Cojeunaze Nursing Center v. Lumpkin

• Decision Date: 25 March 1994
• Docket Number: No. 1-92-2762,1-92-2762
• Citation: 198 Ill.Dec. 87,260 Ill.App.3d 1024,632 N.E.2d 146
• Parties: , 198 Ill.Dec. 87 COJEUNAZE NURSING CENTER, an Illinois partnership and Illinois licensed nursing home, Plaintiff-Appellant, v. John R. LUMPKIN, M.D., Director of the Illinois Department of Public Health, and the Illinois Department of Public Health, Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 146

632 N.E.2d 146

260 Ill.App.3d 1024, 198 Ill.Dec. 87

COJEUNAZE NURSING CENTER, an Illinois partnership and Illinois licensed nursing home, Plaintiff-Appellant, v. John R. LUMPKIN, M.D., Director of the Illinois Department of Public Health, and the Illinois Department of Public Health, Defendants-Appellees.

No. 1-92-2762.

Appellate Court of Illinois,

First District, Fifth Division.

March 25, 1994.

Stackler & Augustine (Ronald E. Stackler, John A. Holtaway, of counsel), Chicago, for appellant.

Roland W. Burris, Atty. Gen., Rosalyn B. Kaplan, Sol. Gen., Jan E. Hughes, Asst. Atty. Gen., Chicago, for appellee.

Presiding Justice MURRAY delivered the opinion of the court:

Plaintiff, Cojeunaze Nursing Center (Cojeunaze), appeals from an order of the trial court affirming the final decision and order of John R. Lumpkin (Lumpkin), Director of the Illinois Department of Public Health (IDPH), revoking Cojeunaze's nursing home license.

The relevant facts are as follows.

Cojeunaze is a 200-bed skilled nursing and intermediate care/long-term care facility, licensed by the IDPH. In May 1990 Dr. Yvon Nazon was convicted of 17 counts of medicaid fraud in connection with his submission of false claims seeking payment for services not performed in the State of Indiana. See United States v. Nazon (7th Cir.1991), 940 F.2d 255.

On February 19, 1991, the IDPH sent a letter to Dr. Nazon, requesting that he divest himself of his 70% ownership interest in Cojeunaze by April 19, 1991, due to his fraud conviction. The notice informed Dr. Nazon that the transferee could not be an affiliate as defined in section 1-106 of the Nursing Home Care Act (NHCA). (See 210 ILCS 45/1-106 (West 1992).) Dr. Nazon was given 90 days to effectuate the transfer and was notified that his failure to comply with the IDPH's request would result in the issuance of license revocation. In March 1991 the IDPH notified Dr. Nazon's attorney that, although the IDPH was authorized to proceed with the revocation of Dr. Nazon's license, it was willing to allow Dr. Nazon time to find a buyer or transferee who was not his affiliate, but that the IDPH would proceed with the license revocation action if the change was not effectuated by April 19, 1991.

On or about April 15, 1991, the IDPH received documents which indicated the transfer of Dr. Nazon's 70% ownership interest from Yvon Nazon to Faye H. Nazon, Cojeunaze administrator and the spouse of Dr. Nazon. ¹

On May 13, 1991, the IDPH revoked Cojeunaze's nursing home license on the basis of Dr. Nazon's conviction. Said revocation was to take effect on June 1, 1991. Pursuant to section 3-119(3)(c) of the NHCA, Cojeunaze requested a hearing to contest the revocation. 210 ILCS 45/3-119(3)(c) (West 1992).

At the administrative hearing, the IDPH presented a motion for summary judgment arguing that Faye Nazon could not be the transferee of Dr. Nazon's ownership interest since the NHCA's definition of affiliate includes a person in the first degree of kinship and that a spouse was included in the definition. The hearing officer issued a report and recommendation finding that the IDPH's motion for summary judgment should be granted, since, as a matter of law, the spouse of an individual person is an affiliate of that individual as defined by the NHCA. The hearing officer stated that "[t]o find otherwise would go against the intent of the Act and the legislature and would lead to absurd and ridiculous results." On October 15, 1991, Lumpkin issued a final decision and order adopting the report and recommendation of the hearing officer and revoking Cojeunaze's nursing home license.

Pursuant to the Administrative Review Act, Cojeunaze filed its complaint objecting to the revocation of its license. (735 ILCS 45/3-104 (West 1992); see also 210 ILCS 45/3-318 (West 1992).) The complaint alleged, inter alia, error on the part of Lumpkin and the IDPH in finding that Faye H. Nazon was an "affiliate" of Yvon Nazon as defined by section 1-106 of the NHCA. See 210 ILCS 45/1-106 (West 1992).

After hearing oral argument by respective counsel, the trial court issued a written memorandum of opinion, stating that "the dispositive issue before this Court is whether the legislature, by narrowly defining an 'affiliate' as a person related in the first degree of kinship, intended to exclude a person's spouse from the reach of the license revocation provision * * *." The trial court affirmed the final decision and order of the IDPH, reasoning that:

"To hold that a spouse is not an 'affiliate' would contravene the obvious legislative intent of preventing unqualified individuals from operating nursing homes. Familial affiliation with a prior licensee who has been convicted of numerous criminal offenses and who is no longer permitted to hold an operating license necessarily disqualifies a spouse for purposes of the Act's licensure revocation provision."

