STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BURLEY CLAYTON, )

)

Petitioner, )

)

vs. ) CASE NO. 80-1281

) FLORIDA DEPARTMENT OF HEALTH AND ) REHABILITATIVE SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, an administrative hearing was held in this cause on October 9, 1980 in Lakeland, Florida. The Petitioner is seeking the return of monies paid to the Department of Health and Rehabilitative Services, specifically the Florida State Hospital during his confinement in that hospital pursuant to a second degree murder conviction and an adjudgment of incompetence under Rule 3.740, Florida Rules of Criminal Procedure.

APPEARANCES

For Petitioner: Jeffrey A. Miller, Esquire

Polk County Legal Aid Society, Inc.

232 North Tennessee Avenue Lakeland, Florida 33801

For Respondent: John L. Pierce, Esquire

District II Legal Counsel Department of Health and

Rehabilitative Services

2639 North Monroe Street, Suite 200-A Tallahassee, Florida 32303

The Respondent obtained payment from the Petitioner for the costs of the patient's care and maintenance at the Florida State Hospital, apparently based upon a formula adopted by the Department predicated on the patient's financial status or income. The money (paid in by the Petitioner's daughter) consisted of the Petitioner's Social Security benefits in total, and the issue is whether a state agency is entitled to be reimbursed for the care and maintenance provided such a patient from that patient's Social Security benefits. The Petitioner presented five exhibits, all of which were admitted, as well as two witnesses.

The Respondent presented one witness.

FINDINGS OF FACT

1. The Petitioner is Burley Clayton, a resident of Polk County, Florida. On or about June 11, 1975 Mr. Clayton was convicted of a second degree murder charge in Lake County, Florida. Pending a pre-sentence investigation, a finding of incompetency was made on September 12, 1975, pursuant to Rule 3.740, Florida

   Rules of Criminal Procedure. Pursuant to that order the Petitioner was committed to the Division of Mental Health, Department of Health and Rehabilitative Services, at Chattahoochee, Florida. The Petitioner remained in the custody of the Department at the Florida State Hospital in Chattahoochee until about July 20, 1979, at which time he was discharged and remanded to the custody of the Sheriff of Lake County for further disposition. Shortly thereafter he was sentenced to ten years probation on November 5, 1979.

   
   

2. During the time that Mr. Clayton was confined in the Florida State Hospital, and on or about May 21, 1976, the cashier at the hospital inquired of Ms. Willie Mac Lewis, Mr. Clayton's daughter, regarding the financial status of the patient, and whether she was receiving his Social Security benefits. The cashier sent a form to Ms. Lewis upon which it was requested that she supply information regarding the Petitioner's financial status.

   
   

3. Ms. Lewis was in fact receiving the Petitioner's Social Security and railroad retirement benefits during his confinement at the Florida State Hospital. She collected the Social Security old age and retirement benefits in the amount of $190.00 per month, and railroad retirement benefits in the amount of $29.00 per month. After the subject financial status form was filed by Ms. Lewis on behalf of the Petitioner, the cashier at the Florida State Hospital, on June 21, 1976, wrote Ms. Lewis declaring that the Petitioner owed $1,535.76 for his care and maintenance at that facility up to that date and would thereafter owe payments for his care and maintenance in the amount of $146.00 per month. Ms. Lewis thereupon inquired regarding whether Medicare would provide the cost of her father's institutionalization. She was informed that Medicare was not available to assist patients at the hospital who were confined there under criminal charges. Ms. Lewis thereupon sent in the payment requested by the cashier believing she was obligated to do so, and ultimately remitted a total of

   $1,973.67 of Mr. Clayton's Social Security benefits as payment on the hospital's assessment of Mr. Clayton's care and maintenance costs during the time she continued to receive her father's benefits as representative payee. She did not pay the benefits voluntarily, but because she felt she was legally compelled to do so.

   
   

4. At some time after the hospital's receipt of the total amount of

   $1,973.66 Mr. Clayton's Social Security benefits were no longer sent to his daughter, but sent directly to him at Chattahoochee. He refused to use these monies to pay for his assessed care despite the hospital's request. No payments have been received by the hospital either from Mr. Clayton or Ms. Lewis, since 1976 although several statements have been issued requesting payment. The last payment made by Ms. Lewis, which was the last one received by the hospital, was made in September, 1976 and the charges continued to be assessed until July, 1979. Mr. Clayton's checks came to him at the hospital for nine months and then reverted to his other designated address (his guardian). Thus, from the viewpoint of the hospital, the payments were in arrears beginning in October, 1976 until July, 1979. Although several letters were written requesting payment, no substantial collection efforts were made by the hospital or the Department until October, 1979, approximately nine minutes after the Petitioner's discharge when the Department filed a lien against the Petitioner for 55,041.42 representing the outstanding bill unpaid after deducting the above amount paid by Ms. Lewis. No explanation 1.705 offered for the Department's failure to secure collection and payment of the benefits to it at an earlier date when the disputed amount was less.

