                IN THE SUPREME COURT, STATE OF WYOMING

                                             2013 WY 91

                                                                     APRIL TERM, A.D. 2013


                                                                             July 24, 2013


STATE OF WYOMING ex rel., DEPARTMENT
OF FAMILY SERVICES,

Appellant
(Respondent),
                                                                    No. S-12-0256
v.

LISA KISLING,

Appellee
(Petitioner).


                      Appeal from the District Court of Fremont County
                          The Honorable Timothy C. Day, Judge

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.


NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third. Readers
are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming
82002, of any typographical or other formal errors so that correction may be made before final publication in
the permanent volume.
BURKE, Justice.

[¶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.

                                               ISSUES

[¶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
                  e q u i t a b l e e s t o p p e l o n r e v i e w o f t h e D e partment’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.

                                               FACTS

[¶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


                                                    1
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. 1 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.2
On October 19, 2011, the OAH issued proposed findings of fact and conclusions of law,
which stated that


1
  Ms. Kisling apparently applied for child care benefits in her name only. The Department’s regulations,
set forth below, suggest that this fact is not relevant to the issues in this appeal. In order to receive
benefits, both parents must be engaged in an “approved activity,” as defined by Department regulations.
2
  Despite the existence of an audio recording of the proceedings before the OAH, a transcript of the
proceedings could not be prepared due to the poor quality of the recording.




                                                   2
              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
              conclusions found to be:

                     (A) Arbitrary, capricious, an abuse of discretion or
                     otherwise not in accordance with law;



                                             3
                    (B) Contrary to constitutional right, power, privilege or
                    immunity;

                    (C) In excess of statutory jurisdiction, authority or
                    limitations or lacking statutory right;

                    (D) Without observance of procedure required by law;
                    or

                    (E) Unsupported by substantial evidence in a case
                    reviewed on the record of an agency hearing provided
                    by statute.

Id.; Dale v. S & S Builders, LLC, 2008 WY 84, ¶ 9, 188 P.3d 554, 557-58 (Wyo. 2008).
We review an agency’s conclusions of law de novo, and “[w]e will affirm an agency’s
legal conclusion only if it is in accordance with the law.” DC Production Service v. Wyo.
Dep’t of Employment, 2002 WY 142, ¶ 7, 54 P.3d 768, 771 (Wyo. 2002).

                                     DISCUSSION

[¶9] The Wyoming Public Assistance and Social Services Act, codified at Wyo. Stat.
Ann. § 42-2-101 et seq., grants the Department of Family Services the authority to adopt
and administer social services programs, including the purchase of child care services,
and to promulgate rules and regulations governing the administration of those services.
Wyo. Stat. Ann. § 42-2-103 states:

             (a) The department shall provide and administer programs for
             public assistance and social services in Wyoming to those
             individuals lacking sufficient income or resources to provide
             themselves or their families with a reasonable subsistence
             compatible with decency and health or with services
             necessary for their well-being.

             (b) In carrying out subsection (a) of this section and except as
             provided under the Wyoming Medical Assistance and
             Services Act [§§ 42-4-101 through 42-4-120], the department
             shall:

                    ...

                    (iv) Supervise the expenditure of state funds and
                    federal funds allocated to the state for purposes of
                    providing public assistance and social services in such


                                            4
                    a manner as to ensure that, to the extent funds are
                    available, funds may be used in separate state-funded
                    programs to:

                           ...

                           (C) Allow an individual receiving assistance to
                           attend school as provided by W.S. 42-2-109(a)
                           provided the individual:

                                 ...

                                 (III) Qualifies as a full-time student
                                 under W.S. 42-2-109(a)(ii)(A) and (C).

In the same section, the Act provides that the Department shall “Limit approved
educational programs under paragraph (iv) of this subsection to educational courses not
to exceed the baccalaureate level, or to one (1) vocational training program[.]” Wyo.
Stat. Ann. § 42-2-103(b)(viii). Section 42-2-109(a), in turn, provides that

             Public assistance and social services provided under this
             article shall be reviewed at least once each year, except for
             recipients enrolled in an approved educational program which
             shall be reviewed once every six (6) months. An approved
             educational program under this section shall be limited to
             educational courses not to exceed the baccalaureate degree
             level.

