Judge: James C. Chalfant, Case: 21STCP03658, Date: 2023-02-28 Tentative Ruling

Case Number: 21STCP03658    Hearing Date: February 28, 2023    Dept: 85

            C. Governing Law[2]

            1. The RFA

            Pursuant to Title IV-E of the federal Social Security Act, states operating Foster Care, Prevention, and Permanency programs must establish and maintain standards for foster family homes receiving AFDC-FC.  42 U.S.C. §671(a)(10).  The RFA program, enacted by legislation sponsored by the County Welfare Directors Association in 2007 and expanded through SB 1013, established a unified process for licensing foster care providers and approving families for legal guardianship or adoption, replacing California’s prior foster family home structure.  Welfare & Institutions (“W&I”) Code §§ 16519.5-19.7; All County Letter (“ACL”) 16-10 (RJN Ex. B).  Beginning January 1, 2017, all counties and licensed foster care providers in California are required to implement the RFA process for new foster care applicants.  ACL16-10.  The RFA program is administered through Written Directives issued by DSS, which have the same force and effect as regulations.  W&I Code §16519.5(f)(1)(A); RFA Written Directives, Version 4 (“RFA Directives”), §1.02(b); ACL 16-10.[3]             The County must follow the directives and regulations of DSS.  W&I Code §16519.56. 

The RFA approval process is intended to be an expedited assessment of individuals and families to provide foster care and become legal guardians or adoptive families for dependent children.  W&I Code §16519.5(a).  It replaced the existing multiple processes into a unified process for licensing foster family homes, certifying foster homes by licensed foster family agencies, approving relatives and non-relative extended family members as foster care providers, and approving guardians and adoptive families.  W&I Code §16519.5(a); RJN Ex. A (RFA Directives §1-02(b); RJN Ex. B (ACL 16-10, p. 3).  The law is designed to eliminate the need for a second approval process for adoption or legal guardianship of the child.  W&I §16519.5(c)(4)(A). 

            The welfare laws are to be actively enforced.  Thornton v. Calrson, (1992) 4 Cal.App.4^th 1249, 1258-59.  Public benefit aid “shall be administered and services provided promptly.” W&I Code §10000.  DSS shall “endeavor at all times to perform [its] duties in such a manner as to secure for every person the amount of aid to which he is entitled.”  W&I Code §10500.  “Administrative duties should be performed in such a manner as to secure for every applicant and recipient the amount of aid to which he or she is entitled under the law.”  DSS’s Manual of Policies and Procedures (“DSS Manual”) §40-101.12.  Counties are “responsible for assisting applicants or recipients in understanding their rights and responsibilities in relation to application for aid; …[and] for assisting them as needed in establishing their eligibility and helping them to realize the maximum personal independence of which they are capable….”  DSS Manual §40-107(a). 

            2. The RFA Assessment Process

            A “resource family” is “an individual or family that has successfully met both the home environment assessment standards and the permanency assessment criteria” established by statute and DSS.  W&I Code §16519.5(c)-(d).  A resource family shall be considered eligible to provide foster care for children in out-of-home placement and approved for adoption and guardianship.  W&I Code §16519.5(c)(4)(A).  An application to be a resource family must be under penalty of perjury, with no material omissions of fact to the best knowledge and belief of the applicant.  W&I Code §16519.55(b).

            A county shall conduct a Comprehensive Assessment of an RFA applicant that includes a Home Environment Assessment, background checks, and a Permanency Assessment.  DSS Directives §6-01(a); ACL 16-10.  The Home Environment Assessment shall include a background check, a health and safety assessment of the home and its outdoor and storage areas, fire clearance, and a description of the physical features of the home.  DSS Directives §6-02(a). 

            The Permanency Assessment includes a psychosocial assessment of the applicant and verification that the applicant has completed the minimum 12 hours of pre-approval training.  DSS Directives §§ 6-04–6-06.  At minimum, the psychosocial assessment must include a risk assessment that includes the past and current physical and mental health of the applicant.  DSS Directives §6-05(d)(3)(C).  When evaluating information that shows an applicant has a history of conduct that may pose a risk or threat to the health and safety, protection, or well-being of a child, nonminor dependent, or other individual, a county shall consider the factors specified in the directive and any other relevant information.  DSS Directives §6-05(e).  

            Once the Comprehensive Assessment is completed, the county shall complete a written report of the assessment determining the applicant’s suitability to foster the child.  DSS Directives §6-07(a), (b)(11); ACL 16-10.  If the county approves the application as documented in the report, it shall issue an RFA Certificate to the approved family.  DSS Directives §6-08.

An RFA applicant is not eligible to receive AFDC-FC benefits on the child’s behalf until he or she receives approval as a resource family.  RFA Directives §§ 7-01(f), 7-02(f); RJN, Ex. C (DSS Manual §§ 45-302.22, 45-302.3-.31). 

3. The Dual Agency Rate

            Children who are consumers of both regional center services and AFDC-FC payments have special needs that can require care and supervision beyond that typically provided to children in foster care.  W&I Code §11464(a)(1).  Clarifying the roles of the child welfare and developmental disabilities services systems will ensure that these children receive the services and supports they need in a timely manner and encourage the successful adoption of these children, where appropriate.  W&I Code §11464(a)(1).  These children are entitled to a rate that is higher than the average rate they would otherwise receive through the foster care system and higher than the rate other children with medical and other significant special needs receive.  W&I Code §11464(a)(1). 

The Dual-Agency Rate is $2,006 per month, effective July 1, 2007.  W&I Code §11464(c)(1); RJN Ex. D (All County Letter 08-17 (“ACL 08-17”), p. 2).  If a county determines that a dual-agency child has extraordinary care and supervision needs, it may approve a supplement of up to $1,000.  ACL 08-17, p. 2.

            4. Emergency Placement

            A child may be placed in the home of a relative who requests temporary placement prior to RFA determination on an emergency basis.  W&I Code §361.45(a), (b).  After emergency placement of the child, the county welfare department shall require the relative to submit an RFA application and initiate the home environment assessment no later than five business days after the placement.  W&I Code §361.45(b). 

When a child is placed in a home on an emergency basis, the county shall complete a Comprehensive Assessment of the RFA applicant, and prepare a Written Report, within 90 days of the date the child is placed, unless good cause exists.  RFA Directives §7-01(d).  This 90-day timeframe does not apply to the issuance of the RFA Certificate to approved resource families.  RFA Directives §6-08.

There is no fundamental right to approval as a resource family, even after emergency placement of a child with an applicant.  W&I Code §16519.5(c)(3). RFA Directives §7-01(g); ACL 16-10. 

The CalWORKs program provides temporary cash aid and services to eligible families with children in the home.  CalWORKs benefits do not require resource family approval and are generally available to families with children in the home who have been deprived of parental support or care because of the absence, disability or death of either parent, and to needy and non-needy caretaker relatives of foster children.   RJN Ex. E (DSS Website).  CalWORKS benefits are available to families who do not have RFA approval.

            D. Statement of Facts

            1. Background

            Reina is quadriplegic and has cerebral palsy and moderate mental retardation.  AR 121.  On December 2, 2016, DCFS began to investigate allegations that Reina’s parents were abusing Reina by failing to bathe her and taking her to occupational and physical therapy sessions.  AR 109.

            Alvarez is Reina’s paternal aunt.  AR 124.  On December 16, 2016, Alvarez contacted a CSW about Reina’s removal from her mothers’ care and expressed interest in caring for Reina.  See AR 7.  On January 9, 2017, DCFS placed Reina with Alvarez on an emergency basis.  See AR 17.

            2. The RFA Application

            On February 17, 2017, Alvarez and her husband, Antonio Alvarez (“Antonio”), submitted an RFA application to DCFS.  AR 515-18.  Alvarez completed a criminal record statement stating that she had no criminal background on February 9, 2017, and her husband did so on February 27, 2017.  AR 567-570.

            On March 13, 2017, three persons provided character reference forms for the RFA application.  AR 571-79.  All three were positive, although two admitted that Alvarez had anxiety issues in the past.  AR 572, 575.

            On March 20, 2017, Alvarez filled out the required SAFE questionnaire.  AR 555, 564.

            On April 13, 2017, Alvarez filled a RFA health screening form in which she admitted that she had mood disorder and anxiety, noting that she was stable and followed by a psychiatrist.  AR 597.  She included a letter from her doctor, Josiah David Hagen, M.D. (“Hagen”), who has diagnosed her with mood and anxiety disorder and treated her with medication management since January 9, 2014.  AR 599.  Her symptoms were overall stable at her most recent appointment on April 11, 2017.  AR 599.  Hagen would continue to monitor Alvarez through appointments every 4-12 weeks.  AR 599.

