Court Opinion

ID: 9850136
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:52:31.689707+00
Date Added: 2024-06-11T09:20:32.227314
License: Public Domain

TYSON, Judge
dissenting.
The majority’s opinion cites to Campbell v. Church and argues the principal rule of statutory construction is the legislature’s purpose and intent controls. 298 N.C. 476, 484, 259 S.E.2d 558, 564 (1979). The majority’s opinion also cites to Cape Fear Mem. Hospital v. N.C. Dept. of Human Resources and contends the legislative intent behind the CON review process is “the regulation of major capital expenditures which may adversely impact the cost of health care services to the patient.” 121 N.C. App. 492, 494, 466 S.E.2d 299, 301 (1996) (citing N.C. Gen. Stat. §§ 131E-174(l)-(2), (4), and (6)-(7)). While I certainly agree that the legislature’s purpose and intent controls our interpretation of the statute, the majority’s opinion misapplies the statute and ignores others. By limiting the right to an exemption from CON review to solely one provision in the exemption statute, N.C. Gen. Stat. § 131E-184(a)(5), the Department and the majority’s opinion overlook the plain language of Section (1), (la), and (lb). I respectfully dissent.
*315I.Issues
GHHS argues the Department: (1) improperly granted summary judgment against it because N.C. Gen. Stat. § 131E-184 grants an exemption for their replacement hospital, which was proposed to eliminate “imminent safety hazards” as defined in life safety codes, comply with state and federal licensure standards, and comply with medicare certification standards; (2) erred in determining that its written notice and explanation were not sufficient to warrant an exemption; and (3) unconstitutionally applied the exemption statute to deprive it of its right to use its existing facility.
II.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 when 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)).
III.Summary Judgment and Exemption from CON Review
GHHS argues the Department improperly granted summary judgment against it because N.C. Gen. Stat. § 131E-184 grants an exemption for their replacement hospital, which was proposed to eliminate “imminent safety hazards” as defined in life safety codes, to comply *316with state licensure standards, and to comply with federal medicare certification standards. I agree.
In a motion for summary judgment, the movant has the burden of establishing that there are no genuine issues of material fact. The movant can meet the burden by either: 1) Proving that an essential element of the opposing party’s claim is nonexistent; or 2) Showing through discovery that the opposing party cannot produce evidence sufficient to support an essential element of his claim nor [evidence] sufficient to surmount an affirmative defense to his claim.
When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him.
Hines v. Yates, 171 N.C. App. 150, 157, 614 S.E.2d 385, 389 (2005) (internal quotation and citation omitted).
The AU reversed the Agency’s decision disapproving GHHS’s 2003 application and ruled that “a CON be issued for the construction of a replacement hospital in Lillington, NC as proposed in the application.” Following the ALJ’s decision, Good Hope wrote a letter to the Agency and explained that GHHS planned to acquire Good Hope and develop a replacement hospital in Lillington. In the letter, Good Hope contended the project was exempt from CON review pursuant to N.C. Gen. Stat. § 131E-184(a)(l), (a)(la), and (a)(lb) which provide:
(a) Except as provided in subsection (b), the Department shall exempt from certificate of need review a new institutional health service if it receives prior written notice from the entity proposing the new institutional health service, which notice includes an explanation of why the new institutional health service is required, for any of the following:
(1) To eliminate or prevent imminent safety hazards as defined in federal, State, or local fire, building, or life safety codes or regulations.
(la) To comply with State licensure standards.
*317(lb) To comply with accreditation or certification standards which must be met to receive reimbursement under Title XVII of the Social Security Act or payments under a State plan for medical assistance approved under Title XIX of that act.
(Emphasis supplied).
The Agency informed GHHS that its project was not exempt from CON review. The Department’s final agency decision reversed the ALJ’s recommended decision and affirmed the Agency’s decision disapproving GHHS’s CON application.
Following the final agency decision, GHHS moved for summary judgment based on N.C. Gen. Stat. § 131E-184(a)(lb), which states, “[t]o comply with accreditation or certification standards which must be met to receive reimbursement under Title XVIII of the Social Security Act or payments under a State plan for medical assistance approved under Title XIX of that act.” The chief ALJ entered summary judgment against GHHS. The final agency decision affirmed summary judgment in favor of the Department. The final agency decision concluded, “now that it has been adjudicated that GHHS should receive a CON to develop a replacement hospital, Good Hope cannot now show that its proposed project is required.”
GHHS appeals from the Department’s final agency decision granting summary judgment in favor of the Agency. GHHS argues it submitted uncontradicted evidence that is sufficient to prove GHHS is exempt from CON review and is entitled to summary judgment. N.C. Gen. Stat. § 1A-Í, Rule 56 (2005). The Agency does not dispute the fact that the facility must be replaced, must comply with health and safety codes, and must maintain its certifications and licenses in order to continue to operate. GHHS contends summary judgment should be reversed because it provided evidence of an exempt purpose.