An “approved educational program” is defined in the Act as

             [A]ny program at the University of Wyoming or a Wyoming
             community college leading to a baccalaureate, associate
             degree, or certificate at the school or a vocational program
             approved by the department, or other accredited educational
             program within Wyoming leading to a baccalaureate,
             associate degree or nationally recognized certification or
             license.

Wyo. Stat. Ann. § 42-2-102(a)(ix).

[¶10] Pursuant to the authority granted by the Wyoming Public Assistance and Social
Services Act, the Department has enacted regulations governing the purchase of child
care services. Those regulations provide that child care assistance is available only to


                                           5
caretakers engaged in specified “approved activities”:

             (C) Child care assistance shall be available only when the
             child(ren)’s parent(s)/caretaker(s) participates in at least one
             (1) of the following approved activities outside the home:

                    (I)    Employment;

                    (II)   Employment Training program;

                    (III) Educational program;

                    (IV)   POWER work requirement; or

                    (V)    SNAP E & T activity.

             (D) Child care assistance shall be available for a child(ren) in
             a two (2) parent/caretaker assistance unit when both
             parents/caretakers are participating in an approved activity
             during the same hours.

             ...

             (H) Child care assistance is available for a child(ren) whose
             parent(s)/caretaker(s) is attending an approved educational
             program, including college undergraduate study when:

                    (I) The parent(s)/caretaker(s) is making satisfactory
                    progress;

                    (II) The educational program does not exceed the
                    first associate or baccalaureate degree unless the
                    associate degree was received while the
                    parent(s)/caretaker(s) was pursuing a baccalaureate
                    as the original employment goal.

Department of Family Services, Child Care, Purchase of Service Regulations, ch. 1, § 8
(emphasis added). As defined in the regulations, an “approved activity” includes

             (ii) An educational program which includes:

                    (A)    High school or GED; or



                                            6
                        (B) A postsecondary educational program which
                        does not exceed the first associate or baccalaureate
                        degree unless the associate degree was received while
                        the   parent(s)/caretaker(s)    was    pursuing     a
                        baccalaureate degree as the original educational
                        goal.

Id., ch. 1, § 4 (emphasis added). Additionally, consistent with the definition of an
“approved educational program” contained in Wyo. Stat. Ann. § 42-2-102(a)(ix), the
regulations define an “educational program” as “a postsecondary course of study, not
exceeding the first associate or baccalaureate degree (unless the associate degree was
received while the parent(s)/caretaker(s) was pursuing a baccalaureate degree as the
original educational goal).” Id., ch. 1, § 4.

[¶11] The Wyoming Public Assistance and Social Services Act, a s w e l l a s t h e
Department’s regulations, clearly indicate that a student enrolled in a graduate-level
educational program is not eligible, on that basis, for receipt of child care assistance
benefits. Ms. Kisling does not contest that conclusion in this appeal. Accordingly,
because Ms. Kisling was enrolled in a graduate-level educational program, we find no
error in the OAH’s decision upholding the Department’s denial of child care assistance
benefits.

[¶12] We turn, then, to the Department’s claim that the district court erred in
determining that it was equitably estopped from denying child care benefits to
Ms. Kisling as a consequence of its erroneous approval of benefits during Ms. Kisling’s
first two years in law school. As presented in Ms. Kisling’s brief in district court, her
estoppel claim was based on the allegation that “the Department misled Petitioner
regarding her eligibility for child care assistance.” Specifically, Ms. Kisling asserted that
“Department employees informed Petitioner there would be no change to her family’s
child care assistance – both upon her move to Laramie for law school in August of 2009,
and upon the formalization of the guardianship two months later.”3 The Department
contends that Ms. Kisling waived this claim because she did not raise it in the
administrative proceedings and, consequently, the Department asserts that the district
court should not have considered the issue.


