Court Opinion

ID: 6551606
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:27:19.822872+00
Date Added: 2024-06-11T15:55:54.675478
License: Public Domain

John E. Jennings, Judge, dissenting. Saint Vincent Infirmary Medical Center was originally determined to be liable for unemployment insurance taxes in 1972 and did not contest that decision. SVI had the burden of proof in seeking an exemption under the Employment Security Law. Employment Sec. Div. v. Shiloh Trust, 249 Ark. 429, 460 S.W.2d 66 (1970). The issue is, as the majority states, whether the Board’s finding that SVI is not operated primarily for religious purposes is supported by substantial evidence. In making that determination we are required to review the evidence in the light most favorable to the findings of the Board. Harris v. Daniels, 263 Ark. 897, 567 S.W.2d 954 (1978); Rose v. Daniels, 269 Ark. 679, 599 S.W.2d 762 (Ark. App. 1980). We are not free to substitute our findings for those of the Board of Review even though we might reach a different conclusion if we made the original determination upon the same evidence considered by the Board. W.C. Lee Construction v. Stiles, 13 Ark. App. 303, 683 S.W.2d 616 (1985). Of course, the testimony of a party is always treated as disputed, as a matter of law. Courtney v. Courtney, 296 Ark. 91, 752 S.W.2d 40 (1988). Even if the evidence is undisputed, the drawing of inferences is for the Board, not the court. Harris v. Daniels, 263 Ark. 897, 567 S.W.2d 954 (1978); W.C. Lee Construction, supra. Not all of the facts in this case support the position taken by the majority. Some excerpts from the testimony recited by the Board in its rather lengthy opinion follow: The Sister stated that the education and training that she received both as a nurse and as a hospital administrator qualify her to work in either a religious or a nonsectarian hospital. The Sister testified that SVI employees could perform comparable services in a lay hospital. The Sister agreed that SVI had approximately 2600 employees. The Sister stated that the average number of SCN members on the SVI board of directors has been about three and that an SVI director need not be a Catholic to qualify to serve on the Board. The Sister said that SVI was incorporated as a separate entity in 1958 and that lay people have constituted a majority on the SVI board of directors since approximately 1978. . . . The Sister stated that the hospital does not offer any religious classes but does have a chapel in which religious services are conducted. The Sister agreed that SVI generates a total annual income from all sources of approximately $155 million a year and that only about $100 thousand a year is received in private donations from the solicitation of funds. The Sister estimates that about 64 percent of gross revenues are received from federal and state sources, primarily Medicare and Medicaid. The Sister stated that SVI does not receive tithes or donations from the Church. . . . The Sister testified that the services performed by the various SVI employees in 1972 were basically the same as the services performed today. . . . The CEO testified that he has been the president and chief executive officer of SVI for the past ten years. . . . The CEO said that he considered himself an employee of SCN and viewed SCN as the owner of the hospital. The CEO testified that he considered SVI a corporate instrument enabling SCN to carry out its mission of caring for the ill and injured. . . . .The CEO stated that in the course of applying for the ERISA exemption the SVI Director of Personnel noticed that the statutory language in the federal ERISA exemption statute was very similar to the exemption language in the Arkansas unemployment compensation statute. The CEO said that SVI decided at that time to apply for the present exemption. . . . The CEO agreed that SVI’s purpose of tending to the ill and injured was grounded in a religious motivation. . . . The CEO testified that when SVI first became covered under the Arkansas Employment Security Law in 1972, SVI probably did not realize it had an option. The CEO stated that SVI therefore decided not to contest the determination of liability and did not elect to be covered. . . . The CEO also agreed that SVI at that time elected to reimburse the fund for sums paid out to claimants rather than to be taxed on its payroll. The CEO testified that he first began his employment with SVI as an assistant administrator in 1967. The CEO stated that he attended about 60 seminars and a summer program in hospital administration but admitted that none of his education or training was limited to religious hospital administration. The CEO further admitted that if the religious aspects of SVI were removed, the facility would still qualify for JCAH accreditation, but that if the health services aspects were removed, the facility would lose the accreditation.. . . The CEO agreed that he is an employee of SVI and that the services rendered by employees of SVI are patient care services.. . . The CEO testified that less than one percent of the hospital’s total revenue comes from donations. The CEO admitted that the hospital does have a collection department and has hired legal counsel to collect debts.The CEO admitted that less than one percent of the total revenue is spent on the chapel, chaplin and SCN visitors.. . . The CEO estimated that SVI admits approximately 60 to 70 thousand patients annually from inpatient, outpatient and emergency room admissions. The CEO agreed that the bulk of these patients visit their doctors for medical problems rather than to have their spiritual needs met. The CEO said that he was not aware whether SVI had to sign a declaration of nonsectarian use to receive Hill-Burton funds. The CEO admitted that SVI represented itself as a health care facility in order to qualify for the Hill-Burton funds. The CEO said that the only type of religious records maintained by SVI are notations on a patient’s admission record of the patient’s religious preference and whether or not a Catholic patient wants communion. . . . The CEO admitted that both the Workers’ Compensation Commission and the Department of Health treat SVI as the employer of its employees.. . . The CEO stated that if SVI were required to perform a morally objectionable procedure it would lose its status as a Catholic hospital. . . . The CEO also admitted that the Department of Health recognizes SVI as a health care facility. . . . .On the Report to Determine Liability attached as an exhibit to the affidavit, SVI exercised its option to reimburse rather than pay a direct contribution tax on its payroll. The Senior Vice President for Human Resources testified that he has been responsible for SVI personnel for 19 