VELMA RODEFER v. JOHN B. McCARTHY, DIRECTOR, et al.
C.A. CASE NO. 2015-CA-1
IN THE COURT OF APPEALS OF OHIO SECOND APPELLATE DISTRICT DARKE COUNTY
July 31, 2015
[Cite as Rodefer v. McCarthy, 2015-Ohio-3052.]
T.C. NO. 14CV389 (Civil Appeal from Common Pleas Court)
Rendered on the 31st day of July, 2015.
JESSE B. BEASLEY, Atty. Reg. No. 0040525, 303 Hacker Road, Dayton, Ohio 45415
Attorney for Plaintiff-Appellant
ARA MEKHJIAN, Atty. Reg. No. 0068800, Assistant Attorney General, Health and Human Services Section, 30 East Broad Street, 26th Floor, Columbus, Ohio 43215
Attorney for Defendants-Appellees
FROELICH, P.J.
{¶ 1} The estate of Velma Rodefer1 appeals from a judgment of the Darke County
{¶ 2} Rodefer‘s complaint alleged the following facts.
{¶ 3} When Rodefer was diagnosed with Alzheimer‘s disease, her only son, Kenneth, brought her into his home. Kenneth and his family cared for Rodefer for more than 3½ years. As her physical and cognitive abilities decreased, she spent more and more time at The Brethren Retirement Community, where other relatives resided.
{¶ 4} With her liquid resources being exhausted, Rodefer looked to sell her life estate interest in farmland. Counsel was consulted, and calculations of the value of her life estate for Medicaid purposes were performed according to
{¶ 5} As her condition continued to deteriorate, Rodefer moved into assisted living and then to the nursing facility of The Brethren Retirement Community. On November 29, 2012, after Rodefer‘s assets were exhausted, Kenneth applied for Medicaid assistance for his mother. The Darke County Department of Job and Family Services (DJFS) determined that the sale of the life estate involved an improper
{¶ 6} Rodefer was invited to respond to the DJFS determination, and she provided DJFS with reasons that its determination was incorrect. The administrator of DJFS rebuffed her response by letter on January 14, 2013.
{¶ 7} On January 23, 2013, she requested an in-person state hearing before the Ohio Department of Job and Family Services (ODJFS). See
{¶ 8} A state hearing was scheduled for March 18, 2013. When Kenneth and counsel arrived, they were informed that the hearing would be conducted by telephone. Counsel objected and asked for an in-person hearing. The hearing officer indicated that such may not be granted, but submitted the request. The state hearing was rescheduled for April 9.
{¶ 9} At the beginning of the April 9 hearing, which was held by video conference, the hearing officer ruled that the January 23 hearing had been dismissed and that only
{¶ 10} The adverse decisions were appealed administratively. The ODJFS hearing authority, A. Ruben Lopez, contacted Rodefer‘s counsel and stated that, due to ODJFS‘s numerous mistakes, a state hearing based on the original January 23, 2013 hearing request would be held. That hearing was held on May 21, 2013. Kenneth and counsel raised various grounds for reversing the DJFS‘s actions. On June 24, 2013, the ODJFS hearing officer upheld DJFS‘s prior decision, based on MEPL 68, that the life estate was properly valued at $117,012. Rodefer states that the decision did not address any of her arguments to the contrary. Rodefer attached the decision to the complaint as Exhibit C.
{¶ 11} The June 24 state hearing decision was appealed to ODJFS, Administrative Appeal Section. The appeal was denied on July 18, 2013. The July 18 decision was attached to the complaint as Exhibit D.
