In re the Matter of: Chad Thompson v. the Commissioner of Douglas County Human Services, ...

• Court: Court of Appeals of Minnesota
• Decided: June 17, 2024
• Docket: a231585
• Status: Published

Opinion

This opinion is nonprecedential except as provided by Minn. R. Civ. App. P. 136.01, subd. 1(c).

STATE OF MINNESOTA IN COURT OF APPEALS A23-1585

In re the Matter of:

Chad Thompson, Appellant,

vs.

the Commissioner of Douglas County Human Services, Respondent,

Minnesota Department of Human Services, Respondent.

Filed June 17, 2024 Affirmed Cochran, Judge

Douglas County District Court File No. 21-CV-23-541

Chad Thompson, Moose Lake, Minnesota (pro se appellant)

Chad M. Larson, Douglas County Attorney, Alexandria, Minnesota (for respondent county)

Keith Ellison, Attorney General, Leonard J. Schweich, Assistant Attorney General, St. Paul, Minnesota (for respondent department)

Considered and decided by Cochran, Presiding Judge; Ede, Judge; and Smith, John,

Judge. ∗

∗ Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10. NONPRECEDENTIAL OPINION

COCHRAN, Judge

Appellant Chad Thompson challenges a district court order affirming respondent

Minnesota Department of Human Services’ decision disqualifying him from participation

in Minnesota’s General Assistance Program for two years. Thompson asks us to reverse,

arguing that the agency’s decision is not supported by substantial evidence. Because we

conclude that substantial evidence supports the challenged decision, we affirm.

FACTS

Thompson is a resident of the Minnesota Sex Offender Program (MSOP) facility in

Moose Lake. Thompson started receiving General Assistance benefits in August 2009.

The January 2023 disqualification decision at issue involves Thompson’s second

disqualification from the General Assistance Program.

Thompson was previously disqualified from the program for a period of one year

starting on July 1, 2020. On July 2, 2021, the day after his disqualification period ended,

Thompson reapplied for General Assistance benefits through respondent Douglas County

Social Services (the county). 1 The application form instructed Thompson to “report any

changes that may affect” his benefits within ten days of the change and informed him that

1 We note that the title of this opinion refers to this respondent as the “the Commissioner of Douglas County Human Services.” The correct name of this respondent is Douglas County Social Services, which we refer to as “the county” in this opinion.

2 he was under a duty to “report all” of his income and assets. 2 Thompson started receiving

monthly General Assistance checks again in August 2021.

In January 2022, Thompson completed a “Household Update Form,” which the

county used to determine whether Thompson continued to be eligible for General

Assistance benefits. On the form, Thompson checked boxes indicating that he (1) had no

assets, (2) was not employed or expecting to start working within 30 days, and (3) was not

receiving or expecting to receive money from sources other than work such as “public

assistance” or “any other payments.” The form included a declaration, signed by

Thompson, stating that “all parts of this form are true and correct statements, to the best of

my knowledge.” Thompson also received a form outlining his responsibilities and rights,

which included language reminding him that he was responsible for reporting any changes

in his income.

Months later, a Minnesota Department of Human Services (DHS) investigator at the

MSOP-Moose Lake facility notified the county that Thompson was drawing his full

allotment of General Assistance benefits while working for pay at MSOP—a potential

program violation. The DHS investigator provided the county with Thompson’s MSOP

account statement. The county determined that Thompson had failed to report the

following sources of income: five paychecks from June 2022 through August 2022 and

several money orders received between October 2021 and July 2022. Based on the

2 Applicants for General Assistance benefits must apply through their county of residence. Minn. R. 9500.1213, subp. 1 (2021). In turn, the county must determine the applicant’s eligibility within 30 days of receiving the application. Id., subp. 7 (2021).

3 unreported income, the county investigator calculated that Thompson had been overpaid

$598.38 in General Assistance benefits.

As a result of the investigation, the county sent Thompson two notices. The first

notice instructed Thompson to repay the $598.38. The second notice, entitled “Notice of

Intentional Program Violation,” proposed to disqualify Thompson from the General

Assistance Program for a period of two years for failing to accurately report his income.

The county also scheduled a hearing before a human-services judge (HSJ) with the DHS

appeals office to address the proposed disqualification.

