Carolyn Whitmore and Carolyn Child Care v. Arkansas Department of Health and Human Services

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ARKANSAS COURT OF APPEALS  NOT DESIGNATED FOR PUBLICATION  JOHN B. ROBBINS, JUDGE  DIVISION IV  CA 07­86  CAROLYN WHITMORE and  CAROLYN CHILD CARE  APPELLANTS  V. ARKANSAS DEPARTMENT OF  HEALTH AND HUMAN SERVICES  APPELLEE  NOVEMBER 7, 2007  APPEAL FROM THE PULASKI  COUNTY  CIRCUIT  COURT,  THIRD  DIVISION, [NO. CV 05­11109]  HONORABLE JAMES MAXWELL  MOODY, JR., JUDGE  AFFIRMED  Appellant Carolyn Whitmore appeals the revocation of her probationary license to run  a  daycare.  Appellee,  the  Arkansas  Department  of  Health  and  Human  Services  (DHHS),  obtained an emergency revocation of her license in June 2005, followed by a full hearing on  the matter.  The administrative proceeding resulted  in affirmation of the revocation.  On  appeal to the Pulaski County Circuit Court, it remanded for findings of fact.  Those findings  were  made,  stating  the  reasons  for  revocation.    Thereafter  the  circuit  court  upheld  the  revocation as supported by substantial evidence and not violative of due process.  The circuit  court ordered appellant responsible for the cost of the record.  This appeal followed.  Appellant argues (1) that it was error to assess appellant the cost of preparing the  record ($580); (2) that the administrative proceedings violated the statutory administrative procedures and violated due process in failing to determine as a matter of fact whether the  daycare was open for business on the day in question; and (3) that the proceedings violated  due  process  where  the  administrative  process  is  pursued  by  and  heard  before    State  employees, exemplified by the rejection of her videotape from consideration in evidence. We  disagree with her arguments and affirm.  Review of administrative agency decisions, by both the circuit court and appellate  courts, is limited in scope.  Arkansas Dep’t of Corr. v. Bailey, ___ Ark. ___, ___ S.W.3d ___,  (Jan. 25, 2007).  The standard of review to be used by both the circuit court and the appellate  court is whether there is substantial evidence to support the agency's findings.  Id.  Thus, the  review by appellate courts is directed not to the decision of the circuit court, but rather to the  decision of the administrative agency.  Id.  The circuit court or appellate court may reverse  the agency decision if it concludes:  (h)  [T]he  substantial  rights  of  the  petitioner  have  been  prejudiced  because  the  administrative findings, inferences, conclusions, or decisions are: (1) In violation of  constitutional or statutory provisions; (2) In excess of the agency's statutory authority;  (3)  Made  upon  unlawful  procedure;  (4)  Affected  by  other  error  or  law;  (5)  Not  supported  by  substantial  evidence  of  record;  or  (6)  Arbitrary,  capricious,  or  characterized by abuse of discretion.  Ark. Code Ann. § 25­15­212(h) (Repl. 2002). An administrative agency's interpretation of its  own regulation will not be overturned unless it is clearly wrong.  Dukes v. Norris, ___ Ark.  ___, ___ S.W.3d ___ (May 3, 2007).  Administrative agencies, due to their specialization,  experience, and greater flexibility of procedure, are better equipped than courts to analyze  legal issues dealing with their agencies.  Id. ­2­  It should be noted that a party appearing before an administrative agency is entitled to  due process in the proceedings. See C.C.B. v. Arkansas Dep’t of Human Servs., 368 Ark. 540,  __ S.W.3d __ (2007).  A fair trial by a fair tribunal is a basic requirement of due process.  Id.  However, an appellant, in attacking an administrative procedure on the basis of a denial of due  process, has the burden of proving its invalidity.  Id.  The first point concerns the recovery of costs associated with the record prepared for  review.  Pursuant to statute, the agency (here DHHS) is responsible for preparation of the  record for review, but if the agency prevails, then the appealing party “shall” bear those costs.  In this instance, the circuit court, after remand for specific findings of fact, reviewed the  agency’s  decision  to  revoke  appellant’s  license.    The  agency  decision  was  upheld,  and  pursuant to Ark. Code Ann. § 25­15­212(d)(2), appellant was made responsible for the cost  of the record.  Appellant contends that this was error.  We disagree.  Arkansas Code Annotated section 25­15­212(d) provides that:  (1)  Within thirty (30) days after service of the petition or within such further time as  the court may allow but not exceeding an aggregate of ninety (90) days, the agency  shall transmit to the reviewing court the original or a certified copy of the entire record  of the proceeding under review.  (2)  The cost of the preparation of the record shall be borne by the agency.  However,  the cost of the record shall be recovered from the appealing party if the agency is the  prevailing party.  Appellant argues that because there was a preparation of the record in the initial appeal that  resulted in a remand, then there was no additional cost incurred when she did not prevail after  remand.  In short, appellant argues that it was improper to have her pay the cost on the second ­3­  round of her appeal on the identical record.  While there might be an equitable argument to  be made on this issue, there is no discretion vested in the circuit court on this subject by use  of the term “shall” in the statute.  Therefore, appellant’s argument for reversal on this point  is not well taken. See, e.g., Hankins v. Ark. Dep’t of Fin. & Admin., 330 Ark. 492, 954 S.W.2d  259 (1997) (holding that because DF&A paid for a transcript and was the prevailing party, the  circuit court did not err in ordering Hankins to reimburse the agency, even though DF&A  failed to provide a complete record for review on appeal).  We affirm this point.  Next, appellant argues that the primary issue was whether the child care facility was  open on the day of the inspection on June 29, 2005.  This specific question, appellant argues,  was not answered by the administrative agency, and thus the administrative action cannot  stand.  We disagree.  The  testimony  and  evidence  leading  to  the  suspension  of  appellant’s  license  is  necessary to give context to this argument.  Appellant was given a one­year probationary  license in February 2005, to run a daycare in her sister’s home in Little Rock, Arkansas, with  the limitation that she care for no more than five children at any given time.  On June 29,  2005, a licensing specialist, Pamela Parker, made an unannounced visit to the daycare. As she  approached, Parker observed four children being driven away by Ms. Covington (the owner  of  the  home).  The  children  were  unbuckled  in  a  van.    Once  inside  the  facility,  Parker  observed ten children ranging from age nine to eight months in the facility.  No adult was  present to oversee the children.  Parker stayed for approximately one hour before appellant  arrived.  Parker noted that there were more children than permissible, and appellant made ­4­  efforts to find placements for the additional children.  Parker asked for required documents  on the children in her care; appellant was able to produce documentation for only four.  The  staff at the licensing agency entered an emergency revocation of appellant’s license.  Appellant appealed to the Child Care Appeal Review Panel, wherein testimony was  taken and letters from parents were submitted, but appellant did not introduce a videotape  showing the inside of her facility.  Appellant and her witnesses testified that the daycare was  technically closed that day for a birthday party. Appellant was permitted to submit letters from  some parents reflecting that sentiment.  Parker testified that appellant never mentioned a  birthday party in her visit that day, nor did any of the children, and that there was no evidence  of a birthday party such as decorations or supplies typically associated with a birthday party.  The agency presented evidence that a voucher program was billed for services rendered for  ten of the children on June 29, 2005.  The Review Panel upheld the agency decision by vote at the conclusion of the hearing.  Appellant appealed to circuit court, which court remanded the case for findings of fact and  conclusions of law.  The Review Panel prepared a more extensive set of findings of fact and  conclusions  of  law,  after  which  the  circuit  court  affirmed  and  ordered  that  appellant  be  responsible for the costs associated with preparation of the record.  Appellant appeals to our  court.  The relevant findings made were that (1) appellant’s secondary child care giver, her  sister Ms. Covington, left a nine­year­old child in charge of nine other children in the daycare  violating  the  requirement  for  prudent  supervision,  (2)  on  June  29,  2005,  the  number  of ­5­  children  in  daycare  exceeded  appellant’s  permitted  number  of  five,  (3)  children  were  transported in an unlicensed vehicle without proper restraints, and (4) on June 29, 2005,  appellant was unable to provide records for all the children in her care, but rather provided  documents for only four of the children.  Assuming for the sake of argument that appellant’s facility was in fact closed on the  day  in  question,  appellant  was  found  to  have  violated  at  least  one  condition  of  her  probationary license that did not depend upon the daycare being open, that being proper  record keeping. Any violation left unrebutted would suffice as substantial evidence to support  the agency decision.  