Public Health Dept. v. Rivergate Manor

• Decision Date: 16 July 1996
• Docket Number: No. 10,Docket No. 100631,10
• Parties: PUBLIC HEALTH DEPARTMENT, Plaintiff-Appellee, v. RIVERGATE MANOR and Senior Services Development Associates, Defendants-Appellants, and Certificate of Need Board, Defendant. Calendar
• Court: Michigan Supreme Court

Page 515

550 N.W.2d 515 452 Mich. 495 PUBLIC HEALTH DEPARTMENT, Plaintiff-Appellee,
v.
RIVERGATE MANOR and Senior Services Development Associates,
Defendants-Appellants,
and
Certificate of Need Board, Defendant. Docket No. 100631. Calendar No. 10. Supreme Court of Michigan. Argued March 6, 1996.
Decided July 16, 1996.

Page 516

[452 Mich. 497] Frank J. Kelley, Attorney General, Thomas L. Casey, Solicitor General, and Ronald J. Styka, Assistant Attorney General, Lansing, for plaintiff.

Sommers, Schwartz, Silver & Schwartz, P.C. by Patrick Burkett, Southfield, and Cook, Goetz & Rogers, P.C. by John A. Cook, Bloomfield Hills, for defendants.

OPINION

LEVIN, Justice.

We granted leave to appeal to decide whether the circuit court erred in entering an order of superintending control, declaring that the Certificate of Need Board of the Department of Public Health acted "without authority" in granting Rivergate Manor's request for modification of a certificate of need issued by the board. The Court of Appeals, in an unpublished opinion, ¹ affirmed the decision of the circuit court. We affirm.

I

In 1983, Rivergate Manor applied to the Michigan Department of Public Health, pursuant to part 221 of the Public Health Code, ² for a certificate of need to permit it to construct a 223-bed nursing home in the City of Riverview. The department denied Rivergate's application on the ground that it had failed to show a [452 Mich. 498] need for the proposed home in the subarea where Riverview is situated. ³

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The Certificate of Need Board reversed the department's decision and, in October, 1987, issued a certificate of need to Rivergate.

Rivergate then entered into an agreement with Senior Services Development Associates to transfer its common stock to Senior Services for $125,000 if Rivergate was able to have the certificate of need amended to allow construction of a nursing home in Westland, ⁴ which is located in a different subarea than Riverview.

In July 1990, Rivergate communicated with the Department of Public Health in an effort to have the certificate of need modified. The department responded that the certificate of need was site specific and not transferable. After Rivergate asked for clarification, a department representative responded that because the certificate had been granted by the Certificate of Need Board and not by the department, the department was "without authority" to modify it.

Rivergate then requested a modification of the certificate from the Certificate of Need Board, explaining why it thought it would be appropriate for the board to modify the certificate of need to allow the project to be built in the northwest Wayne, rather than the southwest Wayne, subarea. On October 2, 1990, the board held a public meeting at which Rivergate's request was discussed in some depth. Twenty days [452 Mich. 499] later, the board granted Rivergate the requested modification.

After the release of the board's decision, Rivergate and Senior Services completed the sale of Rivergate's common stock at a lower purchase price. The closing included an immediate nonrefundable payment of $25,000 from Senior Services to Rivergate.

On January 16, 1991, the Department of Public Health filed a complaint in the Ingham Circuit court, seeking an order of superintending control over the Certificate of Need Board on the ground that the procedure it employed in reviewing Rivergate's request was contrary to law. After both parties filed motions for summary disposition, the circuit court granted summary disposition for the department under MCR 2.116(C)(10). Stating that the board must "act in accordance with law and only to the extent of its statutory authority," the court vacated the board's order granting the modification of Rivergate's certificate of need.

The Court of Appeals affirmed in an unpublished per curiam opinion. ⁵

II

We first consider whether the circuit court had jurisdiction under the circumstances to superintend the Certificate of Need Board. We conclude that it did.

452 Mich. 500] A

The constitution, ⁶ and the Revised Judicature Act ⁷ provide that the circuit court has superintending control over inferior courts and tribunals subject to rules promulgated by this Court. This power of superintending control, enforced by an order of superintending control, ⁸ is available only in a limited number of circumstances. "An order of superintending control ... traditionally has been used only to determine 'if the inferior tribunal, upon the record made, had jurisdiction, whether or not it exceeded that jurisdiction and proceeded according to law.' " In re People v. Burton, 429 Mich. 133, 139, 413 N.W.2d 413 (1987), quoting Genesee Prosecutor v. Genesee Circuit Judge, 386 Mich. 672, 194 N.W.2d 693 (1972). ⁹

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An order of superintending control will not be granted when the party seeking the order is entitled to pursue an appeal. ¹⁰ Nor will an order of superintending control be issued where the petitioner seeks to employ the court's power to superintend as a substitute[452 Mich. 501] for an appeal or to evade a statutory prohibition of an appeal. ¹¹

Both parties concede that the Department of Public Health is precluded by statute from appealing the Certificate of Need Board's decision. ¹² The department asserted in its complaint for superintending control that "the CON Board has acted contrary to law," and "violated its clear legal duty" by making its decision to modify Rivergate's certificate of need without observing the requisite procedural safeguards. The department did not take issue with the substantive merits of the board's decision to modify Rivergate's certificate. We conclude that under the circumstances, the circuit court had jurisdiction to consider the department's complaint seeking superintending control.

B

Rivergate and Senior Services assert that an order of superintending control nevertheless is not available, arguing that "superintending control is an inappropriate remedy where an appeal has been specifically precluded by the Legislature." They rely on In re People v. Burton, in which this Court concluded that the Court of Appeals improperly exercised superintending[452 Mich. 502] control authority when it reversed the trial court's order granting a new trial.

In re People v. Burton and Michigan Affiliated Healthcare System v. Dep't Public Health, 209 Mich.App. 699, 531 N.W.2d 722 (1995), also cited by Rivergate and Senior Services, dealt with situations in which superintending control was sought to review a lower court's or tribunal's decision on the merits, not to inquire whether a lower court...