Court Opinion

ID: 4680109
Source: CourtListenerOpinion
Date Created: 2021-04-22 17:14:22.251343+00
Date Added: 2024-06-11T08:03:53.018930
License: Public Domain

[Cite as Ohio Academy of Nursing Homes, Inc. v. Ohio Dept. of Job & Family Servs., 2021-Ohio-1414.]

                             IN THE COURT OF APPEALS OF OHIO

                                  TENTH APPELLATE DISTRICT

The Ohio Academy of Nursing                        :
Homes, Inc., et al.,
                                                   :
                Relators-Appellants,
                                                   :                      No. 20AP-172
v.                                                                   (C.P.C. No. 03CV-012970)
                                                   :
The Ohio Department of Job and                                     (REGULAR CALENDAR)
Family Services et al.,                            :

                Respondents-Appellees.             :

                                          D E C I S I O N

                                     Rendered on April 22, 2021

                On brief: Webster & Associates, Co., LPA, Geoffrey E.
                Webster, and Mary L. Pisciotta, for appellants. Argued:
                Geoffrey E. Webster.

                On brief: Dave Yost, Attorney General, and Rebecca L.
                Thomas, for appellees. Argued: Rebecca L. Thomas.

                 APPEAL from the Franklin County Court of Common Pleas

LUPER SCHUSTER, J.
        {¶ 1} Relators-appellants, the Ohio Academy of Senior Health Sciences (f.k.a. the
Ohio Academy of Nursing Homes, Inc.), Arcadia Acres, Inc., Main Street Terrace Care
Center, Inc., Spring Meadows Care Center, Woodstock Care Center, Inc., and Willowood
Care Center of Brunswick, Inc., appeal from a judgment of the Franklin County Court of
Common Pleas granting the summary judgment motion of respondents-appellees, the Ohio
Department of Medicaid and its director (collectively "ODM"), and denying appellants'
summary judgment motion. For the following reasons, we affirm.
No. 20AP-172                                                                                               2

I. Factual and Procedural Background
        {¶ 2} This matter began over 17 years ago when appellants filed an action on
November 25, 2003, against the Ohio Department of Job and Family Services and its
director1 alleging appellants' entitlement to immediate Medicaid reimbursement rate
adjustments to cover appellants' increased workers' compensation costs.
        {¶ 3} ODM reimburses participating nursing homes and other facilities through
the Medicaid program for reasonable costs of services provided. Ohio Academy of Nursing
Homes v. Ohio Dept. of Job & Family Servs., 114 Ohio St.3d 14, 2007-Ohio-2620, ¶ 2 ("Ohio
Academy of Nursing Homes Oh.Sup.Ct. 2007 Decision"). At all times relevant to this
appeal, ODM used a prospective payment system whereby it reimbursed facilities using a
per diem rate calculated based on the actual costs, including the premiums paid to the Ohio
Bureau of Workers' Compensation ("BWC"), incurred by the facilities for a prior period. Id.
at ¶ 2-3. In view of this prospective system, providers were not reimbursed for increased
workers' compensation costs in the initial year they were incurred. Id. at ¶ 4. For several
years before 2003, the BWC reduced employers' premiums by about 75 percent under R.C.
4123.32. Id. at ¶ 3. Then, in May 2003, the BWC informed employers of the decision to
eliminate the premium reductions and require employers to pay the full premiums
beginning on July 1, 2003. Id. Based on that change, in June and July 2003, appellants
requested immediate Medicaid rate adjustments pursuant to R.C. 5111.27(F) and Ohio
Adm.Code 5101:3-3-24.1. In August 2003, a bureau chief for ODM sent a letter to
appellants' counsel informing him of ODM's denial of the rate adjustment requests. Three
months later, appellants initiated this lawsuit.
        {¶ 4} Appellants' second amended complaint sought declaratory and injunctive
relief, and, alternatively, "a writ of mandamus * * * directing and ordering the Defendants
to comply with the pertinent provisions of R.C. Chapter 5111 and the rates be recalculated
and paid in an amount and manner in compliance with such laws." (Nov. 30, 2004 Am.