It is apparent that without specifically stating so, the agency deemed the facility to be  open for business on June 29, 2005.  This is made apparent by the findings of fact that discuss  the lack of supervision and lack of required records on this particular date.  While not found  by date  certain,  the  findings  also  determine  that  Ms.  Covington  left  a  child  in  charge  of  supervising the other nine children found inside the daycare, and Ms. Covington drove four  children in an unsafe manner by failure to have them in safety restraints on that day.  Only by  finding that appellant was in business on that day could the agency make these findings of fact  relevant to the daycare license.  Appellant’s final argument is a general attack on the fairness of these proceedings  where the Review Panel, the Panel facilitator, and the DHHS attorney seeking to uphold the  agency  action,  are  all  employed  by  the  State.  Appellant  argues  that  this  unfairness  is ­6­  demonstrated by the initial hearing officer’s rejection of appellant’s videotape being played  at the administrative hearing.  Appellant submitted letters from parents for consideration at the hearing, which were  admitted into evidence.  Appellant noted that she had a videotape showing the layout of her  daycare facility.  The hearing officer stated in that regard:  [W]e’ll discuss the tape a little more in detail when it gets time for it to be shown, and  maybe that it’s published to the Board if not actually accepted as an Exhibit, because  it probably, from what she’s explained to me, has pictures of children in that–on it. So,  we’ll have to wait and see what it is completely, before we accept it or reject it.  At no point thereafter did appellant seek to introduce the tape.  Therefore, she can show no  prejudice where she was not denied any request.  As to the other component of this argument, appellant asserts that the overall process  is unfair where the “prosecutor” via DHHS and the “judge” via the hearing officer for the  agency stem from the same seed.  Appellant did not raise this argument to the hearing officer  or the Review Panel, although it was raised to the circuit court at the final stage of those  proceedings. Appellant has failed to preserve this issue. See Arkansas Contractors Licensing  Bd.  v.  Pegasus  Renovation  Co.,  347  Ark.  320,  64  S.W.3d  241  (2001)  (holding  that  an  appellant  must  obtain  a  ruling from the  Board  in  order  to  preserve  an  argument,  even  a  constitutional one, for an appeal from an administrative proceeding).  It is the appellant's  obligation to raise such matters first to the administrative agency and obtain a ruling.  See  Franklin v. Arkansas Dep’t of Human Servs., 319 Ark. 468,892 S.W.2d 262 (1995) (declining  to review appellant’s arguments that she was denied due process and her right to a hearing ­7­  under Ark. Code Ann. § 25­15­208 where such arguments were not made to the administrative  tribunal); Wright v. Arkansas State Plant Bd., 311 Ark. 125, 842 S.W.2d 42 (1992) (declining  to reach “several arguments” that were not raised before the Board); Alcoholic Bev. Control  Div. v. Barnett, 285 Ark. 189, 685 S.W.2d 511 (1985) (declining to reach a challenge to the  timing of two local option elections because the argument was not raised before the Board).  The rationale behind this rule is that, if the appellate court were to set aside an administrative  determination on a ground not presented to the agency, it would usurp the agency’s function  and deprive the agency of the opportunity to consider the matter, make its ruling, and state the  reasons for its action.  See Wright, supra.  For this reason, this issue is not preserved for  appellate review.  Even were we to conclude that the issue was fully developed at the agency level, we  would reject it.  In C.C.B. v. Arkansas Department of Health & Human Services, ___ Ark.  ___, ___ S.W.3d ___ (Jan. 25, 2007), the supreme court held that an allegation regarding the  appearance of impropriety, based on the fact that the administrative law judge and prosecutor  were  employees  of  the  same  agency  seeking  to  keep  the  alleged  maltreater  on  the  child­maltreatment registry, standing alone, was insufficient to demonstrate bias or even an  appearance of bias.  The supreme court required more than a bare allegation of bias in order  to demonstrate denial of due process.  See id.  For the foregoing reasons, we affirm the agency decision to revoke appellant’s daycare  license.  VAUGHT and BAKER, JJ., agree. ­8­  ­9­

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