped arguments lacking
citation to controlling authority); C.A.R. 28(a)(7)(B). The county also
suggested to the district court that it is immune from a statute of
limitations or a jurisdictional bar, but the law does not support that
proposition, Shootman v. Dep’t of Transp., 926 P.2d 1200, 1207
(Colo. 1996), and the county has not repeated the argument on
appeal, Nicoloff v. Bloom Land & Cattle Co., 100 Colo. 137, 139, 66
P.2d 333, 334 (1937) (explaining that contentions not argued on
appeal are deemed abandoned); Hernandez v. Starbuck, 69 F.3d
1089, 1093 (10th Cir. 1995) (a court is not required to manufacture
a party’s appellate arguments, and if an issue is not briefed and
argued it is waived).
¶ 16 We need not decide whether the district court erred by
dismissing Moore from the case because the county’s efforts to
10
enforce the overpayment notice against Velarde or Moore are
equally flawed. Relatedly, there is no need to address the county’s
claim that the court abused its discretion by vacating the default
after Velarde and Moore, who had failed to respond to the
complaints, later appeared at a hearing to challenge the complaints.
If the court lacked jurisdiction to address the county’s enforcement
action, it also lacked jurisdiction to enter or set aside the default.
Compare In re Marriage of Stroud, 631 P.2d 168, 170 (Colo. 1981)
(recognizing that a judgment is void if the court lacked personal
jurisdiction over the parties or subject matter jurisdiction over the
cause of action), and First Nat’l Bank of Telluride v. Fleisher, 2 P.3d
706, 714 (Colo. 2000) (voiding a judgment where “from its
inception, [it] was a complete nullity and without legal effect”)
(citation omitted), with Nickerson v. Network Sols., LLC, 2014 CO
79, ¶ 18 (where the court had personal and subject matter
jurisdiction, it had authority to enter a default judgment), and Hill
v. Benevolent League of Colo. Travelers Ass’n, 133 Colo. 349,
351-52, 295 P.2d 231, 232 (1956) (a default judgment is subject to
collateral attack for lack of jurisdiction). Because the default is
void, we affirm.
11
III. Conclusion
¶ 17 The judgment is affirmed.
JUDGE FREYRE and JUDGE LIPINSKY concur.
12