1In 2013, ODM succeeded the Ohio Department of Job and Family Services as the state agency responsible
for the administration of Ohio's Medicaid program. R.C. 5162.03; see R.C. 5160.011 ("References to the
* * * department or director of job and family services * * * in any statute, rule, contract, grant, or other
document is deemed to refer to the department of medicaid or medicaid director, as the case may be, to the
extent the reference is about a duty or authority of the department of medicaid or medicaid director
regarding a medical assistance program."). Therefore, all references to these predecessor parties will be to
ODM.
No. 20AP-172                                                                              3

Compl. at 14.) ODM moved to dismiss pursuant to Civ.R. 12(B)(1), which the trial court
granted.
        {¶ 5} On appeal, this court determined that "[b]ecause appellants' mandamus
action seeks a specific order directing [ODM] to perform a legal duty, the common pleas
court has subject matter jurisdiction." Ohio Academy of Nursing Homes v. Ohio Dept. of
Job & Family Servs., 164 Ohio App.3d 808, 2005-Ohio-6888, ¶ 16 (10th Dist.). Based on
appellants' requested relief, this court held appellants must pursue mandamus relief
through a two-step process. First, appellants must seek a writ ordering ODM to exercise its
discretion to determine whether a rate adjustment is appropriate. In reviewing such a writ,
the court must determine if the necessary predicate to ODM's exercise of discretion exists.
If that writ is appropriate, "the court will issue the writ to compel [ODM] to exercise its
discretion and determine whether appellants are entitled to a rate adjustment. Such a writ
would not, however, award the relief appellants sought below-a calculation and award of
money damages; and if the necessary predicate is lacking, the court will deny the writ
altogether." Id. at ¶ 19. A challenge to the exercise of that discretion to determine the
amount of any rate adjustment would be pursued in a second writ of mandamus. Id. at
¶ 20.
        {¶ 6} The Supreme Court of Ohio affirmed, agreeing that "appellants must seek
mandamus relief through a two-step process," and holding that "when a state agency's
decision is discretionary and by statute not subject to appeal, an action in mandamus is the
sole avenue of relief available to a party challenging the agency's decision." Ohio Academy
of Nursing Homes Oh.Sup.Ct. 2007 Decision at ¶ 32. On the "primary issue" before it, the
court "fully agree[d]" that "[r]elief through a mandamus action is the sole remedy available
to appellants." Id. at ¶ 21.
        {¶ 7} Pursuant to the Supreme Court's decision, appellants amended their
complaint in September 2007, seeking two writs of mandamus. Appellants first sought a
writ requiring ODM to consider whether to approve Medicaid reimbursement to appellants
for increased reasonable costs of services provided based on the increase in BWC
premiums. Secondly, appellants sought a writ requiring ODM to pay to appellants adjusted
reimbursement rates.
No. 20AP-172                                                                              4

       {¶ 8} On February 15, 2008, appellants moved for partial summary judgment,
arguing they were entitled to the first writ of mandamus because the record demonstrated
ODM had a clear legal duty to consider the BWC decision to increase premiums to be a
government mandate under the applicable law and to process the rate adjustment request
based on that circumstance. Two weeks later, ODM moved for summary judgment on all
claims.
       {¶ 9} In March 2008, appellants filed a request for a trial by jury. The same month,
appellants took the depositions of five employees of ODM and one employee of BWC.
Disputes arose regarding the questioning at the depositions, with counsel for ODM
instructing witnesses not to answer numerous questions based on the work-product
doctrine or attorney-client privilege. Appellants filed motions to compel responses to the
questions and for sanctions on March 19 and 25, 2008. Appellants also moved to stay
additional briefing on the summary judgment motions until the trial court ruled on the
discovery related disputes. In April 2008, the trial court granted this request pursuant to
Civ.R. 56(F).
       {¶ 10} Nearly eight years later, in January 2016, the trial court granted appellants'
motions to compel, but it delayed resolution of the sanctions requests until the conclusion
of discovery. ODM appealed. As to these discovery disputes, this court affirmed in part
and reversed in part. State ex rel. Ohio Academy of Nursing Homes, Inc. v. Ohio Dept. of
Medicaid, 10th Dist. No. 16AP-102, 2017-Ohio-8000.
       {¶ 11} On remand, the parties completed their briefing on the pending summary
judgment motions. Appellants also filed a motion to compel the resumption of depositions
and the production of certain documents. The trial court granted this motion to compel in
part and denied it in part. On March 4, 2020, the trial court granted ODM's summary
judgment motion and denied appellants' summary judgment motion. In the trial court's
entry awarding summary judgment in favor of ODM, it also denied the requests for
sanctions and ruled that all other pending motions were moot.
       {¶ 12} Appellants timely appeal.
No. 20AP-172                                                                               5