At the disqualification hearing, the county’s representative testified that Thompson

should be disqualified due to his intentional failure to report his income. The representative

testified that Thompson’s MSOP account received monthly money-order deposits between

October 2021 and July 2022. The representative noted that, despite those payments,

Thompson affirmed that “he hadn’t received any other payment” on his Household Update

Form that the county received on February 7, 2022. The representative also testified that

Thompson started working and receiving paychecks in June 2022, but failed to report his

change in employment status to the county. The representative added that Thompson had

received General Assistance benefits since 2009 and argued that Thompson “would know

the program requirements where he was constantly advised that he had to report income.”

Thompson testified about the money orders and his employment status. Regarding

the money orders, he stated that he was not aware that he was required to report the money

orders as income and that his error was “unintentional.” Regarding his unreported

paychecks, Thompson testified that he did not inform the county of his change in

4 employment within ten days of the change as required because he was waiting for the

county to send him a “fresh copy” of the Household Update Form to submit. Thompson

claimed that he “had all [his] paystubs already lined up ready to send” and was merely

waiting to be contacted by the county. Thompson ultimately admitted it was “[his] error”

for not submitting the change in employment information within ten days.

In a written order, the HSJ determined that there was clear and convincing evidence

that Thompson committed an intentional program violation. The HSJ emphasized that

Thompson failed to report his income when he submitted the update form in February 2022,

despite being on notice of the penalties for a fraud violation. The HSJ found Thompson’s

testimony that he did not know that he needed to report the money orders to be not credible,

“particularly considering that [Thompson] had been a recipient of General Assistance

benefits for some time and was previously disqualified for an intentional program

violation.” The HSJ recommended granting the county’s request to disqualify Thompson

from receiving benefits for two years because this was Thompson’s second intentional

violation of program rules. On behalf of the DHS commissioner, the co-chief HSJ adopted

the HSJ’s findings of fact, conclusions of law, and recommended order as the final decision

of DHS.

Thompson appealed to the district court for judicial review of DHS’s final decision.

The district court denied Thompson’s appeal and affirmed DHS’s order. This appeal

follows.

5 DECISION

Minnesota’s General Assistance Program provides “cash payments to persons

unable to provide themselves with a reasonable subsistence compatible with decency and

health and who are not otherwise provided for under the laws of this state or the United

States.” Minn. Stat. § 256D.02, subd. 4 (2022). Any person who attempts to obtain

“assistance to which the person is not entitled” through “a willfully false statement or

representation, or by the intentional withholding or concealment of a material fact, . . . or

other fraudulent device” is subject to the penalties provided in Minnesota Statutes section

256.98 (2022 & Supp. 2023). Minn. Stat. § 256D.14 (2022). Under section 256.98, any

person found to have wrongfully obtained assistance by “an administrative hearing

determination” must be disqualified from the assistance program. Minn. Stat. § 256.98,

subd. 8. 3 First-time offenders are disqualified from the program for one year, second-time

offenders are disqualified for two years, and third-time offenders are disqualified

permanently. Id.

A party aggrieved by an order of DHS disqualifying the party from receiving

General Assistance benefits may appeal that order to district court. Minn. Stat. § 256.045,

subd. 7 (2022). On subsequent appeal to this court, we independently review the agency’s

3 Thompson devotes much of his brief to discussing the required showing for a criminal conviction of theft for wrongfully obtaining assistance under Minnesota Statutes section 256.98, subdivision 1. Thompson argues that the DHS decision does not address the knowledge or intent elements of such an offense, and that there was insufficient evidence to convict. Given that this appeal concerns an administrative proceeding, not a criminal conviction, we find no basis for reversal in Thompson’s arguments premised on criminal caselaw.

6 decision without deferring to the district court’s ruling. Johnson v. Minn. Dep’t of Hum.

Servs., 565 N.W.2d 453, 457 (Minn. App. 1997). Our review of a DHS decision issued

under Minnesota Statutes section 256.045 (2022 & Supp. 2023) is governed by Minnesota

Statutes section 14.69 (2022). Zahler v. Minn. Dep’t of Hum. Servs., 624 N.W.2d 297, 301

(Minn. App. 2001), rev. denied (Minn. June 19, 2001). Under section 14.69, this court

may affirm the decision, remand for further proceedings, or reverse or modify the decision

“if the substantial rights of the petitioner[] may have been prejudiced because,” among

other reasons, the decision was “unsupported by substantial evidence in view of the entire

record as submitted.” Minn. Stat. § 14.69(e).

“Administrative agency decisions enjoy a presumption of correctness.” In re

Appeal by RS Eden/Eden House, 928 N.W.2d 326, 332 (Minn. 2019) (quotation omitted).

