Ex parte Williamson

• Decision Date: 29 October 2004
• Citation: 907 So.2d 407
• Parties: Ex parte Donald E. WILLIAMSON and Alabama Department of Public Health. (In re Donald E. Williamson and Alabama Department of Public Health v. Wynnwood Personal Care Home I).
• Court: Alabama Supreme Court

907 So.2d 407

Ex parte Donald E. WILLIAMSON and Alabama Department of Public Health.

(In re Donald E. Williamson and Alabama Department of Public Health v. Wynnwood Personal Care Home I).

1030406.

Supreme Court of Alabama.

October 29, 2004.

As Modified on Denial of Rehearing January 14, 2005.

William H. Pryor, Jr., and Troy King, attys. gen., Nathan A. Forrester, deputy atty. gen., Scott L. Rouse, asst. atty. gen., and Patricia E. Ivie, asst. atty. gen., Alabama Department of Public Safety, for petitioners.

Algert S. Agricola, Jr., of Slaton & O'Connor, P.C., Montgomery, for respondent.

Albert L. Jordan and Michael L. Jackson of Wallace, Jordan, Ratliff & Brandt, L.L.C., Birmingham, for amicus curiae Assisted Living Association of Alabama, Inc., in support of the respondent.

HARWOOD, Justice.

Donald E. Williamson, the health officer for the Alabama Department of Public Health ("the Department"), petitioned this Court for a writ of certiorari to review the Court of Civil Appeals' no-opinion affirmance of the Coffee Circuit Court's judgment reversing the Department's revocation of the license of Wynnwood Personal Care Home I ("Wynnwood") to operate as an assisted-living facility. Williamson v. Wynnwood Personal Care Home I (No. 2020365, October 3, 2003), 898 So.2d 925 (Ala.Civ.App.2003)(table). We granted the petition on February 9, 2004, and we reverse and remand.

This case began when the Department, by letter dated September 28, 2000, notified Dottie Cummings, the administrator at Wynnwood, that it proposed revoking Wynnwood's license to operate as an assisted-living facility. Williamson appointed a private attorney to serve as hearing officer in the matter, and an evidentiary hearing was conducted on November 2 and 3, 2000. On January 16, 2001, the hearing officer entered a written opinion discussing in detail the testimonial and documentary evidence presented at the hearing. In pertinent part, the opinion of the hearing officer stated:

"IT IS RECOMMENDED that the license issued to Wynnwood Personal Care Home [I] be revoked and/or that the State Health Officer consider the mitigating circumstances that residents at risk are no longer residing at Wynnwood and enter into discussions with Wynnwood for a result other than license revocation. The Hearing Officer is aware of the burden on the Department in monitoring assisted living facilities as there are only two employees in the assisted living unit. Two of the three cited deficiencies in the July survey were corrected by the removal of residents at risk, but there is also the long history of Wynnwood in not complying with its plan of care to correct the deficiencies found in the past."

The hearing officer's recommendations and the complete administrative record were subsequently submitted to Williamson. On February 12, 2001, Williamson entered an order essentially adopting the findings of the hearing officer and revoking Wynnwood's license. Wynnwood filed a notice of appeal with the Department on February 16, 2001, and, on February 21, 2001, filed a petition in the Coffee Circuit Court for review of the license-revocation order, pursuant to Ala.Code 1975, § 41-22-20. Wynnwood also filed a motion for a stay of the revocation order, which the circuit court granted. The Department subsequently sought expedited judicial review on the ground that an inspection of Wynnwood conducted on February 20, 2001, showed that the dangerous conditions that supported the license-revocation order continued to exist. The circuit court did not rule on the motion seeking an expedited review; it held oral argument on the matter on February 13, 2002. The circuit court required additional briefing and proposed orders from the parties, but it received no new evidence. On December 16, 2002, the circuit court entered a 56-page order, which, the Department contends, was a copy of the proposed order submitted by Wynnwood,¹ followed by a four-page "Addendum and Brief of the Court"; the order reversed the Department's revocation of Wynnwood's license. In pertinent part, the circuit court's "Addendum and Brief of the Court" stated:

"This case is before the Court on a petition for review from a ruling of the Alabama Department of Public Health which revoked the operating license of [Wynnwood], an assisted living facility. The judicial review of matters of this kind is governed by the Alabama Administrative Procedure[] Act, section 41-22-20, The Code of Alabama, 1975, as amended. The review must be confined strictly to matters of law and this Court cannot reweigh the evidence. Also, this Court cannot substitute its judgment for that of the agency. Id. The decision[] of the agency carries with it a presumption of correctness and should be upheld unless shown to be unreasonable, arbitrary or capricious. Further, while this Circuit Court does have the authority to reverse an agency decision that is clearly arbitrary, if a decision can be supported by substantial evidence, it must be upheld. However, difficulties present themselves when the evidence produced to support the decision of the agency is questioned on grounds of admissibility and thereby becomes a `due process' issue.

