Waterman Convalescent Hospital v. Dhs

• Decision Date: 12 September 2002
• Docket Number: No. E031943.,E031943.
• Citation: 101 Cal.App.4th 1433,125 Cal.Rptr.2d 168
• Court: California Court of Appeals Court of Appeals
• Parties: WATERMAN CONVALESCENT HOSPITAL, INC., Plaintiff and Appellant, v. STATE DEPARTMENT OF HEALTH SERVICES, Defendant and Respondent.

125 Cal.Rptr.2d 168

101 Cal.App.4th 1433

WATERMAN CONVALESCENT HOSPITAL, INC., Plaintiff and Appellant, v. STATE DEPARTMENT OF HEALTH SERVICES, Defendant and Respondent.

No. E031943.

Court of Appeal, Fourth District, Division 2.

September 12, 2002.

Tyler & Wilson, Elizabeth Plott Tyler, Los Angeles, and Francesca Brotman-Orner, Woodland Hills, for Plaintiff and Appellant.

Bill Lockyer, Attorney General, Charlton C. Holland III, Assistant Attorney General, Jennifer S. Cady, Supervising Deputy Attorney General, and S. Paul Bruguera, Deputy Attorney General, for Defendant and Respondent.

OPINION

RAMIREZ, P.J.

Plaintiff Waterman Convalescent Hospital, Inc. (Waterman) appeals from a judgment of dismissal entered against it after defendant State Department of Health Services' (DHS) demurrer to the first amended complaint was sustained without leave to amend. The trial court found that Waterman's action was barred by the statute of limitations set forth in Health and Safety Code section 1428, subdivision (b).¹ The Appellate Division of the San Bernardino Superior Court, in a decision certified for publication, held that the statute of limitations did not bar the action, and reversed the trial court. On our own motion, in accordance with rule 62(a) and (b) of the California Rules of Court, we ordered transfer of this case to secure uniformity of decision and to settle an important question of law. After under-taking an independent review, we agree that the trial court must be reversed.

Facts and Procedural History

As this is an appeal after a demurrer was sustained without leave to amend, the operative facts are those alleged in the first amended complaint. Waterman does business as Plott Nursing Home. DHS is the state agency charged with regulating such facilities pursuant to the Long-Term Care, Health, Safety, and Security Act of 1973 (the Act). (§ 1417 et seq.) It has the authority to issue citations and to impose civil penalties for violations of applicable health laws.

On April 20, 2000, DHS issued a citation against Waterman for class "A" violations. Within 15 days of its receipt of the citation, on May 8, 2000, Waterman notified DHS of its intent to contest the citation and requested a citation review conference (CRC). On September 7, 2000, Waterman notified DHS of its intent to withdraw its request for a CRC and to instead contest the citation in court. It then filed the instant action within 90 days of its notification to DHS.

Waterman filed its complaint for an order dismissing the citation on September 11, 2000. DHS demurred on the ground that Waterman's action was barred by the statute of limitations in section 1428, subdivision (b), which requires that any court action be filed within 90 days of notification to DHS of the intent to contest a citation. DHS argued that even if Waterman's request for a CRC could be construed as a notice of intent to contest the citation, the lawsuit was not filed until 126 days after that notice, some 36 days late. DHS also argued that since no CRC had been held, and no decision issued, Waterman could not base its court action on that alternative provided by the statute.

Waterman countered that DHS had been dilatory in scheduling the CRC. While waiting for DHS to schedule the CRC, Waterman was issued a second citation, which, even though the first citation remained unsettled, resulted in a treble fine. (§ 1428, subd. (h).) In addition, because of the outstanding citations, Waterman faced a potential 500 percent increase in its insurance premiums. However, that increase could be mitigated by prompt resolution of the citation disputes. For these reasons, Waterman determined that it could no longer accept the laggardly pace of the administrative remedy, and immediately sought resolution through its alternative judicial remedy. The demurrer was heard on November 14, 2000, at which time the trial court begrudgingly agreed with DHS that the action appeared to be barred by the applicable statute of limitations. Nevertheless, it granted Waterman the opportunity to amend its complaint.

