Cnty Dep't of Human Svcs. v. Monica Velarde & Michael Moore

2021 COA 25, 491 P.3d 452

• Court: Colorado Court of Appeals
• Decided: February 25, 2021
• Docket: 20CA0170, Arapahoe
• Status: Published

Opinion

The summaries of the Colorado Court of Appeals published opinions constitute no part of the opinion of the division but have been prepared by the division for the convenience of the reader. The summaries may not be cited or relied upon as they are not the official language of the division. Any discrepancy between the language in the summary and in the opinion should be resolved in favor of the language in the opinion.

SUMMARY February 25, 2021

2021COA25

No. 20CA0170, Arapahoe Cnty Dep’t of Human Svcs. v. Monica

Velarde & Michael Moore — Administrative Law — State

Administrative Procedure Act — Judicial Review

A division of this court of appeals concludes that a county

seeking to enforce an administrative Medicaid overpayment order

must comply with the timeframe in the Administrative Procedure

Act (APA). The APA requires the enforcement proceeding to be filed

within thirty-five days of the final agency action. § 24-4-106(4),

C.R.S. 2020. Here, the county filed suit over a decade after the

final agency action at issue.

Because the county’s suit failed to comply with the APA’s

required timeframe, the district court’s dismissal was proper.

Accordingly, the division affirms. COLORADO COURT OF APPEALS 2021COA25

Court of Appeals No. 20CA0170 Arapahoe County District Court No. 19CV30255 Honorable Elizabeth Beebe Volz, Judge

Arapahoe County Department of Human Services,

Plaintiff-Appellant,

v.

Monica Velarde and Michael Moore,

Defendants-Appellees.

JUDGMENT AFFIRMED

Division A Opinion by JUDGE FOX Freyre and Lipinsky, JJ., concur

Announced February 25, 2021

Ron Carl, County Attorney, Annette M. Myrick, Assistant County Attorney, Aurora, Colorado, for Plaintiff-Appellant

No Appearance for Defendants-Appellees ¶1 The Arapahoe County Department of Human Services (the

county) appeals the district court’s dismissal of its suit to recover

Medicaid overpayments to Monica Velarde and Michael Moore. The

county contends that (1) the court had subject matter jurisdiction

under the Administrative Procedure Act (APA), section 24-4-106,

C.R.S. 2020; and (2) the court abused its discretion by vacating its

entry of default. Because the district court lacked jurisdiction over

the county’s untimely effort to enforce, we affirm.

I. Background

¶2 The county seeks judgment for repayment of medical

assistance benefits totaling $79,591.17 — plus interest and

litigation fees — which Velarde and Moore, the father of Velarde’s

children, allegedly received for their children between September

2002 and July 2004. It claims that Velarde and Moore procured

the benefits fraudulently because Velarde, who applied for the

benefits, failed to report that she and Moore lived together and had

shared income.

¶3 The county sued on December 17, 2018, seeking to enforce a

February 26, 2008, administrative notice regarding the Medicaid

1 overpayments. After Velarde and Moore failed to answer the

county’s complaint and amended complaint, the clerk entered a

default under C.R.C.P. 55(a). When Velarde and Moore later

appeared at the hearing to determine the amount of judgment and

expressed their intent to defend, the court vacated the default.

¶4 The court later denied the county’s summary judgment motion

and dismissed the case because the county failed to seek

enforcement within the period prescribed by section 24-4-106(4).

The county now appeals.

II. Jurisdiction Over the County’s Enforcement Action

¶5 The county argues that the district court had subject matter

jurisdiction because section 24-4-106 does not limit the county’s

ability to pursue a judgment. We disagree.

A. Preservation and Standard of Review

¶6 The issue is preserved. We review questions of law,

jurisdiction, and statutory interpretation de novo. Tulips Invs., LLC

v. State ex rel. Suthers, 2015 CO 1, ¶ 11; Jefferson Cnty. Bd. of

Equalization v. Gerganoff, 241 P.3d 932, 935 (Colo. 2010); see also

2 Rinker v. Colina-Lee, 2019 COA 45, ¶ 26 (the merits of a sua sponte

ruling are subject to review on appeal, regardless of objections).

