State Health Planning & Development Agency v. Forest Manor, Inc.

739 So. 2d 20, 1998 Ala. LEXIS 323, 1998 WL 854803
CourtSupreme Court of Alabama
DecidedDecember 11, 1998
Docket1971320
StatusPublished
Cited by4 cases

This text of 739 So. 2d 20 (State Health Planning & Development Agency v. Forest Manor, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Health Planning & Development Agency v. Forest Manor, Inc., 739 So. 2d 20, 1998 Ala. LEXIS 323, 1998 WL 854803 (Ala. 1998).

Opinions

LYONS, Justice.

Forest Manor, Inc., appealed to the trial court from a decision by the State Health Planning and Development Agency (“SHPDA”) denying a certificate of need (“CON”) to Forest Manor for 11 new nursing-home beds and granting a CON to Heritage Health Care Center, Inc. (“Heritage”), for the 11 new beds. Forest Man- or contended that SHPDA had violated the Alabama Administrative Procedure Act, § 41-22-1 et seq., Ala.Code 1975 (“AAPA”); specifically, Forest Manor contended that the hearing regarding the nursing-home project constituted a “contested case” as defined by the AAPA and contended that SHPDA had not complied with the AAPA’s notice provisions for contested cases, which it argued were mandatory. The trial court entered a judgment [22]*22in favor of Forest Manor, concluding that SHPDA had not complied with the AAPA’s notice provisions, and it set aside the CON granted to Heritage. SHPDA and Heritage appealed to the Court of Civil Appeals. That court reversed the judgment of the trial court, concluding that Forest Manor had received adequate and reasonable notice, even though SHPDA had not complied with every technicality contained in the AAPA. State Health Planning & Development Agency v. Forest Manor, Inc., 739 So.2d 17 (Ala.Civ.App.1998). We granted Forest Manor’s petition for certio-rari review. We reverse and remand.

SHPDA is authorized by § 22-21-265, Ala. Code 1975, to issue CONs for new institutional health services. Pursuant to its rule-making powers, SHPDA has promulgated rules governing the issuance of CONs. Forest Manor and Heritage each applied to SHPDA for a CON authorizing the addition of 11 nursing-home beds to be located in Tuscaloosa County. The CON Review Board (“CONRB”) conducted a public hearing on the competing applications, but did so without providing any opportunity to cross-examine witnesses or to present rebuttal evidence or argument, and during that hearing legal counsel for Forest Manor was not present. After the hearing, the CONRB awarded the beds to Heritage. Forest Manor argues that the CONRB decision was erroneous, citing SHPDA’s failure to comply with applicable provisions of the AAPA, specifically § 41-22-12, which governs notice in “contested cases.”

Section 41-22-2(a) expresses the legislature’s purpose and intent, when it adopted the AAPA, to establish “a minimum procedural code for the operation of all state agencies when they take action affecting the rights and duties of the public.” Section 41-22-12(a) provides that in a contested case, “all parties shall be afforded an opportunity for hearing after reasonable notice in writing.” Section 41-22-12(b) states that the notice “shall” include a “statement of the time, place, and nature of the hearing,” § 41-22-12(b)(l); a “statement of the legal authority and jurisdiction under which the hearing is to be held,” § 41 — 22—12(b)(2); a “reference to the particular sections of the statutes and rules involved,” § 41-22-12(b)(3); and a “short and plain statement of the matters asserted,” § 41-22-12(b)(4). Section 41-22-12(e) ensures that all parties “shall be afforded” the opportunity to “respond and present evidence and argument on all material issues involved and to be represented by counsel at their own expense.”

A “contested case” is a proceeding “in which the legal rights, duties, or privileges of a party are required by law to be determined by an agency after an opportunity for hearing.” § 41-22-3(3). The trial court and the Court of Civil Appeals concluded that a hearing on whether to grant or to deny a CON is a “contested case.” We agree, and we adopt the dictum to that effect in Montgomery Rehabilitation Hospital, Inc. v. State Health Planning Agency, 610 So.2d 403, 407 (Ala.Civ.App.1992).

We now come to the heart of the matter' — the extent to which SHPDA complied with subsections (b) and (e) of § 41-22-12. Forest Manor contends that SHPDA complied only partially with the notice requirements contained in § 41-22-12(b)(1). Forest Manor argues that full compliance with the notice provisions is mandatory, and that SHPDA’s failure to comply in this case deprived Forest Manor of due process. SHPDA states that it notified the parties of the time, date, and location at which the CONRB would consider their respective applications. SHPDA also states that it furnished to Forest Manor a staff committee report summarizing its application and outlining the statutory requirements under which the application would be evaluated. SHPDA also refers us to the CON rules, under which a party has the right to invoke contested-case status and thereby become entitled to the formalities that would accompany satisfaction of the require[23]*23ments of § 41-22-12(e) — the opportunity to all parties to respond, to present evidence and argument on all material issues, and to be represented by counsel. SHPDA then notes that this rule has been in effect for several years and that Forest Manor, as a sophisticated health-care applicant, should have known of the availability of this procedure and, in fact, had certified that it had read the applicable rules. SHPDA cannot point to a document in the record before us, however, that was issued in connection with these applications that satisfies the requirements of § 41-22-12(b) and (e). Specifically lacking is a notice issued for purposes of these applications that deals with the rules applicable to contested cases.

In Flowers v. Alabama Alcoholic Beverage Control Board, 627 So.2d 415 (Ala.Civ.App.1993), the Court of Civil Appeals considered the issue of the adequacy of an agency’s compliance with § 41-22-12(b) in a case in which the applicant for renewal of a liquor license complained that the agency’s compliance with § 41-22-12(b) was too general. When the applicant complained of a lack of specificity, the agency provided her with its entire file. The Court of Civil Appeals specifically found that the agency had complied with the requirements regarding the statement of the time, the place, and the nature of the hearing, as well as a statement of the matters asserted. The Court of Civil Appeals relied upon Flowers when it held in this case that Forest Manor had received “adequate notice of a hearing, notice that complied with the AAPA and due process requirements.” 739 So.2d at 20. Floiuers stands for the rule that an agency’s reasonable conduct in making information available can support a conclusion that the statutory requirements of notice have been fulfilled. But, in Flowers, no party argued that it had been prejudiced by the absence of the notice, required by § 41 — 22—12(b)(3), regarding the specific rules governing the proceedings. Moreover, in Flowers, the agency’s conduct that was found sufficient was specific to the application at hand.

SHPDA and Heritage ask us to extend Flowers so as to treat SHPDA’s supplying generic information to all participants in the administrative process as compliance with the provisions of § 41-22-12. We decline to do so. Section 41-22-12(b) provides that all parties in a contested case “shall” be afforded an opportunity for a hearing and provides that the notice regarding the hearing “shall” include four specific types of information. This Court has often cited this principle:

‘"Words used in [a] statute must be given their natural, plain, ordinary, and commonly understood meaning, and where plain language is used a court is bound to interpret that language to mean exactly what it says.

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Related

Pila‘a 400, LLC v. Board of Land and Natural Resources.
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State Health Planning & Development Agency v. Forest Manor, Inc.
739 So. 2d 25 (Court of Civil Appeals of Alabama, 1999)

Cite This Page — Counsel Stack

Bluebook (online)
739 So. 2d 20, 1998 Ala. LEXIS 323, 1998 WL 854803, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-health-planning-development-agency-v-forest-manor-inc-ala-1998.