### TEXA S C OU R T OF A PPEAL S, THIR D DIST R ICT , AT AU STIN

NO. 03-0 6 -00 573 -CV

Cl a i rmo n t L o n g v i ew , L P, A D el a w a re L i mi te d Pa rt n er s h i p ; a n d Cl a i rmo n t L o n g v i ew GP,

LLC , A Delaware Lim ited Liabi lity Com pany, Ap pellants
v. State of Texas , Appellee

F ROM THE DISTRICT CO URT OF TRAVIS COUNTY , 98TH JUDICIAL DISTRICT NO. D-1- GV-05- 0052 40 , HO NORAB LE STEP HEN Y ELENOSK Y , JUDGE PRESIDI NG

M E M O R

A N D U M O P I N I O N The State’s Depa

rtment of Ag ing and Disability Service s (“D ADS”) a ssessed a f ine ag ainst Clairmont L ong view, L P an d C l ai rmont L ong view GP, L L C (collectively , “Clairmont”), which oper ates a

nursing fac ility

in L o n gview, Te x as, for violating c erta in state regulations. A fe de ra l agency

su bs equ ent ly

ord eredCl air mo nt to pay

a fi ne fo r vi ol ati ng para ll el f eder al r egula ti on s. DADS broug ht this suit to rec over the penalties assessed ag ainst Clairmont. Clairmont a rg ues that such double fines are forbidden under section 242.070 of the T exas Health and Saf ety Code. The tr ia l c ourt g ra nte d s umm ary

jud g me nt f

or DA DS. We w ill a ff

ir m th e tr ia l c ourt ’s jud g me nt.
F ACTUAL AND P ROCEDURAL BACK GR OUND Cla ir mon t is a nurs ingfa c ili ty

lic e ns e d b y

bo th t he fe der a l and

state g ov e rnme nts
. As a re sult, Cl airmont is subject to both feder al and state regulations. On April 8 and 21, 2005, a DADS repr esentative visited the Clairmont f acility and discovere d violations of multiple state a ndWe cit e t h e 2 0 0 5 regulations that were in e ffe ct when this dispute ar ose. See F rank 1 v. Liberty Ins. Corp. , 255 S.W .3d 314, 318 n.3 (Tex. App.—Austin 2008, pet. denied). 2 fede ral re g ulations. On May 2, 2005, DADS imposed a $13,500 fine for the state violations. DADS informed Clairmo n t t h at i t h ad the right to file a n administrative appe al within twenty day s. See Tex. Health & Safety

Code § 242.067 (West 2005). Clairmont did not do s o. 1 I n addition to impos ing a penalty itself, DADS informed its feder al counter part, the Centers for

M ed i care a

nd Medica id Services ( “CMS”), that Clairmont was violating fede ral regulations. See 42 U.S.C.A. § 1395aa( a) ( West 2005) (state surve y ag encie s can monitor re g ulatory compliance for f

eder al g overnme nt). On May 2, 2005, CMS i nformed Clairmont that the f eder al g overnme nt would cea se pay ing Clairmont for

its services a

nd would terminate Clairmont’s fe dera l lic e ns e if Cla ir mon t di d n ot re c tif

y its vio la tio ns . CMS i nf

or me d Cl a ir mon t th a t it

wo uld a lso a sse ss
a fi ne fo r t he vio la tio ns . On J uly 7, 2005, DADS ag ain vi sited Clairmont’s fac ility
. This time it found that the fa c ili ty wa s c omp lying wi th re g ulatio ns . DA DS tr ans mit te d this ne ws to C MS, and a s a re su lt, CMS
res ci n ded its threats to ce ase pa y ments and terminate Clairmont’s fede ral lice nse. CMS did not
resc ind its fine, however , and Clairmont e ventually settled with CMS for $3,000. CMS transmitted
a p o rt i o n o f this pay

ment to the State pursuant to fe dera l regulations. See 4 2 C. F
. R. § 4 8 8
. 4 4 2(f) (2005). Th ou g h Cla ir mon t pa id its CMS fi ne , it n e ve r p a id i ts $ 13 ,5 00 DA DS f ine . T he Sta te sued Clairmont to collect t hat fine. After a period of di scover y , the S tate moved for both traditional3

and no-e vidence summary judgme nt. The trial cour t gr anted the Sta t e’ s m o t ion, and Clairmont pe rf e c te d th is a

pp e a l.
STA ND AR D O F RE VI EW A “tra ditional” motion for summ ary judgme nt is properly

g rante d when the mova

nt
e sta bli sh e s th a t th e re are no g e nu ine iss ue s o f m a te ri a l f act and th at it is en tit le d to jud g me nt a s a
ma tte r o f l aw. Te x. R. C iv. P. 1 66 a (c ); Lear Siegler, Inc . v. Pe rez , 8 1 9 S. W. 2 d 4 70 , 4 7 1 ( T e x. 19 91 ); Holmstrom v. Lee , 26 S.W .3d 526, 530 (Tex. App.—Austin 2000, no pet.).

