Professional Home Health & Hospice, Inc. v. Jackson-Madison County General Hospital District

759 S.W.2d 416, 1988 Tenn. App. LEXIS 160
CourtCourt of Appeals of Tennessee
DecidedMarch 8, 1988
StatusPublished
Cited by3 cases

This text of 759 S.W.2d 416 (Professional Home Health & Hospice, Inc. v. Jackson-Madison County General Hospital District) is published on Counsel Stack Legal Research, covering Court of Appeals of Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Professional Home Health & Hospice, Inc. v. Jackson-Madison County General Hospital District, 759 S.W.2d 416, 1988 Tenn. App. LEXIS 160 (Tenn. Ct. App. 1988).

Opinion

FARMER, Judge.

Jackson-Madison County General Hospital District (Hospital) is a joint non-profit district created by the Tennessee Legislature under Private Acts, Chapter 686 (1949) (Act) “for and in behalf of the City of Jackson, Tennessee and Madison County, Tennessee.” This Act sets forth the geographic boundaries of the district and provides for a Board of Trustees (Board) to be elected who are to operate and control the Hospital.

In July 1985 the Board authorized the purchase of Haven Home Health Services, Inc. (Haven), an agency licensed to provide home health care in every West Tennessee county except Shelby, Fayette and Tipton. Thereafter the Board obtained a license “to conduct and maintain a Home Health Agency” in the location of what was formerly Haven. These offices are located outside the geographic parameters established by the Act.

The Hospital’s home health agency operates in direct competition with the appel-lees, Professional Home Health and Hospice, Inc. and Home Health Care, Inc., corporations for profit licensed to do business as home health agencies. Therefore, on July 30, 1985 the appellees filed a complaint in chancery court seeking declaratory and injunctive relief from the Hospital operating such an enterprise. The basis of the complaint was that the Hospital was acting in excess of any express or implied [418]*418power granted to it by the Act. Further, the appellees assert that they will continue to suffer irreparable harm if the Hospital is allowed to operate a home health agency, since it is in a position to capture a substantial percentage of the home health care patients.

The Chancellor found that the Act does not give the Hospital the express power to operate a home health agency, and since this endeavor is not essential to the object and purpose of the Hospital, such power cannot be implied. The administrative offices of the Hospital’s home health agency, as well as the care it renders, are outside the geographic boundaries established by the Act. Since the Hospital is limited to providing services within certain territorial limits, its action in entering the home health care area was in violation of the Act.

The Chancellor further found that, based on a comparison of the number and quality of the referrals of patients discharged from the Hospital before and after it opened its home health agency, the appellees demonstrated that they had suffered and will continue to suffer irreparable harm. He therefore enjoined the Hospital from providing home health care.

The Hospital has appealed from this judgment and has raised four issues: (1) Did the trial court err in concluding that the Hospital is limited by the geographic parameters of the Act; (2) Did the trial court err in determining the Board did not have the authority to operate a home health agency; (3) Is the operation of a home health agency a proprietary function that is prohibited; and (4) Did the trial court err in finding that the appellees have suffered and will continue to suffer irreparable harm if Hospital is not enjoined? The scope of our review of the Chancellor’s findings of fact is de novo on the record, accompanied by a presumption of correctness unless the evidence otherwise preponderates. T.R.A.P. 13(d).

The Hospital first contends that its activities are not limited to the geographic boundaries set forth in the Act because Section 8 of the Act provides a broad grant of power to the Board. That section provides:

Be it further enacted, That the Board of Trustees shall be vested with full, absolute and complete authority and responsibility for the operation, management, conduct and control of the business and affairs of the Hospital District herein created; such operation, management, conduct and control, however, shall not be inconsistent with existing contractual obligations of said City and County. Said authority and responsibility shall include, but shall not be limited to, the establishment, promulgation and enforcement of the rules, regulations, and policies of the District, the upkeep and maintenance of all property, the administration of all financial affairs of the District, the execution of all contracts, agreements and other instruments, and the employment, compensation, discharge and supervision of all personnel.

The Hospital argues that if the Board determines that it is in the best interest of the Hospital to enter the home health care field, this section gives it the authority to do so.

Additionally, the Hospital asserts that it was issued a license pursuant to a general law of Tennessee, T.C.A. § 68-11-206, to operate a home health agency. That statute provides:

Application for license — Form and contents — Procedure—Term of license — Renewal. —Any person, partnership, association, corporation, or any state, county or local governmental unit, or any division, department, board or agency thereof, in order to lawfully establish, conduct, operate or maintain a hospital, recuperation center, nursing home, home for the aged, home health agency, or ambulatory surgical treatment center in this state, shall obtain a license therefor from the department, upon the approval and recommendation of the board in the following manner:
(1) The applicant shall submit an application on a form to be prepared by the department with the approval of the board, showing that the applicant is of reputable and responsible character and [419]*419able to comply with the minimum standards for a hospital, recuperation center, nursing home, home for the aged, home health agency, or ambulatory surgical treatment center and with rules and regulations lawfully promulgated under this part.
[[Image here]]
(2) The board may recommend and approve the issuance of a license upon the application without further evidence; or, in its discretion, it may have a hearing on the application and conduct its own investigation, to determine whether or not a license ought to be granted....

Since the State issued it a license to operate a home health agency, the Hospital argues that the Act only requires its Board to manage this agency in the same manner as it does the balance of the Hospital business. In effect, the Hospital maintains that the Act merely created “a management tool to oversee the day to day affairs of the Hospital District” and the general law, which sets forth the licensing procedure, confers the authority.

The appellees respond that the Hospital cannot exercise extraterritorial powers without specific legislative authority. If the Legislature did not intend for the Hospital to operate within a certain territory, it would not have set forth the area so specifically in the 1949 Act and again in the 1983 Amendment to the Act. They further state that T.C.A. § 68-11-206 is a procedural statute only and does not confer a grant of power on the licensee.

It is not unusual for the Legislature to provide for the establishment of a district and to give it limited powers in order to carry out a particular public purpose. Such a district is known as a quasi-municipal corporation. 56 Am.Jur.2d Municipal Corporations § 13.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cleveland Surgery Center v. Bradley Co. Hospital
Court of Appeals of Tennessee, 1999
Eye Clinic, P.C. v. Jackson-Madison County General Hospital
986 S.W.2d 565 (Court of Appeals of Tennessee, 1998)

Cite This Page — Counsel Stack

Bluebook (online)
759 S.W.2d 416, 1988 Tenn. App. LEXIS 160, Counsel Stack Legal Research, https://law.counselstack.com/opinion/professional-home-health-hospice-inc-v-jackson-madison-county-general-tennctapp-1988.