Associated Healthcare of Jessamine Cnty., LLC. v. Commonwealth
| Decision Date | 14 February 2014 |
| Docket Number | NO. 2011-CA-001845-MR,2011-CA-001845-MR |
| Parties | ASSOCIATED HEALTHCARE OF JESSAMINE COUNTY, LLC. APPELLANT v. COMMONWEALTH OF KENTUCKY, CABINET FOR HEALTH AND FAMILY SERVICES, OFFICE OF HEALTH POLICY, DIVISION OF CERTIFICATE OF NEED; AND SAINT JOSEPH HEALTH SYSTEM, INC., D/B/A SAINT JOSEPH JESSAMINE, R.J. CORMAN AMBULATORY CARE CENTER APPELLEES |
| Court | Kentucky Court of Appeals |
NOT TO BE PUBLISHED
APPEAL FROM FRANKLIN CIRCUIT COURT
The Cabinet awarded Associated a certificate of need (CON) to establish an ambulatory care center and fixed-site magnetic resonance imaging (MRI) service in Jessamine County, Kentucky. By letter dated October 25, 2010, for reasons not pertinent to the issues raised on appeal, the Cabinet notified Associated of its decision to revoke its CON. Pursuant to Kentucky Revised Statutes (KRS) 216B.086(2), Associated had thirty days - until 4:30 p.m. on November 24, 2010 - to request a hearing. On November 23, 2010, at 4:44 p.m., the Cabinet received, via facsimile, Associated's hearing request. Concurrently, Associated allegedly mailed its original hearing request. However, the Cabinet did not receive the original hearing request until Friday, December 3, 2010.
On February 17, 2011, Appellee Saint Joseph Health System, Inc. d/b/a Saint Joseph Jessamine, R.J. Corman Ambulatory Care Center1 moved for summary judgment, alleging Associated did not adequately perfect its right to an administrative hearing because it did not follow the proper filing procedures setforth in 900 Kentucky Administrative Regulations (KAR) 6:090 Section 2(2). Although the Cabinet received Associated's written hearing request via facsimile within thirty days, Saint Joseph averred that, because the original hearing request was not received by the Cabinet on the next business day after the due date, i.e., Monday, November 29, 2010,2 as required by 900 KAR 6:090 Section 2(2), but instead was received on Friday, December 3, 2010, the hearing request was invalid and Associated waived its right to any further administrative or judicial review.
A public hearing was held on February 21, 2011; an Administrative Law Judge (ALJ) presided. As a preliminary matter, the ALJ first addressed Saint Joseph's summary-judgment motion. The ALJ found Associated indeed failed to comply with the applicable regulatory and statutory requirements regarding the filing of a hearing request. As a result, the ALJ concluded it lacked jurisdiction to hold a hearing in this matter because the Cabinet's revocation decision became final and nonreviewable after thirty days by operation of KRS 216B.086(2). By order dated March 22, 2011, the ALJ granted Saint Joseph's motion.
Associated sought review of the ALJ's decision by the Franklin Circuit Court. The Cabinet and Saint Joseph jointly moved to dismiss Associated's Petition for Review, asserting the circuit court lacked jurisdiction because Associated did not comply with the mandatory requirements of KRS 216B.086(3) and 900 KAR 6:090 Section 2(2), thereby waiving any right to judicial appeal.The circuit court agreed. Like the ALJ, the circuit court found Associated's hearing request to be deficient because Associated did not file its original hearing request on the next business day after the due date, as required by 900 KAR 6:090 Section 2(2). The circuit court concluded the effect of failing to timely file a hearing request was two-fold: (1) the Cabinet's revocation decision became final pursuant to KRS 216B.086(2); and (2) KRS 216B.086(3) prohibited Associated from seeking judicial review of that final decision. By order entered September 8, 2011, the circuit court granted the Cabinet and Saint Joseph's joint motion to dismiss for want of jurisdiction. From this order, Associated appealed.
"The standard of review, when addressing an appeal from an administrative decision, 'is limited to determining whether the decision was erroneous as a matter of law.'" Board of Com'rs of City of Danville v. Davis, 238 S.W.3d 132, 135 (Ky. App. 2007) (quoting McNutt Construction v. Scott, 40 S.W.3d 854, 861 (Ky. 2001)).