GHHS presented undisputed evidence acknowledging the dilapidated condition of Good Hope Hospital, as well as photographs and inspections documenting the deficiencies. GHHS’s evidence included findings of state and federal agencies that identified the major categories of physical and environmental deficiencies throughout the facility. The evidence included a letter from the Centers for Medicare and Medicaid Services to Good Hope that stated:
*318we have determined that your facility does not comply with the provisions of the National Fire Protection Association’s Life Safety Code. These deficiencies form the basis for our determination of noncompliance with the Condition of Participation pertaining to Physical Environment (reference: 42 CFR 482.41) and Medicare Health Safety regulations for hospitals.
GHHS submitted with its notice of exemption a letter from the Director of Harnett County Emergency Services Department. The letter stated, “It is our opinion that the report prepared by C. Ross Architecture L.L.C. and L.C. Thomasson Associates, Inc. accurately summarizes the imminent safety hazards at Good Hope Hospital as defined by Federal, State, and Local fire and safety codes.” (Emphasis supplied). N.C. Gen. Stat. § 131E-184(a)(l) provides GHHS with an exemption from CON review. The facility suffers “imminent safety hazards” and must be replaced. N.C. Gen. Stat. § 131E-184(a)(l).
The majority’s opinion interprets N.C. Gen. Stat. § 131E-184 narrowly and limits exemptions for replacement of a facility solely to Section (5), “[t]o replace or repair facilities destroyed or damaged by accident or natural disaster.” N.C. Gen. Stat. § 131E-184(a)(5). The majority’s opinion cites to Alberti v. Manufactured Homes, Inc. and argues legislative intent may be inferred from the “consequences which would follow, respectively, from various constructions.” 329 N.C. 727, 732, 407 S.E.2d 819, 822 (1991).
In Alberti, the plaintiffs sought to revoke their acceptance of goods from a remote manufacturer with whom they had no contractual relationship. 329 N.C. at 732, 407 S.E.2d at 822. Our Supreme Court relied on Article 2 of the Uniform Commercial Code to define “buyer” and “seller.” Id. The Court stated, “[i]n determining whether remote manufacturers are generally ‘sellers’ against whom a consumer may revoke acceptance, the legislature’s inclusions and omissions in its definition of ‘seller’ are instructive as to its intent.” Id. at 734, 407 S.E.2d at 823. The Court held that the manufacturer was not a seller. Id.
Here, N.C. Gen. Stat. § 131E-184, entitled, “Exemptions from review,” provides in Section (a)(1) “the Department shall exempt from certificate of need review . . . .” and lists nine separate and distinct exemptions from CON review. (Emphasis supplied). The first exemption is to “eliminate or prevent imminent safety hazards.” N.C. Gen. Stat. § 131E-184(a)(l). If the “new institutional health service” must be renovated or replaced to “eliminate or prevent imminent *319safety hazards,” the statute provides an exemption from CON review. Id. N.C. Gen. Stat. § 131E-184(a)(5) identifies a separate and distinct exemption for when a facility must be replaced due to damage from a natural disaster or accident. All parties agree, and the undisputed evidence shows, Good Hope suffers from “imminent safety hazards.” Good Hope is a ninety-year old facility that originated in a residential structure. Undisputed evidence also shows that renovation of the existing structure to comply with present local, state, and federal safety and licensure requirements, cannot be accomplished without demolishing the existing structure. N.C. Gen. Stat. § 131E-184(a)(l) expressly provides GHHS an exemption from CON review.
IV. Conclusion
GHHS presented substantial and undisputed evidence to prove its right to an exemption from CON review in order “to eliminate or prevent imminent safety hazards,” or to maintain licensure standards, or comply with accreditation, or certification standards to receive entitlement reimbursements. N.C. Gen. Stat. § 131E-184(a)(l), (la), and (lb). The ianguage of the statute is mandatory on the Agency. “[T]he legislature clearly did not intend to impose unreasonable limitations on maintaining, or expanding, presently offered health services.” Cape Fear Mem. Hosp., 121 N.C. App. at 494, 466 S.E.2d at 301 (citations omitted).
The final agency decision erroneously granted summary judgment for the Department and against GHHS. GHHS provided substantial and undisputed evidence of its right to statutory exemption^) to survive the Department’s motion. The exemptions for replacement of a facility under N.C. Gen. Stat. § 131E-184(5) are not limited solely to “replace or repair facilities destroyed or damaged by accident or natural disaster.” Deterioration and demolition of an aged facility with an 100 year old residential structure at its core, together with evolving standards required of health care facilities, are no less destructive than a fire, flood, or tornado. Summary judgment in favor of the Agency should be reversed, and remanded for issuance of the CON in accordance with the decision of the ALJ. I respectfully dissent.