may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2002).
IN COURT OF APPEALS
the Matter of the Revocation of the
Family Child Care License of
Minnesota Department of Human Services
File No. 595
David J. Hvistendahl, Mary L. Hahn, Hvistendahl, Moersch & Dorsey, P.A., 311 South Water Street, P.O. Box 651, Northfield, MN 55057 (for petitioner Beckman)
Mike Hatch, Attorney General, 1800 NCL Tower, 445 Minnesota Street, St. Paul, MN 55101-2134; and
Paul Beaumaster, Rice County Attorney, Barbara J. Harrington, Assistant County Attorney, Rice County Courthouse, 218 Northwest Third Street, Faribault, MN 55021 (for respondent Department of Human Services)
Considered and decided by Klaphake, Presiding Judge, Peterson, Judge, and Minge, Judge.
In this appeal by writ of certiorari relator Linda Beckman challenges the revocation of her child-care license arguing that the Commissioner of Human Services was biased and arbitrarily rejected the Administrative Law Judge’s recommendation that the license be reinstated. We affirm.
Relator Linda Beckman (relator) operated a child-care facility in her home in Northfield under a Class C-3 Group Family Child Care license. Relator’s husband, Donovan Beckman, (Beckman) was the second adult caregiver in the facility and has helped care for the children in the facility for five years.
On April 16, 2002, police received a call from a neighbor who lived in an apartment overlooking relator’s backyard approximately “half a football field away.” The neighbor reported that she saw an older man shake a toddler “like a rag-doll,” put the child down hard on the ground twice, and strike the child on the head with his hand. The man was later identified as Beckman and the child as E.B.
Rice County Social Services (RCSS) investigated the report. During the investigation, children from the child-care facility reported that Beckman hit children with a cane. RCSS made findings of maltreatment and disqualification and recommended an immediate temporary suspension of relator’s child-care license, and respondent Department of Human Services (DHS) ordered a temporary immediate suspension. Relator requested reconsideration of the maltreatment and disqualification determinations, and upon reconsideration, the determinations were affirmed. The Commissioner of Human Services (commissioner) issued an order revoking relator’s license, and relator appealed the order and the maltreatment and disqualification determinations.
A hearing was held before an Administrative Law Judge (ALJ). The ALJ concluded that the commissioner and Rice County failed to prove by a preponderance of the evidence that Beckman in any way abused or engaged in maltreatment of E.B. or any other child and recommended that the temporary immediate suspension and the revocation of relator’s child-care license be reversed and the license be reinstated. The commissioner rejected the ALJ’s recommendation and affirmed the maltreatment and disqualification determinations and the revocation of relator’s license.
“Decisions of administrative agencies enjoy a presumption of correctness, and courts must show deference to the agency’s expertise and special knowledge in its field of technical training, education and experience.” In re Petition of Space Ctr. Transp., 444 N.W.2d 575, 579 (Minn. App. 1989), review dismissed (Minn. Oct. 19, 1989). The reviewing court must uphold an agency decision unless the decision violates the constitution, exceeds the agency’s authority or jurisdiction, results from unlawful procedure or other error of law, is not supported by substantial evidence, or is arbitrary and capricious. Minn. Stat. § 14.69 (2002). “The party seeking review of the agency action has the burden of proving that the agency’s conclusions violate one or more of the provisions of section 14.69.” In re Space Ctr., 444 N.W.2d at 579.
1. Rejection of ALJ’s Credibility Determination
In his findings of fact, the ALJ stated:
Having observed the demeanor of the witnesses at the hearing, the Administrative Law Judge finds the witnesses testifying on behalf of [relator] to be credible, corroborative, and believable, and the testimony of the employees of the County not to be credible, especially as to the lack of any communication among employees of RCSS regarding the investigation and prefatory to interviews with the children.
The commissioner rejected the ALJ’s finding and found that
[n]otwithstanding his having observed the demeanor of the witnesses at the hearing, the Administrative Law Judge’s findings regarding the witnesses testifying on behalf of [relator] being credible, corroborative, and believable are not supported by the record as a whole, nor does the record support the Administrative Law Judge’s findings regarding the lack of credibility of the testimony of the employees of the County.”
