Olathe Community Hosp. v. Kansas Corp. Com'n, 54899

Decision Date22 October 1982
Docket NumberNo. 54899,54899
PartiesOLATHE COMMUNITY HOSPITAL, Petitioner, v. KANSAS CORPORATION COMMISSION, Humana, Inc., Humana of Kansas, Inc., Suburban Medical Center, and Secretary of the Kansas Department of Health and Environment, Respondents.
CourtKansas Supreme Court

Syllabus by the Court

1. When a change of law merely affects the remedy or law of procedure, all rights of action will ordinarily be enforceable under the new procedure without regard to whether they accrued before or after such change of law and without regard to whether suit has been instituted or not, unless there is a saving clause as to existing litigation.

2. In this state an appeal is not a matter of right, but is governed by statute. Appeals previously permitted may be subsequently limited or completely withdrawn.

3. An administrative agency's action and authority may, under some circumstances and absent a statutory right of appeal, be challenged in original actions although the right to an appeal from an administrative agency to the judiciary is not a guaranteed right.

4. Administrative agencies are specifically designed by the legislature and attempts to exercise jurisdiction beyond the power conferred by the legislature are without authority and void.

5. In an original action in mandamus before this court seeking a determination of whether an appeal from an order in a certificate of need proceeding under the Health Facilities Act, K.S.A. 65-4801 et seq., which was entered prior to July 1, 1982, but not appealed from until after July 1, 1982, was to the Kansas Corporation Commission or direct to the district court, it is determined and held : that L.1982, Ch. 272, Sec. 4 (repealing and amending K.S.A. 65-4809) requires that such an appeal be direct to the district court and the Kansas Corporation Commission has no jurisdiction to review the administrative proceedings.

George A. Lowe of Lowe, Terry & Roberts, Olathe, and Christopher B. Bacon, of the same firm, Olathe, for petitioner.

Brian J. Moline, Gen. Counsel, Topeka, for respondent Kansas Corp. Com'n.

Emily E. Cameron and Robert Corbett, Topeka, for respondent Kansas Dept. of Health and Environment.

J. Eugene Balloun of Balloun & Bodinson, Chartered, Olathe, and Ron Bodinson, of the same firm, Olathe, for respondents Humana, Inc., Humana of Kansas, Inc. and Suburban Medical Center.

HOLMES, Justice:

This is an original action in mandamus filed by Olathe Community Hospital seeking a determination of the applicable appeal statute in an appeal from an order of the Secretary of the Kansas Department of Health and Environment (KDHE) granting the petitioner's request for a certificate of need pursuant to K.S.A. 65-4801, et seq. This court assumed jurisdiction by an order entered August 30, 1982.

Due to statutory changes enacted by the legislature during its 1982 session, the parties are in disagreement whether an appeal from the order of the KDHE in this certificate of need case is to the Kansas Corporation Commission (KCC) pursuant to K.S.A. 65-4809 (repealed July 1, 1982), or direct to the district court pursuant to L.1982, ch. 272, § 4 (effective July 1, 1982). The facts are not in dispute.

The Olathe Community Hospital seeks an order directing the respondent, KCC, to dismiss, for lack of jurisdiction, an administrative review proceeding lodged there. The real parties in interest are the petitioner, Olathe Community Hospital, and the respondents, Humana, Inc., Humana of Kansas, Inc., and the Suburban Medical Center (hereafter the Suburban group). The Secretary of the KDHE, also named as a respondent, has adopted the legal arguments of the petitioner. The KCC has filed a memorandum asserting its right to exercise jurisdiction and opposing the petition for mandamus. The Suburban group also asserts that the KCC has jurisdiction.

The ultimate litigation concerns the Olathe hospital's application for a certificate of need under the Kansas Health Facilities Act, K.S.A. 65-4801, et seq. The hospital sought a certificate of need from the KDHE for its plans to construct a 150-bed replacement hospital with "shell space" for an additional 50 beds to be finished when needed. The proposal also called for the establishment of computerized axial tomography (CT) scanning services at the hospital. The estimated cost for the project was twenty-nine million, eight hundred fifty-nine thousand dollars ($29,859,000.00). Suburban Medical Center and its owners, Humana, Inc. and Humana of Kansas, Inc., oppose the project.

The Secretary of the KDHE, in his order dated the 18th of June, 1982, modified the Olathe proposal and ordered that a certificate of need be issued only for a 150-bed replacement facility. No need was found for the 50-bed shell space or the CT scanner service.

