Boswell, Inc. v. Harkins, 53379

• Decision Date: 27 February 1982
• Docket Number: No. 53379,53379
• Citation: 230 Kan. 738,640 P.2d 1208
• Parties: BOSWELL, INC., d/b/a Broadacres, Appellant, v. Joseph F. HARKINS, Secretary, Kansas Department of Health and Environment, Appellee.
• Court: Kansas Supreme Court

Page 1208

640 P.2d 1208

230 Kan. 738

BOSWELL, INC., d/b/a Broadacres, Appellant, v. Joseph F. HARKINS, Secretary, Kansas Department of Health and Environment, Appellee.

No. 53379.

Supreme Court of Kansas.

Feb. 27, 1982.

Syllabus by the Court

1. The scope of court review contemplated by K.S.A. 39-931 (Ensley) of an order of the Department of Health and Environment refusing to issue a license to an adult care home is limited to determining whether the order was arbitrary, unlawful, or unreasonable. On appeal a court is restricted to considering whether as a matter of law (1) the administrative tribunal acted fraudulently, arbitrarily, or capriciously, (2) the administrative order is supported by substantial evidence, and (3) the tribunal's action was within the scope of the authority of the administrative tribunal.

2. K.S.A. 39-923, et seq. (Ensley), and amendments which provide for the licensure of adult care homes, do not constitute an unlawful delegation of legislative authority and are not constitutionally impermissible as being vague and indefinite.

3. The record of administrative action in denying licensure and certification of an adult care facility as an intermediate nursing care home is examined on appeal, and it is held, the administrative tribunal acted properly, its denial of licensure and registration is supported by substantial competent evidence, and its order of denial was within the scope of its authority.

Robert L. Taylor, Hutchinson, argued the cause and was on the brief, for appellant.

Emily E. Cameron, of Kansas Dept. of Health and Environment, Topeka, argued the cause and was on the brief, for appellee.

FROMME, Justice:

This is an administrative appeal authorized by K.S.A. 39-931 (Ensley). The appeal is from an order of the Department of Health and Environment denying licensure and certification as an intermediate nursing care home to Boswell, Inc., d/b/a Broadacres. This facility was located in Reno County near the city of Hutchinson, Kansas. The building was rented from the county by Mary and Frank Boswell in 1969, and a family corporation, Boswell, Inc., was organized to operate this and one other nursing home. This appeal only concerns the facility referred to as Broadacres. Broadacres was operated until it was ordered closed January 1, 1980. Most of the seventeen persons who occupied the facility at the time of the closing were recipients of federal benefits in the medicaid program. A state licensed adult care home has to meet the federal certification standards to participate in the medicaid program.

A yearly survey of all nursing homes in Kansas is made by the Kansas Department of Health and Environment. As a result of the survey of Broadacres made at the end of September, 1978, the facility was found not to be in substantial compliance with the rules and regulations set by the department to govern intermediate nursing care homes. License renewal was denied in October, 1978. Later, on October 13, 1978, a second survey was completed to determine if federal certification requirements could be met. The facility did not meet the federal requirements and recertification was denied. The Boswells were notified that the deficiency findings could be discussed in conference with the department on November 2, 1978. They did not confer. The denial of the order refusing to renew the license was appealed. The appeal was heard by a hearing officer and the order revoking the license was affirmed. During this period a third survey and inspection for licensure was carried out. This was during the middle of July, 1979. Again the facility was found in substantial noncompliance with nursing home requirements.

Thereafter the Boswells gave up on the appeal of the revocation proceedings. Instead of appealing the revocation proceedings to the courts, they filed a new application for licensure and certification with the department. The premises were surveyed and inspected a fourth time by the department. This was about the middle of November, 1979. The facility was not in compliance with state and federal requirements and the application was denied.

This latter order denying the new application was appealed and it is the order presently on appeal before this court. The Reno County District Court examined the 911 page transcript of proceedings, including various exhibits, and affirmed the order denying licensure and certification which was issued by the Secretary of the Department of Health and Environment. This court in turn has examined this transcript, the exhibits and the briefs of the parties and will consider the contentions of the appellant.

The appellant first argues for a full de novo review of the proceedings by this court. This is a review of an administrative order denying licensure and certification. The scope of review contemplated by 39-931 is stated:

"Any applicant or licensee aggrieved by the order of the licensing agency in denying, suspending, or revoking a license may appeal therefrom by filing a petition specifying the action of the licensing agency appealed from, in the district court of the county in which the applicant or licensee resides, within fifteen (15) days after receipt of a copy of the order of the licensing agency, and said court shall have jurisdiction to affirm, reverse, modify, or vacate the order complained of if the court is of the opinion that the order was arbitrary, unlawful, or unreasonable.

"... From the judgment of the district court, appeal may be taken as in other civil actions. An appeal to the district court or an appellate court shall not operate to stay the effect of an order of the licensing agency, unless the judge or the court shall specifically allow such a stay." Emphasis supplied.

The scope of court review contemplated by 39-931 of an order of the Department of Health and Environment refusing to issue a license to an adult care home is limited to determining whether the order was arbitrary, unlawful, or unreasonable. On appeal a court is restricted to considering whether as a matter of law (1) the administrative tribunal acted fraudulently, arbitrarily, or capriciously, (2) the administrative order is supported by substantial evidence, and (3) the tribunal's action was within the scope of the authority of the administrative tribunal. See Kansas State Board of Healing Arts v. Foote, 200 Kan. 447, 450, 436 P.2d 828, 28 A.L.R.3d 472 (1968); Olathe Hospital Foundation, Inc. v. Extendicare, Inc., 217 Kan. 546, 539 P.2d 1 (1975); Kansas Dept. of Health & Environment v. Banks, 230...