Relator argues that the commissioner’s rejection of the ALJ’s credibility determination is, on its face, arbitrary and capricious, made upon unlawful procedure, and not supported by substantial evidence in the record.
The ALJ’s functions are subordinate to the agency. City of Moorhead v. Minn. Public Utils. Comm’n, 343 N.W.2d 843, 847 (Minn. 1984). The ALJ’s function is to preside at the hearing and make recommendations for decision. Id. “But the agency is not bound by the findings and recommendations of the [ALJ].” Id. (quotation omitted) (citing Kenneth C. Davis, Administrative Law Text, § 10.07 (3rd ed. 1972)). “In this sense, the relationship [between the ALJ and the agency] differs from that of an appellate court reviewing a lower court’s findings of fact: an agency could make new findings and decide contrary to the [ALJ’s] recommendation. A[n ALJ] takes no power away from an agency.” Id. (quotation omitted) (citing Kenneth C. Davis, Administrative Law Text, § 10.04). However, “the [ALJ’s] findings should not be taken lightly.” Beaty v. Minn. Bd. of Teaching, 354 N.W.2d 466, 472 (Minn. App. 1984).
When an agency rejects or significantly deviates from the [ALJ’s] findings, it should explain, on the record, its reasons for doing so. Failure to do so evidences the agency’s desire to exercise its will and not its judgment. A[n ALJ’s] report and recommendations should not be summarily rejected without reasons.
In the memorandum accompanying his order, the commissioner explained his reasons for rejecting the ALJ’s credibility determination. The commissioner stated:
Finally, the Commissioner has modified the findings of the Administrative Law Judge regarding the credibility of witnesses. These modifications were not made lightly, but only after a thorough examination of the record failed to reveal any objective evidence to support the Administrative Law Judge’s stated perception.
Allegations of Bias
The Administrative Law Judge concluded that the investigation and ultimate conclusion of the department was biased based on the fact that county employees who were involved in the process also had children in the child care facility. It is often the case, particularly in smaller counties, that multiple functions related to child maltreatment investigations are centralized within one department. It is also common in a small community like the one in question, for persons employed by the agency completing the investigation to know the license holders. However, prior to the maltreatment determinations, disqualification, suspension and revocation being issued against the license holder, the state department of licensing reviewed the case and concluded that the actions being proposed by the local unit of government were supported by strong evidence.
Relator argues that the commissioner did not provide a sufficient basis for rejecting the ALJ’s credibility decision. But in making this argument, relator fails to recognize that the ALJ and the commissioner treated witness credibility in distinctly different ways. Based on witness demeanor, the ALJ found that the witnesses for RCSS who conducted the investigation were not credible, and, in turn, found that Beckman did not maltreat E.B. on April 16, 2002, and did not strike, physically abuse, or inflict corporal punishment on other children. In other words, the ALJ found that because the investigators’ testimony was not credible, the results of their investigation were not reliable.
In contrast, the commissioner, who did not observe witness demeanor, examined the record, which included transcripts and recordings of the interviews conducted during the investigation, and found that because there was strong evidence to support the recommendations made by RCSS, the record did not support the ALJ’s determination that the RCSS witnesses were not credible. In other words, the commissioner found that because the record produced during the investigation contained strong evidence that supported the RCSS’s recommendations, the ALJ could not reject the results of the investigation based solely on a subjective determination that the investigators were not credible.
The commissioner did not simply reject the ALJ’s credibility determination without reason, as relator suggests. The commissioner considered the entire record, which included the record produced during the investigation, the record produced during the hearing, and the ALJ’s findings, conclusions, and recommendations. Based on the entire record, the commissioner concluded that the ALJ’s credibility determination, which was based only on the ALJ’s observation of witness demeanor, was not a sufficient basis for rejecting the recommendations made by RCSS. This reasoning indicates that the commissioner was not trying to exercise his will rather than his judgment, and it is not arbitrary and capricious. See Markwardt v. State, Water Res. Bd., 254 N.W.2d 371, 374 (Minn. 1977) (agency decision is arbitrary and capricious when it represents agency’s will and not its judgment); In re Petition of Bailey, 626 N.W.2d 190, 196 (Minn. App. 2001) (stating “agency’s decision is arbitrary and capricious when it is ‘based on whim or is devoid of articulated reasons’”).
