Case Name: HCA CROSSROADS RESIDENTIAL CENTERS, INC. and LAUREL WOOD OF HENDERSON, INC. v. NORTH CAROLINA DEPARTMENT OF HUMAN RESOURCES, DIVISION OF FACILITY SERVICES, CERTIFICATE OF NEED SECTION
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1990-12-05
Citations: 327 N.C. 573
Docket Number: No. 79PA90
Parties: HCA CROSSROADS RESIDENTIAL CENTERS, INC. and LAUREL WOOD OF HENDERSON, INC. v. NORTH CAROLINA DEPARTMENT OF HUMAN RESOURCES, DIVISION OF FACILITY SERVICES, CERTIFICATE OF NEED SECTION
Judges: Justice Frye joins in this dissenting opinion.
Reporter: North Carolina Reports
Volume: 327
Pages: 573–585

Head Matter:
HCA CROSSROADS RESIDENTIAL CENTERS, INC. and LAUREL WOOD OF HENDERSON, INC. v. NORTH CAROLINA DEPARTMENT OF HUMAN RESOURCES, DIVISION OF FACILITY SERVICES, CERTIFICATE OF NEED SECTION
No. 79PA90
(Filed 5 December 1990)
1. Statutes § 5.10 (NCI3d)— qualifying words — doctrine of last antecedent
Under the doctrine of the last antecedent, relative and qualifying words, phrases and clauses ordinarily are to be applied to the word or phrase immediately preceding and, unless context indicates a contrary intent, are not to be construed as extending to or including others more remote.
Am Jur 2d, Statutes § 230.
2. Hospitals § 2.1 (NCI3d)— certificates of need — rejection within review period — construction of statute
Under the doctrine of the last antecedent, the limiting phrase “within the review period” in N.C.G.S. § 131E-185(b) modifies only the phrase “reject the application.” Therefore, the Department of Human Resources is required to reject applications for certificates of need within the review period or, when the review period ends without action by the Department, to issue the certificates.
Am Jur 2d, Hospitals and Asylums §§ 3, 4.
3. Hospitals § 2.1 (NCI3d)— certificates of need — failure to act on applications within review period — issuance of certificates required
When the Department of Human Resources failed to make a decision on applications for certificates of need for construction of chemical dependency treatment facilities within the maximum statutory review period of 150 days, the Department must be deemed as a matter of law to have decided in favor of issuing the certificates of need and lost subject matter jurisdiction to do anything thereafter but issue the certificates of need. Therefore, the Department’s decision purporting to disapprove the pending applications after the maximum review period expired was a nullity and no legal consequence. N.C.G.S. §§ 131E-185(al) and (c).
Am Jur 2d, Hospitals and Asylums §§ 3, 4.
Justice WHICHARD dissenting.
Justice FRYE joins in this dissenting opinion.
On discretionary review pursuant to N.C.G.S. § 7A-31 (prior to a determination by the Court of Appeals) of the 21 November 1988 final decision of the Department of Human Resources denying the petitioner-appellants’ applications for certificates of need for construction of chemical dependency treatment facilities. Heard in the Supreme Court on 4 September 1990.
Petree, Stockton & Robinson, by Noah H. Huffstetler, III, for petitioner-appellant HCA Crossroads Residential Centers, Inc.
Bode, Call & Green, by Robert V. Bode, Nancy O. Mason and Diana E. Ricketts, for petitioner-appellant Laurel Wood of Henderson, Inc.
Lacy H. Thornburg, Attorney General, by Richard A. Hinnant, Jr., and James A. Wellons, Assistant Attorneys General, for the respondent-appellee Department of Human Resources.
Johnson, Gamble, Hearn & Vinegar, by George G. Hearn and Samuel H. Johnson, for North Carolina Health Care Association, amicus curiae.

Opinion:
MITCHELL, Justice.
The controlling issue before this Court is whether the Department of Human Resources ("Department") lost subject matter jurisdiction when it failed to act, within the time prescribed by law, on applications for certificates of need for construction of chemical dependency treatment facilities. We conclude that when the prescribed statutory review period ended with the Department having failed to act, the Department was deemed as a matter of law to have decided in favor of issuing the certificates of need and it lost subject matter jurisdiction to do anything but issue those certificates of need. As a result, the agency had no authority to deny the applications.
On 16 May 1988, HCA Crossroads Residential Centers, Inc. ("Crossroads") submitted an application for a certificate of need to construct and operate a 48-bed freestanding chemical dependency treatment facility for adolescents in Buncombe County. On the same date, Laurel Wood of Henderson, Inc. ("Laurel Wood") submitted its application to develop a 66-bed adolescent chemical dependency treatment facility in Henderson County. The Department, acting through the Certificate of Need Section of its Division of Facility Services, assigned both applications to a regularly scheduled 90-day review cycle beginning on 1 June 1988.