{¶ 12} With respect to McCarthy specifically, Rodefer alleged that McCarthy is responsible for the actions taken by the Ohio Department of Job and Family Services, to whom Medicaid decision-making authority has been delegated, and the County Departments of Job and Family Services (CDJFS), to whom day-to-day operations have been delegated. Rodefer further alleges that, [a]s the chief executive of ODM, Defendant McCarthy is responsible for the supervision and operation of the Medicaid
{¶ 13} On August 8, 2014, Rodefer brought suit under
{¶ 14} In Count One, Rodefer claims that defendants’ actions in seeking to rescind and replace an enacted rule by a letter, and apply such retroactively, violated the Ohio Administrative Procedure Act, and Plaintiff‘s rights under the Ohio and United States Constitutions. Count Two claims that the denial of Medicaid benefits and ability to obtain Medicaid benefits violate her rights under Title XIX of the Social Security Act and her rights to medical assistance under Ohio law. Count Three alleges that the denial of Medicaid benefits violates her rights under the Ohio and United States Constitutions. Count Four alleges that defendants violated state and federal law by refusing to follow its own rules and seeking to replace such rules by administrative fiat. Finally, Rodefer alleged in Count Five that she was denied her right to substantive and procedural due process by defendants’ attempts to avoid and deny her meaningful hearings and to
{¶ 15} Rodefer requested as relief that defendants’ prior decision on her eligibility for benefits be reversed, that the court issue a judgment declaring that MEPL 68 has no force and effect and that
{¶ 16} On September 5, 2014, ODM and McCarthy moved to dismiss the action, pursuant to
{¶ 17} ODM and McCarthy attached 13 exhibits to their motion, including Medicaid regulations and a copy of Rodefer‘s complaint against DJFS and its director in her administrative appeal of that agency‘s decision to the Darke County Court of Common Pleas.
{¶ 18} On December 30, 2014, the trial court granted the motion to dismiss. The court found that the action was barred by res judicata, that the exclusive method of challenging the decision denying her Medicaid benefits was through the statutory framework for administrative appeals, that the procedural due process claims must fail because the county decision and the state appeal decision satisfied due process requirements and were not arbitrary denials of benefits or substantive rights, that ODM was not a person within the meaning of
{¶ 19} Rodefer appeals from the trial court‘s dismissal of her action against McCarthy. She does not challenge the dismissal of ODM.
I. Standards of Review and 42 U.S.C. 1983
{¶ 20} A motion to dismiss a complaint for failure to state a claim upon which relief can be granted, pursuant to
{¶ 21} Similar principles control a
{¶ 22} Section 1983 provides a remedy to persons whose federal rights have been violated by state governmental officials. Shirokey v. Marth, 63 Ohio St.3d 113, 116, 585 N.E.2d 407 (1992). Although
{¶ 23} The trial court found that it lacked subject matter jurisdiction over the § 1983 action, because Ohio‘s administrative procedures provided the exclusive avenue for
II. Res Judicata
{¶ 24} The trial court held that Rodefer‘s § 1983 action against McCarthy was barred by res judicata. In their motion to dismiss, ODM and McCarthy stated that Rodefer filed a prior action in the trial court, which challenged DJFS‘s decision regarding the valuation of her life estate and the resultant restriction of Medicaid benefits for her nursing home care. McCarthy stated that the trial court upheld DJFS‘s decision, and that the trial court‘s decision was pending on appeal at the time Rodefer filed her § 1983 action. In finding that Rodefer‘s action in this case was barred by res judicata, the trial court presumably took judicial notice of her prior action against the DJFS and its director, Rodefer v. Colbert, Darke C.P. No. 13-CV-387.
{¶ 25} The doctrine of res judicata encompasses the two related concepts of claim preclusion (estoppel by judgment) and issue preclusion (collateral estoppel). Grava v. Parkman Twp., 73 Ohio St.3d 379, 381, 653 N.E.2d 226 (1995). Under the doctrine of res judicata, [a] valid, final judgment rendered upon the merits bars all subsequent actions based upon any claim arising out of the transaction or occurrence that was the subject matter of the previous action. Kelm v. Kelm, 92 Ohio St.3d 223, 227, 749 N.E.2d 299 (2001), quoting Grava at syllabus. Furthermore, [r]es judicata operates to bar litigation of all claims which were or might have been litigated in a first lawsuit. (Emphasis omitted.) Grava, 73 Ohio St.3d at 382, quoting Natl. Amusements, Inc. v. Springdale, 53 Ohio St.3d 60, 62, 558 N.E.2d 1178 (1990).
{¶ 27} Rodefer‘s complaint in this case does not mention Rodefer v. Colbert, Darke C.P. No. 13-CV-387, nor does she allege that she had appealed the administrative determination by ODJFS to the trial court and, after an adverse ruling in the trial court, to the court of appeals.