B. Statutory and Regulatory Framework

¶7 Medicaid is a joint federal-state program created by the Social

Security Act to provide care to those who cannot afford private

medical care. See 42 U.S.C. §§ 1396 to 1396w-5. If a state chooses

to participate in Medicaid, it must comply with applicable federal

requirements. Harris v. McRae, 448 U.S. 297, 301 (1980).

¶8 Colorado participates in Medicaid, § 25.5-5-101, C.R.S. 2020,

and the Colorado Department of Health Care Policy and Financing

(HCPF) and the Department of Human Services (DHS) administer

Colorado’s Medicaid program, exercising rulemaking authority

through the Medical Services Board (Board). The Board’s rules

govern program eligibility, scope, and administration. § 25.5-4-104,

C.R.S. 2020; § 25.5-4-205, C.R.S. 2020; see also Dep’t of Health

Care Policy & Fin. Reg. 8.540, 10 Code Colo. Regs. 2505-10; Dep’t

of Human Servs. Reg. 1.120, 9 Code Colo. Regs. 2501-1. HCPF,

DHS, and counties partner in determining benefit eligibility and

recovering erroneous payments. § 25.5-4-106, C.R.S. 2020; § 25.5-

3 1-118, C.R.S. 2020; Dep’t of Human Servs. Reg. 1.110, 9 Code Colo.

Regs. 2501-1 (DHS supervises county departments).

C. Analysis

¶9 The county had various legal remedies available to recover the

overpayment1 at issue, including but not limited to seeking to

enforce a final agency action, pursuing a wage garnishment,

intercepting other aid grants, and using the State Income Tax

Refund Intercept process.2 See Dep’t of Health Care Policy & Fin.

Reg. 8.065.2.21.C, 10 Code Colo. Regs. 2505-10; see also § 25.5-4-

305, C.R.S. 2020 (liability for false Medicaid claims); § 25.5-4-306,

1 An “overpayment” includes “any medical assistance payments . . . paid on behalf of a recipient who was not lawfully entitled to receive the benefits for which the payments were made[;] no recovery shall be made where the overpayment occurred through no fault of the recipient.” Dep’t of Health Care Policy & Fin. Reg. 8.065.1, 10 Code Colo. Regs. 2505-10. 2 If the county had chosen a different remedy, it would, of course,

have had to abide by the statutory framework applicable to that remedy. See, e.g., § 25.5-4-307, C.R.S. 2020 (limitation periods for false Medicaid claims); § 26-2-133, C.R.S. 2020 (state income tax intercept); § 13-80-103.5(1)(a), C.R.S. 2020 (six years to enforce a judgment); see also § 26-2-128(4), C.R.S. 2020 (recognizing a six-year limitation period for the execution of judgments involving state debt). Even if a statute does not prescribe a period of limitations, agencies are expected to institute enforcement proceedings promptly. See, e.g., NLRB v. La Salle Hat Co., 105 F.2d 709, 710 (3d Cir. 1939); Nat’l Wildlife Fed’n v. Cotter Corp., 665 P.2d 598, 603 (Colo. 1983) (requiring action “within a reasonable time”). 4 C.R.S. 2020 (civil actions); § 25.5-4-307, C.R.S. 2020 (limitation

periods). The county chose to enforce its final agency action by

invoking APA section 24-4-106. Subsection 106(3) provides that

“[a]n action may be commenced in any court of competent

jurisdiction by or on behalf of an agency for judicial enforcement of

any final order of such agency.” As we explain below, having

elected that remedy, the county also had to comply with the

thirty-five-day time limit in the APA. § 24-4-106(4).

¶ 10 In determining the meaning of a statute, our primary goal is to

ascertain and give effect to the intent of the General Assembly.