3
   Although Ms. Kisling, in her brief to this Court, attempts to characterize the Department’s
representation as an assurance that her benefits would not change upon her enrollment in law school, the
evidence contained in the record does not support that characterization. At oral argument, Ms. Kisling’s
counsel conceded that there is nothing in the record indicating that Ms. Kisling made inquiry with the
Department regarding the effect of her enrollment in law school on her eligibility for child care assistance
benefits. The parties agree that Ms. Kisling’s change in status from foster parent to guardian was not
relevant to her eligibility for receipt of child care benefits.




                                                     7
[¶13] Ms. Kisling responds that the Pre-Hearing Statement submitted to the OAH
“impliedly reserved” her equitable estoppel claim. However, she also claims that the
Department cannot assert waiver in this appeal because it did not do so in response to her
petition for review in district court. Alternatively, Ms. Kisling contends that her estoppel
claim could not have been waived because it presented an issue of such fundamental
nature that it must have been considered by the district court. She asserts that the issue of
whether she is entitled to child care benefits is “fundamental” because of a “right to
familial association.” She clarifies, however, that she “does not assert any constitutional
rights in this brief. Ms. Kisling only invites this Court to extend the fundamental nature
exception to a recognized category of issues that this Court considers fundamental in
nature.”

[¶14] As noted in our standard of review, W.R.A.P. 12.09(a) limits an appellate court’s
review of administrative action to “issues set forth in the petition and raised before the
agency.” In accordance with this rule, we have consistently held that issues raised for the
first time on appeal from an administrative decision will not be considered.

              We recently reiterated that, “With the exception of certain
              jurisdictional or fundamental issues, we will not consider
              issues raised for the first time on appeal.” Street v. Street,
              2009 WY 85, ¶ 17, 211 P.3d 495, 501 (Wyo. 2009). We have
              held that “This rule is equally applicable to appeals from
              administrative decisions as to those from district courts.” BP
              Am. Prod. Co. v. Dep’t of Revenue, 2006 WY 27, ¶ 18, 130
              P.3d 438, 462 (Wyo. 2006).

Orchard v. State, 2011 WY 145, ¶ 19, 262 P.3d 197, 203 (Wyo. 2011); see also
McCulloch Gas Transmission Co. v. Public Serv. Comm’n, 627 P.2d 173, 180 (Wyo.
1981). After noting that “It is well established that issues not raised in an administrative
action may not be considered for the first time on appeal,” we identified the reasons for
this rule in Watkins v. State ex rel. Wyo. Med. Comm’n & Wyo. Workers’ Safety & Comp.
Div., 2 0 1 1 W Y 4 9 , ¶ 22, 250 P.3d 1082, 1089 (Wyo. 2011) (quoting Wyo.
Bancorporation v. Bonham, 527 P.2d 432, 439 (Wyo. 1974)):

              We have recognized in more than a few decisions, and
              Congress has recognized in more than a few statutes, that
              orderly procedure and good administration require that
              objections to the proceedings of an administrative agency be
              made while it has opportunity for correction in order to raise
              issues reviewable by the courts.

[¶15] We are unable to conclude that Ms. Kisling raised the issue of equitable estoppel,


                                             8
either by implication or otherwise, in the proceedings before the OAH. As we explained
in Knori v. State ex rel. Dep’t of Health, Office of Medicaid, 2005 WY 48, ¶ 11, 109 P.3d
905, 909 (Wyo. 2005), a claim of equitable estoppel asserted against a governmental
entity requires a showing of (1) authorized affirmative misconduct; (2) reliance; (3)
substantial prejudice; (4) rare and unusual circumstances; and (5) a situation that will not
defeat public policy. We noted that a claim of equitable estoppel against a governmental
agency requires a heightened burden of proof:

                        With respect to governmental agencies functioning in
              their governmental capacities, the standard for equitable
              estoppel is higher, requiring “even more egregious conduct.”
              [Department of Family Services v.] Peterson, 957 P.2d [1307,
              1311 (Wyo. 1998)]. Namely, for equitable estoppel to
              operate against the government, the movant must demonstrate
              that the inducement was made by “authorized affirmative
              misconduct.” In addition to the “authorized affirmative
              misconduct” requirement, equitable estoppel is applied
              a g a i n s t t h e g o v e r n m e n t only in rare and unusual
              circumstances, where its application would not serve to defeat
              public policy. See Big Piney Oil & Gas Company v.
              Wyoming Oil and Gas Conservation Commission, 715 P.2d
              557, 560 (Wyo. 1986).