            On April 14, 2017, Yolanda Weidner (“Yolanda”), Reina’s paternal grandmother, completed a criminal record statement that she had no criminal background.  AR 565-66, 614.

            Alvarez, her husband, and Yolanda submitted evidence that each had completed the required RFA training between February and May 2017.  AR 581-86.

            On May 23, 2017, CSW Cindy Mata (“Mata”) met with Alvarez and her husband.  AR 601.  Mata conducted a tuberculosis skin test on Antonio, which yielded a negative result, and requested that he provide a health screen form.  AR 601.  Alvarez had a copy of her medication history from her primary physician.  AR 601.  Alvarez explained that she had redacted them because she was no longer on certain medications.  AR 601.  She agreed to provide an unredacted copy when Mata next visited.  AR 601.

            On June 15, 2017, a CSW confirmed via the Home Environment Checklist that Alvarez’s home met all the requirements for RFA.  AR 592-93.

            3. RFA Approval

            On September 11, 2017, Mata submitted a written report that recommended approval of Alvarez and Antonio as an RFA.  AR 603, 616. 

            The report noted that Alvarez has been diagnosed with mood and anxiety disorder and has been treating with Hagen since January 2014.  AR 609.  During her interview, Alvarez stated that she had one hospitalization in 2014 on a 5150 hold, and she was apprehensive to talk about it because it embarrassed her.  AR 609. Alvarez’s and Antonio’s narrative about what led to the hospitalization varied, but they agreed that they were arguing about Alvarez not having done the dishes when Antonio came home from work.  AR 610.  Shortly after that, Alvarez slashed Antonio’s tires and took some pills.  AR 610.  She was taken to the hospital where she was hospitalized on a 5150.  AR 610.  Following this incident, Alvarez began treatment for her mental health diagnosis.  AR 610.  Antonio added that prior to this incident he never observed symptoms from Alvarez that would indicate something was wrong.  AR 610.  Both Alvarez and Antonio agreed that there have been no other incidents.  AR 610.

            The report also said that in response to Question 21 of the first questionnaire, Alvarez stated that she needed counseling and psychiatric care as a child.  AR 610.  When Mata discussed this with her, Alvarez denied it and stated she marked that question as a mistake.  AR 610.

            On October 11, 2017, the County notified Alvarez that DCFS had approved her RFA application.  AR 75.  Reina would receive benefits at an F4 specialized rate of $1,744 per month.  AR 75.

            4. The Request for Retroactive Benefits

            On October 25, 2017, Alvarez’s attorney wrote DSS to request a state hearing for Reina.  AR 73.  He asserted that DCFS and DSS failed to provide the appropriate level of benefits and that Alvarez was entitled to receive retroactive funding at the appropriate rate from the date of Reina’s placement with Alvarez as caregiver.  AR 73.

            On May 15, 2018, DCFS submitted a Statement of Position asserting that Reina is not eligible for retroactive foster care funding.  AR 475.  State regulations require that caregivers meet all the standards of approval before a home is approved as an RFA home.  AR 475.  Because Alvarez was approved as an RFA home on September 11, 2017, DCFS was correct in approving federal foster care funding from that date.  AR 475.  Reina could not receive retroactive funding from April 9 to September 10, 2017.  AR 475.

            5. Alvarez’s Declaration

            On September 15, 2020, Alvarez submitted a hearing brief in support of her position that DCFS owed her retroactive benefits (AR 80-102) and attached a declaration in support of her claim.  AR 105-07. 

Alvarez stated that she was not familiar with the RFA process or rules when DCFS first placed Reina with her.  AR 106.  She also was not familiar with the process DCFS uses to determine federal eligibility for foster care funding.  AR 106.  She relied on DCFS social workers to provide her with correct information on the process.  AR 106. 

            Alvarez made her best effort to do all that DCFS asked of her as quickly as possible.  AR 106.  She spent a lot of time re-faxing documents to DCFS when it claimed they were lost or never received.  AR 106.

            In April 2017, Alvarez sent DCFS some of her medical records which redacted medications she no longer took.  AR 106.  She was embarrassed because those medications were psychiatric medications.  AR 106.  The RFA CSW asked Alvarez for an unredacted copy, which Alvarez provided as soon as possible for fear of losing Reina.  AR 106. 

            During the RFA process, Alvarez regularly called DCFS employees for updates.  AR 106.  In June 2017, she was told the process was done.  AR 106.  Between June and September 2017, she was never asked to provide any additional documents.  AR 106.

The extended delay in the RFA approval process was a great burden.  AR 106.  She incurred credit card debt to provide for Reina.  AR 106-07.  She had to purchase special cleansing products and foods Reina required.  AR 107.  She also had to make out-of-pocket modifications to the home, including ramps, special shower bars, and chairs.  AR 107.  She regularly called DCFS because she was running out of money and feared losing Reina.  AR 107.

            Alvarez asked a DCFS employee if she should apply for CalWORKS public assistance.  AR 107.  The employee told her not to do so because she would need to pay it back once she received foster care funding.  AR 107.  As a result, Alvarez did not apply for CalWORKS.  AR 107.  Alvarez also did not receive the three $400 emergency stipends for January, February, and March 2017 until October 2017.  AR 107.

            6. The ALJ’s Proposed Decision

            The state hearing occurred on September 15, 2020.  AR 1258.  On October 28, 2020, the ALJ issued a proposed decision that denied Alvarez’s request for retroactive benefits AFDC-FC benefits.  The ALJ also found that the County caused Alvarez not to apply for CalWORKS and ordered the County to facilitate through its Department of Public Social Services for the payment of non-needy caretaker benefits to Alvarez on behalf of Reina for January 9 through September 10, 2017.  AR 2, 72.

            a. Procedural History

            On February 17, 2017, Alvarez and Antonio applied to the County requesting approval as care providers for Reina under the RFA program.  AR 3.  On September 11, 2017, DCFS approved the RFA application and began paying benefits for Reina at the County's F-4 Specialized Care Rate.  AR 3.  The County later determined she was eligible for both the Regional Center Dual Agency Rate and a $1,000 supplement, also effective September 11, 2017.  AR 4. 

Alvarez requested a hearing, asserting that she was entitled to retroactive benefits at that level from the date of Reina’s initial placement with Alvarez.  AR 4. 

            The parties agreed that the disputed period for which Alvarez sought benefits was from April 9, 2017 -- 90 days after Reina's placement with Alvarez -- to September 10, 2017.  AR 4.  Alvarez also asserted that she did not receive the appropriate rate of funding, the Dual Agency Rate plus the $1,000 supplement, until December 1, 2017.  AR 5.

            b. Jurisdiction

            A claimant must file a request for a hearing in 90 days of notice of a county’s action.  AR 66.  The County asserted that Alvarez received three Notices of Action, dated August 17, October 11, and December 18, 2017, regarding foster care benefits that triggered the 90-day period for a state hearing request and that Alvarez’s request was untimely.  AR 5-6. 

            The ALJ concluded that the County’s jurisdiction argument was not well taken.  AR 5.  DSS Manual section 22-001(a)(1) defines adequate notice as written notice informing the claimant of the action that the county intends to take, the reasons for the intended action, the specific regulations supporting such action, an explanation of the claimant’s right to request a state hearing, and if appropriate, the circumstances under which aid will be continued if a hearing is requested.  AR 66. 

None of the three notices cited by the County were adequate.  AR 66.  The notices did not explain why Alvarez’s home was not considered eligible, why foster care funding did not commence until September 11, 2017, and did not set forth the pertinent regulations.  AR 8, 66.  As a result, the appeal was not untimely.  AR 8, 66.

            c. Undisputed Facts

            The undisputed facts included the following.  On January 9, 2017, DCFS placed Reina with Alvarez on an emergency basis.  AR 17.  On February 17, 2017, Alvarez and Antonio submitted an RFA application.   AR 17.  The County completed its assessment and issued an RFA certificate on September 11, 2017 and commenced foster care benefits effective that date.  AR 17. 

Alvarez received three $400 stipends in October 2017.  AR 17-18.  The County initially authorized foster care funding at the County’s Specialized Care F4 rate effective September 11, 2017.  AR 18.  It later determined that as a regional center client, Reina was eligible to receive the Dual Agency Rate, together with a $1,000 supplement.  AR 18.

            The required criminal record clearances for all adults residing in or regularly present in the claimant’s home were completed by May 12, 2017.  AR 18.  Alvarez, Antonio, and Reina’s grandmother completed First Aid/CPR training and required RFA training by March 18, 2017, and F-Rate training on March 20, 2017.  AR 18.  

            On April 12, 2017, Alvarez submitted a Health Screening Form.  AR 18.  It described her diagnoses of mental illness, mood disorder, and anxiety, but reported that she was stable as of her most recent visit on April 11, 2017.  AR 18.  Alvarez provided the County a list of medications on May 15, 2017, with some former medications redacted out of embarrassment.  AR 18. 