Lewis v. Taylor, 2016 CO 48, ¶ 20. If possible, we must determine

that intent from the plain meaning of the statute, construing it as a

whole and giving effect to all its parts. Id. Our reading of the

statute reflects that subsection 106(2) allows judicial review in

response to a final agency action, and subsection 106(3) provides

that such review is available when the agency seeks to enforce a

final agency order. Construing the statute as a whole, we conclude

that subsection 106(4) limits the time to bring an action for judicial

review of “any agency action,” whether it be review of a final agency

action pursuant section 24-4-106(2) or review of a final agency

5 action in the course of an agency enforcement proceeding under

section 24-4-106(3). Nothing in the language or structure of the

statute exempts counties or DHS from subsection 106(4)’s time

limits.

¶ 11 The failure to seek enforcement within thirty-five days of the

date the action becomes effective, as subsection 106(4) requires,

deprives a court of jurisdiction to review the matter. Roosevelt

Tunnel, LLC v. Norton, 89 P.3d 427, 429 (Colo. App. 2003) (failure to

lodge a timely challenge deprived the court of jurisdiction to decide

the complaint on its merits); Allen Homesite Grp. v. Colo. Water

Quality Control Comm’n, 19 P.3d 32, 34 (Colo. App. 2000) (timely

filing is a jurisdictional prerequisite to judicial review under the

APA). Thus, the county’s complaint invoking the APA, if filed after

the thirty-five-day period in section 24-4-106(4), was subject to

dismissal and that dismissal must be upheld on review. Cheney v.

Colo. Mined Land Reclamation Bd., 826 P.2d 367, 368 (Colo. App.

1991).

¶ 12 We next consider when the county’s order became final,

triggering the thirty-five days for the county to seek enforcement

under the APA regime. Peabody Sage Creek Mining, LLC v. Colo.

6 Dep’t of Pub. Health & Env’t, Water Quality Control Div., 2020 COA

127, ¶ 20 (recognizing that final agency action “must ‘(1) mark the

consummation of the agency’s decision-making process and not be

merely tentative or interlocutory in nature, and (2) constitute an

action by which rights or obligations have been determined or from

which legal consequences will flow” (quoting Doe 1 v. Colo. Dep’t of

Pub. Health & Env’t, 2019 CO 92, ¶ 38)); see also Dep’t of Human

Servs. Reg. 3.850, 9 Code Colo. Regs. 2503-8. As relevant here, the

county provided notice of an adverse action — that Velarde had

received an overpayment of Medicaid benefits — on February 26,

2008. The applicable regulatory framework then allowed for

additional administrative review consisting of (1) a county

conference or a state-level fair hearing; (2) review by the Office of

Appeals (OA), resulting in a final agency decision; and (3) judicial

review. Id. at Reg. 3.840 (dispute resolution process); id. at Reg.

3.850.11 (aggrieved party has ninety days from the notice to invoke

a state-level appeal); id. at Reg. 3.850.72 (OA review); id. at Reg.

3.850.75 (judicial review within thirty-five days after the final

agency decision becomes effective); see also Dep’t of Health Care

Policy & Fin. Reg. 8.057, 10 Code Colo. Regs. 2505-10 (agency

7 review process); 42 C.F.R. § 431.210 (2019) (federal requirements).

The conclusion of this process yields a final agency action subject to

judicial review by the aggrieved party or judicial enforcement by the

agency.

¶ 13 The record indicates, as the county represents on appeal, that

Velarde did not avail herself of the formal administrative process.3

Velarde is therefore unable to challenge the substance of the

agency’s decision, having failed to exhaust available administrative

remedies. Thomas v. Fed. Deposit Ins. Corp., 255 P.3d 1073, 1077

(Colo. 2001); see also Peabody Sage Creek Mining, ¶ 10 (dismissal is

not an adjudication on the merits; it results because the court lacks

the power to hear the claim). But contrary to the county’s

argument, the APA also prescribed a timeframe within which the

agency could seek to enforce its administrative order. § 24-4-

106(4).

