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High court: State can use foster child’s survivor benefits

The state has every right to use a foster child’s survivor benefits toward his care, the state’s top court has held.

The child and his lawyer or guardian, however, must be informed when the state applies for these benefits and when it receives them— to not do so would be a violation of the child’s due process rights, the court held.

The Court of Appeals also held that a juvenile court does not have authority in a dispute over the use of a foster child’s benefit payments because federal law dictates the appointment of payees and allocation of survivor benefits. These matters, the court held, should be handled in federal administrative and court systems.

Though the decision is not what advocates for foster child rights had hoped for, it will at least allow foster children to choose who the payee of their benefits are in the future, said Daniel L. Hatcher, a professor at the University of Baltimore School of Law who filed an amicus brief in the case along with the Public Justice Center, the National Association of Counsel for Children, First Star Inc. and the Children’s Advocacy Institute.

“I think the court got it wrong on the jurisdiction question and also got it wrong on saying the state could take the children’s money and apply it to state costs,” Hatcher said. “I think those are legally incorrect.”

Now that the state is required to give the child notice it is applying for survivor benefits, the child’s attorney will have a chance to object and ask that another payee besides the state be appointed. Those include a nonprofit organization, family member, attorney or even a law or accounting firm, Hatcher said.

“If foster care agencies are underfunded, is it really good policy to take assets for abused and neglected children in order to gain more government revenue?” Hatcher said. “I obviously think the answer to that is no.”

Ramesh Kasarabada, a professor at the University of the District of Columbia David A. Clarke School of Law, the attorney for the child in this case, did not return requests for comment. The Office of the Maryland Attorney General did not respond to a request for comment.

Ryan W., who was born in 1993, went into foster care in June 2002 at the age of 9. His mother, who had problems with drugs, died in August 2006 and his father, who had problems with alcohol, died in November 2008.

The Baltimore City Department of Social Services filed an application with the Social Security Administration to become Ryan W.’s payee for Old-Age, Survivors and Disability Insurance.

After the application was approved, the department did not notify Ryan W., his lawyer or the juvenile court.

The department received two lump sums covering the interim between the filing of the application and his parents’ deaths — one for his mother in November 2009 for $8,481 and $11,647.50 in December 2009 for his father. The department then collected $771 a month from December 2009 until February 2011, when Ryan turned 18. Ultimately, the department received $31,693.50, which the department used entirely for Ryan W.’s foster care.

In Maryland, this practice is “standard operating procedure,” said Ed Kilcullen, state director of the Maryland Court Appointed Special Advocates (CASA) Association, which advocates for abused and neglected children.

And while Ryan W.’s situation is not one Susan Burger, executive director of CASA of Baltimore, hears about often, she said she thought the benefits could be put to better use.

“I know with the push to move the older kids into living independently that one would think using that money to help them to learn to budget and manage their money could be very beneficial,” Burger said.

Ryan filed a lawsuit in April 2011, challenging the allocation of his benefits when he turned 18, claiming the department failed to determine what was in his best interests when allocating the money and failed to notify him it was collecting the funds.

A juvenile court held the department violated Ryan W.’s due process and equal protection rights when it failed to notify him it was using his survivor benefits. The court then ordered the department to hold $31,693.50 in a constructive trust for Ryan W.

The Court of Special Appeals, however, reversed the order, saying the juvenile court did not have the jurisdiction to order money be kept in a trust. The intermediate appellate court, however ordered the department reimburse Ryan W. for $8,075.32 for a period of time when his cost of care was lower.

The department filed a motion for reconsideration, disputing the amount it owed the child. In November 2012, the court issued an opinion on reconsideration, changing the reimbursement amount to $660.

Ryan W. petitioned the Court of Appeals to reverse the Court of Special Appeals’ decision.

Though the majority of the court found that federal law allowed the state to apply for and use a child’s survivor benefits, Judge Sally D. Adkins, joined by former Chief Judge Robert M. Bell, dissented.

In her dissenting opinion, Adkins contended the juvenile court had jurisdiction over Ryan’s case because he sought to recover funds through the common-law system since his claims were against the department, not the Social Security Administration.

Adkins held that his common-law cause of action for unjust enrichment or breach of fiduciary duty was not precluded by the Social Security Act.

“It is difficult to imagine any court — other than the juvenile court — more familiar with Ryan’s circumstances and thus in a better position to determine whether the Department’s use of the benefits in such a way was in Ryan’s best interest,” Adkins wrote.

WHAT THE COURT HELD

Case:

In Re: Ryan W., No. 95 & No. 101, September Term 2012, Argued June 5, 2013. Decided Sept. 26, 2012. Opinion by Harrell, J. Dissenting opinion by Adkins, J. and Bell, C.J. (ret.).

Issue:

Can the state collect survivor benefits for a child in the foster care system and use it for his care without informing him it is doing so?

Holding:

The Court of Appeals held that under federal law, the state can apply for and collect a foster child’s survivor benefits, but must inform the child and his legal representative of the action.

Counsel:

Ramesh Kasarabada, University of the District of Columbia David A. Clarke School of Law, for petitioner; Julia Doyle Bernhardt, Maryland Office of the Attorney General, for respondent.

RecordFax 13-0926-20 (53 pages).