A par ty seekinga “no-e vidence ” summary judgme nt, on the other ha nd, does not bea

r the burd e n o f e sta

bli sh ingits ri g ht t o ju dg me nt b y pr ov inga

c la im, bu t inste a d ass e rt s tha t the re is no evidenc e of one or more e ssential elements of a claim on which the opposing pa rty will have the burd e n o f pr oo f at tr ia l. T e x. R. C iv. P. 1 66 a (i ); Hamilton v. W ilson , 249 S.W .3d 425, 426 (Tex. 2008) (per

curiam). I f the nonmovant fa ils to produce more than a sc i n t i l l a of probative evidenc e ra ising a

g enuine issue of

materia l fac t as to eac h challeng ed ele ment on which he ha s the burden of proof, summary

judgme nt is proper. Id
. I n revie wing a g rant of summar y judgme nt, we take as true evidenc e fa vorable to the nonmovant, making ever

y rea sonable infere nce and re solving a ll doubts i n the nonmovant’s fa vor. Centeq Realty, I

nc. v. Sie gler , 899 S.W .2d 195, 197 (Tex. 1995).Hea lth and Safety Code section 242.002(4) define s “D epar tment” to mean the T exas 2 Depa rtment of Human Ser

vices. DA DS took over the De partment of H uman S er v i ce s ’s rele vant regulatory

functions on September

1, 2004. See Tex. Hum. Res. Code § 161.071 (6 ) ( W es t S u p p. 20 08 ). Thus , li ke the pa

rt ie s, we int e rp re t “ De pa

rtme nt” in s e c tio n 2 42 .0 02 (4 ) t o r e fe r t o D AD S. 4 DI SCU SSIO N This appea l turns on a

s in g le q u e s ti o n
— n a me ly , wh e th er se ction 242.070 of the Te x as He a lthand

Sa fe ty Cod e pr e c lud e s D AD S and CMS f ro m bo th c oll e c tin g fi ne s fo r a sin g le inc ide nt. Se c tio n 2 42 .0 70 state s: The department may not a ssess more than one monetary penalty under this cha pter and C hapter 32, Human R esourc es C ode, for a viol ation arising out of t he same act or failure t o act .
. . . The department may a sse ss t he g re a te r o f a

mon e tary pe na lty under this cha

pter or a monetary penalty under Chapter 32, Human Resourc es Code, fo r t he same a c t or

fa ilure to a c t. 2
Te x. He a lth & Sa fe ty Cod e Ann. § 2 42 .0 70 (We st Su pp . 2 00 8) (e mph a sis a dd e d) . O n it s f a c e , th is regulation prec ludes DADS from assessing multipl e fines for a single incident; it does not prec lude DADS from a ssessing a

fine if a separ ate f

eder al ag ency

like CMS assesses its own fine. Clairmont
never theless ar g ues that the statute pr eclude s DADS from assessing a fine if CMS also assesses one. Clairmont’s argument turns on the asser tion that DADS eff

ectively “asse ssed” a

fine wh e n th e State re c e ive d a

po rt ion of the $3 ,0 00 fi ne that Cla ir

mon t pa id CMS. Th e State ult imate ly
rec eived that money , howeve r, only beca use fe dera l regulations require d as much. See 42 C.F.R. § 488.442(f) . The State did not ask CMS to fine Clairmont, nor did it ask for a portion of Clairmont’s pay ment. I n no sense, then, did DA DS itself, as opposed to CMS, “assess” the f ine.5 I n fac t, DADS may

only “asse ss” a pe nalty

in one of thre e wa

y s: by imposing i ts own adminis t ra t i v e p en alty ; by rec ommending to CMS that CMS impose a fe dera l civil penalty ; or by
rec omm en d ing to the T exas Attorney Gene ral that he impose a state c ivil penalty
. Se e Sta te
v . H altom Me d. In v esto rs , 153 S.W .3d 664, 666-67 (Te x . App.—For t Worth 2004, no pet.). Here , DADS chose the first option; it di d not rec ommend that CMS i mpose a pe nalty or that the Attorne y Ge ne ra l im

