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Spurgeon v. Missouri Consolidated Health Care Plan

Court of Appeals of Missouri, Western District, Second Division

March 20, 2018


         Appeal from the Circuit Court of Cole County, Missouri The Honorable Jon Edward Beetem, Judge.

          Before: James Edward Welsh, Presiding Judge, Alok Ahuja, Judge, Anthony Rex Gabbert, Judge.

          Anthony Rex Gabbert, Judge.

         Janice Spurgeon appeals the circuit court's Judgment concluding that she is not entitled to enroll in the Missouri Consolidated Health Care Plan (MCHCP) pursuant to Section 103.085[1] and 22 C.S.R. 10-2.020.[2] Spurgeon contends that the circuit court erred in interpreting Section 103.085 and in applying 22 C.S.R. 10-2.020.

         Factual and Procedural History

         Spurgeon's late husband, Gary, [3] was an employee of the Missouri Department of Public Safety, Division of Alcohol and Tobacco Control, from January 12, 1976, through November 30, 2009. He retired on December 1, 2009. Gary was covered for health care benefits under MCHCP at the time of his retirement. He elected to continue coverage with MCHCP upon his retirement and maintained coverage until his death on March 4, 2014.

         Gary did not elect to enroll Spurgeon in MCHCP coverage when he retired. Spurgeon, therefore, was not covered by MCHCP at the time of Gary's death. At the time of Gary's passing, Spurgeon was an employee of Crawford Electric Cooperative covered under her employer's health insurance plan. After Gary's death, Spurgeon completed a Survivor Enrollment Form which was received by MCHCP on April 3, 2014. MCHCP denied Spurgeon's application on the grounds that Spurgeon was ineligible to enroll for survivor coverage under 22 C.S.R. 10-2.020(2)(C)2. This provision only allows survivors of retirees to continue enrollment in MCHCP if the retiree elected at retirement to enroll the survivor; it does not allow a survivor to initiate enrollment at the time of a retiree's death.

         Spurgeon appealed MCHCP's decision to the MCHCP Board of Trustees ("the Board"). The Board denied Spurgeon's appeal. On October 2, 2014, Spurgeon filed an amended petition[4]in the circuit court against the Board and Judith Muck, executive director of MCHCP ("Respondent's" collectively). The amended petition alleged that Spurgeon met all of the requirements of Section 103.085 to be allowed healthcare coverage under MCHCP, and the Board's denial of her appeal was unlawful, unreasonable, arbitrary, capricious, and deprived her of a property right she is entitled to under the law. Spurgeon also contended that she had relied upon an averment made in a telephone call to MCHCP's customer service representative that Spurgeon could wait until Gary's death to enroll for coverage. Further, she argued that MCHCP had discretion to approve coverage pursuant to 22 C.S.R. 10-2.075(6)(B). She contended that 22 C.S.R. 10-2.020(2)(C)2 contradicts Section 103.098 which statutorily authorizes her enrollment.

         On October 22, 2014, Respondents moved to dismiss Spurgeon's petition for failure to state a claim upon which relief could be granted. The court heard argument on Respondent's motion on November 7, 2014, and on July 15, 2015, entered a Judgment dismissing Spurgeon's petition for failure to state a claim. Spurgeon appealed the circuit court's dismissal to this court. On March 9, 2016, we issued a mandate reversing the circuit court's judgment. Spurgeon v. Missouri Consolidated Health Care Plan, 481 S.W.3d 604 (Mo. App. 2016). We found that, in construing Spurgeon's petition liberally and assuming the facts alleged therein to be true, the petition stated a claim for judicial review of MCHCP's decision. Id. at 607-608 (Mo. App. 2016). We determined that MCHCP's motion to dismiss challenged the merits of Spurgeon's claim rather than the adequacy of the petition, and noted that MCHCP had not alternatively requested a judgment on the pleadings. Id. at 608. We concluded that Spurgeon was entitled to a decision on the merits and remanded the matter to the circuit court. Id.

         On remand, the circuit court reviewed the merits of Spurgeon's claims and concluded, as relevant to this appeal, that Section 103.085 and 22 C.S.R. 10-2.020 required MCHCP to deny Spurgeon's application for enrollment. This appeal follows.

         Standard of Review

         "On appeal from the circuit court's review of a non-contested administrative decision, we review the circuit court's judgment, not the administrative agency's decision." Spurgeon, 481 S.W.3d at 606 (citing Mo. Nat'l Educ. Ass'n v. Mo. State Bd. of Educ., 34 S.W.3d 266, 274 (Mo. App. 2000). "Legal questions of statutory interpretation are reviewed de novo." Macon County Emergency Services Board v. Macon County Commission, 485 S.W.3d 353, 355 (Mo. banc 2016). '"The rules of a state administrative agency duly promulgated pursuant to properly delegated authority have the force and effect of law and are binding upon the agency adopting them."' Farrow v. Saint Francis Medical Center, 407 S.W.3d 579, 588 (Mo. banc 2013) (quoting State ex rel. Martin-Erb v. Missouri Com'n on Human Rights, 77 S.W.3d 600, 607 (Mo. banc 2002). However, '"[a]s a creature of statute, an administrative agency's authority is limited to that given it by the legislature."' Farrow, 407 S.W.3d at 588 (quoting State ex rel. Missouri Public Defender Com'n v. Waters, 370 S.W.3d 592, 598 (Mo. banc 2012)). "While administrative regulations are entitled to a presumption of validity and may not be overruled except for weighty reasons, the rules or regulations of a state agency are invalid if they are beyond the scope of authority conferred upon the agency, or if they attempt to expand or modify statutes." Union Elec. Co. v. Director of Revenue, 425 S.W.3d 118, 124-125 (Mo. banc 2014) (internal quotation marks and citations omitted).

         Points on Appeal

         Spurgeon asserts two points on appeal. In her first point she contends that the circuit court erred in finding that MCHCP was required to deny her application for survivor enrollment because denial of her enrollment is contrary to the purpose of the plan's establishment set forth in Section 103.005, [5] and she met the statutorily mandated requirements for enrollment under Section 103.085. In her second point she contends that 22 C.S.R. 10-2.020(2)(B)[6] is in direct conflict with Section 103.085 and, therefore, the court erred in applying 22 C.S.R. 10-2.020. As both points involve interpretation of Section 103.085, we review them together.

         MCHCP's Purpose - Section 103.005

         Section 103.005, titled "Missouri Consolidated Health Care Plan established, purpose - powers to ...

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