Delaware Health and Social Services, Audit and Recovery Management Services v. Andrea L. Glazik

IN THE COURT OF COMMON PLEAS FOR THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
C.A. No. CPU4-14-OO1527
Subrrn'tted: january 15, 2016
Decided: March 14, 2016
DECISION AFTER TRIAL
SMALLS, c.].
This matter is on appeal from the justice of the Peace Court pursuant to 10 De/. C. §
9571. Delaware Health and Social Services ("DHSS"), through its collecting agent Audit and
Recovery Management Services ("ARMS") (collectively, the "State"), seeks recovery of
overpayments for certain welfare benefits provided to Andrea L. Glazil< ("Defendant")
pursuant to 10 De/. C. § 114, in the amount of $6,156.60.1 On january 5, 2016, the Court
held trial, and reserved its decision. This is the Court’s final Opinion and Order.
Specifically, the State claims that DHSS overpaid Defendant for the following: (1)
3£709.00 for Temporary Assistance for Needy Families ("TANF")Z for benefits received from
December 2011 through May 2012; (2) $4,394.60 for Child Care benefits received from
April 2013 to August 2013; and (3) $1,053.00 for TANF benefits received from April 2013
to August 2013. The overpayment in the amount of 3£709.00 for TANF benefits for
December 2011 through l\/lay 2012 is not in dispute.-°’ Therefore, the Court will focus its
analysis on whether the State can recover the alleged overpayments for the time period of
April 2013 to August 2013.
FACTS
At trial, the State presented Leith Murray, a collections enforcement officer employed
by ARl\/IS, as its sole witness. Mr. Murray explained that DI~ISS refers cases to ARMS when
it determines that there has been an overpayment of public assistance benefits, which may
1 AR_l\/IS is a division within DHSS, and provides audit and recovery services addressing acts of fraud in
public welfare programs administered by DHSS. fee 16 De/. Aa'Mz`/¢. C. § 5100-7001. The caption from the
justice of the Peace Court matter only lists DHSS as the Plaintiff. On appeal, however, ARMS is also
included. In the Complaint on Appeal, DHSS avers that ARMS is merely its collecting agent.
2 TANF is “a program established by Title IV-A of the Social Security Act and authorized by Title 31 of the
Delaware Code to provide benefits to needy children who are deprived of parental support and care. While
on TANF, families are eligible for child care only as long as they are working or participating in a TANF
Employment and Training activity." State’s Ex. 13. fee ¢z/ro 16 De/. Admz`n. C. § 5100-3000.
3 Defendant admitted to receiving this overpayment in her Answer and at trial.
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Thereafter, the State attempted to recover the overpayment by filing a debt action in
the justice of the Peace Court. The State timely filed an appeal to this Court after the justice
of the Peace Court determined that it found that the Notices DHSS and ARMS sent to
Defendant were sent to improper addresses.
DISCUSSION
The instant matter is an action to recover overpayments of certain welfare benefits
embedded in the nature of a debt action. As such, the State has the burden of proving the
underlying debt by a preponderance of evidence.7 Preponderance of the evidence is defined
to mean "the side on which the ‘greater weight of the evidence’ is found" under all of the
facts and circumstances presented at trial.8 Accordingly, the State must prove, by a
preponderance of the evidence, that DHSS overpaid Defendant for 154,394.60 in Child Care
benefits and $1,053.00 in TANF benefits during the time period of April 2013 to August
2013.