{¶ 28} McCarthy and ODM attached to their motion to dismiss unauthenticated copies of Rodefer‘s complaint and two of the trial court‘s decisions in Rodefer v. Colbert, Darke C.P. No. 13-CV-387 (Ex. 5, 6 & 7), as well as a decision from this court denying a motion to dismiss the appeal from Case No. 13-CV-387, Rodefer v. Colbert, 2d Dist. Darke No. 2014-CA-3, Decision and Entry (July 28, 2014) (Ex. 8). In response, Rodefer disagreed that her action against McCarthy and ODM was barred by res judicata, noting DJFS had argued that the § 1983 claims could not be raised as part of the administrative appeal and that the § 1983 claims had been dismissed from her first action; a copy of that dismissal decision is not part of the record. Rodefer further argued that res judicata is not properly addressed in a
{¶ 29} On appeal, Rodefer argues that the trial court‘s ruling was incorrect, because she has sued different parties in the two actions, that the claims could not have been litigated in the prior action, and that because the trial court‘s decision in her prior
{¶ 30} Res judicata is an affirmative defense, and it does not affect a court‘s jurisdiction over an action. E.g., Jefferson v. Bunting, 140 Ohio St.3d 62, 2014-Ohio-3074, 14 N.E.3d 1036, ¶ 10; State ex rel. Vanni v. McMonagle, 137 Ohio St.3d 568, 2013-Ohio-5187, 2 N.E.3d 243, ¶ 12 (res judicata is not a basis for [a writ of] prohibition because it does not divest a trial court of jurisdiction to decide its applicability.). Since res judicata is not jurisdictional,
{¶ 31} Further, [w]hen a defense of res judicata requires consideration of materials outside the record, the defense may not be determined on a
{¶ 32} As stated above, Rodefer‘s complaint in this action does not mention any prior court case related to her Medicaid claim, and she did not attach any documentation
III. Effect of Administrative Appeal Procedures
{¶ 33} Rodefer claims that the existence of an administrative appeals system does not preclude her ability to bring her § 1983 claim in state court. McCarthy responds that the only means by which Rodefer could challenge the agency determination was through an administrative appeal.
{¶ 34} Medicaid is a federally-established program developed by Congress to provide state and federal funding to those individuals who cannot afford their medical care. See Title XIX of the Social Security Act, 79 Stat. 286 (1965). The state of Ohio, as a participant in the Medicaid program, develops its own rules for implementing the program, which must be consistent with the federal Medicaid statutes. Koenig v. Dungey, 2014-Ohio-4646, 19 N.E.3d 1006, ¶ 3 (1st Dist.). At the time Rodefer filed her application for Medicaid benefits in November 2012, ODJFS was designated as the single state agency to supervise the administration of Ohio‘s Medicaid program. Former
{¶ 35}
{¶ 36} McCarthy argues on appeal that Rodefer has failed to exhaust her administrative remedies. He states that she appealed the administrative denial to the court of common pleas, and that her appeal from the common pleas court‘s decision against her to the court of appeals is pending. He further argues that Rodefer cannot circumvent the appeals process by filing a civil action under
{¶ 37} The Ohio Supreme Court has explained the principle of exhaustion of administrative remedies, saying:
It is a well-established principle of Ohio law that a party seeking relief from an administrative decision must pursue available administrative remedies before pursuing action in a court. We have stated, Exhaustion is generally required as a matter of preventing premature interference with agency processes, so that the agency may function efficiently and so that it may have an opportunity to correct its own errors, to afford the parties and the courts the benefit of its experience and expertise, and to compile a record which is adequate for judicial review. The purpose of the doctrine * * * is to permit an administrative agency to apply its special expertise * * * in developing a factual record without premature judicial intervention. The judicial deference afforded administrative agencies is to * * * prepare the way, if the litigation should take its ultimate course, for a more informed and precise determination by the Court * * *.
The exhaustion doctrine is not without exception. For instance, when there is a judicial remedy that is intended to be separate from the administrative remedy, the requirement of exhaustion of administrative remedies does not apply.
The failure to exhaust administrative remedies is not a jurisdictional defect but is rather an affirmative defense, if timely asserted and maintained. * * *
(Citations omitted.) Dworning v. Euclid, 119 Ohio St.3d 83, 2008-Ohio-3318, 892 N.E.2d 420, ¶ 9-11.
{¶ 38} The Ohio Supreme Court has recognized that [a] Section 1983 action provides a supplement to any state remedy, and there is no general requirement that state judicial or administrative remedies be exhausted in order to commence a Section 1983 action. (Citations omitted.) Schotten, 70 Ohio St.3d at 91, 637 N.E.2d 306 (1994). Moreover, after considering the legislative histories of
{¶ 39} We recognize that the Ohio Supreme Court has held that, to assert a claim under Section 1983, Title 42, U.S.Code and the Fourteenth Amendment for deprivation without due process of a purely economic interest, a plaintiff must allege and prove the inadequacy of state remedies. 1946 St. Clair Corp. v. Cleveland, 49 Ohio St.3d 33, 550 N.E.2d 456 (1990). However, 1946 St. Clair Corp. is directed to the adequacy of the plaintiff‘s pleading, not whether a trial court has jurisdiction over the matter. Moreover, Rodefer‘s claims, on their face, raise more than just a procedural due process claim related to the deprivation of a property right.