The commissioner’s decision is supported by substantial evidence in the record. Substantial evidence means “(1) such relevant evidence as a reasonable mind might accept as adequate to support a conclusion; (2) more than a scintilla of evidence; (3) more than some evidence; (4) more than any evidence; or (5) the evidence considered in its entirety.” Minn. Ctr. for Envtl. Advocacy v. Minn. Pollution Control Agency, 644 N.W.2d 457, 466 (Minn. 2002). The record includes transcripts and recordings of interviews that the RCSS investigators conducted with children who attended relator’s child-care facility and with the neighbor who reported the April 16, 2002, incident. In the interviews, some of the children and the neighbor described incidents where Beckman struck, physically abused, or inflicted corporal punishment on children who attended relator’s facility. The statements made during these interviews are more than a scintilla of evidence that supports the commissioner’s determination that the RCSS’s recommendations should not be rejected as unreliable based only on the demeanor of county employees when they testified before the ALJ.
2. Administrative Procedure Act
Without citing any specific errors, relator argues that the commissioner’s order does not comply with Minn. Stat. § 14.62, subd. 1 (2002), because the order does not contain reasons for each instance where the commissioner rejected or modified one of the ALJ’s finding or conclusions.
Minn. Stat. § 14.62, subd. 1, provides that “[a] decision or order that rejects or modifies a finding of fact, conclusion, or recommendation contained in the report of the administrative law judge . . . must include the reasons for each rejection or modification.” The commissioner’s order does not explicitly state a reason for each rejection or modification. But for virtually every finding of fact that was rejected or modified, the order includes a citation to the item in the record that provides the basis for the commissioner’s finding. And the reasons for rejecting or modifying the ALJ’s conclusions are either self-explanatory based on the text of the changes or they are explained in the memorandum that accompanies the order. Without any analysis of a specific failure to provide a reason for a rejection or a modification, we conclude that relator has not met her burden of proving that the commissioner violated Minn. Stat. § 14.62, subd. 1, by not adequately explaining the bases for his modifications and rejections.
3. Relator’s Due Process Rights
Relator contends that the commissioner’s order constructively denied her procedural-due-process rights because the commissioner (1) ignored the evidence that she presented at the hearing; (2) was not an un-biased decision maker; and (3) did not make a reasonable decision based on the record. The procedural-due-process protections to which relator is entitled “include reasonable notice, a timely opportunity for a hearing, the right to be represented by counsel, an opportunity to present evidence and argument, the right to an impartial decisionmaker, and the right to a reasonable decision based solely on the record.” Humenansky v. Minn. Bd. of Med. Exam’rs, 525 N.W.2d 559, 565 (Minn. App. 1994), review denied (Minn. Feb. 14, 1995).
“This court reviews de novo the procedural due process afforded a party.” Zellman ex rel. M.Z. v. Indep. Sch. Dist. No. 2758, 594 N.W.2d 216, 220 (Minn. App. 1999), review denied (Minn. Jul. 28, 1999). Relator makes no separate arguments to support her contention that she was denied her procedural-due-process rights; she simply refers to her arguments that the commissioner improperly rejected the ALJ’s credibility determinations and failed to provide reasons for each instance where the commissioner rejected or modified one of the ALJ’s finding or conclusions. We have already addressed these arguments, and we will only add with respect to procedural due process that relator was given a full evidentiary hearing with a right to counsel and an opportunity to call witnesses and cross-examine witnesses. Relator cites no evidence that the commissioner was not impartial or ignored the evidence that relator presented at the hearing. The record indicates that the commissioner reviewed the record and reached a different conclusion than the ALJ; the commissioner disagreed with the ALJ that the manner in which RCSS conducted its investigation made the results of the investigation unreliable.
4. Relator’s Statement of the Facts
In its brief, respondent contends that because the statement of facts in relator’s brief violates Minn. R. Civ. App. P. 128.02, subd. 1(c), and Minn. R. Civ. App. P. 128.03, the statement of facts “should be struck as unsatisfactory and in violation of the Rules.” Minn. R. Civ. App. P. 127 provides that “an application for an order or other relief shall be made by serving and filing a written motion for the order or relief.” Because respondent has not served and filed a written motion, its request to strike relator’s statement of facts is not properly before us, and we will not consider the request.