The Reillys also participate in a state social services program designed to help incapacitated persons avoid institutionalization. The In-Home Supportive Services (IHSS) program compensates those who provide care for aged, blind, or disabled individuals incapable of caring for themselves. ( Norasingh v. Lightbourne (2014)
According to the verified petition that is the operative pleading in this case, Reilly and two daughters moved into a three-bedroom apartment in Novato in 1998 and began receiving Section 8 housing assistance payments. In 2004 one daughter moved out, but Reilly failed to inform MHA of her departure. Five years later,
By letter dated April 7, 2015, Reilly requested that MHA recalculate her rent and exclude her income from IHSS. MHA did not respond to that request, but soon thereafter served Reilly with notice of a proposed termination of her Section 8 voucher. A hearing officer determined that this first proposed termination was defective, but on July 31, 2015, MHA issued a second termination notice, this time alleging that Reilly failed to make multiple payments under the repayment plan. At an informal hearing on August 25, 2015, Reilly argued that MHA had improperly included her IHSS payments as income and that, excluding these payments, there was no lawful basis for MHA to have demanded $16,000 from her.
On September 8, 2015, the hearing officer issued a short, written decision upholding MHA's decision to terminate Reilly's housing voucher. The hearing officer made the following factual findings: Reilly failed to promptly notify MHA when one daughter moved out of the subsidized apartment, then entered into a repayment agreement in 2009; Reilly breached that agreement in 2010, and at a hearing following the breach was warned that any future failure to make payments would result in the termination of her housing assistance; Reilly breached the agreement again in 2012, and in 2014 and 2015 when she missed payments for 16 months. The hearing officer concluded that Reilly's failure to pay the amounts required under the agreement was grounds for terminating assistance under a HUD regulation (see
MHA demurred to the petition, and the trial court sustained the demurrer after a hearing on November 4, 2016. The trial court concluded that Reilly's interpretation of section 5.609(c)(16) was "wrong as a matter of law." The HUD regulation
Given the trial court's reading of the HUD regulation, the court concluded that no amendment to Reilly's petition would cure the defect the court had identified, so it sustained the demurrer without leave to amend and dismissed Reilly's petition with prejudice. This appeal timely followed. While the case is pending this court ordered, as did the trial court before us, a stay in the enforcement of the administrative order terminating Reilly's Section 8 benefits.
DISCUSSION
We review de novo the trial court's order sustaining MHA's demurrer. ( Williams v. Housing Authority of Los Angeles (2004)
The IHSS Program
IHSS is a "state and federally funded program developed to permit persons with disabilities to live safely in their own homes." ( Calderon v. Anderson (1996)
Those who provide services to IHSS beneficiaries "work pursuant to various arrangements. Some are civil service employees of a county; some are employees of an entity that contracts with the county; some contract directly with the county or authorized entity; some are referred to the recipient by the authorized entity; and
The applicable HUD regulation defines income broadly, as "all amounts, monetary or not," that a Section 8 program participant receives or anticipates receiving, unless such amounts are specifically excluded. (
MHA does not dispute that, to the extent the IHSS program pays for Reilly's daughter to attend a day program for special needs individuals or to receive assistance from a care-giver other than her mother, the value of those benefits must be excluded when calculating the Reilly family's income. According to MHA, such expenditures are precisely the sort of benefits that section 5.609(c)(16) is designed to cover-reimbursement for out-of-pocket expenses the Reillys incur for services necessary to having Reilly's daughter live at home.
We are aware of only one other case that has construed the language of
In an unpublished decision, the Fifth Circuit disagreed. The court noted at the outset that "all state-funded in-home attendant-care services in Texas are provided by private intermediaries, and Texas does not provide any amounts directly to families ...." ( Anthony , supra ,
MHA urges us to follow Anthony in construing section 5.609(c)(16). The plain meaning of "[a]mounts paid ... to offset the cost of services ..." is that a family must have incurred a cost, or expense, for services before that cost can be offset, or reimbursed, by a state agency's payment, MHA argues. (
Reilly argues that MHA's construction of section 5.609(c)(16) violates another interpretive maxim-that MHA reads into the regulation limitations that are not there, a practice courts should avoid if possible. (See People v. Bautista (2008)
We agree with Reilly as to the interpretation of "offset." Section 5.609(c)(16)'s exemption from income appears to reach money paid to a family so that the family can go out and hire services or purchase equipment necessary for the developmentally disabled family member. Such payments "offset the cost of services and equipment" that would otherwise fall on the family. But they are not reimbursement for out-of-pocket expenses if the family receives payment before, rather than after, incurring the expense. For this reason, Reilly is persuasive that MHA has too narrowly defined "offset," but this is a comparatively small point that does not mean we agree with Reilly's construction of the regulation.
Considering further the meaning of "offset," we uncover the first of two problems with Reilly's construction of the phrase "cost of services ...." If a payment is to "offset the cost of services," the payment must go to the same entity that incurs the cost of those services. Otherwise the payment does not counterbalance or compensate for the cost of services. Here, section 5.609(c)(16) addresses amounts paid "to a family ... to offset the cost of services ...." This means that the costs these payments offset must be costs that the family itself incurs. We recognize that in caring for her daughter Reilly performs services that are of great value to the State of California, but we do not think that the meaning of "cost of services ... to keep the developmentally disabled family member at home" can be stretched to reach cost savings to the state from the provision of these services. To the extent that Reilly construes "cost of services ..." to include costs to the State of California, we reject her construction.