The trial court ordered counsel to prepare a draft order consistent with its ruling. The trial court's order affirmed the final decision and order of the IDPH revoking Cojeunaze's nursing home license and stayed license revocation pending appeal.

The sole issue plaintiff raises on appeal is whether in affirming the decision and order of the IDPH revoking Cojeunaze's nursing home license, the trial court erred in its interpretation and application of the term "affiliate" with respect to the transfer of an ownership interest in a nursing home to a spouse. ² Refreshingly, both parties meet the issue directly.

Plaintiff argues: (A) By definition of the term in the NHCA, a spouse cannot be an "affiliate"; (B) Absent evidence of legislative intent, the statutory language must be given its plain and commonly understood meaning; and (C) Faye H. Nazon has rights as a married woman independent of the disabilities of her husband.

Defendant argues (A) Including a spouse within the meaning of affiliate and prohibiting a spouse from obtaining a license where the nursing home's license has previously been revoked promotes the main purpose of the NHCA, i.e. the welfare of its residents; (B) Lumpkin's interpretation that a spouse is in the "first degree of kinship" with each other is consistent with the definition of the term "kinship"; and (C) The limitation of a spouse's ability to obtain a license under the NHCA controls over the provisions contained in the Rights of the Married Persons Act.

Section 1-106 of the NHCA provides:

" 'Affiliate' means:

(1) With respect to a partnership, each partner thereof.

(2) With respect to a corporation, each officer, director and stockholder thereof.

(3) With respect to a natural person: any person related in the first degree of kinship to that person; each partnership and each partner thereof which that person or any affiliate of that person is a partner; and each corporation in which that person or any affiliate of that person is an officer, director or stockholder." (Emphasis added.) (210 ILCS 45/1-106 (West 1992).)

We have found no Illinois case wherein the definition of affiliate as used in the NHCA was at issue. In addition, we have found no Illinois case wherein the phrase "first degree of kinship" was defined.

Cojeunaze cites Calvert v. Beck (1941), 240 Ala. 442, 199 So. 846 and Estate of Ferguson v. Conklin (1986), 723 S.W.2d 24, both of which are from other jurisdictions and deal with estate distribution questions in support of its position that first degree of kinship means blood relatives and not spouses. We do not feel these cases to be persuasive authority in this case.

When interpreting a statute the primary function of a court is to ascertain and give effect to the intent of the legislature. (Business & Professional People for Public Interest v. Illinois Commerce Comm'n (1991), 146 Ill.2d 175, 207, 166 Ill.Dec. 10, 22, 585 N.E.2d 1032, 1044.) The primary source for determining legislative intent is the language used in the statute. (Business & Professional People v. Illinois Commerce Comm'n for Public Interest, 146 Ill.2d at 207, 166 Ill.Dec. at 22, 585 N.E.2d at 1044.) Determining legislative intent is accomplished by concentrating on the terminology, its goals and purposes, and the natural import of the words used. City of Chicago v. Cross City Disposal, Inc. (1990), 200 Ill.App.3d 520, 146 Ill.Dec. 286, 289, 558 N.E.2d 249, 252.

Where facts are not in dispute, their legal effect becomes a matter of law, which is reviewable by the court; and a court of review is not bound by an agency's conclusions of law. (Callahan v. Department of State Police (1991), 223 Ill.App.3d 1081, 1085, 166 Ill.Dec. 423, 426, 586 N.E.2d 381, 384.) Although not formally bound by administrative decisions interpreting the legal effect of statutory language, a court will give an administrative agency's conclusions great weight in the court's own statutory construction. (Whitley v. Board of Review (1983), 116 Ill.App.3d 476, 478, 71 Ill.Dec. 788, 790, 451 N.E.2d 942, 944.) Courts will give substantial weight and deference to the interpretation of an ambiguous statute by the agency charged with administration and enforcement of the statute. (Illinois Consolidated Telephone Co. v. Illinois Commerce Comm'n (1983), 95 Ill.2d 142, 152, 69 Ill.Dec. 78, 83, 447 N.E.2d 295, 300.) "A significant reason for this deference is that courts appreciate that agencies can make informed judgments upon the issues based upon their experience and expertise." Illinois Consolidated Telephone Co., 95 Ill.2d at 153, 69 Ill.Dec. at 83, 447 N.E.2d at 300.

In the absence of a statutory definition indicating a different legislative intent words are to be given their ordinary and commonly understood meaning. (People v. Dednam (1973), 55 Ill.2d 565, 568, 304 N.E.2d 627.) The dictionary can be used as a resource to ascertain the ordinary and popular meaning of words. Dednam, 55 Ill.2d at 569, 304 N.E.2d 627; Kozak v. Retirement Board of the Firemen's Annuity & Benefit Fund (1983), ...