In order to receive TANF benefits, a minor child must be living in the home of a
parent, guardian, custodian or specified relative, and be considered in need under the
Division of Social Services ("DSS") standards.‘) By participating in TANF, "[t]he State and
the family have mutual responsibilities. The State [ ]create[s] positive incentives for the
family to become self sufficient[, and t]he family accepts responsibility to become self-
sufficient and self supporting."lo Upon entering TANF, the adult caretaker enters into a
Contract of Mutual Responsibility with DSS (the "Contract"), which outlines, infer ¢z/z`¢z,
employment requirements, school attendance requirements, family planning, and patenting
education classes, which fits the specific needs of each individual farnily.“ When a TANF
recipient fails to comply with the Contract, DSS will impose sanctions, including a decrease
in or discontinuation of benefits.lz
When a recipient of TANF benefits meets certain employment criteria or adheres to
certain participation requirements as provided by TANF, he or she may also receive Child
Care benefits for a dependent child.l3 However, TANF recipients who fail to meet these
requirements or fail without good cause to comply with the TANF program are sanctioned
and lose their Child Care benefits.l‘*
Section 51()0-7002 of the Delaware Administrative Code governs the way in which
the amount of overpayment is determined, and provides, in pertinent part:
An overpayment is a Cash Assistance payment made in excess
of the amount a recipient is entitled to receive..[sic]
Overpayments may be caused by client or agency error. In
either situation, the recipient is expected to repay to DHSS the
amount of benefits received in error. Repayment is based on the
legal principle that when a person is paid benefits to which (s)he
is not entitled, the payer has a right to recovery of those
benefits.l5
Moreover, "[w]hen an overpayment occurs because a recipient is technically ineligible for
assistance, the overpayment equals the amount of the assistance grant paid." Under § 5100-
7002.l, a person is ‘technical ineligible’ for assistance when his or her ineligibility hinges on
non-financial reas0ns. Once DSS discovers a recipient’s ineligibility, it notifies ARMS, and
ARMS calculates the overpayment and notifies the recipient of that overpayment.lé The
recipient has thirteen days from the date of the Notice to request a fair hearing.'l
As stated m}>m, the State alleges that that DHSS overpaid Defendant for $4,394.60 in
Child Care benefits and j£l,()§§.()© in TANF benefits during the time period of April 2013 to
August 2013. After reviewing the applicable rules that govern TANF and Child Care
benefits, it logically follows that in order to prove this overpayment, the State must first
establish that Defendant was eligible to receive the benefits, entered into a Contract with
DSS outlining her responsibilities while receiving TANF benefits, received payments from
the State, and then became technically ineligible while continuing to receive those benefits by
failing to comply with the Contract. In essence, this matter amounts to an action for breach
of contract.
In reviewing the record, l find that the State has not met its burden in establishing
that Defendant received an overpayment of benefits. Although the State proffered evidence
demonstrating that it paid Defendant TANF and Child Care benefits during the time period
of April 2013 to August 2()13, the State has not proffered any evidence regarding
Defendant’s eligibility prior to this time period, nor has the State proffered any evidence that
Defendant entered into a Contract with DSS.W Instead, the State focused solely on
establishing that Defendant received Notice of the overpayment, thereby bypassing the
17 _]d_
la The State failed to present any evidence regarding the process an individual must go through in order to
obtain TANF benefits, including the fact that upon entering TANF, the adult caretaker must enter a Contract
with DSS outlining their responsibilities while in the program. This is especially problematic because the
basis of Defendant’s liability purportedly would fall on her alleged noncompliance with the Contract.
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underlying issue of establishing the debt itself. While the Notices state that Defendant
became ineligible for benefits because she was "not cooperating," the record is void of any
other facts detailing her alleged noncompliance.” This conclusive statement is insufficient
to establish Defendant’s liability for the overpayment. Therefore, because there is nothing in
the record establishing Defendant’s initial eligibility to receive benefits, her Contract with
DSS, and facts detailing her alleged noncompliance, l find that the State has not established
the debt by preponderance, and thus has not established Defendant’s liability for the
overpayments.
CONCLUSION
For the foregoing reasons, judgment is entered in favor of Plaintiff in the amount of
§1$709.00 for overpayment of TANF benefits for the time period of December 2011 through
May 2012. judgment is entered for Defendant on the State’s claim regarding the alleged
overpayments of $4,394.60 in Child Care benefits and 1£1,053.0() in TANF benefits during
the time period of April 2013 through August 2()13.
IT IS SO ORDERED.
19 The Notices provide, in pertinent part, "While looking at your TANF case, we found that you were paid
too much. This is because important information was not included when we figured out the amount of your
TANF. The important information was: DSS applied a Division of Child Support Sanction at the request of
DCSE due to client not cooperating." fee State’s EX.’s 10, 11, 19; fee a/.ro State’s Ex.’s 6, 12, 14.
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