years. . . . The vice president noted the similarities in language between the ERISA statutes and the exemption provision of the AESL.. . . The vice president stated that SVI has about 2650 employees and is very similar in structure or hierarchy to other hospitals in terms of basic medical operations although SVI does differ in having a Pastor of Care Department.. . . The vice president estimated that 99 percent of the jobs require lay training, education or experience and that only about one percent or eighteen jobs out of a total of about 2600 involved the religious aspect. The vice president testified that there is no requirement that an employee sign a declaration indicating support of the Catholic philosophy and that there is no grievance procedure in the employee handbook providing for the discipline of an employee for failure to support the Catholic philosophy. . . . The Personnel Director testified that he had served SVI in that capacity for over five years and had worked in the SVI personnel department since 1969. . . . The director said that SVI is self-funded in that it reimburses the fund on the basis of claims paid out to its former employees but does not pay a regular contribution tax on its payroll. . . . The Board explained the basis of its holding and the methodology used in reaching its decision: In its discussion under Part I of the Statute, the Board previously found that SVI is engaged in the delivery of health care in a religious context and with a religious motivation and purpose. SVI, therefore, has a commercial function as a hospital, infirmary and medical clinic and has a religious purpose of serving God and fulfilling the apostolate of the Sisters of Charity of Nazareth in delivering these services within a religious context. However, the Board hereby determines that the primary function of SVI is the commercial delivery of health care services as a hospital facility and medical institution and that the religious aspects are secondary. In reaching this conclusion, the Board has considered not only the nature and purpose of the employment of the SVI employees, the “employment itself’ test urged by counsel for the ESD, but has used a general weighing and balancing test to ascertain the essential function of SVI. Although SVI was founded by a religious order of the Roman Catholic Church, was first brought into existence through a religious motivation and for a specific religious purpose and mission, and remains under the control of the Church up to the present day, the essential function of the institution remains that of a hospital, infirmary and medical institution. Through both inpatient, outpatient, and emergency admissions, SVI delivers health services to approximately 60,000 to 70,000 patients a year, according to the testimony of the CEO, very few, if any of whom, visit the facility to have their spiritual or religious needs met. SVI is open to all members of the public regardless of religious faith or denomination and none of its medical staff or other employees need be members of the Roman Catholic faith to qualify for employment. The record indicates that only 15 to 13 of SVI’s 2600 employees are associated with the in-house chapel or the other purely religious aspects of SVI. Less than one percent of the institution’s revenues are allocated to the chapel, the payroll of the chaplain and the employees engaged in a purely religious function, or to the maintenance of the religious aspects of SVI. The testimony indicates that regular religious services are not held in the chapel and that the only religious records maintained for the patients are possibly the denomination of each patient and whether those patients of the Catholic faith desire Mass or the administering of other sacraments. Nor does the record indicate that SVI is operated for the religious training or education of those of the Roman Catholic faith. Although SVI does conduct some educational classes, the instruction is in the area of health care and community services rather than religion. In determining “purpose” the Board obviously considered both motive and function. I do not find this objectionable. The construction of a statute by an administrative agency is entitled to consideration and is “highly persuasive.” Farm Bureau Mutual Ins. Co. v. Wright, 285 Ark. 228, 686 S.W.2d 778 (1985); Brawley School Dist. No. 38 v. Kight, 206 Ark. 87, 173 S.W.2d 125 (1943). Were we deciding this case de novo or functioning as the factfinder I could not quarrel with the result the majority has reached. But that is not what we ought to be doing. This is the point made by Chief Justice Hammond of the Maryland Court of Appeals in State Insurance Commissioner v. National Bureau of Casualty Underwriters, 248 Md. 292, 236 S.2d 282 (1967): The required process [judicial review of administrative agency decisions] is difficult to precisely articulate but it is plain that it requires restrained and disciplined judicial judgment, so as not to interfere with the agency’s factual conclusions under any of the tests, all of which are similar. . . . [J]udicial review essentially should be limited to whether a reasoning mind reasonably could have reached the factual conclusion the agency reached. This need not and must not be either judicial fact-finding or substitution of judicial judgment for agency judgment. 236 A.2d at 292. In Kendall v. Director of Division of Employment Security, 393 Mass. 731, 473 N.E.2d 196 (1985), the main case relied upon by the majority, the Massachusetts Supreme Judicial Court did not hold, as a matter of law, that the Board was required to find that the Cardinal Cushing School and Training Center was operated “primarily for religious purposes,” but rather held only that such a finding was a permissible one. The law requires that the board’s findings be upheld if they are supported by substantial evidence. Substantial evidence is “such evidence as a reasonable mind might accept as adequate to support a conclusion.” Furthermore, in reviewing the board’s findings we “give due weight to the experience, technical competence and specialized knowledge of the agency, as well as to the discretionary authority conferred upon it.” We conclude that substantial evidence exists on the record to warrant the board’s finding that the Center is “operated primarily for religious purposes.” 473 N.E.2d at 199-200. (Emphasis added and citations omitted.) While we rely on Kendall to reverse, we ignore its real basis for decision. In the case at bar the majority, in my view, exceeds our proper scope of review and simply decides the case anew. Because I believe the findings and conclusions of the Board of Review are supported by substantial evidence, I would affirm. Rogers, J., joins in this dissent.