II. Assignments of Error
       {¶ 13} Appellants assign the following errors for our review:

              [1.] The lower court's determination that the BWC did not enact
              or amend a policy is, as a matter of law, reversible error.

              [2.] The appropriate legal standard was not applied. The lower
              court erred in not finding a material issue of fact and denying
              summary judgment to [appellants].

              [3.] It was error to grant the ODM's Summary Judgment
              Motion and deny [appellants'] Motion where there was no
              evidence ODM took action to exercise its discretion to
              determine whether there was a government mandate.

              [4.] The lower court erred in not granting, considering or
              discussing [appellants'] motion for partial summary judgment.

              [5.] The lower court erred in denying [appellants'] motion to
              compel deposition resumption of Saxe, Valentino and Weibl
              (nka, O'Brien).

              [6.] The lower court erred in declaring moot all pending
              motions.

III. Discussion
       {¶ 14} Appellants' first, second, third, and fourth assignments of error challenge the
trial court's disposition of the parties' summary judgment motions.           In their first
assignment of error, appellants assert the trial court erred in granting ODM's summary
judgment motion based on its determination that because the BWC did not enact or amend
a policy appellants were not entitled to the requested rate adjustment. Their second
assignment of error alleges the trial court did not apply the appropriate legal standard in
reviewing the parties' motions for summary judgment. Their third assignment of error
contends the summary judgment ruling was erroneous because there was no evidence
ODM exercised its discretion to determine whether there was a government mandate. And
in appellants' fourth assignment of error, they argue the trial court erred in not adequately
considering or granting its summary judgment motion. These four assignments of error
lack merit.
No. 20AP-172                                                                              6

       {¶ 15} Taken together, appellants' first four assignments of error present the issue
of whether the trial court erred in granting ODM's summary judgment motion and denying
appellants' summary judgment motion. We review the granting of summary judgment
under a de novo standard. Coventry Twp. v. Ecker, 101 Ohio App.3d 38, 41 (9th Dist.1995);
Koos v. Cent. Ohio Cellular, Inc., 94 Ohio App.3d 579, 588 (8th Dist.1994). Summary
judgment is appropriate only when the moving party demonstrates (1) no genuine issue of
material fact exists, (2) the moving party is entitled to judgment as a matter of law, and
(3) reasonable minds could come to but one conclusion and that conclusion is adverse to
the party against whom the motion for summary judgment is made, that party being
entitled to have the evidence most strongly construed in its favor. Civ.R. 56(C); State ex
rel. Grady v. State Emp. Relations Bd., 78 Ohio St.3d 181, 183 (1997).
       {¶ 16} Pursuant to Civ.R. 56(C), the moving party bears the initial burden of
informing the trial court of the basis for the motion and identifying those portions of the
record demonstrating the absence of a material fact. Dresher v. Burt, 75 Ohio St.3d 280,
293 (1996). However, the moving party cannot discharge its initial burden under this rule
with a conclusory assertion that the nonmoving party has no evidence to prove its case; the
moving party must specifically point to evidence of the type listed in Civ.R. 56(C)
affirmatively demonstrating that the nonmoving party has no evidence to support the
nonmoving party's claims. Id.; Vahila v. Hall, 77 Ohio St.3d 421, 429 (1997). Once the
moving party discharges its initial burden, summary judgment is appropriate if the
nonmoving party does not respond, by affidavit or as otherwise provided in Civ.R. 56, with
specific facts showing that a genuine issue exists for trial. Dresher at 293; Vahila at 430;
Civ.R. 56(E).
       {¶ 17} In this matter, appellants seek writs of mandamus directing ODM to duly
exercise its discretion to determine first whether, and then to what extent, increased
Medicaid reimbursements to appellants were appropriate for the pertinent time period
based on the increase in BWC premiums. For a writ of mandamus to issue, the relator must
demonstrate (1) that relator has a clear legal right to the relief prayed for, (2) that
respondents are under a clear legal duty to perform the acts requested, and (3) that relator
has no plain and adequate remedy in the ordinary course of law. State ex rel. Berger v.
McMonagle, 6 Ohio St.3d 28 (1983).
No. 20AP-172                                                                                 7

