STATE of Wyoming ex rel., DEPARTMENT OF FAMILY SERVICES, Appellant (Respondent),
Lisa KISLING, Appellee (Petitioner).
Representing Appellant: Gregory A. Phillips, Attorney General; Robin Sessions Cooley, Deputy Attorney General. Argument by Ms. Cooley.
Representing Appellees: John M. Burman, Director, Ethan Doak and Matthew Pennell, Student Interns, University of Wyoming, College of Law Legal Services Program. Argument by Mr. Doak.
Before KITE, C.J., and HILL, BURKE, and DAVIS, JJ., and SANDERSON, D.J.
[¶ 1] Appellant, the Department of Family Services (Department), denied child care assistance benefits to Appellee, Lisa Kisling, because her participation in a graduate-level educational program rendered her ineligible for receipt of such benefits. The Office of Administrative Hearings (OAH) upheld the denial of benefits after a contested case hearing. Ms. Kisling petitioned for review of that decision in the district court, and the district court reversed the OAH's decision after finding that the Department was equitably estopped from denying benefits to Ms. Kisling. The Department appeals from the district court's order, contending that the issue of estoppel was not raised before the OAH, and that the district court should not have considered it. We agree, and accordingly, we will reverse the district court's order.
[¶ 2] The Department presents three issues for our review, which we discuss in the following order:
I. Did the Department correctly conclude, as a matter of law, that its statutes and rules precluded Ms. Kisling from receiving child care assistance benefits while she attended law school?
II. Did the district court err when it considered the issue of equitable estoppel on review of the Department's decision?
III. Did the district court err when it determined that the Department was equitably estopped from terminating, and thereafter denying, Ms. Kisling benefits while she attended law school?
Ms. Kisling states the issues in a substantially similar manner.
[¶ 3] The facts in this case are not in dispute. In July, 2007, Ms. Kisling and her husband, Scott, became foster parents for two children with special needs, K.S. and H.S. From 2007 to 2009, K.S. and H.S. lived with the Kislings in Lander, Wyoming. Ms. Kisling applied for, and received, child care assistance benefits from the Department. In 2009, the Kislings considered becoming guardians for K.S. and H.S. While considering this prospect, Ms. Kisling contacted the Department and was advised that her child care benefits would not be affected by her change in status from foster parent to legal guardian. In October, 2009, the Kislings became guardians for K.S. and H.S.
[¶ 4] Before and during the period in which the Kislings served as foster parents for K.S. and H.S., Ms. Kisling had been planning to attend law school. She applied to the University of Wyoming and, after being accepted, moved from Lander to Laramie with the children. She began her first year at the law school in August, 2009. She continued to apply for, and receive, child care benefits.  Each time she applied for benefits, Ms. Kisling advised the Department that she was enrolled in law school.
[¶ 5] In the summer after her second year, Ms. Kisling returned to Lander to participate in an unpaid externship. She requested a change in child care provider. On June 20, 2011, after being alerted to Ms.
Kisling's participation in the externship, a Benefits and Eligibility Specialist with the Department sent an email to a Department Administrator questioning whether Ms. Kisling was eligible for child care benefits during her enrollment in graduate-level courses or during her unpaid externship. The Administrator responded that Ms. Kisling was not eligible for benefits. Accordingly, on June 22, the Department sent Ms. Kisling notification that her child care benefits had been terminated effective June 1, 2011, because her " participation in a graduate program in college is not a qualifying work/study program for child care assistance."
[¶ 6] The Kislings requested an administrative hearing to contest the termination of her child care benefits. Ms. Kisling submitted a Pre-Hearing Statement to the OAH, in which she asserted that the Department's regulations were " not in accordance with Wyoming law." She also asserted that the termination of her child care benefits " violates the Department's prior representation to Petitioner Lisa Kisling that Child Care benefits would be afforded to Petitioners upon their consent to a Subsidized Guardianship of two neglected minors" and that " the Department knew or had reason to know that Lisa Kisling was enrolled in law school at the time the Subsidized Guardianship was established, yet nonetheless informed her that she would continue to receive Child Care Assistance." Ms. Kisling further asserted that " Petitioners did in fact continue to receive Child Care Assistance during Lisa Kisling's first two years of law school and relied on such payments in good faith, without any misrepresentation of Lisa Kisling's educational pursuits." After a hearing, the OAH upheld the Department's termination of benefits. On October 19, 2011, the OAH issued proposed findings of fact and conclusions of law, which stated that
The Department's rules and Wyoming law provide a person can only receive child care benefits if the person is in an approved activity. An approved activity includes work or an educational program. However, an educational program beyond a BA/BS degree is not an approved activity. The Department properly determined Kisling was attending law school, a graduate program, while receiving child care benefits and termination of child care benefits was proper.
On November 3, 2011, after receiving no objections to the proposed order from either party, the OAH issued a final order incorporating the proposed findings of fact and conclusions of law.
[¶ 7] Ms. Kisling subsequently filed a petition for review in district court, contending that (1) the Department's termination of benefits was contrary to the plain language of Department regulations and Wyoming statutes, (2) the Department's findings were contrary to the Wyoming Public Assistance and Social Services Act, and (3) the Department was equitably estopped from denying her child care benefits. The district court agreed that the Department was equitably estopped from terminating Ms. Kisling's child care benefits and, as a result, concluded that " the findings of the hearing officer are not in accordance with the law." The district court did not address Ms. Kisling's remaining claims. The Department timely filed this appeal.
STANDARD OF REVIEW
[¶ 8] When we consider an appeal from a district court's review of an administrative agency's decision, we review the case as though it had come directly from the administrative agency. Guier v. Teton County Hosp. Dist., 2011 WY 31, ¶ 12, 248 P.3d 623, 629 (Wyo.2011). The extent of our review is governed by Rule 12.09 of the Wyoming Rules of Appellate Procedure. That rule provides that " Review ... shall be confined to the record as supplemented pursuant to Rule 12.08 and to the issues set forth in the petition and raised before the agency. Review shall be limited to a determination of the matters specified in Wyo. Stat. 16-3-114(c)." Wyo. Stat. Ann. § 16-3-114(c)(ii) (LexisNexis 2011), part of the Wyoming Administrative Procedure Act, provides that the reviewing court shall:
(ii) Hold unlawful and set aside agency action, findings and ...