"Eddie May was the `surveyor' who investigated Wynnwood for the deficiencies from the rules and regulations of the State Department of Public Health. Mr. May is the Director of the Assisted Living Facility Unit. According to the petition of Wynnwood, Mr. May based much of his testimony on information and statements made by employees of Wynnwood he gathered while conducting his investigation. Specifically, and with regard to the July 2000 `survey' of Wynnwood, Mr. May testified about the door alarms at Wynnwood not being on when he arrived and about residents' `elopements' from the facilities. Mr. May testified that a Wynnwood employee, Betty Whitehurst, had told him about the position of the alarm system at his arrival. He further testified about what one employee told him she had overheard from another employee concerning residents leaving the facility. While the Administrative Procedure[] Act does relax the rules of evidence, it does not relax the rules to the point of allowing `DOUBLE HEARSAY' TO BE CONSIDERED. See Screws v. Ballard, 574 So.2d 827, 829 (Ala.Civ.App. 1990). The Act provides that in contested cases: `the rules of evidence [as] applied in nonjury civil cases in the circuit courts of this state shall be followed.' See section 41-22-13(1), the Code of Alabama, 1975, as amended. The agency argues that the statements made should be admitted under an exception to the hearsay rule, Ala.R.Evid. 801(d)(2)(C)-(D) admissions against party interest. However, these statements were made by agents of the principal, at best, but to be admissible, the statements must have been made within the scope of the authority conferred on the agent at the time the statements were made and within the exercise of such authority. See Slade v. City of Montgomery, 577 So.2d 887 (Ala.1991). The employees were not in an administrative position with Wynnwood but rather were members of the housekeeping staff and did not have even apparent authority to speak for the principal, i.e., Wynnwood. In a nonjury circuit civil trial, the statements testified to by Eddie May WOULD NOT have been admissible and, therefore, should not have been admitted in the administrative hearing.

"If the statements of the employees of Wynnwood were not allowed, the deficiencies against Wynnwood would not be supported by `substantial evidence.' Allowing the consideration of clearly inadmissible testimony in a matter as serious as revoking the operating license of an assisted living facility is an obvious violation of the Constitutional `due process' rights of the owners and operators of Wynnwood.

"While the evidentiary and `due process' issues are substantial, the Department of Public Health also faces another obstacle. Mr. May reported that he lost confidence in the management of Wynnwood and their abilities to follow the promulgated rules and regulations for the operation of an assisted living facility. However, the `sister' facility, Wynnwood II, which is owned and operated by the same people and located immediately next door was `surveyed' by a different person. Wynnwood II apparently operates in conjunction with Wynnwood as the residents of Wynnwood take their meals at Wynnwood II. The surveyor of that facility saw no reason to move to revoke its license. Based upon the same management, operation and probably at least shared staff, since the meals are common, it is POLITICALLY suspicious that there is such a tremendous difference in the surveyor's results. Those facts alone should alert an independent fact-finder as to the possibility of problems but the facts are not to be reviewed by this Circuit Court. However, if the trial court finds that the decision was unreasonable, arbitrary or capricious, this Court is within its authority to overturn the agency's decision. Having two completely opposite conclusions based upon seemingly nearly identical facts, should raise the notion of capriciousness. However, the lack of admissible evidence is a sufficient basis to overturn the agency's decision under the Administrative Procedure[] Act and this Court so finds.

"The Circuit Court of Coffee County, Enterprise Division, Alabama is within its authority to overturn the decision of the Alabama Department of Public Health based upon a lack of `substantial evidence' to support the findings in the order. Such lack of evidence results from the exclusion from consideration of hearsay testimony. Further, the revocation of the operation license that is not supported by substantial evidence is a violation of the Constitutional `due process' rights of the owners of Wynnwood."

(Emphasis and capitalization by the circuit court.)

The Department appealed to the Court of Civil Appeals, which affirmed the trial court's judgment without opinion, citing State Health Planning...