A time limit of 90 days is prescribed by statute for the Department's review of applications for certificates of need, running from the date upon which the assigned review period begins. N.C.G.S. § 131E-185(al) (1988). The statute further provides that upon complying with certain requirements, the Department may extend this time limit for a period not to exceed 60 days. N.C.G.S. § 131E-185(c) (1988).
On 29 August 1988, the Department purported to extend the review period for the petitioner-appellants' applications until 28 October 1988. The petitioner-appellants contend that the Department's attempt to extend the applicable review period for 60 days did not comply with statutory requirements and was ineffective. We neither consider nor decide this disputed question. Instead, we assume for purposes of this opinion that the purported 60-day extension complied with the law in all respects and was proper.
For both the Crossroads and the Laurel Wood applications, the Department thereafter allowed the maximum 150-day period (90 days plus 60 days) prescribed by statute to expire on 31 October 1988, without acting on either application. On 21 November 1988, 173 days after the applicable review cycle began, the Department issued letters to Crossroads and Laurel Wood which purported to deny their applications for certificates of need.
In verified petitions for contested case hearings before the Office of Administrative Hearings filed by Crossroads on 30 November 1988 and by Laurel Wood on 21 December 1988, those parties asserted that the Department's purported denials of their applications exceeded its authority and jurisdiction. They contended that the Department was required by law to issue the certificates of need they sought when it failed to act on their applications within the statutorily prescribed maximum time limit of 150 days. By order of Chief Administrative Law Judge Robert A. Melott, dated 29 December 1988, the contested cases initiated by Crossroads and Laurel Wood were consolidated for hearing.
On 20 December 1988, Crossroads filed a motion for a recommended decision granting summary judgment in its favor, pursuant to N.C.G.S. § 1A-1, Rule 56, N.C.G.S. § 150B-34, and 26 NCAC 3 .0005. At the conclusion of a hearing on 6 January 1989, presiding Administrative Law Judge Beecher R. Gray issued a recommended decision concluding inter alia that the Department's denial of Crossroads' application was in excess of its authority and jurisdiction and recommending that the Department issue a certificate of need to Crossroads to develop its project.
On 10 January 1989, Laurel Wood filed a similar motion for a recommended decision granting summary judgment in its favor. On 27 January 1989, Administrative Law Judge Gray issued a decision recommending that the Department issue a certificate of need to Laurel Wood.
Under N.C.G.S. § 131E-188(a), the recommended decisions in favor of Crossroads and Laurel Wood were subject to further review by the Department before issuance of its final decisions on their applications. The Department issued final decisions on the applications of Crossroads and Laurel Wood on 8 March 1989 and 17 March 1989, respectively. In each instance the Department rejected the recommended decision of the Administrative Law Judge, reaffirmed its denial of the application, and informed the applicant of its right to appeal to the Court of Appeals. Crossroads and Laurel Wood filed notices of appeal to the Court of Appeals on é April 1989 and 14 April 1989, respectively. On 1 March 1990, this Court granted discretionary review, ex mero motu, prior to a determination by the Court of Appeals.
N.C.G.S. § 131E-185(al) provides:
Except as provided in subsection (c) of this section, there shall be a time limit of 90 days- for review of the applications [for certificates of need], beginning on the day established by rule as the day on which applications for the particular service in the service area shall begin review.
(Emphasis added.)
An exception to the 90-day time limit mandated by the foregoing provision is contained in N.C.G.S. § 131E-185(c), which states:
The Department shall promulgate rules establishing criteria for determining when it would not be practicable to complete a review within 90 days from the beginning date of the review period for the application. If the Department finds that these criteria are met for a particular project, it may extend the review period for a period not to exceed 60 days and provide notice of such extension to all applicants.
(Emphasis added.)
These statutory provisions clearly prescribe a mandatory maximum time limit of 150 days within which the Department must act on applications for certificates of need. To the extent it is applicable, this time limit is jurisdictional in nature. See Snow v. Board of Architecture, 273 N.C. 559, 569, 160 S.E.2d 719, 727 (1968) (administrative agency loses jurisdiction over the subject matter when it fails to make a decision within the time allowed by law); see also 2 Am. Jur.2d Administrative Law § 334 (the jurisdiction of administrative agencies "although once obtained, may be lost, and in such case proceedings cannot be validly continued beyond the point at which jurisdiction ceases").
We conclude that since it failed to make a decision as to either of the applications at issue here within the statutory review period, the Department must be deemed as a matter of law to have decided in favor of issuing certificates of need to Crossroads and Laurel Wood and that the Department lost subject matter jurisdiction to do anything thereafter but issue the certificates of need. Therefore, the Department's decision purporting to disapprove the pending applications after the maximum 150-day review period expired was a nullity and of no legal consequence. See Charlotte Liberty Mut. Ins. Co. v. Lanier, 16 N.C. App. 381, 384, 192 S.E.2d 57, 59 (1972) (action of board in excess of its jurisdiction "was without warrant in law and is a nullity").