One of the reasons the Health Facilities Act, K.S.A. 65-4801, et seq., was adopted by the legislature in 1976 was to bring the Kansas statutes and resulting regulations into compliance with certain federal requirements (42 U.S.C. § 300k, et seq., and regulations issued thereunder). One of those requirements was that any order of the KDHE in a proceeding for a certificate of need must be reviewed by an administrative "review agency" before any appeal could be taken to the courts. K.S.A. 65-4809 provided for such review. K.S.A. 65-4801(f) provided that the review agency would be the statewide health coordinating council or such other agency as was designated by the governor. The KCC was designated as the appropriate review agency by former Governor Robert F. Bennett in Executive Order No. 78-35, issued December 12, 1978. The KCC remained the designated review agency until July 1, 1982, when the necessity for such review was abolished by L.1982, ch. 272, § 4.

The 1982 Legislature, after changes in the federal requirements no longer required the intermediate step of appealing first to a review agency, amended the statutes to provide that all appeals from orders of the KDHE in certificate of need cases should be directly to the district court (L.1982, ch. 272, § 4) and allowed thirty days from the date of the entry of the order by the Secretary of the KDHE in which to file the appeal. The prior statute had allowed a similar thirty-day period in which to seek a review hearing before the review agency. The order authorizing the certificate of need for the new facility at Olathe Community Hospital was issued June 18, 1982. K.S.A. 65-4809 was repealed effective July 1, 1982, and the new statute providing for a direct appeal to the district court became effective the same date. Thus the Suburban group was faced with a dilemma, and proficient counsel being aware of the change effected on July 1, 1982, filed a request for a hearing before the review agency, the KCC, on July 14, 1982, and also filed a notice of appeal to the district court of Johnson County on July 16, 1982. Obviously, both appeals were filed within thirty days of the issuance of the order by the KDHE. Olathe Community Hospital, after motions to dismiss were denied by the KCC, then filed this original action seeking a determination of which statute governs the appeal and whether the KCC has jurisdiction under the old statute as the review agency or the district court has jurisdiction under the new statute of the direct appeal. The Suburban group and the KCC argue that the KCC has jurisdiction and should proceed as the statutory review agency to hear the first step in the appeal process. Olathe Community Hospital and the KDHE, on the other hand, argue that the new statute effective July 1, 1982, controls and that the district court has jurisdiction to hear the appeal without the necessity of the matter being first submitted to a review agency.

Four Kansas cases are cited by the parties in support of their relative positions. Olathe Community Hospital and the KDHE rely on three early cases from this court: Coal Co. v. Barber, 47 Kan. 29, 27 P. 114 (1891); Kansas City v. Dore, 75 Kan. 23, 88 P. 539 (1907); and Bowen v. Wilson, 93 Kan. 351, 144 P. 251 (1914), while the respondents rely upon Harder v. Towns, 1 Kan.App.2d 667, 573 P.2d 625 (1977). None of the cases is directly in point with the factual situation before the court.

In Coal Co., Barber recovered a judgment for $65.00 and costs on February 20, 1889. At the time the judgment was entered the Coal Co. had a right to appeal to the Supreme Court and filed the necessary documents to do so on March 20, 1889. However, the 1889 Legislature had passed a statute, effective March 20, 1889, setting a jurisdictional limit of $100.00 on all such appeals. The court found that the new statute became effective upon its publication at 6:00 a.m. on March 20, 1889, and that the appeal was not filed until later that same day and was therefore barred. The court held:

"A party who has been defeated in a civil action in the district court has no vested right to an appeal or to the prosecution of proceedings in error in the supreme court to review the rulings or judgment of the district court before he has filed his appeal or proceedings in the supreme court; and an act of the legislature taking away the privilege of appeal or the permission to prosecute proceedings in error before the appeal or petition in error is filed, is valid and constitutional." Syl. p 4.

In Kansas City v. Dore, Dore recovered a judgment against the city for the wrongful death of his minor son. The judgment was entered December 13, 1904, and at that time the city had one year in which to file an appeal to the Supreme Court. The appeal was filed December 9, 1905. However, the 1905 legislature had shortened the appeal time to ninety days effective March 15, 1905. The court, in reliance upon Coal Co., held:

"Where a statute which gives a party one year after final judgment to perfect his appeal to the supreme court is repealed and amended by limiting the time within which such proceeding must be commenced, which am...

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1 books & journal articles
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