            Alvarez requested that the County provide her family with additional time to complete the health screening/physical requirements on March 30 and April 4, 2017.  AR 18.  On June 15, 2017, DCFS determined that Alvarez’s home met RFA environmental requirements.  AR 18.

d. Reina’s Initial Placement and RFA Application, the RFA Assessment, and Funding

As reflected in DSS’s opposition (DSS Opp. at 9-10), the relevant timeline in the ALJ’s proposed decision may be summarized as follows:

Home Inspections (January 6-June 15, 2017):  A CSW inspected Alvarez’s home on January 6, 2017.  A Corrective Action Plan was entered following the inspection, indicating the changes that needed to be made to the home.  The home was found to meet RFA standards as of June 15, 2017.  AR 11.

Questionnaire Forms (February 9-March 20, 2017):  Alvarez and her husband submitted questionnaire forms on March 20, 2017, in which Antonio disclosed Alvarez’s history of mental illness, and psychiatric hospitalization or outpatient treatment.  AR 11.

Criminal Record Clearances (February 9-May 12, 2017):  Alvarez, Antonio, and Reina’s grandmother submitted criminal record statements on February 9, February 7, and April 14, 2017, respectively.  Antonio and Reina’s grandmother submitted to the Live Scan process on March 16, 2017.  Alvarez submitted to Live Scan on May 12, 2017.  AR 11-12.

Character References (March 17-April 17, 2017):  The County received character reference forms for Alvarez and her husband between March 17 and April 17, 2017.  AR 12.

Trainings/Certifications (March 8-May 20, 2017):  Alvarez, Antonio, and Reina’s grandmother completed First Aid/CPR training on March 8, 2017.  In March 2017, Alvarez requested additional time for her husband and mother to complete other trainings.  The County issued Alvarez a Certificate of Attendance for completing F-Rate Pre-Service training between May 13 and May 20, 2017.  AR 12-13.

Health Screenings (April 12-May 23, 2017:  Alvarez’s physician submitted a Health Screening form on April 12, 2017, identifying that her medical history included mood disorder and anxiety.  In April 2017, Alvarez sent medical records to the County but redacted past psychiatric medications.  On May 15, 2017, an RFA CSW requested that Alvarez provide an unredacted copy.  Alvarez submitted an unredacted version on May 23, 2017.  Alvarez and her husband submitted immunization records on September 26 and May 3, 2017, respectively.  AR 13-14.

Interviews with Alvarez and Family (March-May 2017):  An RFA CSW conducted interviews with Alvarez and her husband on March 20, May 15, and May 22, 2017.  Alvarez disclosed to the CSW that she had been hospitalized in approximately 2014 following a 5150 hold.  AR 13-14.

SAFE Written Report (September 11, 2017):  The County submitted the SAFE report, indicating that it was prepared by the RFA CSW on June 15, 2017, who recommended that Alvarez be approved.  The SAFE report was signed and dated by the RFA CSW and a supervisor on September 11, 2017.  AR 15.  The County’s Appeals Hearing Specialist testified that while the report was for the most part completed on June 15, 2017, it could not be submitted for approval until all the documents were received.  The requirements were not met until September 11, 2017.  AR 15.

Resource Family Approval Certificate (September 11, 2017):  The County issued the Certificate to Alvarez and her husband on September 11, 2017.  AR 17.

September 26, 2017: Alvarez and her husband submitted immunization records on September 26, 2017, and May 3, 2017, respectively.  AR 13-14.

            e. Funding

            Alvarez reported that a DCFS employee told her not to apply for CalWORKs because it would create a lot of confusion.  AR 16.  The employee claimed that she would have to pay the CalWORKs funds back when she began receiving foster care funding.  AR 16.  Alvarez complied with this advice.  AR 16.

            There were multiple entries in DCFS’s computer regarding communications with Alvarez about the delay in funding, including July 17, August 2, August 23, 2017.  AR 16-17.  During the delay, Alvarez incurred credit card debt to provide for Reina.  AR 16.  This included out-of-pocket expenses that Medi-Cal did not fully cover, such as ramps, special shower bars, and chairs that Reina required.  AR 16. 

            f. Law

            The ALJ’s proposed decision summarized the governing law (AR 26-57), including regulations as to foster child eligibility (AR 25-26), the RFA Approval Program (AR 26-38), County Assessments (AR 38-44), and Written Report (AR 44-49), the RFA Certificate (AR 50-51), denial of a RFA application (AR 51-53), published rates (AR 53-54), and emergency placements and the interim funding available to emergency caregivers beginning March 31, 2018 (AR 54-62). 

            The proposed decision also discussed the doctrine of equitable estoppel, which the Supreme Court has held applies to state administrative hearings.  Lentz v. McMahon, (“Lentz”) (1989) 49 Cal.3rd 393, 401.  AR 63.  Estoppel against a county’s assertion of purely procedural preconditions and limitations on benefits will not defeat the underlying statutory policy of safeguarding accurate and orderly administration of the welfare system.  AR 64.  However, the policy considerations may be different when substantive preconditions of benefits are in issue.  AR 64.  Id. at 401-02.  In balancing burdens between the parties, the individual’s burden stems from the fact that welfare benefits are intended to provide a basic means of subsistence and that CSWs stand in a confidential relationship with them.  Id. at 400-01.  AR 64.

            In Canfield v. Prod, (“Canfield”) (1977) 67 Cal.App.3d 722, equitable estoppel applied to preclude DSS from denying retroactive benefits to a recipient of Aid to the Totally Disabled for payment of Social Security on behalf of her provider of attendant care.  AR 64.  Canfield identified the four elements of equitable estoppel, which are that (1) the party to be estopped must be apprised of the facts; (2) the party must intend that his conduct be acted upon, or must so act that the party asserting the estoppel had a right to believe it was so intended; (3) the other party must be ignorant of the true state of facts; and (4) the other party must rely on the conduct to his or her injury.  AR 64.  Additionally, when a party asserts estoppel against a government agency, application of estoppel will be applied when justice requires it but it will not apply if to do so would nullify a strong rule of policy adopted for the benefit of the public.  City of Long Beach v. Mansell, 3 Cal.3d 463, 493.  AR 65.  The more culpable or negligent the agency is, and the more serious the effect of its advice on the claimant, the more likely the doctrine is to be applied.  AR 65. 

Factors include the degree of negligence or culpability of the public agency, to what extent the agency is certain of the knowledge or information it dispenses, whether it purports to advise and direct or merely to inform and respond to inquiries, and whether it acted in bad faith.  AR 65-66.  When negligence is the basis of the estoppel, the injured party must show that such negligence was the proximate cause of the deceit.  Gajanich v. Gregory, (“Gajanich”) (1931) 116 Cal. App. 622.  AR 65.

            The appellate courts have applied equitable estoppel against public agencies if and only if it is a special case where the interests of justice clearly require it.  AR 65.  The supporting facts must go beyond the ordinary principles of estoppel, and each case must be examined carefully to ensure that it does not establish precedent that could swindle the public interest of defeat public policy.  City of Imperial Beach v. Algert, (“Imperial Beach”) (1962) 200 Cal.App.2d 48, 52).  AR 65. 

            d. Conclusions

            (1). Date of Federal Foster Care Eligibility

            The purpose of the foster care program is to provide financial assistance for those children in need of substitute parenting and who have been placed in foster care.  AR 67.  A minor’s case must meet several mandatory requirements before the minor can be eligible to receive federal foster care benefits.  AR 67.  Federal law governing foster care approvals defines an eligible foster family home as one that has been approved by the state agency responsible for licensing homes as meeting the standards for such licensing.  AR 67.  Since January 1, 2017, all new applicants seeking to care for a dependent child in California have been required to meet the RFA requirements in order to have an eligible foster care facility for federal foster care funding purposes.  AR 67. 

            The version of DSS Directives in effect at the time of Alvarez’s RFA application had various requirements, including that an applicant be in good physical and mental health.  AR 67.  “Good mental health” may include information that shows the applicant has not engaged in conduct that poses a risk or threat to the health and safety, protection, or well-being of a child, nonminor dependent, or other individual.  DSS Directives §5-02.  AR 67.  Counties must obtain information from applicants which “at a minimum” addresses the applicant’s risk assessment and includes a review of the applicant’s current physical and mental health.  AR 67.  In turn, the applicant must consent to release all records, including the applicant’s mental health records.  DSS Directives §5-03.  AR 67.  The county must then prepare a detailed written report and, if the report documents the county’s approval of an RFA application, prepare and issue an RFA certificate to the resource family.  DSS Directives §§6-01-6-08.  AR 67.

