Good Hope Hospital, Inc. v. North Carolina Department of Health & Human Services

623 S.E.2d 315, 175 N.C. App. 309, 2006 N.C. App. LEXIS 63
CourtCourt of Appeals of North Carolina
DecidedJanuary 3, 2006
DocketCOA05-183
StatusPublished
Cited by12 cases

This text of 623 S.E.2d 315 (Good Hope Hospital, Inc. v. North Carolina Department of Health & Human Services) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Good Hope Hospital, Inc. v. North Carolina Department of Health & Human Services, 623 S.E.2d 315, 175 N.C. App. 309, 2006 N.C. App. LEXIS 63 (N.C. Ct. App. 2006).

Opinions

[310]*310STEELMAN, Judge.

Petitioner, Good Hope Hospital (Good Hope), is licensed as an acute care hospital. It has been in operation since 1921 in Erwin, North Carolina. Betsy Johnson Regional Hospital, Inc. (Betsy Johnson), is located in Dunn, North Carolina. Both hospitals are located in Harnett County. Due in part to its age, Good Hope’s existing hospital is nearing the end of its useful life and suffers from multiple deficiencies.

Certificate of Need Applications

In 2001, Good Hope applied for a Certificate of Need (CON) with the Department of Health and Human Services, Division of Facility Services, Certificate of Need Section (Agency) pursuant to Chapter 131E of the North Carolina General Statutes to partially replace its existing facility. The Agency conditionally approved Good Hope’s 2001 application, but only for two operating rooms. Good Hope filed a petition for contested case hearing in the Office of Administrative Hearings (OAH). Good Hope and the Agency settled the dispute in a written agreement. On 14 December 2001, the Agency issued a CON to Good Hope for a forty-six bed hospital with three operating rooms.

Good Hope was unable to obtain funding for its hospital through HUD. As a result, Good Hope entered into a joint venture with Triad Hospital, Inc., who agreed to finance the project, and the two formed Good Hope Hospital System, L.L.C. (GHHS). GHHS filed a motion for declaratory ruling requesting it be assigned Good Hope’s 2001 CON. The Agency denied this request. GHHS appealed the denial to the Department of Health and Human Services, Division of Facility Services (Department), but obtained a stay of this appeal. Good Hope has not relinquished its 2001 CON.

On 14 April 2003, GHHS filed a new application for a CON to build what it characterized as a complete replacement hospital in Lillington. The Agency denied this application. On 10 September 2004, the Department denied GHHS’s application in a final agency decision. GHHS appealed this decision in a separate appeal. See Good Hope Health Sys., L.L.C. v. N.C. Dep’t of Health and Human Servs., 175 N.C. App. 296, 623 S.E.2d 307 (2006).

Exemption Notice

By letter dated 21 August 2003, GHHS notified the Agency that it proposed to acquire Good Hope Hospital and develop a replacement [311]*311hospital in Lillington. GHHS asserted it was exempt from CON review pursuant to N.C. Gen. Stat. § 131E-184. GHHS gave its notice of exemption while its second application for a CON was pending. On 11 December 2003, the Agency denied GHHS’s exemption request. GHHS filed a petition for contested case hearing on 12 January 2004 with OAH. In its petition, GHHS alleged the Agency erred in refusing to recognize its proposal to replace its existing hospital as exempt from CON review under N.C. Gen. Stat. § 131E-184. The administrative law judge (AU) allowed motions to intervene by the Town of Lillington, Betsy Johnson, and Amisub of North Carolina, Inc. On 2 August 2004, the ALT issued a recommended decision to grant summary judgment against GHHS. On 1 November 2004, the Department issued its Final Agency Decision, determining GHHS’s proposal was not exempt under N.C. Gen. Stat. § 131E-184. GHHS appealed.

Argument

In GHHS’s first argument, it contends the Department improperly granted summary judgment against it because it erred in applying N.C. Gen. Stat. § 131E-184. We disagree.

Standard of Review

In determining whether an agency erred in interpreting a statute, this Court employs a de novo standard of review. Chesapeake Microfilm v. N.C. Dept. of E.H.N.R., 111 N.C. App. 737, 744, 434 S.E.2d 218, 221 (1993). We also review the grant of summary judgment de novo. Stafford v. County of Bladen, 163 N.C. App. 149, 151, 592 S.E.2d 711, 713, disc. review denied, 358 N.C. 545, 599 S.E.2d 409 (2004).

Analysis

A certificate of need (CON) is required before an entity can develop a “new institutional health service” as defined in N.C. Gen. Stat. § 131E-176(16). This includes building a new hospital. However, the CON law exempts certain projects that would otherwise be subject to CON review if they fit within any of the listed grounds contained in N.C. Gen. Stat. § 131E-184. Any part of the project which does not fit within an exempt purpose remains subject to the statutory prerequisite of CON review and approval. N.C. Gen. Stat. § 131E-184(b).

When interpreting a statute, we must apply the rules of statutory construction. Campbell v. Church, 298 N.C. 476, 484, 259 S.E.2d 558, 564 (1979). The principal rule of statutory construction is that the [312]*312legislature’s intent controls. Id. That intent “may be inferred from the nature and purpose of the statute, and the consequences which would follow, respectively, from various constructions.” Alberti v. Manufactured Homes, Inc., 329 N.C. 727, 732, 407 S.E.2d 819, 822 (1991). “A court should always construe the provisions of a statute in a manner which will tend to prevent it from being circumvented,” otherwise, the problems which prompted the statute’s passage would not be corrected. Campbell, 298 N.C. at 484, 259 S.E.2d at 564. In addition, statutory exceptions must be narrowly construed. Publishing Co. v. Board of Education, 29 N.C. App. 37, 47, 223 S.E.2d 580, 586 (1976). The party seeking the benefit of the exception bears the burden of establishing that they fit squarely within the exception. Id. In addition, “the interpretation of a statute given by the agency charged with carrying it out is entitled to great weight.” Frye Reg’l Med. Ctr. v. Hunt, 350 N.C. 39, 45, 510 S.E.2d 159, 163 (1999) (citations and internal quotation marks omitted).

“[T]he overriding legislative intent behind the CON process, [is the] regulation of major capital expenditures which may adversely impact the cost of health care services to the patient.” Cape Fear Mem. Hosp. v. N.C. Dept. of Human Resources, 121 N.C. App. 492, 494, 466 S.E.2d 299, 301 (1996) (citing N.C. Gen. Stat. §§ 131E-175(l)-(2), (4) and (6)-(7)). See also In re Denial of Request by Humana Hosp. Corp., 78 N.C. App. 637, 646, 338 S.E.2d 139, 145 (1986). To achieve this goal, the CON law was enacted to “limit the construction of health care facilities in this state to those that the public needs and that can be operated efficiently and economically for [the public’s] benefit.” In re Humana Hosp. Corp. v. N.C. Dept. of Human Resources, 81 N.C. App.

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Good Hope Hospital, Inc. v. North Carolina Department of Health & Human Services
623 S.E.2d 315 (Court of Appeals of North Carolina, 2006)

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623 S.E.2d 315, 175 N.C. App. 309, 2006 N.C. App. LEXIS 63, Counsel Stack Legal Research, https://law.counselstack.com/opinion/good-hope-hospital-inc-v-north-carolina-department-of-health-human-ncctapp-2006.