3 The record is unclear regarding whether Velarde or Moore invoked informal administrative processes. Although the timing is not apparent from the record, the county appears to have implemented a payback process, but it is unclear whether that process related to the other benefits which are not contested in this appeal or the Medicaid benefits at issue. 8 ¶ 14 The district court properly concluded that it lacked

jurisdiction to consider the county’s attempt to enforce the agency’s

February 26, 2008, notice because the county failed to file within

thirty-five days of when the agency’s notice was deemed final.

Although the county’s briefing does not identify precisely when the

agency’s overpayment notice became a final agency order, it seeks

to enforce the February 26, 2008, notice. Per the applicable

regulations, Velarde had ninety days to initiate a challenge to the

overpayment notice to seek enforcement under the APA. Velarde’s

time to challenge thus ended on May 26, 2008, when the

overpayment notice became final, and the county had thirty-five

days from then to file an enforcement action. Peabody Sage Creek

Mining, ¶ 20. The thirty-five days ran out on June 30, 2008. The

county did not seek enforcement until December 17, 2018, well

beyond the APA’s timeframe. Therefore, the district court lacked

jurisdiction to entertain the county’s requested relief and properly

dismissed the county’s complaint. § 24-4-106(3) and (4); see also

McGihon v. Cave, 2016 COA 78, ¶ 12 (recognizing judicial

enforcement by or on behalf of an agency); Sterling Ethanol, LLC v.

9 Colo. Air Quality Control Comm’n, 2017 COA 26, ¶ 8 (recognizing the

thirty-five-day deadline after an agency action becomes effective).

¶ 15 On appeal, the county baldly asserts, without citing to

controlling authority, that no “timeframe is imposed on a county

department pursuing a judgment.” See Vallagio at Inverness

Residential Condo. Ass’n, Inc. v. Metro. Homes, Inc., 2017 CO 69,

¶¶ 39-40 (we do not consider undeveloped arguments lacking

citation to controlling authority); C.A.R. 28(a)(7)(B). The county also

suggested to the district court that it is immune from a statute of

limitations or a jurisdictional bar, but the law does not support that

proposition, Shootman v. Dep’t of Transp., 926 P.2d 1200, 1207

(Colo. 1996), and the county has not repeated the argument on

appeal, Nicoloff v. Bloom Land & Cattle Co., 100 Colo. 137, 139, 66

P.2d 333, 334 (1937) (explaining that contentions not argued on

appeal are deemed abandoned); Hernandez v. Starbuck, 69 F.3d

1089, 1093 (10th Cir. 1995) (a court is not required to manufacture

a party’s appellate arguments, and if an issue is not briefed and

argued it is waived).

¶ 16 We need not decide whether the district court erred by

dismissing Moore from the case because the county’s efforts to

10 enforce the overpayment notice against Velarde or Moore are

equally flawed. Relatedly, there is no need to address the county’s

claim that the court abused its discretion by vacating the default

after Velarde and Moore, who had failed to respond to the

complaints, later appeared at a hearing to challenge the complaints.

If the court lacked jurisdiction to address the county’s enforcement

action, it also lacked jurisdiction to enter or set aside the default.

Compare In re Marriage of Stroud, 631 P.2d 168, 170 (Colo. 1981)

(recognizing that a judgment is void if the court lacked personal

jurisdiction over the parties or subject matter jurisdiction over the

cause of action), and First Nat’l Bank of Telluride v. Fleisher, 2 P.3d

706, 714 (Colo. 2000) (voiding a judgment where “from its

inception, [it] was a complete nullity and without legal effect”)

(citation omitted), with Nickerson v. Network Sols., LLC, 2014 CO

79, ¶ 18 (where the court had personal and subject matter

jurisdiction, it had authority to enter a default judgment), and Hill

v. Benevolent League of Colo. Travelers Ass’n, 133 Colo. 349,

351-52, 295 P.2d 231, 232 (1956) (a default judgment is subject to

collateral attack for lack of jurisdiction). Because the default is

void, we affirm.

11 III. Conclusion

¶ 17 The judgment is affirmed.

JUDGE FREYRE and JUDGE LIPINSKY concur.