            Alvarez and her family consented to all assessments and training and participated in multiple interviews with the RFA CSW assigned to the case.  AR 67.  The last interview was on May 25, 2017.  AR 67.  As of June 15, 2017, DCFS found that the home met health and environment standards.  AR 67.  The CSW and her supervisor signed the SAFE Report and issued the RFA certificate on September 11, 2017.  AR 67.  Alvarez did not meet all requirements under the Directives until that date, so the County’s determination to commence foster care funding on that date was correct.  AR 67.  The County issued, somewhat delayed, benefits at the Dual Agency Rate with a $1,000 supplement for the period commencing September 11, 2017 and thereafter.  AR 68.

            (2). Equitable Estoppel

            When a county place a dependent child with a relative on an emergency basis prior to RFA approval, DSS Directives require that it ensure the relative has completed an application, discuss funding options prior to approval, and conduct at least one face-to-face interview of the applicant and each child placed in the home within five business days of the placement.  AR 68.  The county must also complete its Comprehensive Assessment of the applicant and prepare a Written Report within 90 calendar days of the placement unless good cause exists, which the county must document.  AR 68.  DSS Directive section 7-01 clarifies that such a relative is not eligible to receive AFDC-FC benefits unless the case meets all other criteria.  AR 68.

            The County did not comply with the DSS Directives’ timeline for placement of a child on an emergency basis.  AR 68.  There is no documentation that, upon Reina’s emergency placement, the County discussed funding options, ensured that Alvarez submitted an application, or had an RFA CSW conduct a face-to-face interview of Alvarez within five business days of the placement.  AR 68.  The County also took 245 days to complete the RFA assessment and did not document a reason why.   AR 68.  During this period, Alvarez did not receive funding to care for Reina.  AR 68.

            Alvarez did not receive any funding between January 9 and September 11, 2017 because a County representative told her not to apply for CalWORKs funding during the RFA assessment process.  AR 68.  The legislature did not make funding available for emergency caregivers in Alvarez’s situation until March 31, 2018.  AR 68.  Alvarez was without funding during this period; she did receive three $400 stipends for this period but only after her RFA approval.  AR 68-69.

            The ALJ analyzed that case under the four elements of equitable estoppel under Canfield, supra, 67 Cal.App.3d 722.  AR 69-70.  As to the first element, the County was imputed with knowledge of foster care funding requirements and expedited applicable timelines for completing the RFA assessments.  AR 69.  As to the second element, the County staff was in a position to advise and direct Alvarez as to the various documents and assessments that needed to be completed so that she could receive foster care funding or other available funding, such as CalWORKS.  AR 69.  As to the third element, both DSL logs and the Alvarez’s declaration show that she had little to no understanding of the RFA process or funding requirements when DCFS placed Reina in her home.  AR 69.  As to the fourth element, because of the confidential relationship formed between Alvarez and the County, Alvarez was fully justified in relying upon the County to inform and correctly direct her on the process for obtaining RFA approval and funding under the new program.  AR 70.  Alvarez told CSWs from the beginning that, while she wanted to keep Reina and prevent her removal from Alvarez’s care, she would need help.  AR 70.

            The four elements of estoppel have arguably been met.  AR 70.  The final consideration is whether justice requires the application of equitable estoppel in this case.  AR 70.  The ALJ must consider the degree of the County’s culpability or negligence and may only invoke estoppel in the most exceptional cases and when the ends of justice clearly demand it.  AR 70.  Thus, the facts must be examined carefully and rigidly.  AR 70.

            There was no showing that County employees acted intentionally to bar Alvarez from benefits to care for Reina.   AR 70.  While the County may have acted negligently when it failed to complete the assessment earlier, at the time it had only recently begun to assess relative caregivers under the RFA program.  AR 70.  Further, although the County had no documented explanation for why it took over 90 days to complete the RFA assessment, evidence showed that Alvarez was responsible for some of the delay.  AR 70.  She did not submit to Live Scan until May 12, 2017, and her home did not meet environmental standards until June 15, 2017.  AR 70-71.  DSL logs show that she requested extensions to complete trainings and to submit required health screening forms.  AR 71.  She provided redacted medication history on May 15, 2017 and did not provide an unredacted copy until May 22 or 23, 2017.  AR 71.  Contrary to Alvarez’s claim, her home was not RFA approvable on April 9, 2017 because she failed to provide all the required documents by that date.  AR 71.

            Another reason for the delay was that Antonio and references disclosed that Alvarez had suffered from mental health conditions and anxiety, including a 5150 involuntary hospitalization in 2014.  AR 71.  Under the DSS Directives section 6-05(d), a county must at minimum gather information to conduct a psychosocial assessment of the claimant.  AR 71.  This includes review of the past and current physical and mental health of the applicant.  AR 71.  When an evaluation thereby shows that the applicant has a history of conduct that may pose a risk or threat to the health and safety, protection, or well-being of the child, a county must consider additional factors and relevant information.  DSS Directives §6-05(e).  AR 71.  While it appears that the county could have completed the assessment more expeditiously, the disclosure of Alvarez’s prior mental health problems, including a 5150 detention, the additional time the County spent to investigate the matter for its assessment from May 23, 2017 through September 11, 2017 was warranted.  AR 71.

            Alvarez did not establish that the County’s negligence was the sole cause of the delay in RFA approval, or that the County’s negligence was so egregious that this is the exceptional case where the ends of justice demand application of equity to require the County to issue funding for a period prior to the RFA approval.  AR 71. 

            However, Alvarez did establish negligence by a County employee telling her to not apply for CalWORKs because she would need to reimburse the County later.  AR 71-72.  The ALJ ordered the County to facilitate with its Department of Public Social Services the payment of the appropriate level of non-needy caretaker CalWORKs benefits for period from January 9 to September 10, 2017.  AR 72.  The proposed decision denied Alvarez’s claim in all other aspects.  AR 72.  The DSS Director adopted the proposed decision on October 28, 2020.  AR 2. 

            7. Request for Rehearing

            On December 3, 2020, Alvarez requested a rehearing of the ALJ’s proposed decision.  AR 651-57.  The request for rehearing was denied. 

            E. Analysis

Petitioner Alvarez contends that the ALJ[4] erred in her proposed decision’s discussion of equitable estoppel by (a) failing properly to apply the proper hardship and public policy balancing, which also is not supported by the weight of the evidence or the findings, (b) requiring that the County act intentionally before equitable estoppel will apply, and (c) applying an incorrect standard for estoppel in public benefit cases.  

1. Principles of Equitable Estoppel

Equitable estoppel applies in circumstances where a party has induced another into forbearing to act.  Lantzy v. Centex Homes, (2003) 31 Cal..App.4th 363, 383.  “The essence of an estoppel that the party to be estopped has by false language or conduct “led another to do that which he [or she] would not otherwise have done and as a result thereof that he [or she] has suffered injury.”  Steinhart v. County of Los Angeles, (2010) 47 Cal.4th 1298, 1315).  The elements of estoppel are: (1) the party to be estopped must be appraised of the facts; (2) he must intend that his conduct shall be acted upon; (3) the other party must be ignorant of the true state of facts; and (4) he must rely upon the conduct to his injury.  Driscoll v. City of Los Angeles, (“Driscoll”) (1967) 67 Cal.2d 297, 305 (applying equitable estoppel against agency to assert statute of limitations for pension claims).

The doctrine applies to a public entity in the same manner as a private party when the elements of equitable estoppel have been shown, and when the injustice which would result from a failure to estop the agency is sufficient to justify any adverse effect upon public interest or policy which would result.  City of Long Beach v. Mansell, (“Mansell”) (1970) 3 Cal.3d 462, 496-97.  The injustice must be of “sufficient dimension” to justify any effect upon public interest or policy which would result from the estoppel.  Lentz, supra, 49 Cal.3d at 400 (quoting Mansell, supra, 3 Cal.3d at 462).  The rule is balanced against the well-established proposition that equitable estoppel will not be applied against the government if to do so would effectively nullify “a strong rule of policy, adopted for the benefit of the public, ...”  County of San Diego v. Cal. Water etc. Co., (1947) 30 Cal.2d 817, 829-30; see also Page v. City of Montebello, (1980) 112 Cal. App. 3d 658, 667.  

If the four elements of equitable estoppel are established against the government agency, the court must then balance the burden on the party asserting estoppel if the doctrine is not applied with the public policy that would be affected by the estoppel.  Lentz, supra, 49 Cal.3d at 400-01 (equitable estoppel available for welfare recipients to prevent DSS from recouping overpayment).  In considering the public policy requirement of equitable estoppel, courts must examine the “totality of the circumstances,” including the “seriousness of the effect of the public agency's conduct or advice on the claimant,” whether there is a “confidential relationship between the public entity and the claimant,” and the “nature of the right asserted by the claimant.”  Driscoll, supra, 67 Cal. 2d at 308.  The “degree of culpability or negligence of the public agency” is an important consideration when determining whether estoppel may be applied against a public agency.  Canfield, supra, 67 Cal.App.3d at 732; Berlin v. McMahon, (1994) 26 Cal.App.4th 66, 75.