The operative first amended complaint was filed on December 14, 2000. Waterman alleged that the citation was both procedurally and substantively defective, and therefore must be dismissed. It also alleged that it was excused from pursuing its optional administrative remedy (the CRC) on the grounds that it would be futile and would cause irreparable injury, and because DHS unreasonably delayed in conducting the hearing. DHS again demurred on the basis of the statute of limitations. Waterman's request to file additional briefing was granted and the demurrer was set for hearing on March 15, 2001. On March 20, 2001, the decision was issued sustaining the demurrer without leave to amend based upon the expiration of the statute of limitations. The case was dismissed, pursuant to DHS's motion, on April 23, 2001. This appeal followed.

Discussion

The question that we must consider is whether Waterman's action is barred by the statute of limitations in section 1428, subdivisions (a) and (b). To do so, we must interpret the statute, an action that we undertake de novo. (Catalina Investments, Inc. v. Jones (2002) 98 Cal.App.4th 1, 6, 119 Cal.Rptr.2d 256.) Section 1428, subdivision (a) provides, "If the licensee desires to contest a citation or the proposed assessment of a civil penalty therefor, the licensee shall use the processes described in subdivisions (b) and (c) for classes `AA,' `A,' or `B' citations...." Subdivision (b) then states, "[i]f a licensee notifies the director that he or she intends to contest a class `AA' or a class `A' citation, the licensee may first, within 15 business days after service of the citation, notify the director in writing of his or her request for a citation review conference. The licensee shall inform the director in writing, within 15 business days of the service of the citation or the receipt of the decision of the director's designee after the citation review conference, of the licensee's intent to adjudicate the validity of the citation in the municipal or superior court in the county in which the long-term hearth care facility is located.... The action shall be filed no later than 90 calendar days after a licensee notifies the director that he or she intends to contest the citation, or no later than 90 days after the receipt of the decision by the director's designee after the citation review conference, and served not later than 90 days after filing." Subdivision (a) also indicates, "If the licensee desires to contest a decision made after the citation review conference, the licensee shall inform the director in writing within 15 business days after he or she receives the decision by the director's designee." (§ 1428, subds.(a) & (b).)

This statute is not a model of clarity. Thus, we resort to long-held rules of statutory construction. "`The fundamental purpose of statutory construction is to ascertain the intent of the lawmakers so as to effectuate the purpose of the law. [Citations.] In order to determine this intent, we begin by examining the language of the statute. [Citations.] [However,] "language of a statute should not be given a literal meaning if doing so would result in absurd consequences which the Legislature did not intend." [Citations.] Thus, "[t]he intent prevails over the letter, and the letter will, if possible, be so read as to conform to the spirit of the act." [Citation.] ... [Nor do we] construe statutes in isolation, but rather read every statute "with reference to the entire scheme of law of which it is part so that the whole may be harmonized and retain effectiveness." [Citation.]' [Citation.] We must also consider `the object to be achieved and the evil to be prevented by the legislation. [Citations.]' [Citation.]" (Horwich v. Superior Court (1999) 21 Cal.4th 272, 276, 87 Cal.Rptr.2d 222, 980 P.2d 927.)

In its distilled form, section 1428 provides a facility charged with a class "A" violation with a choice. The facility must inform the director of its intent to contest the citation. It may first, within 15 business days of service of the citation, request a CRC. It can also, within 15 business days of service of the citation, inform the director of its intent to adjudicate the validity of the citation in the trial court. If it chooses the second option, the action shall be filed within 90 calendar days after the director was notified of the intent to contest. If, however, it chooses the first option, it may still file a court action. Subdivisions (a) and (b) both provide that if, after receipt of the CRC decision, a facility desires to contest the action in court, it must so notify the director. This notice must be within 15 business days after receipt of the CRC decision. The action must then be filed within 90 days after receipt of the CRC decision.

The statute does not deal expressly with the problem that we encounter here, to wit: What is the time limit for filing an action when a CRC has been requested but it is alleged that it has not been provided within a reasonable time? Rather than choosing to file a petition for a writ directing the DHS to promptly conduct a CRC, Waterman withdrew its request and filed this action. Thus, we must now determine whether this case should be barred because Waterman did not wait for the CRC decision that would have triggered its right to file it.

When a statute is silent on a point, the courts resort to statutory interpretation, the rules concerning which have already been set out. (See, e.g., Lakin v. Watkins Associated Industries (1993) 6 Cal.4th 644, 663, 25 Cal.Rptr.2d 109, 863 P.2d 179.) Our mandate is to determine legislative intent consistent with enforcing the purpose of the law. One of the express purposes of the Act is the prompt issuance of civil sanctions against facilities that violate health and safety regulations. (§ 1417.1.) Since sanctions may be avoided until a...