   CONCLUSIONS OF LAW

   
   

5. Section 402.33(2)(4), Florida Statutes provides in pertinent part:

   
   

   (2) The Department of Health and Rehabilitative Services may, at its discretion and in accordance with rules and regulations established by the Department, charge fees for any service provided by the Department. Fees will be reasonably related to the cost of providing the service

   and the client's ability to pay...

   
   

   (4) All persons receiving services for which fees have been established pursuant to this act shall be liable for the actual cost of the service provided. ...

   
   

6. Title 42 USC Section 407 pertains to Social Security benefits and provides in pertinent part:

   
   

   The right of any person to any future payment under this subchapter shall not he transferable or assignable, at law or in equity, and none of

   the moneys paid or payable or rights existing under this subchapter shall be subject to execution levy, attachment, establishment, or other legal process, or to the operation of any bankruptcy or insolvency law.

   
   

7. The issue is thus whether the Department of Health and Rehabilitative Services may withhold sums collected from the Petitioner's Social Security benefits as payments on a statutory lien for services rendered while the Petitioner was confined at the Florida State Hospital. The Respondent relies on Chapter 402.33, as well as a recent case from the U.S. Court of Appeals for the Fifth Circuit, Department of Health and Rehabilitative Services v. Davis, Case No. 78-3652 (1980) as justifying the collection of the $1,973.67 from the Petitioner for his care and maintenance while a patient at the hospital. There is no question but that these monies were paid entirely from the Petitioner's Social Security benefits. The Petitioner relies on Title 42 USC Section 407 cited above and the LJ. S. Supreme Court case of Philpott v. Essex County Welfare Board, 409 US 413, 93 S.Ct. 590, 34 L.Ed. 2d 608 (1973) which he contends exempt. Social Security benefits from such legal process add liens for reimbursement.

   
   

8. It is clear that the federal statute cited above prohibits the transfer or assignment of any future Social Security benefits to which a recipient is entitled, as well as exempting such funds from any legal process whether a potential Plaintiff is termed a creditor or otherwise. The congressional intent behind the passage of that section and similar Social Security laws must be examined prior to making a determination with regard to the disputed funds. In the Philpott case, the trial court found that the congressional intent underlying Section 407. was to .. protect the recipient from the attack of creditors before and after the monies are paid, and to permit him or his dependents to obtain the necessities of life." So too, the court in the Davis case, supra, construes the exemption contained in Section 407 as evincing "...

   a clear legislative purpose of precluding beneficiaries from diverting the Social Security payments away from the statutes' seminal goal of furnishing

   financial medical rehabilitative and other services to needy individuals."

   Supra at 5440. In the Davis case, relied upon by the Respondent, tide court indicated that the legislative purpose underlying the enactment of Title 42 USCA Section 301 (the portion of the Social Security Act involved in that case) was to "... promote the well being of the nation by assisting the states to place greater emphasis ... helping needy families and individuals obtain tide maximum economic and personal independence of which they are capable." Thus, when considered "in pari materia" it appears that the various Social Security statutes were enacted ideally to provide both for the care and maintenance as well as the financial independence of its recipients and their families.

   
   

9. In this case the recipient earned at least a portion of the disputed benefits during his working life by making Social Security payroll contributions and being retired due to disability from the railroad from whence came his railroad retirement benefits. It is obvious, given the determination of congressional intent behind the Social Security legislation discussed in these two cases, that the Congress meant to protect such benefits from any arbitrary disposition or classification, nor did the Petitioner or his family voluntarily wish that the Social Security funds be used for payment to the department.

   
   

10. The Philpott case cited above is directly on point and controlling in the instant situation. In discussing the exemption provided for claims against a recipient's Social Security benefits pursuant to 42 USC Section 407 the court in the Philpott case said that all claimants, including a state, are subject to the exemption provided in that section of the statute wherein it is provided that "the right of any person to any future Social Security payments shall not be transferable or assignable at law or in equity, and that none of the monies paid or payable, or rights existing under the Social Security subchapter, shall be subject to execution, levy, attachment, garnishment or other legal process" (emphasis supplied) . That case held that a state could not reach the Social Security benefits even when the recipient had agreed to reimburse a county welfare board for all public assistance payments received by him. The court opined that the State's effort through a legal proceeding to obtain reimbursement of its expenditures on behalf of the recipient constituted "other legal process" from which the subject Social Security funds were exempt. The unanimous opinion was: ... we see no reason why a state, performing its statutory duties to take care of the needy, should be in a preferred position as compared with any other creditor." The court then, in discussing whether or not a state in such a position is a creditor, cited cases in which a state in providing care and maintenance to an incompetent veteran has at times been ruled to be a creditor, and at other times not so, but then proceeded to find that Section 407 does not refer to any "claim of creditors" but rather imposes a broader bar against the use of any legal process to reach all Social Security benefits, which is broad enough to include all claimants, including the State. (emphasis added). The court in Philpott then clearly found that all Social Security benefits are exempt from such a claim by a State for reimbursement for health and welfare type services rendered to a recipient of Social Security benefits.