The party challenging an agency decision bears the burden of proving that the decision

“was reached improperly.” Cannon v. Minneapolis Police Dep’t, 783 N.W.2d 182, 196

(Minn. App. 2010) (quotation omitted).

Thompson argues that DHS’s decision to disqualify him from the General

Assistance Program for two years is not supported by substantial evidence and therefore

should be reversed or modified. 4 “[S]ubstantial evidence is relevant evidence that a

4 Thompson also asserts that the “overpayment amount must be set aside.” The scope of this appeal is limited to DHS’s final decision, which concerned whether Thompson should be disqualified from the General Assistance Program. From the record, it is not clear whether Thompson requested a hearing on or appealed the county’s overpayment determination. Thus, the issue of whether Thompson is obligated to repay benefits he was not entitled to receive is not properly before this court on appeal. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (observing that appellate courts generally will not review matters not presented to and considered by the district court); see also In re A.D.,

7 reasonable mind might accept as adequate to support a conclusion, and more than a

scintilla, some, or any evidence.” In re NorthMet Project Permit to Mine Application,

959 N.W.2d 731, 749 (Minn. 2021) (quotations omitted). To determine whether an agency

decision is supported by substantial evidence, we must “determine whether the agency has

adequately explained how it derived its conclusion and whether that conclusion is

reasonable on the basis of the record.” Id. (quotation omitted).

Thompson contends that there is no evidence in the record to support DHS’s

determination that he committed an intentional program violation by failing to report

income. An intentional program violation occurs when an applicant has intentionally

“[m]ade a false or misleading statement, or misrepresented, concealed or withheld facts.”

7 C.F.R. § 273.16(c)(1) (2024); see also Minn. Stat. § 256.046, subd. 1 (Supp. 2023)

(providing that General Assistance benefits disqualification hearings are subject to the

requirements of 7 C.F.R. § 273.16 (2024)). We conclude that substantial evidence supports

DHS’s determination that Thompson committed an intentional program violation when he

failed to report certain income for the following four reasons.

First, the record reflects that Thompson misrepresented his income on the

Household Update Form that he completed in January 2022. The form instructed

Thompson to report any money received from a broad array of sources, including a catchall

category of “any other payments.” As of January 1, 2022, Thompson had received three

$50 money orders, which were deposited in his MSOP account. Yet, on the Household

883 N.W.2d 251, 261 (Minn. 2016) (discussing this aspect of Thiele in certiorari review of an agency decision).

8 Update Form that Thompson completed in January 2022, Thompson stated that he did not

“get money . . . from sources other than work.” At the hearing before the HSJ, Thompson

testified that his failure to report the income was unintentional, but the HSJ did not find

this testimony credible. We defer to an agency’s “conclusions regarding conflicts in

testimony” and “the inferences to be drawn from testimony.” Cannon, 783 N.W.2d at 189

(quoting In re Excess Surplus Status of Blue Cross & Blue Shield of Minn., 624 N.W.2d

264, 278 (Minn. 2001)). Therefore, the record demonstrates that Thompson intentionally

failed to report income from three money orders on the Household Update Form.

Second, Thompson failed to update his income information during subsequent

months. After Thompson completed his Household Update Form in January 2022, he

continued to receive monthly money orders and, in June 2022, he started receiving

paychecks. The Household Update Form explicitly instructed Thompson to “report any

changes that may affect [his] benefits to [his] county . . . within 10 days after the change

has occurred.” The form instructed Thompson that he “may be required to report”

employment changes, and that he “must” report all his income and assets. Yet, the record

reflects that he failed to do so.

Third, Thompson admitted that he failed to report both the money orders and

paychecks to the county. At the hearing, Thompson stated, “[M]y error was not

understanding the putting the money orders on that piece of paper. That was my error.”

He also said:

I was waiting on Douglas County to send me a household report form, to put all my deposit slips in there and mark on

9 there, yes, I have a job and this is all my stuff. And that would have been my error of not doing that within 10 days.

By his own admissions, Thompson did not comply with program requirements.

Fourth, the record reflects that Thompson had been receiving General Assistance

benefits since 2009 and had been disqualified from the program on a prior occasion. These

facts suggest that Thompson was familiar with the program and knew or should have

known of his obligations to report income changes and the consequences for failing to do

so.

In sum, DHS adequately explained its determination that Thompson committed an

intentional program violation by failing to report his income to the county. And based on

our independent review of the record, we conclude that there is substantial evidence in

support of DHS’s determination. Accordingly, Thompson has not met his burden of

showing that DHS’s decision was improper.

Affirmed.