Court Opinion

ID: 9850058
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:51:37.76794+00
Date Added: 2024-06-11T09:20:31.156062
License: Public Domain

TYSON, Judge
dissenting.
I. Mootness
The majority’s opinion cites In re Denial of Request by Humana Hospital Corp. and applies the mootness doctrine to GHHS’s appeal. 78 N.C. App. 637, 640, 338 S.E.2d 139, 141 (1986). In Humana, this *303Court stated, “[t]he doctrine of mootness is applicable to an appellate proceeding where the original question in controversy is no longer at issue.” 78 N.C. App. at 640, 338 S.E.2d at 141.
A case is considered moot when “a determination is sought on a matter which, when rendered, cannot have any practical effect on the existing controversy.” Roberts v. Madison Cty. Realtors Ass’n, 344 N.C. 394, 398-99, 474 S.E.2d 783, 787 (1996). Courts will not entertain such cases because it is not the responsibility of courts to decide “abstract propositions of law.” In re Peoples, 296 N.C. 109, 147, 250 S.E.2d 890, 912 (1978), cert. denied, 442 U.S. 929, 61 L. Ed. 2d 297 (1979). Conversely, when a court’s determination can have a practical effect on a controversy, the court may not dismiss the case as moot.
Lange v. Lange, 357 N.C. 645, 647, 588 S.E.2d 877, 879 (2003) (emphasis supplied).
GHHS persuasively argues reasons to show this case is not moot. GHHS contends, the “agency has deprived Good Hope Hospital of the substantive legal right to use and maintain its existing, previously approved hospital by erroneously misapplying the CON act to evaluate GHHS’s 2003 proposal as for a new hospital and new services rather than as for replacement of an existing hospital.”
The 2003 application is to be reviewed and evaluated under Policy AC-5 in the 2003 SMFP and criterion (3a) concerning reduction and relocation of existing health services. N.C. Gen. Stat. § 131E-183(a)(3a) (2003). Proposals for new services are judged against criteria 1, 3, and 6. N.C. Gen. Stat. §§ 131E-183(a)(l), (3), and (6). GHHS’s 2005 CON is an application for “new services” and does not moot the 2003 CON for “relocation of existing services.” I respectfully dissent.
II. Standard of Review
N.C. Gen. Stat. § 150B-23(a) (2003) provides:
A contested case shall be commenced by filing a petition with the Office of Administrative Hearings and, except as provided in Article 3A of this Chapter, shall be conducted by that Office ... A petition shall be signed by a party or a representative of the party and, if filed by a party other than an agency, shall state facts tending to establish that the agency named as the respondent has deprived the petitioner of property, has ordered the petitioner to *304pay a fine or civil penalty, or has otherwise substantially prejudiced the petitioner’s rights and that the agency:
(1) Exceeded its authority or jurisdiction;
(2) Acted erroneously;
(3) Failed to use proper procedure;
(4) Acted arbitrarily or capriciously; or
(5) Failed to act as required by law or rule.
The parties in a contested case shall be given an opportunity for a hearing without undue delay. Any person aggrieved may commence a contested case hereunder.
In Humana, cited by the majority’s opinion, the hospital submitted two applications as a new provider for a new facility and new beds. 78 N.C. App. at 640, 338 S.E.2d at 141. Humana’s request for a reconsideration hearing regarding the denial of its 1981 application was also denied. Id. This Court held that because Humana’s 1982 application was reviewed, and the 1981 and 1982 applications were virtually identical, “the 1982 review process afforded Humana an adequate remedy to have its application reviewed under a plan projecting a bed need, regardless of any alleged error in the 1981 review process. Therefore, the assignments of error as to the review process of Humana’s 1981 application are moot.” Id. at 641, 338 S.E.2d at 142. This Court in Humana also limited the applicability of its holding and stated, “[t]his opinion should not be construed as holding that the opportunity to reapply for a certificate of need automatically moots all procedural claims in all cases.” Id. at 646, 338 S.E.2d at 145.
Here, GHHS’s 2005 application did not moot the claims involved in the 2003 application. The original issue on appeal regarding GHHS’s 2003 application remains unanswered. The legal issue of how the CON Act can constitutionally and statutorily be applied to replacement projects remains unanswered. GHHS’s 2003 CON and the 2005 CON applications are factually and legally different.
