Opinion ID: 2172649
Heading Depth: 1
Heading Rank: 1

Heading: Plaintiff Gary McKee

Text: McKee alleged that he resided with his wife and three children at their marital home located in Bay City, Michigan, until September, 1980. At that time, McKee left and, with two of his children, took up residence in a rental unit in Essexville, Michigan. He also asserted that from October, 1980, until March, 1981, his sole source of income was AFDC benefits. In March of 1981, McKee and his wife were divorced. Pursuant to the terms of the divorce decree, the marital home was to be sold and the proceeds divided evenly between the parties. Mrs. McKee was apparently granted exclusive use of the former marital home until it was sold. On April 9, 1981, McKee was notified that he and his two children were no longer eligible for AFDC benefits because he owned nonexempt property valued in excess of the resource limitation for AFDC eligibility. The Bay County DSS had learned that McKee and his two children no longer lived in the marital home and thus determined that they were no longer eligible for AFDC benefits because McKee's interest in the former marital home was an available, nonexempt asset that exceeded the AFDC assets limit. The Bay County DSS determined, however, that McKee had no income, that McKee could not sell his home, and that closing his AFDC case would cause undue hardship. A policy exception was requested, but was denied by the state office in April, 1981, and McKee was then notified that his benefits would be terminated. McKee filed a timely request for an administrative hearing on the termination of his AFDC benefits, and, pursuant to regulation 45 CFR 205.10(a)(6)(i), his benefits continued until the hearing decision was issued on June 29, 1981. At a hearing held May 26, 1981, the hearing referee made, inter alia, the following findings of fact: McKee had been receiving AFDC for himself and two of his three children; under the judgment of divorce, the house was to have been sold and the proceeds divided between McKee and his ex-wife; on February 7, 1981, the parties had listed their house for $32,900, on April 9, they had reduced the asking price to $29,900, and on May 20, 1981, they had further reduced the price to $25,900; and the parties had made a good-faith effort to sell their house, and continued to do so. In his recommended hearing decision, the hearing referee concluded that, until McKee's property was sold, it could not be considered nonexempt property for the purpose of determining McKee's AFDC eligibility. Therefore, the hearing referee concluded that the DSS incorrectly decided to cancel McKee's benefits. [2] The Policy Hearing Authority of the DSS adopted the referee's findings of fact, but rejected his conclusions of law. It upheld the decision of the Bay County Department of Social Services to terminate McKee's benefits. [3] On July 30, 1981, McKee appealed to the Bay Circuit Court. By stipulation of the parties, the action was dismissed without prejudice, and the matter was remanded for another administrative hearing to determine whether McKee's former wife had consented to lower the asking price of the property in question. The parties also stipulated that, pending final decision by the DSS, McKee's AFDC benefits were to be reinstated, effective the second half of July, 1981. The hearing referee issued a recommended rehearing decision on November 17, 1981, in which he found, inter alia, as a matter of fact: that on October 10, 1981, the parties had accepted a contingent offer to purchase in the amount of $19,900; that the parties had made a good-faith effort to sell their house, and continued to do so; that the DSS argued that McKee was still not eligible for AFDC benefits because of excess resources; and that McKee argued that the real property was not available and therefore not countable. The hearing referee also found that the rehearing had been requested to obtain information on the ex-wife's role, but that the ex-wife did not appear to testify because she was not subpoenaed. On rehearing, the hearing referee did not change, in any manner, his conclusions of law. (See n 2.) However, again the hearing referee's recommended rehearing decision was not adopted by the Policy Hearing Authority, which issued a decision and an order signed November 18, 1981, upholding the decision of the Bay County Department of Social Services. [4] The Policy Hearing Authority adopted the original conclusions of law found in the order signed June 29, 1981, see n 3, and, in addition, stated: It is amply evident from the Findings of Fact in the most recent decision that the property is currently available and has been available.... The law does not require that real property be reduced to a liquidated sum before it can be considered excess property. [5] The McKees sold their home in October of 1981, and Gary McKee received $2,000 as his share of the proceeds. On December 3, 1981, McKee filed his claim of appeal and a verified complaint for injunctive and declaratory relief and for damages in the Bay Circuit Court.