Lietz v. State ex rel. Dep't of Family Servs.

430 P.3d 310
CourtWyoming Supreme Court
DecidedNovember 27, 2018
DocketS-18-0030
StatusPublished
Cited by3 cases

This text of 430 P.3d 310 (Lietz v. State ex rel. Dep't of Family Servs.) is published on Counsel Stack Legal Research, covering Wyoming Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lietz v. State ex rel. Dep't of Family Servs., 430 P.3d 310 (Wyo. 2018).

Opinion

DAVIS, Chief Justice.

*312[¶ 1] This appeal involves Lucy Lietz's nearly nine year effort to challenge her termination by the Wyoming Department of Family Services (DFS). DFS dismissed Ms. Lietz from her position as a fraud investigator when it discovered that she signed daycare logs for her grandchildren that resulted in overpayment of DFS child care benefits to daycare providers in the amount of $196.95. Ms. Lietz appealed, and the Office of Administrative Hearings (OAH) reversed. DFS appealed, and the district court found that the OAH erred as a matter of law because it failed to apply the Life Care Centers of America, Inc. v. Dexter , 2003 WY 38, 65 P.3d 385 (Wyo. 2003), good faith standard in evaluating whether DFS had cause to terminate Ms. Lietz's employment. On remand, the OAH again found in favor of Ms. Lietz. DFS appealed, and the district court again reversed, finding that the OAH had improperly substituted its judgment for that of DFS. Ms. Lietz timely appeals from the district court's determination. We reverse the district court and reinstate the OAH decision.

ISSUE

[¶ 2] Both parties present several issues, which we consolidate into the following issue and sub-issues:

Was the OAH's determination that DFS lacked good cause for dismissing Ms. Lietz supported by substantial evidence and in accordance with the law?
A. Does the good faith standard require notice and an opportunity to be heard beyond that which is contained in the employment contract?
B. What is the role of the fact-finder in evaluating cause under the good faith standard?
C. Was the OAH's determination that DFS lacked good cause for dismissing Ms. Lietz supported by substantial evidence?

FACTS

[¶ 3] Lucy Lietz, a fraud investigator, worked for DFS for just short of 25 years when it terminated her employment. The series of events that led to her termination began in May of 2010, when Ms. Lietz learned that her pregnant daughter was drunk and was driving with her three children from Fort Collins, Colorado, toward Casper. Ms. Lietz called in a REDDI report, and knowing that her daughter would be arrested, headed south on I-25 from Casper so that she could meet up with law enforcement and take her grandchildren if necessary. As she anticipated, her daughter was arrested, and Ms. Lietz began caring for her three grandchildren that night. The children were 9 years, 6 years, and 18 months old at the time.

[¶ 4] Ms. Lietz immediately sought daycare for the children. Because daycare for a child under the age of two is expensive, she applied for daycare benefits through DFS. In addition, because one of the children had a hereditary illness that required daily medication, Ms. Lietz applied for Medicaid benefits. Ms. Lietz was also eligible for benefits under the POWER program, which pays cash directly to family members who care for children who would otherwise go to foster care. Ms. Lietz testified that she did not apply for POWER benefits because she did not need the money to pay for the children's daily needs. That program would have paid Ms. Lietz approximately $550 per month during the time she had the children, for a total of over $3,000.

[¶ 5] In late 2010, DFS received a "complaint" asking how Megan Juarez's (Ms. Lietz's daughter) children could be receiving public assistance when she did not have the children with her. Michelle Rossetti, Ms. Lietz's supervisor, was assigned to investigate. Ms. Rossetti set out to determine whether the children (and Ms. Lietz) were eligible for benefits. Ms. Lietz was eligible for benefits, including financial assistance for her grandchildren's daycare during the time *313she was working or engaged in an otherwise approved activity.1

[¶ 6] However, during her investigation, Ms. Rossetti discovered that "there were days in which Ms. Lietz was not in an approved activity and yet DFS had paid for daycare." On eight days between June and October, Ms. Lietz was not engaged in an approved activity (she had taken personal, sick or vacation leave on those days rather than working) and therefore she was not eligible for DFS assistance. Nevertheless, she signed daycare time logs approving DFS payment for daycare on those days, which resulted in an overpayment of benefits actually due by DFS to the daycare providers of $196.95. Ms. Rossetti concluded her investigation without speaking with Ms. Lietz. Based upon her findings, on January 4, 2011, DFS placed Ms. Lietz on administrative leave, and on January 21, 2011, notified Ms. Lietz of its intent to dismiss her from her employment because she engaged in "an act of intent to fraud the Child Care Program."

[¶ 7] Ms. Lietz immediately repaid the $196.95 overpayment and responded to the DFS intent-to-dismiss letter. In her response, Ms. Lietz admitted that she made a mistake when she signed the daycare logs without reviewing them, she explained that she signed the logs without thinking because she was under a lot of pressure caring for all three children and with her daughter in jail, but "vehemently disagree[d]" with DFS's allegations of fraud and theft. On February 10, 2011, DFS dismissed Ms. Lietz.

[¶ 8] Ms. Lietz requested a hearing before the OAH, and the OAH hearing examiner reversed the dismissal. The State appealed that decision, and the district court reversed, directing the OAH to apply the good faith standard set forth in Life Care Centers of America, Inc. v. Dexter , 2003 WY 38, 65 P.3d 385 (Wyo. 2003). On remand, the OAH again found in favor of Ms. Lietz. The State appealed, and the district court again reversed, finding that the OAH erred as a matter of law when it concluded that DFS failed to follow procedural requirements and because it substituted its own discretion for that of DFS. The district court also found that DFS met the Life Care good faith standard. Ms. Lietz timely appealed.

STANDARD OF REVIEW

[¶ 9] The Wyoming Administrative Procedure Act establishes the scope of this Court's review:

(c) To the extent necessary to make a decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. In making the following determinations, the court shall review the whole record or those parts of it cited by a party and due account shall be taken of the rule of prejudicial error. The reviewing court shall:
(i) Compel agency action unlawfully withheld or unreasonably delayed; and
(ii) Hold unlawful and set aside agency action, findings and conclusions found to be:
(A) Arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law;

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Bluebook (online)
430 P.3d 310, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lietz-v-state-ex-rel-dept-of-family-servs-wyo-2018.