In the context of public assistance, an applicant may rely on equitable estoppel to receive public benefits to which he or she is entitled but did not receive from the appropriate agency.  Lentz, supra, 49 Cal.3d at 401.  In Lentz, the Director of DSS was precluded by equitable estoppel from denying retroactive benefits to a recipient of Aid to the Totally Disabled for payment of Social Security on behalf of her provider of attendant care. Id. The court noted that burden on the individual asserting estoppel in such cases is based on the fact that welfare benefits are intended to provide a basic means of subsistence to recipients and welfare works stand in a confidential relation to them.  Id. at 401-02.  A recipient’s justified reliance on a county welfare department can produce compelling hardship.  Id. at 402.  On the public policy side of the balancing, procedural preconditions to benefits (such as a statute of limitations) will not defeat the underlying policy of safeguarding accurate and orderly administration of the welfare system when the county itself is responsible for the procedural default.  Id.  On the other hand, when substantive preconditions to benefits are at issue, the policy considerations may well be different.  Id.  Estoppel against a welfare agency may be appropriate when “a government agent has negligently or intentionally caused a claimant to fail to comply with a procedural precondition to eligibility.”  Id. at 401-02.

Estoppels against a government entity “are rare and are to be invoked only in extraordinary circumstances”.  Chaplis v. County of Monterey, (1979) 97 Cal. App. 3d 249, 253.  Estoppel “ordinarily will not apply against the government except in unusual instances when necessary to avoid grave injustice and when the result will not defeat a strong public policy.”  Imperial Beach, supra, 200 Cal.App.2d at 52; Steinhart v. County of Los Angeles, supra, 47 Cal.4th at 1315. 

Generally, the existence of estoppel is a question of fact unless only one conclusion can be drawn from the evidence.  Driscoll, supra, 67 Cal.2d at 305. The determination whether estoppel will nullify an important public policy for purposes of the balancing is a question of law reviewed de novo.  Smith v. Cnty. of Santa Barbara, (1992) 7 Cal. App. 4th 770, 776 (“the question whether [governmental] estoppel should apply is not solely a question of fact . . . [since] the effect of the estoppel on the public interest must be decided by considering the matter from the point of view of a court of equity”).

2. The ALJ’s Equitable Estoppel Decision Is Not Entitled to Deference

The parties agree that the ALJ correctly found that Alvarez met the four elements of equitable estoppel. As to the first element, the ALJ found that the County was imputed with knowledge of foster care funding requirements and knowledge of the expedited applicable timelines for completing the RFA assessments.  AR 69.  As to the second element, the ALJ held that “the [C]ounty staff were in a position to advise and direct [Alvarez] as to the various documents and assessments that needed to be completed so that she could receive foster care funding….”  AR 69.  As to the third element, the ALJ highlighted evidence Alvarez had little to no understanding of the RFA process or funding requirements when Reina was placed in her home. AR 69.  As to the fourth element, the ALJ found that, because of the confidential relationship formed between Alvarez and County, she was fully justified in relying upon the CSWs to inform and correctly direct her on the process for obtaining RFA approval and funding under the new program.  AR 70.  See Pet. Op. Br. at 6-7.

 The ALJ then balanced the burden on Alvarez against public policy, noting that “…the degree of the county’s culpability or negligence must be considered, and the doctrine cannot be invoked to contravene statutes and constitutional provisions that define the agency’s powers.  Furthermore, the doctrine is only to be invoked in the most ‘exceptional case’ and when the ends of justice clearly demand it.” AR 70.  The ALJ ruled against Alvarez for the following reasons: (1) the County did not act intentionally to cause Alvarez not to receive benefits, (2) the County’s negligence was not the sole cause of the delay, (3) the County’s negligence was not “so egregious that this is the exceptional case where the ends of justice demand application of equity to require the county to issue funding to her,” and (4) Alvarez may have caused some delays.  AR 70-71.

DSS argues that the ALJ’s decision is entitled to deference.  The ALJ reasonably determined that the higher standard for estoppel against the government was not met for Alvarez’s eligibility to receive AFDC-FC benefits.  This finding is supported by the weight of the evidence and grounded upon a reasonable basis in law, and therefore the ALJ’s exercise of discretion is entitled to deference.  DSS Opp. at 13.

As Alvarez notes (Reply to DSS at 2-3), DSS’s contention that the ALJ’s decision is entitled to deference is inconsistent with the independent judgment standard of review.  See Fukuda v. City of Angels, supra, 20 Cal. 4th at 817, 977; Bixby v. Pierno, supra, 4 Cal. 3d at 151.  The court must accord the ALJ’s decision with a strong presumption of correctness.   Fukuda v. City of Angels, supra, 20 Cal.4^th at 817.  But the court also must review the facts and legal issues independently.  Generally, the existence of estoppel is a question of fact.  Driscoll, supra, 67 Cal.2d at 305. The determination whether estoppel will nullify an important public policy for purposes of the balancing is a question of law reviewed de novo.  Smith v. Cnty. of Santa Barbara, supra, 7 Cal. App. 4th at 776.  Both are reviewed by the court independently without deference to the ALJ.

3. The ALJ Did Not Apply an Erroneously Heightened Standard from Land Use Cases

Alvarez argues that the ALJ incorrectly relied on Imperial Beach, supra, 200 Cal.App.2d at 52, to conclude that the County’s negligence did not rise to the level of an “exceptional case” in which equitable estoppel should be applied.  AR 65.  Imperial Beach is inapposite because it is a land use case, not a public benefits case, and the public policy considerations in the two types of cases are very different.  Both Lentz and Driscoll establish that public beneficiaries rely on such benefits to meet essential needs.  In contrast, land use cases involve shared rights of way and laws that everyone in a community must follow.  In Imperial Beach, the court had to consider the public policy ramifications of treating public land as private land after the government mistakenly sold it to a private party.   200 Cal. App. 2d at 51.  The court in Schafer v. City of Los Angeles, (2015) 237 Cal.App.4th 1250, 1263 clarified, estoppel will be applied “in the land use context in only ‘the most extraordinary case where the injustice is great and the precedent set by the estoppel is narrow.’” (emphasis added) (citation omitted). 

As a result, the heightened standard of an “exceptional case” discussed in Imperial Beach is inapplicable.  The ALJ focused on public policy considerations relevant to land use cases instead of on the public policy underlying the foster care system, which is primarily to ensure foster children are placed in homes that can appropriately care for these children, which in many cases require public benefits for the caregivers.  The ALJ abused her discretion by applying an incorrect legal standard.  Pet. Op. Br. at 11, 13; Reply to DSS at 4-5.

Alvarez is wrong.  The legal standard for estoppel of a public agency does not vary depending upon the agency or the nature of the right or entitlement sought.  Rather, it is the public policy that would be affected by estoppel of the agency that varies with the type of underlying law or program authorizing the right or entitlement.  All equitable estoppel cases against an agency require an injustice of sufficient dimension to justify any effect upon public interest or policy which would result from the estoppel.  Lentz, supra, 49 Cal.3d at 400.  All cases where estoppel will be applied against a government entity “are rare and are to be invoked only in extraordinary circumstances”.  Chaplis v. County of Monterey, supra, 97 Cal. App. 3d at 253; Imperial Beach, supra, 200 Cal.App.2d at 52; Steinhart v. County of Los Angeles, supra, 47 Cal.4th at 1315.  In fact, as DSS notes, the California Supreme Court in Lentz imported the equitable estoppel test from Mansell, a land use case, in holding that equitable estoppel is available against a welfare agency.  49 Cal.3d at 400-01.  DSS Opp. at 17. 

Hence, the ALJ did not apply an irrelevant and heightened standard available only for land use cases.  The standard is high in all cases of equitable estoppel against the government.  Of course, this standard is more easily satisfied in some type of cases, including public benefits cases, than others.

4. The ALJ Did Not Erroneously Hold That the County Must Have Acted Intentionally or Be the Sole Cause of Delay, Did Not Erroneously Conclude That the Newness of the Emergency Care Program Was Relevant, and Did Not Erroneously Consider Alvarez’s Contribution to the Delay

a. Intentional Misconduct

Alvarez notes that estoppel against a welfare agency is appropriate “when government officials have intentionally or negligently caused a claimant to fail to comply with a procedural precondition to eligibility, and failure to invoke estoppel would cause great hardship to the claimant.”  Lentz, supra, 49 Cal. 3d at 402.  Indeed, the Supreme Court has held estoppel can be applied against the government even where officials act in good faith but erroneously.  See Driscoll, supra, 67 Cal.2d at 297 (equitable estoppel against the government was appropriate where city in good faith but erroneously advised widows of retired fire fighters that they were not entitled to pensions).  Pet. Op. Br. at 9-10.