Unlike Humana, GHHS requested a reduction in beds and relocation of the existing facility in its 2003 application, not a CON for a new facility. The 2005 application sought a “new facility.” This application resulted from and was based upon the Governor’s amendment to the 2005 SMFP, which determined that a “New Hospital” is needed in central Harnett County. The Governor specifically stated, *305“I have concluded that the Certificate of Need (“CON”) application process to build the New Hospital should be open to any applicant and nothing herein is to be construed as favoritism toward, or bias against, any potential applicant.” Substantially different review criteria applies if an applicant seeks to replace existing health services rather than apply for a CON for new health services. Compare N.C. Gen. Stat. § 131E-183(a)(3a) with § 131E-183(a)(l), (3), and (6). The 2005 CON request for a New Hospital is a new and different application that solely arose due to the Governor’s amendment to the 2005 SMFP and is subject to review under different statutory regulations. Id.
The requirements for a relocation or reduction in services are provided in N.C. Gen. Stat. § 131E-183(a)(3a), which provides:
In the case of a reduction or elimination of a service, including the relocation of a facility or a service, the applicant shall demonstrate that the needs of the population presently served will be met adequately by the proposed relocation or by alternative arrangements, and the effect of the reduction, elimination or relocation of the service on the ability of low income persons, racial and ethnic minorities, women, handicapped persons, and other underserved groups and the elderly to obtain needed health care.
The Agency found that GHHS met the requirements of N.C. Gen. Stat. § 131E-183(a)(3a). GHHS’s 2003 application did not request new beds, as did the 2005 application. In its final decision, the Agency concluded that GHHS’s 2003 application failed to satisfy the requirements for new services; criteria that is wholly inapplicable to the 2003 application.
The 2005 application must satisfy the standards under N.C. Gen. Stat. § 131E-183(a)(l), (3), and (6). Under these Sections of the statute, GHHS must explain why “new” services are needed and demonstrate that the “new projects” will not result in an “unnecessary duplication” of existing health services.
The Agency denied GHHS’s 2003 application. The Agency found that GHHS failed to meet the statutory requirements of N.C. Gen. Stat. § 131E-183(a)(l), (3), (4), (5), (6), (12), (18a) and 131E-183(b). GHHS argues the Agency incorrectly applied N.C. Gen. Stat. § 131E-183(a)(l), (3), and (6) standards to the 2003 application. I agree. In 2003, GHHS applied for a modification to the existing facility only. The Agency erred when it reviewed and evaluated the *3062003 application under the standard set forth for new facilities in N.C. Gen. Stat. § 131E-183(a). GHHS is entitled to a decision on the merits of this issue. The majority’s opinion fails to correctly apply the mootness doctrine. Since I find the appeal is not moot, I address the merits of the appeal.
TTT. Issues
GHHS argues the Agency: (1) exceeded its authority by ignoring its own statutes, plan, prior decisions, and settlement agreement with Good Hope; (2) exceeded its authority by demanding space information not required under N.C. Gen. Stat. § 131E-182(b) and ignoring space information required by the application; (3) violated N.C. Gen. Stat. § 13IE-185 by failing to consider information from the public hearing concerning how GHHS’s application conformed to the applicable law; and (4) unconstitutionally applied the CON criteria to deny GHHS’s application and deprive the hospital of its right to use its existing facility.
IV. Standard of Review
N.C. Gen. Stat. § 131E-188(b) (2003) provides:
Any affected person who was a party in a contested case hearing shall be entitled to judicial review of all or any portion of any final decision of the Department in the following manner. The appeal shall be to the Court of Appeals as provided in G.S. 7A-29(a).
“On judicial review of an administrative agency’s final decision, the substantive nature of each assignment of error dictates the standard of review.” North Carolina Dep’t of Env’t and Natural Res. v. Carroll, 358 N.C. 649, 658, 599 S.E.2d 888, 894 (2004) (citation omitted). “If the party asserts the agency’s decision was affected by a legal error, de novo review is required; if the party seeking review contends the agency decision was not supported by the evidence, or was arbitrary or capricious, the whole record test is applied.” Christenbury Surgery Ctr. v. N.C. Dep’t of Health and Human Servs., 138 N.C. App. 309, 312, 531 S.E.2d 219, 221 (2000). “[T]his Court reviews the agency’s findings and conclusions de novo whén considering alleged errors of law.” Cape Fear Mem. Hosp. v. N.C. Dept. of Human Resources, 121 N.C. App. 492, 493, 466 S.E.2d 299, 300 (1996) (citing Walker v. N.C. Dept. of Human Resources, 100 N.C. App. 498, 502, 397 S.E.2d 350, 354 (1990), disc. review denied, 328 N.C. 98, 402 S.E.2d 430 (1991)).
