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HENRY SIMMONS v. WALTER COHEN (11/24/87)

decided: November 24, 1987.

HENRY SIMMONS, EXECUTOR OF THE ESTATE OF ETHEL H. HOLLOWAY SIMMONS, PETITIONER
v.
WALTER COHEN, SECRETARY OF PUBLIC WELFARE AND JOHN C. BROWN, MANAGER, CASE CORRESPONDENCE UNIT OF DEPARTMENT OF PUBLIC WELFARE; AND MARTHA A. ROBERTS, CLAIM SETTLEMENT AGENT OF DEPARTMENT OF PUBLIC WELFARE; AND ROGER T. MARGOLIS, ASSISTANT COUNSEL, CHIEF OF DEPARTMENT OF PUBLIC WELFARE, INDIVIDUAL, JOINT AND SEVERAL LIABILITY, RESPONDENTS



Original Jurisdiction in the case of Ethel H. Holloway v. Walter Cohen, Secretary of Public Welfare and John C. Brown, Manager, Case Correspondence Unit of Department of Public Welfare; and Roger T. Margolis, Assistant Counsel Chief, Civil Recovery Unit of Department of Public Welfare, Individual, Joint and Several Liability.

COUNSEL

Robert J. Mulligan, Jr., Robert J. Mulligan, Inc., P.C., for petitioner.

Kate L. Mershimer, Deputy Attorney General, with her, Andrew S. Gordon, Chief Deputy Attorney General, Chief, Litigation Section, and LeRoy S. Zimmerman, Attorney General, for respondents.

Judges Craig and Doyle, and Senior Judge Barbieri, sitting as a panel of three. Opinion by Judge Craig.

Author: Craig

[ 111 Pa. Commw. Page 269]

Petitioner Holloway, now deceased and represented by her personal representative, has filed a petition for review addressed to this court's original jurisdiction, seeking relief on behalf of Pennsylvania citizens who have been successful, pursuant to appeals, in obtaining past due Supplemental Security Income (SSI) benefits from the federal government by awards made before April 1, 1983.

Recipients of such SSI awards pursuant to appeal must reimburse the Commonwealth of Pennsylvania for state payments they received from the Commonwealth during the period of time that federal benefits should have been paid. In view of the reimbursement benefit thus obtained by the Commonwealth, the Pennsylvania Department of Public Welfare (DPW) has adopted a policy of reimbursing to the claimant a pro-rata share of the legal costs related to the successful prosecutions of appeals, but only in those cases where the federal SSI award was made on or after April 1, 1983.

The petitioner avers that the exclusion of awardees before April 1, 1983 violates state and federal constitutional

[ 111 Pa. Commw. Page 270]

    provisions, statutory provisions and regulations. As relief, the petitioner seeks damages and an order barring the department from refusing in the future to limit payments by the April 1, 1983 date, as well as orders relating to the notification of entitled persons and the maintenance of a class action.

The respondents removed the case to the United States District Court for the Middle District of Pennsylvania. The federal court retained jurisdiction over the claims based on federal law, but remanded to this court the claims based on state law, staying the federal proceedings pending the decision in the state court.

The state government respondents now move to quash the action as an untimely appeal. In the alternative, those respondents move for summary judgment on the ground that the action lies within the exclusive original jurisdiction of the Board of Claims, but that it should be dismissed, rather than transferred to that board, because it is barred by the statute of limitations applicable to proceedings before the board. Should this court find the action to be within its original jurisdiction, the respondents move for summary judgment on the ground that it is time-barred by either a six-month or a two-year statute of limitations. Finally, the respondents argue that claims against them for damages, interest and attorney's fees (for this litigation) for actions taken in their official capacities are barred by the principle of official immunity.

In 1981, petitioner Holloway sought SSI benefits from the federal Social Security Administration, which initially denied the request, and she appealed that denial through a federal administrative process. During her SSI appeal, Holloway received benefits known as "interim general assistance" from DPW. Holloway ultimately prevailed in her SSI appeal. On March 14, 1983, she received a notice from the Social Security Administration,

[ 111 Pa. Commw. Page 271]

    dated March 1, 1983, that she had been awarded a lump sum for back benefits in the amount of $4,892.40, and that a check for that amount had been sent to the Commonwealth of Pennsylvania to pay back DPW for the interim assistance DPW paid to her during the appeal. DPW retained an amount equal to the total interim assistance it had paid, $2,854.40, and refunded the rest to Holloway.