       {¶ 18} The trial court found that appellants are not entitled to a writ of mandamus
because they failed to show a clear legal right to the requested relief. Appellants challenge
this finding. We do not reach this issue, however, because we find appellants are not
entitled the requested writ of mandamus for a different reason. This court may affirm a
grant of summary judgment on a different basis than that used by the trial court. Henry v.
Kohl's Dept. Stores, Inc., 11th Dist. No. 2018-L-113, 2019-Ohio-2094, ¶ 51; see Newcomb v.
Dredge, 105 Ohio App. 417, 424 (2d Dist.1957) ("It is the duty of the reviewing court to
affirm the judgment if it can be supported on any theory, although a different theory from
that of the trial court.").
       {¶ 19} We find appellants fail to meet the third requirement for a writ of mandamus
to issue—no plain and adequate remedy in the ordinary course of law—because they did not
pursue an available adequate administrative remedy. It is "well settled that the failure to
pursue an adequate administrative remedy bars mandamus relief." State ex rel. Borchert
v. Greenbriar Health Care Ctr., 10th Dist. No. 06AP-88, 2007-Ohio-940, ¶ 35, citing State
ex rel. Reeves v. Indus. Comm., 53 Ohio St.3d 212 (1990); State ex rel. Berger, 6 Ohio St.3d
28; State ex rel. Kevin O'Brien & Assocs. Co., L.P.A. v. Tyack, 10th Dist. No. 13AP-1099,
2014-Ohio-3048. See State ex rel. Harson Invests., Ltd. v. Troy, 2d Dist. No. 2017-CA-22,
2018-Ohio-2748, ¶ 15 ("[t]ypically, parties must exhaust administrative remedies before
seeking mandamus relief"). Consequently, when an adequate remedy at law existed, but
was not pursued, mandamus relief is inappropriate. State ex rel. Evans v. Garfield-
Indecon Elec. Serv. & Indus. Comm. of Ohio, 10th Dist. No. 10AP-700, 2011-Ohio-5763,
¶ 8. The failure to exhaust administrative remedies is an affirmative defense, but if the facts
are undisputed it constitutes a question of law that is reviewed de novo. Clagg v. Baycliffs
Corp., 82 Ohio St.3d 277 (1998); see San Allen v. Buehrer, 8th Dist. No. 99786, 2014-Ohio-
2071, ¶ 63 (reviewing de novo whether there had been an exhaustion of administrative
remedies). Exceptions to this exhaustion requirement have been found when no
administrative remedy is available that can provide the requested relief and resorting to the
remedy would be "wholly futile," or "when the available remedy is onerous or unusually
expensive." (Citation omitted.) State ex rel. Harson Invests., Ltd. at ¶ 17; see State ex rel.
Cotterman, 46 Ohio St.3d 42, 44 (1989) ("a person need not pursue administrative
remedies if such an act would be futile").
No. 20AP-172                                                                                 8