*307V. Agency Authority
GHHS argues the Agency exceeded its authority by ignoring its own statutes, plan, prior decisions, and settlement agreement with Good Hope. I agree.
Good Hope applied for a CON in 2001. The application proposed to: (1) replace part of its existing hospital with a new facility on Highway 421 near Erwin; (2) utilize buildings on the old campus for outpatient physical therapy, business offices, plant operations, information services, and other support functions; (3) reduce the number of beds from seventy-two to forty-six; (4) develop three operating rooms; (5) encompass 61,788 square feet; and (6) spend a capital expenditure of $16,159,950.00.
The Agency approved the application, but conditioned its approval on the development of two operating rooms. Good Hope and the Agency entered into a settlement agreement, and the Agency agreed that Good Hope could develop three operating rooms. A CON was issued to Good Hope on 14 December 2001.
Good Hope secured financing through a joint venture with Triad Hospitals, Inc. known as Good Hope Health Systems, L.L.C., and referred to in the majority’s opinion as “GHHS.” In 2003, GHHS filed an application to develop a replacement facility in central Harnett County. The 2003 application proposed the same number of beds and operating rooms as was provided in the 2001 application but increased the size of the facility to 112,945 square feet. The 2003 application proposed more meeting space, more private rooms, and to relocate all facilities rather than utilize any portion of the existing facility. During the review process, GHHS sent a letter to the Agency stating it was entitled to an exemption from CON review under N.C. Gen. Stat. § 131E-184(a). The Agency denied the application.
N.C. Gen. Stat. § 131E-176(16)(e) (2003) provides:
“New institutional health services” means any of the following:
(e) A change in a project that was subject to certificate of need review and for which a certificate of need was issued, if the change is proposed during the development of the project or within one year after the project was completed. For purposes of this subdivision, a change in a project is a change of more than fifteen percent (15%) of the approved capital expenditure *308amount or the addition of a health service that is to be located in the facility, or portion thereof, that was constructed or developed in the project.
GHHS’s 2003 application proposed additional capital expenditures exceeding 15% over the 2001 project for which a CON was issued. The 2003 application was “proposed during the development of the project” granted in the 2001 application and stated that it was proposing changes to the approved 2001 project.
The Agency incorrectly reviewed the 2003 application as a new project, rather than a modification to an existing project. The Agency failed to set forth any finding to support its determination that the 2003 application should be reviewed and evaluated as a new project instead of an existing project.
GHHS argues N.C. Gen. Stat. § 131E-183(a)(3a) controls the 2003 application. The application proposes to “reduce and relocate facilities” rather than establish a new hospital. The Agency found that GHHS’s proposed replacement facility would appropriately meet the needs of all patient groups, but GHHS failed to adequately demonstrate “that the population projected to be served needs the scope of services proposed by the application,” a requirement of N.C. Gen. Stat. § 131E-183(a)(3). The Agency also found GHHS’s application complied with N.C. Gen. Stat. § 131E-183(a)(3a). The Agency also analyzed the application under N.C. Gen. Stat. § 131E-183(a)(6) and found the requirement of demonstrating “that the proposed project will not result in unnecessary duplication of existing or approved health service capabilities or facilities” was not satisfied. The Agency erred when it applied criterion for new hospitals in N.C. Gen. Stat. § 131E-183(a) to GHHS’s 2003 modification. In light of this error, it is unnecessary to consider the remaining assignments of error.
VI. Conclusion
The majority’s opinion improperly applies the mootness doctrine to dismiss GHHS’s appeal. GHHS is entitled to a decision on the merits of its appeal.
The Agency erred when it reviewed GHHS’s 2003 application based on criterion for a new facility. In light of this error, it is unnecessary to consider the remaining assignments of error. I vote to reverse and remand this case for evaluation of GHHS’s 2003 CON application under the statutes and regulations applicable to relocation of an existing facility. I respectfully dissent.