According to Alvarez, the ALJ held that she (Alvarez) did not show that public policy weighed in her favor because there was “no showing that the county employees acted intentionally to cause [Alvarez] not to receive benefits to care for [Reina].”  AR 70.  The ALJ failed to provide any legal authority that a finding of intentional misconduct is necessary for estoppel, and no such requirement exists.  Application of this incorrect standard would nullify the vast majority of equitable estoppel claims concerning foster care funding, which very rarely involve intentional malfeasance by the County.  Pet. Op. Br. at 9-10.

The County agrees with Alvarez’s citation of the ALJ’s decision that equitable estoppel requires intentional actions to deprive her of benefits.  The County concludes that there is substantial evidence that the County employees did not intentionally act to deprive Alvarez of her benefits (AR 70) and therefore she did not meet her burden of showing that the County’s intentional conduct caused the delay.  County Opp. at 15.

Both Alvarez and the County are wrong.  Lentz expressly required the ALJ to evaluate whether DCFS “intentionally or negligently caused” Alvarez to fail to comply with a procedural precondition for eligibility.  49 Cal. 3d at 402.  Thus, the ALJ was required to consider the disjunctive of intentional misconduct or negligence.  This requires an evaluation of the “degree of culpability or negligence of the public agency” as an important consideration.  Canfield, supra, 67 Cal.App.3d at 732.  In evaluating this issue, the ALJ did not rule that intentional misconduct is required for equitable estoppel.  As DSS points out, Alvarez’s claim is directly contradicted by the fact that the ALJ applied estoppel for CalWORKs benefits based on a finding that the County’s actions were negligent, not intentional.  AR 71.  DSS Opp. at 16.

b. The Sole Cause of Delay

Alvarez notes that the ALJ found that that public policy weighed in the County’s favor because it was not the “sole cause of the delay”, even though the County was clearly the main source of delay.  AR 70-71.  The ALJ did not cite a single case that the County’s negligence must be the sole cause of delay.  The ALJ only relied on Gajanich v. Gregory, (“Gajanich”) (1931) 116 Cal. App. 622, which held that to show estoppel, an “injured party must show that such negligence was the proximate cause of the deceit”.  AR 65.  The ALJ’s own findings show that DCFS’s actions were the proximate cause of the lengthy delay in approving Alvarez’s home.  AR 70-71.  Furthermore, Gajanich does not use the balancing test for negligence – namely, balancing “the degree of ‘culpability or negligence of the public agency or its representatives in their conduct or advice’ and ‘the seriousness of the impact or effect of such conduct or advice on the claimant.’” Canfield, supra, 67 Cal. App. 3d at 732.  Pet. Op. Br. at 10.

This argument is incorrect.  The ALJ did not state that estoppel may only ever be applied when an agency is the sole cause of negligence; she only noted that the County was not the sole cause of negligence.  AR 71.  This is a relevant consideration in determining the degree of an agency’s negligence.  DSS Opp. at 16.  As discussed post, the period when the County was solely negligent is an important consideration in the necessary balancing of hardship and public interest.  Gajanich merely holds that a party’s negligence must be a proximately cause of injury, not the only cause.  As such, the ALJ’s reliance on that case is not inconsistent with weighing the agency’s culpability in considering the public policy requirement of equitable estoppel under Driscoll, supra, 67 Cal. 2d at 308, Canfield, supra, 67 Cal.App.3d at 732, and Berlin v. McMahon, supra, 26 Cal.App.4th at 75.

c. Alvarez’s Contribution to the Delay

On a related issue, Alvarez notes that the ALJ found that the County’s negligence was lessened by “some of the delays” attributable to Alvarez.  AR 70.  DSS Directives section 5-02 require an applicant to be in “good physical and mental health.” They indicate that “[v]erification of good physical health of each applicant shall include form RFA 07: Health Questionnaire, or a health screening by a health professional that was issued not more than one year prior to the date of application.”  Id.  Alvarez contends that the ALJ ignored her own finding that Alvarez promptly provided unredacted medical records upon request.  AR 14.  By April 2017, Alvarez had provided DCFS with comprehensive documentation of her mental and physical health, which included doctor’s notes and a completed version of the RFA 07 form.  Pet. Op. Br. at 11.

The ALJ was entitled to address whether Alvarez contributed to the delay, including her requests for extension, redactions of medication, and the late disclosure of prior mental health issues.  AR 13-14, 70-71, 597–99.  Otherwise, the County’s negligence may not be a proximate cause of the delay or one that is sufficiently egregious to be the exceptional case justifying estoppel against the agency.

d. The Newness of the Emergency Care Program

Alvarez argues that the ALJ erroneously reasoned that the “degree of County’s negligence is lessened given that the county recently began the new RFA program.” AR 70.  The newness of the RFA program is irrelevant and does not excuse the County’s negligence.  The ALJ erroneously ignored case law that a government backlog does not constitute good cause for the RFA delay.  AR 97.  The ALJ relied on the newness of the RFA program even though DCFS did not provide any evidence that the newness of the RFA program caused the County’s delay.  Pet. Op. Br. at 11.

There is nothing wrong with the ALJ considering the newness of the RFA program in evaluating the County’s culpability. For example, CSWs may be confused by program requirements or what discretion they have in implementing the program, which would affect culpability.  The court agrees, however, that the ALJ had no evidence that the newness of the program caused any delay by the County and should not have relied on speculation to this effect.  See post.

5. The ALJ Improperly Balanced Alvarez’s Burden Against the Public Policy Affected by Estoppel

Alvarez argues that, like the petitioners in Lentz and Driscoll, she seeks to apply the doctrine of estoppel against a public agency to receive public benefits.  Yet, the ALJ ignored the individual burden analysis required under California law and considered only the severity of the County’s actions rather than the totality of the circumstances as required.  The ALJ made no reference to how the County’s delay burdened Alvarez, a caregiver of a child with cerebral palsy who is a quadriplegic and suffers from mild mental retardation and seizures.  The ALJ failed to apply the individual burden analysis and ignored the significant burdens the County’s negligence placed on her.  Pet. Op. Br. at 8-9.

DSS responds that the ALJ’s decision specifically noted Alvarez’s declaration detailing the credit card debt she incurred for Riena’s expenses that were not covered by Medi-Cal during the pendency of her RFA application.  AR 16.  The significance of Alvarez’s financial burden was well-understood and the ALJ did not deny her financial relief.  The ALJ ordered the County to facilitate retroactive payments of CalWORKs benefits for the nine-month period that Riena was in Alvarez’s home prior to her approval as a resource family.[5]  DSS Opp. at 15.

It is true that the ALJ mentioned Alvarez’s burden in setting forth the facts, but she failed to analyze that burden as part of the balancing process.  AR 15, 66-72.  The burden on the individual asserting estoppel in welfare benefits cases is based on the fact that welfare benefits are intended to provide a basic means of subsistence to recipients and welfare works stand in a confidential relation to them.  Lentz, supra, 49 Cal.3d at 401-02.  A recipient’s justified reliance on a county welfare department can produce compelling hardship.  Id. at 402.  Similar hardships are at stake in a foster care benefits case.  The ALJ mentioned, but failed to analyze, Alvarez’s hardship in the balancing process.

The ALJ also was required to consider the other side of the balancing scale: whether the application of equitable estoppel could “nullify ‘a strong rule of policy, adopted for the benefit of the public.’”  Mansell, supra, 3 Cal.3d at 493.  Alvarez argues that the ALJ failed to discuss the impact that estopping the County would have on the public policy interests underlying the foster care system, and instead focused on whether the County’s acts were negligent or intentional. AR 70-72.  In this case, the application of equitable estoppel perfectly aligns with the public policy of the Approved Relative Caregiver program: “Foster children are some of the most vulnerable in our state.  It is vitally important that we do everything we can to help them succeed. This includes funding for caregivers, support services, and an expanded safety net for older children as they transition out of the foster care system.” AB 423 (2015-2016 Reg. Sess.) April 23, 2015.[6]  The public policy of supporting the caretakers of foster children weighs in favor of granting Alvarez, the caregiver of a foster child with special needs, retroactive benefits.  This analysis was largely absent from the ALJ’s reasoning.  Pet. Op. Br. at 9; Reply to DSS at 5.