By letter of June 20, 1983, Holloway's counsel for the SSI benefits requested DPW to reimburse his client for a portion of the attorney's fees she incurred in pursuing the SSI appeal. The Social Security Administration had judicially approved those fees, and the petitioner had paid them in full. After various correspondence, DPW denied the request in a letter to Holloway dated July 2, 1984. DPW had adopted an "SSI Attorney's Fee Reimbursement Policy" (SSI Fee Policy), dated June 28, 1983, setting forth the conditions under which DPW would agree to reimburse an attorney's fee for the successful representation of a welfare recipient in an SSI proceeding. The first condition set forth in the SSI Fee Policy is that "[t]he SSI award of record date is on or after April 1, 1983." DPW denied Holloway's request because the record date of her award, March 1, 1983, did not meet this condition.

By letter dated September 7, 1984, Holloway's counsel requested a formal hearing on the amount of the DPW refund. DPW did not respond to that request. Respondents have stipulated that, as a matter of general practice and policy during all times relevant, DPW did not provide a hearing to review the amount it withholds from an SSI lump sum reimbursement when the issue is attorney's fees reimbursement.

Respondent Walter Cohen was Secretary of DPW at the time of these events and was charged with the overall execution of the welfare laws of the Commonwealth

[ 111 Pa. Commw. Page 272]

    and with the adoption of policies and procedures to carry out those laws. Respondent Roger T. Margolis was Assistant Counsel and Chief of the Civil Recovery Unit of DPW. He developed the SSI Fee Policy, and he sent the letter of July 2, 1984, to Holloway, denying the request for partial reimbursement of attorney's fees. An order of this court, filed May 19, 1987, certified the action as a class action.

1. Appellate Versus Original Jurisdiction

Respondents first argue that this action lies within the appellate jurisdiction of this court as provided in 42 Pa. C.S. § 763,*fn1 rather than within the court's original jurisdiction as provided in 42 Pa. C.S. § 761.*fn2 This argument

[ 111 Pa. Commw. Page 273]

    rests on respondents' characterization of DPW's letter to Holloway of July 2, 1984, denying her request for partial reimbursement of attorney's fees, as a "final order" within the meaning of section 763(a) from which her only remedy was to appeal. Petitioners filed this action in this court on August 14, 1985, clearly outside the thirty-day limit for taking an appeal provided in Pa. R.A.P. 1512(a), if the July 2, 1984 letter is found to be a final appealable order.

Respondents rely principally on the recent companion cases of Hasinecz v. Pennsylvania State Police, 100 Pa. Commonwealth Ct. 622, 515 A.2d 351 (1986), and Whittaker v. Pennsylvania State Police, 100 Pa. Commonwealth Ct. 631, 515 A.2d 347 (1986), both en banc decisions of this court. Hasinecz involved the effort of a

[ 111 Pa. Commw. Page 274]

    state police officer who had retired to be reinstated in the face of a firm state police policy against reinstatement of former members, and to be granted Heart and Lung Act benefits for the period after his retirement. The court noted that, for the purpose of establishing this court's appellate or original jurisdiction, the letter from the state police to the retired officer denying reinstatement was an adjudication in the broad sense that it was a final order as to a purported property right, even though no hearing was provided. In Whittaker, the state police denied the petitioner's application to become a state police cadet without providing him a hearing. This court held that the letter that finally determined that the petitioner was disqualified as a candidate for appointment as a cadet was a final appealable order. Respondents further note that these decisions are consistent with the decision of the Pennsylvania Supreme Court in O'Brien v. State Employees' Retirement System, 503 Pa. 414, 469 A.2d 1008 (1983), cert. denied, 469 U.S. 816 (1984), in which the Pennsylvania Supreme Court held that an agency's denial of an administrative hearing constituted a final appealable order, a challenge to which lay within the Commonwealth Court's appellate jurisdiction.

The crux of respondents' argument is that DPW's letter to Holloway of July 2, 1984, was an agency decision rendered without a hearing that "subsume[d] the agency's denial of a hearing" and so constituted a final appealable order.

Petitioner argues on the merits of this action that DPW was required to provide a hearing for her dispute as to the amount of her SSI benefits refund under the federal Social Security Act and Social Security regulations, under the express terms of the federal/state compact relating to the interim assistance program in Pennsylvania, and ...


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