{¶ 40} Rodefer‘s complaint establishes that she pursued administrative appeals through ODJFS, but it does not indicate that she appealed the denial by ODJFS to the court of common pleas; Rodefer also does not allege in her complaint that she exhausted her administrative remedies. (Again, the record of her case against ODJFS and its director is not properly before us and cannot be considered.) Regardless, in light of the foregoing authority, we find that Rodefer‘s action was not precluded by the existence of state administrative appeal procedures and by Rodefer‘s alleged failure to exhaust her administrative remedies. The trial court erred in dismissing Rodefer‘s action on the ground that the exclusive method of challenging the decision denying her Medicaid benefits was through the statutory framework for administrative appeals.
IV. Failure to State a Claim Upon Which Relief May be Granted
{¶ 41} To establish a claim under § 1983, a plaintiff must establish that (1) the conduct complained of was committed by a person acting under color of state law, and (2) the conduct deprived the plaintiff of a federally-protected right, either constitutional or statutory. E.g., Shirokey v. Marth, 63 Ohio St.3d 113, 116, 585 N.E.2d 407 (1992); Granato v. Davis, 2d Dist. Montgomery No. 26171, 2014-Ohio-5572, ¶ 36.
{¶ 42} In Count One of her complaint, Rodefer alleges that McCarthy‘s and ODM‘s actions in seeking to rescind and replace an enacted rule by a letter, and apply such retroactively, violate the Ohio Administrative Procedure Act, and Plaintiff‘s rights
{¶ 43} Counts Two and Three allege that Defendants denied and continue to deny both Medicaid benefits and the ability to obtain Medicaid benefits. Count Two states that these actions violate her rights under Title XIX of the Social Security Act and her right to medical assistance under Ohio law. Count Three states that these actions violate her rights under the Ohio and United States Constitutions.
{¶ 44} Count Five alleges that Rodefer was denied her right to substantive and procedural due process under the Ohio and United States Constitutions by Defendants’ attempts to deny her a meaningful hearing and continued refusal to address grounds raised.
{¶ 45} Section 1983 applies only to violations of federal rights. Shirokey at 116. Consequently, Rodefer cannot challenge McCarthy‘s failure to comply with Ohio‘s Administrative Procedure Act, the Ohio Constitution, or any other Ohio law by way of an action under § 1983. All of Rodefer‘s claims under Ohio law were properly dismissed pursuant to
{¶ 46} In addition, Rodefer‘s general references to violations of federal law and the United States Constitution, without some specificity as to the provision that was allegedly violated, were insufficient to state a claim upon which relief may be granted. Accordingly, Counts One, Three, and Four were properly dismissed in their entirety under
{¶ 48} In Count Five, Rodefer claims violations of her right to substantive and procedural due process related to the administrative review process. Rodefer does not identify the substantive due process right of which she was allegedly denied. The trial court did not err in dismissing the claim based on a violation of substantive due process.
{¶ 49} With respect to her procedural due process claim, Rodefer‘s allegations also are not sufficient to state a claim.
{¶ 50} The Due Process Clause of the Fourteenth Amendment states that no state shall deprive any person of life, liberty, or property without due process of law. In
{¶ 51} [T]he determination of the existence of a property right protected by due process is controlled by the statute creating and defining that right. Hamby v. Neel, 368 F.3d 549, 558 (6th Cir.2004). To have a property interest in a benefit, a person must have a legitimate claim of entitlement to it, not just an abstract need or desire for it. K.W. ex rel. D.W. v. Armstrong, 9th Cir. No. 14-35296, __ F.3d. __, 2015 WL 3529727 (June 5, 2015), quoting Bd. of Regents of State Colleges. v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972). The Sixth Circuit has held that a Social Security claimant, including a claimant for Medicaid benefits, has a property interest in benefits for which he or she hopes to qualify. Hamby at 559.