            DSS responds that Alvarez ignores the purpose of the RFA program, which is to ensure that children are placed in safe homes with caregivers who will provide them the care they need.  ACL 16-10.  Alvarez needed to meet the substantive criteria for RFA, based on standards established by the state, to be eligible to receive AFDC-FC benefits.  42 U.S.C. §672(b); W&I Code §§ 11402, 16519.5.[7]  Consistent with federal law, state regulations restrict the availability of AFDC-FC benefits to approved resource families.  MPP §§ 45-302.22, 45-302.3-.31; DSS Directives §§ 7-01(f), 7-02(f).  Such funding limitations are fundamental to AFDC-FC payments and preserve the public fisc.  Application of estoppel to permit Alvarez to receive AFDC-FC benefits prior to complying with the substantive eligibility criteria for RFA would be a bestowal of benefits not contemplated by the Legislature.  See Lentz, supra, 49 Cal.3d at 401-02 (estoppel may not be a bar to substantive preconditions to benefits).  Thus, Alvarez is wrong that public policy must weigh in favor of equitable estoppel, and she has failed to show that the ALJ committed legal error in failing to do so.  DSS Opp. at 15-16; County Opp. at 14.

It is true that the public policy at stake is substantive and not procedural: Alvarez’s eligibility for RFA approval is a substantive issue.   Policy considerations may control the balancing when substantive preconditions to benefits are at issue.  See Lentz, supra, 49 Cal.3d at 401.[8]  If Alvarez was not eligible, then a grant of benefits would “be a bestowal of benefits not contemplated by the Legislature” that would be inconsistent with the purpose of the RFA program of ensuring that children are placed in safe homes.  

Alvarez also argues that withholding funding harms both Reina and Alvarez because an unfunded placement is inherently destabilizing and withholding funding to an existing placement does nothing to promote the security of that placement.  Alvarez contends that estoppel would have a minimal impact on public policy.  See Cnty. of Orange v. Carl D., (1999) 76 Cal. App. 4th 429, 441 (estoppel applied to prevent county from recouping children’s welfare assistance from father who unsuccessfully had been searching for them  because “[n]o injustice will result from application of an estoppel” and there would be “little if any impact upon the public interest”).  Both the ALJ and Respondents fail to articulate any cognizable negative impact applying equitable estoppel here would have on public policy.  Indeed, applying equitable estoppel in this case would support the public policy in ensuring foster care children with special needs are given proper care.  Reply to DSS at 5-6.

The court generally agrees with Alvarez although her point is overstated.  The public policy at stake is Alvarez’s eligibility for RFA approval, which is a substantive one.  But this substantive policy of ensuring eligibility is supplemented by the fact that the RFA approval process is intended to be an expedited assessment of individuals and families to provide foster care.  W&I Code §16519.5(a).  It also is embodied in the more general directive that public benefits aid “shall be administered and services provided promptly” (W&I Code §10000) and DSS shall “endeavor at all times to perform [its] duties in such a manner as to secure for every person the amount of aid to which he is entitled.”  W&I Code §10500.

As Alvarez notes (Reply to DSS at 6-7), the importance of expeditious assessment is underscored by the fact that six months after Petitioner’s RFA was approved, DSS recognized that its policy needed improvement and instituted Emergency Caregiver funding, which provides funding for foster caregivers during the RFA approval process.  AR 57.  This demonstrates that the RFA policy seeks to provide immediate financial support to foster caregivers, even before RFA approval.  Thus, the public policy to be weighed against Alvarez’s hardship is the assurance of her eligibility for RFA approval, performed in an expeditious manner.  The ALJ did not perform this evaluation.

In sum, the ALJ failed to balance Alvarez’s hardship against the public policy for assuring that she is qualified for RFA approval coupled with the public policy of expeditious assessment.

6. The Balancing Test Favors Alvarez

The balancing of the Alvarez’s financial burden against the public policy of the assurance of her eligibility for RFA approval, performed in an expeditious manner, is a mixed question of law and fact that weighs in Alvarez’s favor.

a.      Hardship

Alvarez suffered financial burden from her delayed approval.  Reina is a special needs child entitled to the highest level of funding available to foster caregivers. AR 2, 4.  Alvarez’s resulting financial impact was greater than for a neurotypical child of her age.  AR 3.

The extended delay in the RFA approval process was a great burden.  AR 106.  During the delay, Alvarez incurred credit card debt to provide for Reina.  AR 16, 106-07.  She had to purchase special cleansing products and foods Reina required.  AR 107.  She also had to make out-of-pocket modifications to the home, including ramps, special shower bars, and chairs.  AR 16, 107.  She regularly called DCFS because she was running out of money and feared losing Reina.  AR 107.  This made her caretaking burdensome and amplified Alvarez’s financial burden during her delayed approval.  Reply to DSS at 6.

The ALJ’s finding that there is no evidence that Alvarez would not have taken the placement of Reina, or would have requested that Reina be moved out, if she had been aware that the foster care funding would not be available, is not particularly significant.  AR 70.  The balancing requires the analysis of the burden on the individual.  A financial cost may be more significant for a poor person than someone who is wealthy, and Alvarez told DCFS that she would need financial assistance to support Reina.  AR 9. 

b.      Public Policy

With respect to the public policy of expeditious assurance of Alvarez’s eligibility for RFA approval, the ALJ correctly found that the County did not comply with the timeframes imposed under the RFA Written Directives for placement of a child on an emergency basis.  AR 68.  When a child is placed in a home on an emergency basis, the county shall complete a Comprehensive Assessment of the RFA applicant, and prepare a Written Report, within 90 days of the date the child is placed, unless good cause exists.  RFA Directives §7-01(d).  There is no documentation that, upon Reina’s emergency placement, the County discussed funding options, ensured that Alvarez submitted an application, or had an RFA CSW conduct a face-to-face interview of Alvarez within five business days of the placement.  AR 68.  Alvarez was not approved until eight months after Reina was placed in her home.  AR 17. DCFS also did not document any good cause for the delay as required.  AR 68.  Thus, the evidence shows that DCFS was negligent in failing to complete a timely assessment and in its obligation to document any good cause for delay.[9]

DSS argues that Alvarez’s conduct contributed to the delay in RFA approval.  DSS notes that Alvarez premised her estoppel claim on a contention that her home was RFA approvable on April 9, 2017 and that she should have been approved to receive AFDC-FC benefits on that date.  AR 81.  The weight of the evidence shows that not to be true.  The County was still receiving character references and health screening forms as late as April 17, 2017 (AR 12, 13), Alvarez did not submit to Live Scan to complete her criminal record clearance until May 12, 2017 (AR 12), following a Corrective Action Plan in January 2017, Alvarez’s home did not meet home environment assessment standards until June 15, 2017 (AR 11), and the County had to follow up with Alvarez in May 2017 because she redacted her prior psychiatric medications from a health evaluation form.  AR 13-14.  Therefore, Alvarez’s home was not approvable on April 9, 2017 due in part to her failure to provide all required documents by that date.  AR 71.  DSS Opp. at 18; see County Opp. at 14.

The court accepts Alvarez’s contribution to the delay as a legitimate factor.  The totality of the circumstances should be examined before applying estoppel against the government.  Driscoll, supra, 67 Cal.2d at 308.  Moreover, the public policy of assuring Alvarez’s eligibility for RFA approval means that the County’s negligence cannot be sufficiently egregious to warrant estoppel during a period when Alvarez is contributing to the delay.  While DCFS was negligent during the period from Alvarez’s February 17, 2017 RFA application to her last submission in June 2017, a conclusion cannot be drawn that this negligence was so egregious as to warrant estoppel until Alvarez completed all her necessary tasks and submissions. 

DSS relies on Alvarez’s mental health history as contributing to the delay.  DSS Opp. at 19.  On April 13, 2017, Alvarez filled a RFA health screening form in which she admitted that she had mood disorder and anxiety, noting that she was stable and followed by a psychiatrist.  AR 597.  Her psychiatrist corroborated her stability AR 599.  In April 2017, Alvarez sent DCFS some of her medical records, which redacted medications she no longer took.  AR 106.  She was embarrassed because those medications were psychiatric medications.  AR 106.  On May 23, 2017, CSW Mata met with Alvarez and her husband.  AR 601.  Alvarez had a copy of her medication history from her primary physician.  AR 601.  Alvarez explained that she had redacted them because she was no longer on certain medications.  AR 601.  Mata asked Alvarez for an unredacted copy, which Alvarez provided as soon as possible for fear of losing Reina.  AR 106, 601.

Alvarez’s disclosure of mental health records triggered only a possibility that the County needed to investigate Alvarez’s mental health further, but it is not a foregone conclusion that DCFS would do so.  After all, she had filled a RFA health screening form on April 13, 2017 admitting that she had mood disorder and anxiety and that she was stable and followed by a psychiatrist.  It is not clear that DCFS would want to do more when she disclosed her no longer taken medications in late May 2017.