In an appeal of an administrative action by an agency, the circuit courts are to provide review, not reinterpretation. Kentucky Unemployment Insurance Commissioner v. King, Ky.App., 657 S.W.2d 250 (1983). Thus, when substantial evidence exists in the record to support an administrative agency's action, the circuit court has no authority to overturn it. Kentucky State Racing Commission v. Fuller, Ky., 481 S.W.2d 298 (1972). Our task is to determine whether or not the circuit court's findings upholding the Cabinet are clearly erroneous. CR 52.01.
Kentucky Retirement Systems v. Heavrin, 172 S.W.3d 808, 815 (Ky. App. 2005). Agency findings supported by substantial evidence are not clearly erroneous. Id. at 814.
Of course, whether a circuit court lacks jurisdiction is a question of law. Mitchell v. Mitchell, 360 S.W.3d 220, 221 (Ky. 2012). Our review of legal questions is de novo.3 Id.
Before addressing the merits of Associated's arguments, an appraisal of the applicable statutory and regulatory provisions is warranted. We start with the procedures set forth in KRS 216B.086. That statute permits the Cabinet to revoke a certificate of need for certain delineated reasons. KRS 216B.086(1). Should it so choose, the Cabinet must give the CON holder notice of its revocation decision. KRS 216B.086(2). The CON holder then has a thirty-day window in which to request a hearing to challenge that decision. KRS 216B.086(3) ("The holder of thecertificate of need to be revoked may request in writing a public hearing in respect to an initial decision by the cabinet to revoke a certificate of need within thirty (30) days of the date of notice of the initial decision."). Unless a hearing is so requested, the Cabinet's revocation decision "shall become final after thirty" days. KRS 216B.086(2). The CON holder's "[f]ailure to request a hearing shall constitute a waiver of any right to reconsideration or judicial appeal of a final cabinet decision to revoke a certificate of need." KRS 216B.086(3). If a hearing is timely requested, it shall be held before a hearing officer within thirty days and, at the hearing, the challenger is entitled to counsel, to present oral arguments and evidence, to conduct reasonable cross-examination, and to appeal an adverse final decision by the Cabinet. KRS 216B.086(4) - (6), (10).
In addition to KRS 216B.086, the regulatory provision 900 KAR 6:090 is at issue. Specifically, subsection 2 of that regulation instructs:
Associated presents two primary arguments: (1) the Cabinet's decision to revoke its certificate of need was arbitrary, capricious, and unsupported by substantial evidence; and (2) the circuit court erroneously concluded it lacked jurisdiction to consider Associated's Petition for Review and Appeal. We decline to address Associated's substantive argument because it is not ripe for our review. The circuit court did not reach the underlying merits concerning the Cabinet's decision to revoke Associated's CON because it concluded it lacked jurisdiction over the matter. If this Court finds the circuit court erred in so concluding, the relief to which Associated is entitled is to have this matter returned to the circuit court for consideration of the underlying merits. It is not our function to rule on a question that has not been first resolved by the circuit court. Ten Broeck Dupont, Inc. v. Brooks, 283 S.W.3d 705, 734 (Ky. 2009) .
We now turn to Associated's jurisdiction-related arguments. We preface our discussion by emphasizing that the appellate courts of this Commonwealth rigorously enforce the tenet that judicial review of "an administrative decision is a matter of legislative grace and not a right." Triad Development/Alta Glyne, Inc. v.Gellhaus, 150 S.W.3d 43, 47 (Ky. 2004); Taylor v. Duke, 896 S.W.2d 618, 621 (Ky. App. 1995). "Thus, the failure to follow the statutory guidelines for such an appeal is fatal." Gellhaus, 150 S.W.3d at 47. In that regard, judicial review is foreclosed to a person who fails to strictly follow applicable procedures and statutory mandates because "the court lacks jurisdiction or has no right to decide the controversy." Metro Medical Imaging, LLC v. Commonwealth, 173 S.W.3d 916, 917 (Ky. App. 2005) (citation omitted).
Associated raises numerous grounds upon which it claims the circuit court erroneously concluded it lacked jurisdiction. Associated first asserts 900 KAR 6:090 Section 2(2) has no impact on the...
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