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Small World Early Childhood Center v. Ohio Dept. of Job & Family Services

Court of Appeals of Ohio, Second District, Montgomery

October 27, 2017

SMALL WORLD EARLY CHILDHOOD CENTER Plaintiff-Appellant
v.
OHIO DEPT. OF JOB & FAMILY SERVICES Defendant-Appellee

         Civil Appeal from Common Pleas Court T.C. NO. 16-CV-5982

          JOHNNA M. SHIA, Atty. Reg. and ANTHONY S. VanNOY, Atty., Attorney for Plaintiff-Appellant

          REBECCA L. THOMAS, Atty., Assistant Attorney General, Health and Human Services Section, Attorney for Defendant-Appellee

          OPINION

          FROELICH, J.

         {¶ 1} Small World Early Childhood Center appeals from a judgment of the Montgomery County Court of Common Pleas, which dismissed, pursuant to Civ.R. 12(B)(1), Small World's administrative appeal of two decisions by the Ohio Department of Jobs and Family Services (ODJFS). For the following reasons, the trial court's judgment will be affirmed.

         I. Background and Procedural History

         {¶ 2} Small World is a child daycare provider that had a contract with ODJFS to provide publicly-funded child care. In the spring of 2015, ODJFS received allegations that Small World was improperly in possession of Ohio Electronic Child Care (ECC) swipe cards and that Small World's staff was using the cards to check children into the center when they were not actually in attendance. ODJFS conducted an investigation.

         {¶ 3} According to the termination decision on appeal, ODJFS personnel conducted a timed observation on April 23, 2015 and counted 62 children entering the center between 6:00 a.m. and 7:00 a.m. During the same time, Ohio ECC records showed 170 children were swiped in as having arrived at the center. ODJFS personnel returned on May 21, 2015, and performed another timed observation between 6:00 a.m. and 8:15 a.m. and observed 105 children arriving. Ohio ECC transactions for that same period showed that Small World had 217 children swiped in as arriving and receiving care. ODJFS staff entered the building and conducted a head-count; 108 children were present.

         {¶ 4} ODJFS staff identified themselves to Small World staff, spoke to the owner, and asked for permission to search the facility. ODJFS located 99 Ohio ECC swipe cards. Interviews with Small World staff indicated that the center's owner, administrator, and office managers used the swipe cards. ODJFS collected billing and attendance records from Small World. ODJFS concluded that it had overpaid Small World by $442, 963.67.

         {¶ 5} On April 15, 2016, ODJFS provided Small World with a written Child Care Provider Investigative Report, recommending suspension and termination of the Provider Agreement, as well as a Proposed Suspension and Termination of Provider Agreement and Overpayment Collection Notice. (The investigative report and the notice are not part of the record.) On April 20, 2016, Small World filed an appeal of the suspension and termination decision with ODJFS. The same day, it sought reconsideration by ODJFS of the overpayment calculation.

         {¶ 6} On November 16, 2016, ODJFS sent two decision letters to Small World, one of which denied Small World's appeal of the suspension and termination decision and the other denying reconsideration of the overpayment calculation. The reconsideration decision expressly stated that the "reconsideration decision is final and not subject to further review by the department." The letter informing Small World of the suspension and termination decision similarly stated, "This appeal decision is final and not subject to further review by the department." Both determinations were made by the bureau chief of ODJFS's Office of Fiscal and Monitoring Services, Monitoring and Consulting Services Division.

         {¶ 7} On November 22, 2016, Small World filed a notice of appeal, pursuant to R.C. 119.12 and R.C. 5101.35, in the Montgomery County Court of Common Pleas. Small World claimed that both ODJFS decisions were "not supported by reliable, probative, and substantial evidence and [were] not in accordance with law." Small World filed motions to stay the ODJFS decisions and for court-ordered mediation. The court denied both motions.