po se a pe na lty . Cl a ir

mon t ne ve rt

he le ss in si st s tha t CM S’ s in de pe nd e nt d e c isi on to impose a fine c ounts as an “asse ssment” that prec ludes DADS fr om assessing its own administrative p e n a l t y. B e sid e s r e qu ir ingan unn a tur a l re a din g of “ a sse ss” and de fy ing the a bo ve -c ite d c a se law, Clairmont’s ar g ument y ields tw o additional conseque nces that show a contra ry leg islative intent. First, C lairmont’s position would require that DADS await the outcome of any independe nt enfor ceme nt action taken by CMS, no m atter how belated or protrac ted, bef

ore D ADS could pursue its own. Here , DADS assesse d a fine on May 2 , 2 0 05, that beca

me final on May

22, 2005, when Clairmont’s time to appeal expired. See Tex. Heal t h & S af et y Code § 242.067(d). CMS did not ind ic a te that it wo uld imp os e its ow n fin e on Cla ir mon t unti l four day s lat e r, and it d id n ot a c tua lly impose that fine until roug hly six months a fter that. Under Clairmont’s inter pretati o n o f s ection 242.070, DADS ei t h er ha d to (1) aw ait the outcome of the fe dera l proce ss—notwithst anding that DA DS f ina lize d its pro c e ss be fo re the fe de ra l pro c e ss ev e n b e g an— be fo re de te rm ini ngwh e the r i t could assess its own fine, or (2) a cce pt that its alre ady -finalized penalty could l ater be voided at any po int by ind e pe nd e nt f

e de ra l a c tio n. Ac c e pti ngCla ir mon t’ s p os iti on

wo uld me an th a t any

“ fi na l” administrative pena lty

assessed by

DADS could be voide d retrospe ctively by a fe dera l ag ency ’s6

unilatera l action. Ther e is no rea son to believe that the Tex as l eg islature int ended to impose such a limitation on a State ag ency . A much more logic al interpre tation of section 242.070, and one that
a c c or ds wi th e xistin g c a se law, is that a CMS f ine c ounts a s an “ a sse ssm e nt” by DA DS on ly

if DA DS rec ommends it. See H altom , 1 5 3 S. W. 3 d a t 6 6 6 ( D A D S c an “ a s s e s s ” p e nalty by
rec ommending that CMS pursue one ).

S ec o n d , as t he district cour t noted, Clairmont’s interpretation of section 242.070
c re a te s an in te rn a l in c on sis te nc y . T he fi rs t se nte nc e of se c tio n 2 42 .0 70 pe rm its DA DS to a sse ss a single penalty , and the se cond sente nce pe rmits DADS to choose the g reater of a penalty under the Hea lth and Safety

Code or the Huma

n Resource s Code. See Tex. Health & Safety Code § 242.070. I f a CMS fine counte d as an “ assessment” in the f irst sentence , howeve r, CMS’s imposit ion of a f ine would nece ssarily

deprive DADS of the discr etion g uara nteed it by

the sec ond sentenc e. More over, DADS would be powe rless to object if, a s here , CMS ch o s e t o p u rs ue a le sser pe nalty , a state of
a f f a i r s i r r e c o n c i l a b l e w i t h t h e s t a tu t e ’ s c l e ar i n t e n tt h a tD A D S b e a

b l e t o c h o o s e a

g r e a t e r p e n a l t y. We presume tha t t h e l egi s l ature did not int end to nullify half the statute at issue. See Tex. Gov’t Code § 311.021 (West 2005) (pre sumption t hat entire statute is intended to be ef fec tive). I n sum, we hold as a matter of law that Texas Health and Saf ety Code section 242.070 only prec ludes DADS from assessing multipl e penalties itself. The statute does not prec lude DADS from asse ssing a

penalty when a fede ral a g ency , acting independe ntly and of its own accor d, assesses its own penalty
. CO NC LU SION

F or the re a so ns dis c us se d a

bo ve , w e a ff

ir m th e dis tr ic t c ourt ’s jud g me nt.7 __________________________________________ J . Woodfin J ones, Chief Just ice Be fore Chief J ustice Jones, J ustices Pury ear and He nson Affir med Filed: Jul y

14, 2009