    
    

11. The court in the Davis cape, supra, found otherwise but distinguished its situation from that in the Philpott case because in the Davis case the court held, and there was no question that the State hospital patient involved was in a relationship with the State of "in loco parentis". In that case the patient had been voluntarily committed many years before as a total mental incompetent and had ace continuously hospitalized as such. He was totally unable to care for himself or to handle his own funds or other affairs. His funds bad been legally designated and allocated to a guardian for his care and maintenance and

    the state was merely seeking reimbursement from the guardian from funds over which the recipient had already lost control. On the other hand, however, the court in the Philpott case reasoned that that recipient of benefits "... was capable at least in part, of providing for his own care". The record in this case indicates the same situation with regard to the Petitioner. He had full legal rights of access and control with regard to his Social Security and other benefits even during confinement. He was adjudged incompetent to be sentenced in a criminal proceeding and was placed in the Florida State hospital involuntarily pursuant to an adjudication of guilt and a finding of incompetency to be sentenced. The record does not reflect that he was totally incapacitated and capable of managing his own affairs and own funds and, indeed, after several months of confinement, he began receiving his Social Security checks at the hospital and apparently handling his own Social Security income funds. He was released to the care and custody of the appropriate law enforcement agency upon his discharge from the hospital. The record simply does not establish that the State, with regard to the Petitioner, was in relationship "in loco parentis" because he was not shown to be totally incapacitated and merely a recipient of the State's largess as the Davis case envisioned, rather this recipient earned, at least a portion of Iris disputed benefits during his working life, and it was clearly the intent of Congress as the Philpott case holds, that these funds were meant to be retained by such a recipient and his family to afford them some modicum of familial financial and social independence. The court in Davis, in distinguishing that case from the Philpott situation on the basis of an "in loco parentis" relationship, acknowledged that in the Philpott case the recipient "... was capable, at least in part, of providing for his own care's. There was no showing here that the Petitioner or his family was not, at least in part, capable of providing for his own care such that he or they would not be capable of using the Social Security benefits for that purpose for which they were intended. That factor, however, is somewhat irrelevant in that whether or not be could provide for his own care, he was in Florida State Hospital involuntarily pursuant to an adjudication of guilt and a finding that he was incompetent to stand sentencing, rather than a pure commitment based on a finding of total mental and/or physical incapacity.

    
    

12. Finally, it should be pointed out that the Petitioner in effect, is being asked to pay for his own confinement and incarceration. This, of course, is not in itself statutorily absurd since Section 944.485(b), Florida Statutes provides that inmates, when they have the financial resources available, "shall pay ... except where such income is exempt by State or Federal law ... all or a portion of the prisoner's daily subsistence costs ..." (emphasis added). In the case at hand, however, the ultimate objectives of both the Department of Corrections and Health and Rehabilitative Services with regard to this Petitioner are the same; that is, confinement and rehabilitation. What becomes absurd is that the Davis case and the Department's interpretation of Section

402.37 Florida Statutes with it attempts to apply herein, would allow the Department to recover the Petitioner's subsistence costs with no provisions for exemption whatever, whereas those Social Security benefits involved would be exempt from recovery by the State for purposes of Chapter 944 Florida Statutes when, the Patient/prisoner in either instance is confined through criminal process. Thus, in consideration of the above, the case of Philpott v. Essex County Welfare Board, supra, must be determined to be controlling and the Petitioner should be entitled to the return of the sum of $1,973.67 already paid to the Respondent, and the release of the statutory lien filed by the Respondent.

RECOMMENDATION

Having considered the competent, substantial evidence in the record, the candor and demeanor of tide witnesses, the foregoing Findings of Fact and Conclusions of Law, and pleadings and arguments of counsel, it is

RECOMMENDED that the Petitioner, Burley Clayton, be reimbursed the sum of

$1,973.67 previously paid to the Department of Health and Rehabilitative Services, and that he be released from the statutory lien of $5,041.42 previously filed by the Respondent.

DONE and ENTERED this 23rd day of December, 1980, in Tallahassee, Florida.

P. MICHAEL RUFF, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301

(904) 488-9675

COPIES FURNISHED:

Jeffrey A. Miller, Esq. Polk County Legal Aid

Society, Inc.

232 N. Tennessee Avenue Lakeland, Florida 33001

John L. Pierce, Esq. District II Legal Counsel Department of Health and

Rehabilitative Services 2639 North Monroe Street Suite 200A

Tallahassee, Florida 32303

Docket for Case No: 80-001281

Orders for Case No: 80-001281