         {¶ 8} On December 19, 2016, ODJFS moved to dismiss the appeal for lack of jurisdiction, pursuant to Civ.R. 12(B)(1). ODJFS argued that the decisions on appeal were not "adjudications" by an "agency" for purposes of R.C. Chapter 119, nor was this the type of matter that triggered rights conferred or duties imposed under that chapter. ODJFS further argued that R.C. 5101.35 provided no statutory authority for an appeal of the two decisions. Small World opposed the motion.

         {¶ 9} On January 26, 2017, the trial court agreed with ODJFS and granted the motion to dismiss for lack of jurisdiction. Small World appeals the trial court's decision.

         II. Jurisdiction to Small World's Administrative Appeal

         {¶ 10} In its sole assignment of error, Small World claims that "[t]he trial court erred when it dismissed Small World's Administrative Appeal because Small World was entitled to judicial review pursuant to the Ohio Revised Code."

         {¶ 11} A motion to dismiss for lack of subject matter jurisdiction, pursuant to Civ.R. 12(B)(1), challenges whether the complaint raises any cause of action cognizable by the forum. State ex rel. Ohio Civ. Serv. Emps. Assn. v. State, 146 Ohio St.3d 315, 2016-Ohio-478, 56 N.E.3d 913, ¶ 12. We review de novo the trial court's dismissal of Small World's administrative appeal for lack of jurisdiction. See id.; Crawford v. United Dairy Farmers, Inc., 2d Dist. Montgomery No. 25786, 2013-Ohio-5047, ¶ 8.

         {¶ 12} "It is well-settled law that a state is not subject to suit in its own courts unless it expressly consents to be sued." Proctor v. Kardassilaris, 115 Ohio St.3d 71, 2007-Ohio-4838, 873 N.E.2d 872, ¶ 7. Since 1913, the Ohio Constitution has provided that "[s]uits may be brought against the state, in such courts and in such manner, as may be provided by law." Ohio Constitution, Article I, Section 16. However, this constitutional provision "did not provide specific consent for every state entity to be sued in every state court. Rather, it merely enabled the state to pass statutes consenting to be sued in specific ways; unless an explicit statutory waiver exists, the presumption of sovereign immunity applies." (Citations omitted.) Proctor at ¶ 8.

         {¶ 13} Article IV, Section 4(B) of the Ohio Constitution grants the Ohio legislature exclusive authority to define the jurisdiction of the courts of common pleas. Article IV, Section 4(B) provides, in relevant part, that courts of common pleas have "such powers of review of proceedings of administrative officers and agencies as may be provided by law."

         A. R.C. Chapter 5104

         {¶ 14} We begin with a review of the relevant portions of R.C. Chapter 5104, the chapter under which Small World contracted with ODJFS to receive public funds for child daycare. (Pursuant to R.C. 5101.30, ODJFS was designated as the state agency responsible for administration and coordination of federal and state funding for publicly funded child care in Ohio.)

         {¶ 15} Certain provisions governing publicly funded child care required the creation of a process for applying for publicly funded child care, as well as procedures for determining whether the applicant is eligible to receive publicly funded child care. See R.C. 5104.33 and R.C. 5104.34. R.C. 5104.34(A)(1) expressly provides that "[a]n applicant aggrieved by a decision or delay in making an eligibility determination may appeal the decision or delay to the department of job and family services in accordance with section 5101.35 of the Revised Code. The due process rights of applicants shall be protected."

         {¶ 16} R.C. 5104.31 specifies what entities may provide publicly funded child care, and R.C. 5104.32(A) requires that "all purchases of publicly funded child care shall be made under a contract entered into by a licensed child day-care center * * * and the department of job and family services." R.C. 5104.32(B) sets forth specific terms that are required to be included in each contract for publicly funded child care. R.C. 5104.32(A) further provides, in part:

To the extent permitted by federal law and notwithstanding any other provision of the Revised Code that regulates state contracts or contracts involving the expenditure of state or federal funds, all contracts for publicly funded child care shall be entered into in accordance with the provisions of this chapter and are exempt from any other provision of the Revised Code that regulates state contracts or contracts involving the expenditure of state or federal funds.

Small World was a licensed child daycare provider that contracted with ODJFS to provide publicly funded child care, ...


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