              ...

              The reason for the higher standard for equitable estoppel as to
              the government is premised on the notion that:

                     When the Government is unable to enforce the law
                     because the conduct of its agents has given rise to an
                     estoppel, the interest of the citizenry as a whole in
                     obedience to the rule of law is undermined. It is for
                     this reason that it is well settled that the Government
                     may not be estopped on the same terms as any other
                     litigant.

              Heckler v. Community Health Services, 467 U.S. 51, 60, 104
              S.Ct. 2218, 81 L.Ed.2d 42 (1984).

Id., ¶¶ 11-12, 109 P.3d at 909 (footnote omitted).

[¶16] Although Ms. Kisling’s Pre-Hearing Statement alleged that the Department
represented that her benefits would not change based on her consent to a guardianship,


                                             9
there is no allegation that the alleged assurances constituted “authorized affirmative
misconduct,” as necessary to a claim of equitable estoppel asserted against a
governmental agency. Likewise, there is no discussion of facts supporting the remaining
elements of estoppel or any analysis directing attention to the issue. Further, the OAH’s
findings of fact and conclusions of law make no reference to a claim of estoppel.
Notably, although Ms. Kisling had the opportunity to object to the proposed findings of
fact and conclusions of law before the issuance of the OAH’s final order, she made no
objection calling attention to a claim of equitable estoppel. We have previously indicated
that, in order to preserve an issue for appeal, the issue must be clearly presented to the
trial court:

                     Father’s position is that an issue may be raised by
              implication from the pleadings, or that the mere mentioning
              of an issue is sufficient to preserve it for appeal. This notion
              runs contrary to both the purpose of the rule and our
              established jurisprudence. We have held that we will not
              consider issues that were not “raised below in any meaningful
              manner.” Beaugureau v. State, 2002 WY 160, ¶ 11, 56 P.3d
              626, 631 (Wyo. 2002). . . . “It is a basic premise of appellate
              practice that to preserve an issue for appeal, that issue must
              be called to the attention of the trial court in a clear manner.”
              Elder v. Jones, 608 P.2d 654, 660 (Wyo. 1980).

Yates v. Yates, 2003 WY 161, ¶ 15, 81 P.3d 184, 189 (Wyo. 2003) (emphasis omitted).
We find nothing in the record to indicate that Ms. Kisling raised the issue of equitable
estoppel before the OAH in a clear or meaningful manner.

[¶17] Additionally, Ms. Kisling has presented no authority suggesting that the rule
barring consideration of issues raised for the first time on appeal or its rationale is
contingent upon whether or when waiver is asserted by the opposing party. Indeed, our
precedent indicates our willingness to apply the doctrine of waiver regardless of whether
the issue is raised by the opposing party. See, e.g., Orchard, ¶ 19, 262 P.3d at 203;
Belden v. Lampert, 2011 WY 83, ¶ 11, 251 P.3d 325, 328-29 (Wyo. 2011); Watkins, ¶ 22,
250 P.3d at 1089. Finally, we are not persuaded that Ms. Kisling’s claim for child care
assistance benefits presents a “fundamental issue” precluding waiver. She has presented
no authority suggesting that her right to familial association was impinged by the denial
of child care benefits. Accordingly, under W.R.A.P. 12.09(a) and well-established
precedent, we conclude that the district court erred in considering Ms. Kisling’s estoppel
claim because that issue was not raised in the proceedings before the OAH. Because this
issue is dispositive, we do not address the Department’s claim that the district court erred
in determining that the Department was equitably estopped from denying child care
benefits to Ms. Kisling.



                                             10
[¶18] The district court’s order reversing the OAH’s decision upholding the
Department’s denial of benefits is reversed, and we remand to the district court with
instructions that an order be entered affirming the OAH’s decision.




                                         11