In any event, there is no evidence that DCFS in fact investigated Alvarez’s mental health any further.  The ALJ speculated that the County delayed home approval to investigate Alvarez’s mental health status, stating: “[G]iven the disclosure of claimant’s prior mental health problems, including a 5150 detention, the additional time spent by the county in completing the assessment, from in or around May 23, 2017 through September 11, 2017 was warranted.”  AR 70-71.  There is no evidence supporting this speculative conclusion.[10] 

The ALJ also took into consideration that the RFA program had only been implemented on January 1, 2017, eight days before Reina’s emergency placement with Alvarez.  The ALJ reasoned that the newness of the RFA assessment process to County personnel likely contributed to delays.  AR 70.  DSS argues that the ALJ had discretion to consider this mitigating factor when determining the degree of the County’s negligence.  DSS Opp. at 18-19.

The court has little doubt that the newness of the RFA program and DCFS confusion about it could have led to delay.  Again, however, there is no evidence that it did so. 

c.       Balancing

Alvarez made her best effort to do all that DCFS asked of her as quickly as possible.  AR 106.  She spent a lot of time re-faxing documents to DCFS when it claimed they were lost or never received.  AR 106.  Alvarez completed all her tasks at the latest on June 15, 2017 when a CSW confirmed via the Home Environment Checklist that Alvarez’s home met all the requirements for RFA.  AR 592-93.  From that date until September 11, 2017, there is no evidence that Alvarez contributed to the delay in any way.  In June 2017, she was told the process was done.  AR 106.  Between June and September 2017, she was never asked to provide any additional documents.  AR 106.  There also were multiple entries in DCFS’s computer regarding communications with Alvarez about the delay in funding, including July 17, August 2, August 23, 2017.  AR 16-17. 

Balancing Alvarez’s hardship against the public policy of thoroughly assuring that she is eligible for RFA approval coupled with the public policy of expeditious assessment, the ALJ’s “all or nothing” approach to retroactive benefits was an error.  The evidence shows that both the County and Alvarez contributed to the delay until June 15, 2017, after which the County’s negligence was the sole cause of delay.  The application of equitable estoppel to the County’s negligence before Alvarez completed all her tasks and submissions would not be sufficiently egregious as to warrant estoppel.  After June 15, however, the County’s negligence was sufficiently egregious that it became the exceptional case where the ends of justice demand application of equity to require the county to issue funding to her.  This retroactive funding should occur at the dual agency foster care rate with the $1000 supplement from June 15 to September 11, 2017.

            7. Entitlement to Attorney’s Fees

Alvarez is statutorily entitled to an award of reasonable attorney’s fees and costs.  See W&I Code §10962 (“The applicant or recipient shall be entitled to reasonable attorney's fees and costs, if he obtains a decision in his favor.”).  See also Cnty. of Humboldt v. Swoap, (1975) 51 Cal. App. 3d 442, 445 (“if the recipient's interests were safeguarded through the assistance of counsel, Welfare and Institutions Code section 10962 requires an award of reasonable attorney's fees”).  Attorney’s fees pursuant to W&I Code section 10962 may be awarded to a legal aid agency that represented the petitioner.  See Trout v. Carleson, (1974) 37 Cal. App. 3d 337, 343 (attorney fees may be awarded in welfare cases even though applicant is represented by a legal aid attorney under section 10962).

Alvarez adds that she is entitled to pre-judgment interest on the award.  See, e.g., Burch v. Prod, (1979) 90 Cal. App. 3d 987, 992–93 (directing trial court “to order AFDC benefits retroactively and award prejudgment interest and reasonable attorney's fees” under W&I Code section 10962); cf. Am. Fed'n of Lab. v. Unemployment Ins. Appeals Bd., (1996) 13 Cal. 4th 1017, 1042–43 (holding that while a court may award prejudgment interest on its judgment following a mandamus action to recover benefits wrongfully withheld by an administrative agency, administrative law judges do not have that authority.  Reply to County at 1.

The County notes that the TAP’s second cause of action for traditional mandamus alleged that Respondents County and DSS both failed to comply with the DSS Directives, failed to conduct the requisite oversight of placements between January 2017 and March of 2018 (TAP, ¶36), and failed to perform their legal duties under state and federal law.  TAP, ¶33.  Alvarez has presented no evidence in support of these allegations, despite several months of taking discovery from Respondents.  County Opp. at 15-16.

Alvarez’s last-minute concession in a footnote that she is not pursuing the second cause of action also comes after months of litigation in which she failed to comply with the court’s orders. Alvarez filed her First Amended Petition on March 10, 2022.  On March 17, 2022, the court ordered her to add the County as Respondent to the traditional mandamus claim and as a Real Party-in-Interest to the administrative mandamus claim and issued an OSC re sanctions for failure to comply.  On March 11, 2022, the court continued the OSC re sanctions to July 21, 2022 based on a stipulation between DSS and Alvarez.  The County had not yet appeared.

On July 21, 2022, Alvarez filed the Second Amended Petition naming the County as a Respondent for both causes of action.  County Opp. at 16-17.  That day, the court held a hearing on the OSC re sanctions. The court found that an amended petition properly naming the County had not been filed in compliance with the court’s previous order.  The next day, Alvarez filed the TAP, again naming the County as a Respondent for both causes of action, not as a Real Party for administrative mandamus.  On July 28, 2022, the court held a hearing on the OSC re sanctions. Counsel for all three parties appeared and the Court discharged the OSC.  The court set a discovery cut off for October 27, 2022.  County Opp. at 17.

The County argues that, as a result of being a Respondent for both causes of action, it was required to file an Answer for both causes of action and to respond to discovery.  Alvarez has abandoned the second cause of action in her opening brief.   At a minimum, Alvarez has not prevailed on the frivolous second cause of action and is not the prevailing party to the lawsuit.  As such, she is not entitled to attorney’s fees and costs on the first cause of action.  County Opp. at 15-16.

The County’s argument is a non-sequitur.  Apparently, Alvarez failed to follow the court’s orders that only the Director of DSS should be a respondent for the administrative mandamus claim (W&I Code §10962), but the County provides no connection between this fact and Alvarez’s abandonment of the traditional mandamus claim in which it was properly named as Respondent.  Nor does the dismissal of one legal theory bear on Alvarez’s entitlement to attorney’s fees, costs, and pre-judgment interest on her award.

The County also argues that it is entitled to attorney’s fees on the abandoned traditional mandamus cause of action.  Given the procedural history, and the choices of Alvarez and her counsel to litigate the frivolous second cause of action, an order requiring her to pay fees to the County is appropriate under CCP section 128.5.  The County prayed for attorney’s fees in its Answer.  Answer, p. 15, ¶4.  County Opp. at 17.

Alvarez correctly argues that the County’s request for attorney’s fees is procedurally defective.  CCP section 128.5 requires a separately noticed motion and a reasonable opportunity to respond before sanctions can be imposed for a frivolous filing.  CCP §128.5(f)(1); Levy v. Blum, (2001) 92 Cal.App.4th 625, 635. The County raised CCP 128.5 for the first time in its opposition, which is non-compliant with this rule.   See Code Civ. Proc. § 128.5 (f)(1)(A) (a request for fees “shall be made separately from other motions or requests.”). Reply to County at 2.

Nor has the County shown that pleading the second cause of action was a tactic (1) totally and completely without merit, measured by an objective reasonable attorney standard, or (2) motivated solely by an intention to harass or cause unnecessary delay, measured by a subjective standard.  CCP §128.5(a); Weisman v. Bower, (1987) 193 Cal. App. 3d 1231, 1236.  Alvarez’s decision to abandon her traditional mandamus claim by itself does not support a finding of bad faith, frivolous, or solely intended to delay.  Sanctions for frivolous filings should not be used as a means of shifting the burden of litigation expenses and should be used only in the clearest cases to deter the most egregious conduct.  In re Marriage of Flaherty, (1982) 31 Cal. 3d 637, 650-51.  The County is not entitled to attorney’s fees under section 128.5.

F. Conclusion

The TAP is granted.  The ALJ failed to properly balance Alvarez’s hardship against the public policy for assuring that she is qualified for RFA approval coupled with the public policy of expeditious RFA assessment.  The proper balancing shows that after June 15, 2017 the County’s negligence was sufficiently egregious that it became the exceptional case where the County is required to issue funding to her at the dual agency foster care rate.  A writ shall issue directing DSS to set aside its decision and for DCFS to pay Alvarez retroactive benefits at her dual-agency rate with a supplement of $1,000 from June to September 11, 2017, with an award of pre-judgment interest and attorney's fees.  See W&I Code §10962.  

Alvarez’s counsel is ordered to prepare a proposed judgment and writ of mandate, serve them on counsel for the opposing parties for approval as to form, wait ten days after service for any objections, meet and confer if there are objections, and then submit the proposed judgment and writ along with a declaration stating the existence/non-existence of any unresolved objections.  An OSC re: judgment is set for April 4, 2023 at 1:30 p.m.