       {¶ 20} Here, the record demonstrates appellants did not exhaust an adequate
administrative remedy. After being notified in May 2003 of the BWC's decision to no longer
provide premium discounts, appellants requested immediate Medicaid rate adjustments
pursuant to former R.C. 5111.27(F) and Ohio Adm.Code 5101:3-3-24.1. On August 25,
2003, Harry Saxe, the Chief of ODM's Bureau of Long Term Care Facilities, Office of Ohio
Health Plans, sent a letter to appellants' counsel notifying him that ODM was denying
appellants' request for rate adjustments. To conclude the letter, Saxe stated that ODM's
decision was not subject to appeal pursuant to Chapter 119, but that appellants could
request reconsideration by ODM's director pursuant to Ohio Adm.Code 5101:3-3-24.1.
This rule, which was rescinded in 2007, stated in pertinent part: "The decision of [ODM]
in response to a request for rate adjustment is subject to appeal to the director of [ODM]
within thirty days of notification to the provider or group of provider's [sic] of the decision
made by [ODM]. The decision of [ODM] is not subject to appeal pursuant to Chapter 119.
of the Revised Code." Former Ohio Adm.Code 5101:3-3-24.1(D) (2003). Thus, appellants
could have appealed, within 30 days from notification of the rate adjustment denial, to the
ODM director. But they did not avail themselves of this opportunity.
       {¶ 21} Appellants do not dispute that they did not appeal ODM's August 25, 2003
rate adjustment denial to the director of ODM. Appellants contend any appeal to the ODM
director would have been futile and was not adequate because it was not through the
judicial process. They also argue the Supreme Court of Ohio resolved the adequate remedy
issue in its 2007 decision regarding this matter.
       {¶ 22} We first reject appellants' argument that the Supreme Court of Ohio resolved
the adequate remedy issue in its 2007 decision. Appellants suggest the only issue left to
decide after that decision was whether the BWC's rate adjustment in 2003 constituted a
government     mandate,    thus   requiring    an   immediate     adjustment    of   Medicaid
reimbursement rates. We disagree. The issue before the Supreme Court was "the nature
of relief that is available when nursing homes and their trade association seek to challenge
a state agency's denial of requests for reconsideration of Medicaid reimbursement rates."
Ohio Academy of Nursing Homes Oh.Sup.Ct. 2007 Decision at ¶ 1. In holding that the
"exclusive avenue of relief available to the nursing homes is to pursue a writ of mandamus,"
the court did not address or resolve the issue of whether any of the requirements necessary
No. 20AP-172                                                                                 9

for a writ to issue were established. See generally id. Thus, the issue of whether appellants
met the no adequate remedy requirement was left unresolved at that procedural juncture.
       {¶ 23} In support of appellants' contention that an "adequate remedy at law" is only
through the "judicial process," they cite Ohio Hosp. Assn. v. Ohio Bur. of Workers' Comp.,
10th Dist. No. 06AP-471, 2007-Ohio-1499. We are unpersuaded. In Ohio Hosp. Assn., this
court stated that the term " '[a]dequate remedy at law' contemplates a legal remedy
undertaken through the judicial process." Id. at ¶ 31. Appellants argue this means an
adequate remedy at law must be one available through the judicial process. They therefore
reason that because an administrative appeal is not a judicial process, an appeal to the
director was not an adequate remedy. But Ohio Hosp. Assn. did not hold that an adequate
remedy at law only occurs via the judicial process. In that case, the reference to the judicial
process was in the context of rejecting an assertion that requiring hospital providers to
cancel contracts "to avoid the effects of the invalidly promulgated fee provisions would not
constitute an adequate remedy at law." Id. at ¶ 31. Furthermore, appellants' contention is
contrary to the well-settled general principle that failure to pursue an adequate
administrative remedy bars mandamus relief. See, e.g., State ex rel. Borchert, supra.
       {¶ 24} We also reject appellants' contention that an appeal to the director of ODM
would have been "wholly futile." According to appellants, the director would have simply
confirmed the earlier decision to deny the requested rate adjustment. Although futility is
an exception to the exhaustion of administrative remedies requirement, "[a] party's
speculation as to how his claim would be resolved is insufficient to overcome the
requirement to exhaust administrative remedies." State ex rel. Rennell v. Indus. Comm.,
10th Dist. No. 07AP-67, 2007-Ohio-4597, ¶ 5. See Reasoner v. Randle, 4th Dist. No.
00CA2557, 2001 Ohio App. LEXIS 1672 (Jan. 11, 2001) (even when denial may be the
likeliest outcome, this is not a sufficient basis for waiving the administrative remedy
exhaustion requirement). "Futility in this context means not that the administrative agency
would not grant the requested relief, but that the administrative agency lacks the authority
or power to grant the relief sought." Rural Bldg. of Cincinnati, LLC v. Village of Evendale,
1st Dist. No. C-140404, 2015-Ohio-1614, ¶ 11, citing Nemazee v. Mt. Sinai Med. Ctr., 56
Ohio St.3d 109, 115 (1990). Pursuant to former Ohio Adm.Code 5101:3-3-24.1, the director
had the authority to review the appeal and decide the matter as he saw appropriate. And
No. 20AP-172                                                                                 10