N.C.G.S. § 131E-185(b) states:
The Department shall issue as provided in this Article a certificate of need with or without conditions or reject the application within the review period.
The limiting phrase "within the review period" modifies only the phrase "reject the application," and, therefore, the Department loses subject matter jurisdiction to reject an application when the review period ends. Once the review period expires without action by the Department, it retains jurisdiction only for the purpose of issuing certificates of need.
By what is known as the doctrine of the last antecedent, relative and qualifying words, phrases, and clauses ordinarily are to be applied to the word or phrase immediately preceding and, unless the context indicates a contrary intent, are not to be construed as extending to or including others more remote. See 82 C.J.S. Statutes § 334 (1953); see also 73 Am. Jur.2d Statutes § 230 (1974) ("In construing statutes, qualifying words, phrases, and clauses are ordinarily confined to the last antecedent, or to the words and phrases immediately preceding"); cf. State v. Cloninger, 83 N.C. App. 529, 531, 350 S.E.2d 895, 897 (1986) (applying but not announcing the doctrine of last antecedent). This doctrine is not an absolute rule, however, but merely one aid to the discovery of legislative intent. As we find no contrary legislative intent expressed in N.C.G.S. § 131E-185(b) or elsewhere in our Certificate of Need Law, Article 9 of Chapter 131E, we apply the doctrine of the last antecedent and conclude that the Department is required to reject applications for certificates of need within the review period or, when the review period ends without action by the Department, to issue the certificates. N.C.G.S. § 131E-185(b) (1988).
The only other conceivable interpretation of the language of N.C.G.S. § 131E-185(b) is that it merely reiterates the time limits specified in N.C.G.S. § 131E-185(al) and (c) without doing anything more. Under such an interpretation, N.C.G.S. § 131E-185(b) would be entirely redundant and meaningless. Such statutory construction is not permitted, because a statute must be construed, if possible, to give meaning and effect to all of its provisions. See State v. Williams, 286 N.C. 422, 431, 212 S.E.2d 113, 120 (1975); see also Schofield v. Tea Co., 299 N.C. 582, 590, 264 S.E.2d 56, 62 (1980).
Our interpretation of N.C.G.S. § 131E-185(b) finds additional support when that statute is construed in pari materia, as it must be, with N.C.G.S. § 131E-186(a), which states: uWithin the prescribed time limits in N.C.G.S. § 131E-185, the Department shall issue a decision to 'approve,' 'approve with conditions,' or 'deny,' an application for a new institutional health service." (Emphasis added.) As N.C.G.S. § 131E-186(a) makes clear, in cases in which the Department approves an application for a certificate of need, it is required to make and issue its decision to approve the application within the time limits prescribed by N.C.G.S. § 131E-185. However, the legislature also anticipated that the Department ordinarily would not actually issue the certificate of need within the time limits prescribed in N.C.G.S. § 131E-185(b), when the legislature specifically provided in N.C.G.S. § 131E-187(a) that the Department must issue the certificate within 35 days of the Department's decision to approve it, and then only if "no request for a contested case hearing has been filed . . . and all applicable conditions of approval that can be satisfied before issuance of the certificate of need have been met." Construed in pari materia, as they must be, the foregoing sections of Article 9 must be read as providing that the Department shall exercise one of two options, within the review period, when dealing with an application for a certificate of need: (1) make a decision to deny or approve the application or (2) reject the application. In the present case, the Department failed to do either within the maximum 150-day review period.
When viewed in its entirety, Article 9 of Chapter 131E of the General Statutes, the Certificate of Need Law, reveals the legislature's intent that an applicant's fundamental right to engage in its otherwise lawful business be regulated but not be encumbered with unnecessary bureaucratic delay. The comprehensive legislative provisions controlling the times within which the Department must act on applications for certificates of need, set forth in Article 9, will be nullified if the Department is permitted to ignore those time limits with impunity. As a result, the provisions of Article 9 must be construed as expressing the legislature's intent that the Department be deemed as a matter of law to have rendered a decision to approve a certificate of need, if the Department fails to act upon an application within the applicable review period. Thereafter, the Department retains subject matter jurisdiction only for the purpose of issuing the certificate of need, which it is deemed to have decided to approve. A contrary interpretation of our Certificate of Need Law would leave the applicant with no effective remedy for the Department's failure to comply with the statute.
For the foregoing reasons we have concluded that the Department was required, within the review period, either to reject the applications for certificates of need in the present case, or make a decision to deny or approve those applications. Further, we conclude that, having failed to act within the applicable review period, the Department is deemed as a matter of law to have decided to approve the certificates of need in question, and that it lost jurisdiction over the subject matter of the applications in question for all purposes except the issuance of the certificates of need. As a result, the Department must now issue the certificates of need applied for by Crossroads and Laurel Wood. Accordingly, we vacate the final decision of the Department of Human Resources and remand this case to that Department for proceedings consistent with this decision.
Vacated and remanded.