Court Opinion

ID: 4408340
Source: CourtListenerOpinion
Date Created: 2019-06-19 16:05:12.084458+00
Date Added: 2024-06-11T14:37:31.875989
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                    No. 18-0189
                                Filed June 19, 2019

JULIE PFALTZGRAFF,
      Plaintiff-Appellant,

vs.

IOWA DEPARTMENT OF HUMAN SERVICES,
     Defendant-Appellee.
________________________________________________________________

       Appeal from the Iowa District Court for Polk County, Scott D. Rosenberg,

Judge.

       Julie Pfaltzgraff’s appeals the district court ruling denying her petition for

judicial review. AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

       Trent W. Nelson of Sellers, Galenbeck and Nelson, Des Moines, for

appellant.

       Thomas J. Miller, Attorney General, and Tabitha J. Gardner, Assistant

Attorney General, for appellee.

       Considered by Vogel, C.J., and Potterfield and Doyle, JJ.
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DOYLE, Judge.

       This appeal, like Endress v. Iowa Department of Human Services, No. 18-

1329, 2019 WL ________, at *___ (Iowa Ct. App. June 19, 2019), also filed today,

concerns attempts by the Iowa Department of Human Services (DHS) to recoup

payments to childcare providers under the Child Care Assistance Program

(CCAP). Julie Pfaltzgraff appeals the district court ruling denying her petition for

judicial review. We reverse for the reasons set forth in Endress but affirm the

district court’s determination that Pfaltzgraff failed to preserve error on her

remaining claim.

       I. Background Facts and Proceedings.

       Pfaltzgraff was a registered childcare provider who had signed an

agreement allowing the DHS to pay her directly for childcare services she provided

to families eligible for the CCAP. In May 2016, the DHS sent Pfaltzgraff a notice

that it was revoking her childcare registration and cancelling the CCAP agreement.

Pfaltzgraff appealed the decision. Although the agency reversed the decision to

revoke her childcare registration, it approved the termination of her CCAP

agreement in its final decision, issued in September 2016.

       While her appeal was pending, Pfaltzgraff elected to continue receiving

CCAP payments. The notice of cancellation of her CCAP agreement set out her

right to continue receipt of CCAP payments during the appeal process but

cautioned, “Any benefits you get while your appeal is being decided may have to

be paid back if the Department’s action is correct.” The appeal form asked, “Do

you want your benefits to continue during your appeal? (You may have to pay

them back, if you lose your appeal)”; Pfaltzgraff checked “yes.”
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       On October 31, 2016, the DHS sent Pfaltzgraff a notice of CCAP

overpayment, alleging she owed it $31,815.46 for CCAP payments made during

the appeal process. The notice states the reason for the money owed is “[a]

mistake by a provider that caused DHS to pay the provider incorrectly for child care

services.” It also states, “This overpayment happened because of [y]our choice to

continue benefits pending an appeal.” Pfaltzgraff appealed, and the decision was

affirmed. Pfaltzgraff petitioned for judicial review in the district court, alleging

among other claims that the DHS violated her right to procedural due process by

failing to provide adequate notice that she was required to repay all CCAP funds

she received during the appeal process. The district court determined that the

DHS satisfied due process requirements and affirmed the recoupment of the

CCAP payments.

       II. Scope and Standard of Review.

       “In a judicial review action on appeal, our job is to determine whether in

applying the applicable standards of review under section 17A.19(10) [(2017)], we

reach the same conclusions as the district court.” Colwell v. Iowa Dep’t of Human

Servs., 923 N.W.2d 225, 238 (Iowa 2019), reh’g denied (Mar. 8, 2019).

               We can grant relief from agency action if the action is
       “[u]nconstitutional on its face or as applied or is based upon a
       provision of law that is unconstitutional on its face or as applied.” We
       do not give any deference to the agency with respect to the
       constitutionality of a statute or administrative rule because it is
       entirely within the province of the judiciary to determine the
       constitutionality of legislation enacted by other branches of
       government. Accordingly, we review constitutional issues in agency
       proceedings de novo.

NextEra Energy Res. LLC v. Iowa Utils. Bd., 815 N.W.2d 30, 44 (Iowa 2012)

(alteration in original) (internal citations omitted).
                                         4

       III. Analysis.

       Pfaltzgraff raises the same arguments addressed in Endress.           As we

concluded in that decision, the notice the DHS provided concerning recoupment

of the CCAP payments made during the appeal process was constitutionally

deficient. On this basis, we reverse the district court’s ruling on judicial review,

which affirmed the agency decision regarding the recoupment of CCAP

overpayments and amount. And because Pfaltzgraff is entitled to an award of her

attorney fees under Iowa Code section 625.29 for the reasons set forth in Endress,

we remand to the district court to determine an appropriate award, which should

include appellate attorney fees. See Schaffer v. Frank Moyer Constr., Inc., 628

N.W.2d 11, 23 (Iowa 2001) (noting that the mechanics lien statute did not limit an

award of attorney fees to those incurred in the district court and therefore the

statute contemplated an award of appellate attorney fees as well).

       The only claim remaining on appeal concerns Pfaltzgraff’s attempt to

reapply for a CCAP agreement while she was pursuing the administrative appeal

of the first agreement’s cancellation. The DHS refused to process Pfaltzgraff’s

second application and informed her that she could not reapply for a CCAP

agreement until the appeal process was completed. Because Iowa Administrative

Code rule 441-170.5(5)(a) allows a provider to reapply for another agreement at

any time after termination of the first CCAP agreement, Pfaltzgraff argues the DHS

violated its own rule in denying her second application. However, Pfaltzgraff never

contested the DHS’s refusal to process her second application. Pfaltzgraff did

raise the issue during her administrative appeal of the notice of CCAP

overpayment, but the agency determined that the issue was not properly before it.
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Because Pfaltzgraff failed to appeal the DHS’s refusal to process her reapplication

for a CCAP agreement, we agree that Pfaltzgraff failed to preserve error on that

claim. Accordingly, we affirm the district court’s determination that the issue is not

preserved.

       AFFIRMED IN PART IN PART, REVERSED IN PART, AND REMANDED.

       Potterfield, J., concurs; Vogel, C.J., partially dissents.
                                          6

VOGEL, Chief Judge (concurring in part and dissenting in part).

       For the reasons expressed in my dissent in Endress v. Iowa Department of

Human Services, No. 18-1329, 2019 WL ________, at *___ (Iowa Ct. App. ___

__, 2019), also filed today, I dissent in part from the opinion of the majority, which

found the notice to Julie Pfaltzgraff was deficient and she is entitled to attorney

fees. I agree with the majority’s conclusion that error was not preserved on the

refusal to process her second application.