Court Opinion

ID: 6550657
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:25:07.886908+00
Date Added: 2024-06-11T15:56:06.007969
License: Public Domain

Tom Glaze, Judge, concurring. In this Court’s original opinion, we upheld the chancellor’s decision decláring the parties’ option to renew the 1978 lease void for lack of definiteness and enjoining the appellants from moving their nursing home businesses. We further concluded that the parties’ landlord-tenant relationship is over so the appellee was free to sell or lease its premises and the appellants were free to take the assets of their nursing home businesses. We merely remanded this cause for the chancellor to ensure that the parties’ respective interests would be protected and that an orderly transition would ensue. Both parties now seek clarification of what interests or assets go with which party. This, of course, has been the integral issue in this case all along. If appellants are permitted to remove the entire nursing home business, leaving appellee only its lands and buildings, the value of appellee’s facilities is greatly reduced because the facilities are valuable as nursing homes, but not nearly so valuable for other purposes. Because the record clearly reflects these parties’ respective interests, I believe we should resolve their doubts now rather than compelling them and the trial judge to go through the frustration of another hearing and, most likely, another appeal. First, I believe the appellee gave undue emphasis to the term “certificate of need” when attempting to define each party’s rights in this case. As appellee earlier pointed out in its brief, the business relationship between the parties actually commenced in 1962, long before certificates of need were authorized in 1975. See Ark. Stat. Ann. § 82-2311 (Supp. 1983). The undisputed evidence reflects that Mrs. Pennock — from whom appellants acquired the Lonoke and Cedar Lodge Nursing homes — applied for and was given the license to operate these nursing homes on appellee’s premises. Neil Bennett, Sr., representing the appellee, testified: I have never held a nursing home license or an administrator’s license. My family’s sole association with the nursing home business is that we own the land and the buildings in- which some nursing homes were operated. We did not give Mrs. Pennock any advice concerning the operation of the nursing home. The only advice we gave anybody was to operate them so that they would stay in good standing with the State. In sum, under Ark. Stat. Ann. § 82-346 (Repl. 1976), appellants, through their original owner Mrs. Pennock, were issued nursing home licenses to operate homes on appellee’s premises only. Those licenses are not transferable; they cannot be transferred to appellee or others, nor, as the licenses were issued, can appellants operate their nursing homes operations at other than on appellee’s premises. See § 82-346. Nevertheless [pursuant to Ark. Stat. Ann. § 82-347 (Repl. 1976)], the appellants, as the licensees, may seek the State’s approval to construct new facilities. Depending upon what appellants’ plans encompass, they could also be subject to § 82-2311, supra. Regardless of what appellants’ existing licensure rights may be under the Arkansas law, it appears eminently clear that appellee neither owns nor possesses the licenses in question and their incidental interest in appellants’ licenses terminated when the parties’ leasehold relationship ended. Appellee admittedly owned only the land and buildings in which appellants operated their licensed nursing home businesses, and- all three lease agreements between the parties reflect this fact. These arguments were arms-length business transactions under which appellee merely furnished two facilities, and in turn, appellants paid appellee a monthly rent so they could operate in each a fifty-three patient bed unit and 132-patient bed unit. To decide that appellee has any continuing interest in or control over appellants’ licenses after their lease ends would inferentially grant appellee a transferable interest in those licenses, which is clearly contrary to statutory law. See § 82-346, supra. In addition, because the subject licenses are appellants’ indicia of title to operate nursing homes in the State, appellants’ business — except for its tangible assets such as kitchen, dining and lounge equipment and nursing supplies — would be rendered totally worthless. On the other hand, appellants’ loss would become appellee’s gain because their premises remain valuable for nursing home purposes as a result of appellee’s continued, appropriated use of appellants’ licenses. In reaching this conclusion, I am aware that appellee places small emphasis on the fact that appellants were granted the licenses. Instead, appellee argues that the critical issue is who is granted the certificate of need — not the license — because the certificate is the prior authorization from the State to construct the facilities in the first instance and because it specifies the bed capacity the facilities shall have. Although such certificates were not provided by law until 1975 — six years after appellants’ licenses were granted — appellee suggests that they (not appellants) were given the “authorization” by the State to build the homes in 1962 with their existing bed capacity and that “authorization” has not changed. As I indicated earlier, I am firmly of the opinion that under Arkansas’ statutory law, the licensed person (or organization) is the only person who may apply with the State to alter or add to its facilities or to request permission to construct new facilities. Any such nursing home licensee who operates under a grandfathered status (as do appellants) is also the one who must obtain a certificate of need from the State before seeking construction of additional patient beds to reach licensed capacity. See § 82-23Ilfi). Here, the appellee, by showing its responsibility for obtaining the State’s authorization to build the homes in 1962, cannot thereby subrogate itself to the rights of the appellants, who possess the licenses granted under § 82-346. I still agree that this cause should be remanded so an orderly transition can be made by the parties. However, the issue on which both parties request clarification should be addressed to avoid further confusion below and other appeals to this Court. To return this cause to the trial court to determine the assets of appellants’ nursing home operation is merely to delay ruling on the obvious question sought to be resolved by both parties: Does the appellee have any continuing interest in the licensed nursing home businesses and its bed capacity allocations once the appel-lee’s and the appellants’ lease relationship ended? The parties fully developed the evidence and submitted excellent arguments in an effort to resolve this question. I believe the answer is no. Because this question is one of first impression involving statutory construction, perhaps the Supreme Court would agree to accept this cause on review if we would conclusively decide this issue now.