Reilly raises a closer question with her argument that the "cost of services ..." includes the opportunity cost to Reilly of providing those services. IHSS payments to Reilly do counterbalance or compensate for her loss of income in staying home to care for her daughter. And under one
There is, however, another more common and concrete meaning of the word "cost," namely "the amount or equivalent paid or charged for something; price." (Merriam-Webster's Collegiate Dict., supra, at p. 262.) If "cost" means "price," then the cost of services that Reilly provides her daughter is, to Reilly, zero. And because Reilly's services are free to the family, the family incurs no "cost of services or equipment ..." that the IHSS payments could be said to offset.
In choosing between these two plausible constructions of section 5.609(c)(16), we look more broadly to the language of the regulation of which paragraph (c)(16) is a part. Reilly reminds us, words " 'that relate to the same subject matter " 'must be harmonized to the extent possible.' " ' " ( People v. Gonzalez (2008)
History, Policy, and Deference to Agency Interpretation
The parties agree that where the language of a regulation lends itself to more than one plausible reading, we must consider other interpretive methods. To the extent the language of section 5.609(c)(16) leaves room for ambiguity, we look to the history of the regulation's enactment and the reasonableness of the competing proposed constructions, and we defer to an agency's authoritative interpretation of its own regulations. (See Mt. Hawley Ins. Co. v. Lopez (2013)
Reilly cites several passages from the rulemaking record that we think are unhelpful in resolving the interpretive issue before us. On April 5, 1995, HUD published as an interim rule the exact language defining an exclusion from income that later became section 5.609(c)(16). (See
The rule-making record having failed to answer the question before the court, we turn now to comparing the results of the two proposed constructions. If a regulation " 'is amenable to two alternative interpretations, the one that leads to the more reasonable result will be followed.' " ( Greening v. Johnson (1997)
If the court adopts MHA's construction of the regulation, then families with a developmentally disabled family member at home will be able to exclude IHSS payments from income only to the extent the payments go to provide services and equipment for which the family pays. For example, if the family pays an in-home service provider to care for a disabled child while an able parent works outside the home, IHSS payments to cover the cost of that homecare aide are not counted toward the family's income. Only the parent's outside income counts. If instead the parent takes on the job of providing the child's homecare, as occurred in this case, then the IHSS payments to compensate for parental care count toward income, but the parent has no outside income. Just as IHSS payments substitute in the family's budget for the money the parent would have earned outside the home, so, too, they substitute for those foregone wages in being counted as income.
We believe this result is a reasonable outcome. First, the regulation so construed treats comparably two families with a developmentally disabled family member: one family in which a third party cares for the disabled person, and the other in which a parent does. Presumably the HUD regulation, like the IHSS program, seeks to assist both families, and to assist them equally. A second reason we think the result is reasonable is that it achieves a measure of parity between a family with a developmentally disabled family member and a family with a member disabled by severe medical problems.
By contrast, Reilly's construction of the regulation gives people in Reilly's position a benefit that comparable families do not receive. Reilly would have her rent calculated as if she had no income from work at all, while another family with a disabled family member in which the parent works outside the home and pays a third party to provide homecare would have to pay rent calculated to include the parent's outside income. Also inequitable would be the result that, by virtue of her daughter's disabilities being developmental rather than physical, Reilly's construction would allow her to exclude IHSS payments for parental care-giving, which a parent receiving IHSS payments to care for a child disabled by medical problems could not do.
In sum, comparing the results of the competing constructions confirms our conclusion that MHA and the trial court correctly construe section 5.609(c)(16). We reach this conclusion without the benefit of the final interpretive tool the parties have urged upon us-deference to an agency's interpretation of its own regulation-because neither party points us toward an authoritative HUD interpretation of section 5.609(c)(16). MHA attempts to do so in its request for judicial notice filed on May 30, 2017, but we deny that request.
MHA requests this court take judicial notice of a short letter dated May 10, 2017, to MHA's general counsel from the Director, Office of Public Housing, U.S. Department of Housing and Urban Development, San Francisco Regional Office-Region IX. The letter attaches a 2007 letter from HUD's Office of General Counsel-Assisted Housing Division opining that the mother in Anthony could not exclude her wages from income under section 5.609(c)(16), representing that this decade-old opinion is "our current interpretation of 24 C.F.R. section 5.609(c)(16)." If the 2017 letter could be characterized as an official act of the executive branch, we could choose to take judicial notice of it (see Evid. Code, § 452, subd. (c) ; § 459, subd. (a) ), but we decline to do so. "Litigation-inspired opinions have no authority" where "the administrative agency is a party to the litigation." (
Because we agree with the trial court and MHA on the meaning of section 5.609(c)(16), we find no error in the trial court's order sustaining MHA's demurrer to the petition. Reilly has shown no reasonable possibility that she could cure the defect if granted leave to amend, so we find no abuse of discretion in the trial court's decision to dismiss the petition with prejudice.
DISPOSITION
The decision of the trial court is affirmed. In the interests of justice, each party shall bear its own costs on appeal.
We concur:
Kline, P.J.
Richman, J.
Notes
Judge of the Alameda County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
Welfare and Institutions Code section 12300, subdivision (e), provides: "Where supportive services are provided by a person having the legal duty pursuant to the Family Code to provide for the care of his or her child who is the recipient, the provider of supportive services shall receive remuneration for the services only when the provider leaves full-time employment or is prevented from obtaining full-time employment because no other suitable provider is available and where the inability of the provider to provide supportive services may result in inappropriate placement or inadequate care." Family Code section 3910, subd. (a) places on each parent "responsibility to maintain, to the extent of their ability, a child of whatever age who is incapacitated from earning a living and without sufficient means."
With no citation to the record, MHA asserts that the Reillys receive IHSS payments to cover costs for attendant care and participation at a YMCA day program, in addition to payments to compensate Reilly for her care-giving services. As these are not facts in the petition or of which the court has taken judicial notice, we ignore this information except to emphasize that nothing in our decision should be understood to include any such expenses in Reilly's income.