{¶ 52} Assuming, for sake of argument, that Rodefer has a protected interest in the Medicaid benefits for which she applied, Rodefer must also allege that she was deprived of a meaningful opportunity to be heard regarding the DJFS determination providing restricted coverage. As stated by the United States Supreme Court:
* * * A § 1983 action may be brought for a violation of procedural due process, but here the existence of state remedies is relevant in a special sense. In procedural due process claims, the deprivation by state action of a constitutionally protected interest in life, liberty, or property is not in itself unconstitutional; what is unconstitutional is the deprivation of such an
interest without due process of law. The constitutional violation actionable under § 1983 is not complete when the deprivation occurs; it is not complete unless and until the State fails to provide due process. Therefore, to determine whether a constitutional violation has occurred, it is necessary to ask what process the State provided, and whether it was constitutionally adequate. * * *
(Footnotes and citations omitted and emphasis sic.) Zinermon v. Burch, 494 U.S. 113, 125, 110 S.Ct. 975, 108 L.Ed.2d 100 (1990). See also Shirokey, 63 Ohio St.3d 113, 585 N.E.2d 407 (1992).
{¶ 53} Rodefer‘s complaint alleges that she requested a state hearing on January 23, 2013. When a video-conference was held on April 9, 2013, Kenneth and Rodefer‘s counsel were informed that the State hearing requested on January 23 had been dismissed and that the hearing would address only the hardship waiver. Nevertheless, Rodefer further alleged that her counsel later was contacted by Hearing Authority A. Ruben Lopez, who stated that due to the Department‘s numerous mistakes he was granting a state hearing based on the original January 23, 2013 state hearing request. The complaint indicates that, at this hearing, Rodefer raised the reasons set forth in her complaint as reasons to reverse the actions of DJFS.
{¶ 54} In the June 24, 2013 decision, which was attached to the complaint, the hearing officer noted that Rodefer‘s attorney did not dispute the value of the transferred property, that Rodefer‘s son had bought the life estate for $22,000 upon the advice of Rodefer‘s attorney, and that the agency had valued the life estate at $117,012 using the multiplier of .29655. The hearing officer cited
Here, the Agency [DJFS] referred to the chart in MEPL 68 to determine the product of .26955 for the Appellant‘s age of 91. The Agency multiplied the value of the life [sic] estate of $434,100 by .26955 for a total life estate value of $117,012. The Agency subtracted the purchase price of $22,000 from the value of $117,012 for a total improper transfer of $95,012. The Appellant‘s attorney argued that the Agency was incorrect to use the table set forth in MEPL 68 in its calculation. Because the Department of Job and Family Services has issued supplemental guidance for the calculation of life estate values, this hearing officer is persuaded that the Agency was correct to use MEPL 68 in its calculation. The Agency‘s determination of the life estate value is correct.
The hearing officer‘s decision was adopted by Lopez, the ODJFS state hearing authority. An appendix to the decision indicated that the Agency had presented sixteen exhibits and Rodefer had presented one. The decision stated that [a]ll papers and materials introduced at the hearing or otherwise filed in the proceeding make up the hearing record. Rodefer appealed the June 24 decision to ODJFS, Administrative Appeal Section, and it was denied on July 18, 2013.
{¶ 55} In the July 18 decision, which was attached to the complaint as Exhibit D, the administrative appeal officer stated, in part: Appellant‘s attorney argues that the Agency used the incorrect table. However, the Ohio Department of Job and Family Services has spoken through its regulations and policy issuances, which in this case, supersede the rule regarding this particular point. The rule refers to a table found in 26
{¶ 56} Rodefer‘s complaint itself indicates that she was presented an opportunity to challenge the DJFS decision (albeit after bureaucratic mistakes) before a state hearing officer, at which time she was permitted to present evidence and argue why MEPL 68 was inapplicable. She was also given the right to appeal that decision to an administrative appeal officer and, when that appeal was unsuccessful, to the court of common pleas. Although the hearing officers might not have addressed her specific arguments in its decisions, the complaint reflects that Rodefer was provided adequate notices and opportunities to be heard. Based on the allegations in the complaint, including the administrative decisions of ODJFS, we agree with the trial court that the complaint does not state a claim for a violation of Rodefer‘s right to due process.
{¶ 57} The trial court did not err in dismissing Count Five pursuant to
V. Conclusion
{¶ 58} The trial court‘s judgment will be affirmed.
FAIN, J. and WELBAUM, J., concur.
Copies mailed to:
Jesse B. Beasley
Ara Mekhjian
Hon. Jonathan P. Hein