appellants' speculative belief that the director would have agreed with the ODM bureau
chief's decision did not make the appeal process "wholly futile."
       {¶ 25} Alternatively, appellants argue ODM waived its exhaustion argument
because it did not present evidence of an adequate remedy. We are unpersuaded. Insofar
as appellants contend the adequate remedy issue was not contested in the trial court, we
disagree. The parties briefed the issue in their summary judgment filings. Additionally, it
was not necessary for ODM to submit evidence of the existence of an adequate remedy. As
discussed above, the administrative rule in effect at the time ODM notified appellants of
the rate adjustment denial, Ohio Adm.Code 5101:3-3-24.1, expressly provided that
appellants could appeal, to ODM's director, the initial decision of ODM in response to a
request for Medicaid rate adjustments. Pursuant to Civ.R. 44.1(A)(1), "[j]udicial notice
shall be taken of the rules of the supreme court of this state and of the decisional,
constitutional, and public statutory law of this state." Administrative rules "enacted
pursuant to a specific grant of legislative authority" have the "force and effect of law." Doyle
v. Ohio Bur. of Motor Vehicles, 51 Ohio St.3d 46 (1990), paragraph one of the syllabus.
Thus, ODM was not required to submit evidence of the administrative rule that authorized
an appeal to the director of the initial Medicaid rate adjustment denial.
       {¶ 26} For these reasons, we find that appellants' failure to pursue an adequate
administrative remedy bars the requested mandamus relief as a matter of law. Because the
trial court properly granted ODM's summary judgment motion and denied appellants'
summary judgment motion, we overrule appellants' first, second, third, and fourth
assignments of error.
       {¶ 27} Appellants' fifth assignment of error alleges the trial court erred in denying
its motion to compel the resumption of depositions of certain individuals. Based on our
disposition of appellants' first, second, third, and fourth assignments of error, its fifth
assignment of error is moot.
       {¶ 28} In its sixth assignment of error, appellants assert the trial court erred in
declaring as moot all remaining pending motions based on its granting of summary
judgment in favor of ODM. First, appellants suggest the trial court did not rule on the
merits of their motions for sanctions. But the trial court expressly denied the pending
motions for sanction in its March 4, 2020 decision and entry. Second, appellants assert
No. 20AP-172                                                                            11

that their motions for a jury trial and to certify a class are not moot. This assertion,
however, is contingent on this court reversing the trial court's granting of ODM's summary
judgment motion and remanding this matter. Because we affirm the trial court's granting
of summary judgment in favor of ODM, appellants' motions for a jury trial and to certify a
class remain moot.
      {¶ 29} Accordingly, we overrule appellants' sixth assignment of error.
IV. Disposition
      {¶ 30} Having overruled appellants' first, second, third, fourth, and sixth
assignments of error, and having found as moot appellants' fifth assignment of error, we
affirm the judgment of the Franklin County Court of Common Pleas.
                                                                     Judgment affirmed.

                          BROWN and BROGAN, JJ., concur.

             BROGAN, J., retired, formerly of the Second Appellate District,
             assigned to active duty under authority of the Ohio
             Constitution, Article IV, Section 6(C).