ORDERS:
ORDER ON REMAND
STATEMENT
OF THE CASE
This
matter is before me pursuant to an Order of Remand filed with the
Administrative Law Court (ALC or Court) on September 19, 2005, by the Board (Board)
of the South Carolina Department of Health and Environmental Control (DHEC).
In that Order of Remand, the Board set forth, in relevant part:
Rather than ruling in the first instance
on this Motion based on evidence not presented to the Administrative Law Judge
or appearing in the Record on Appeal, the Board remands this matter to the
Administrative Law Judge pursuant to S.C. Code Ann., Section 1-23-610(D) (2005)
for consideration of the limited issues of property ownership and transfer
raised by the Motion to Dismiss and the Responses thereto. On remand, the
Board requests that the Administrative Law Judge examine the effect of these
property ownership and control issues on the Certificate of Need, including
receipt of any appropriate evidence on these issues and its impact on the
viability on the Certificate of Need.
A hearing was held before me at the offices of the Court on November 30,
2005.
DISCUSSION
Background
On
January 24, 2005, I issued a Final Order and Decision determining that the
South Carolina Medical Endoscopy Center’s (Center) CON application did not meet
the applicable criteria set forth in The 2001 State Health Plan to
warrant its expansion of services. During the review of the case, I remanded the
matter to DHEC for the staff to make a determination as to whether the change
in the location of the property created a substantial
change in the application as to constitute a new application. See 24A S.C. Code Ann. Regs. 61-15 § 310 (Supp. 2003). DHEC
determined that no substantial change resulted from the modification in the
site of the location but, nevertheless, issued a letter which set forth that
any future change in the property will render the project void.
Property
Ownership
In
the contested case before me, the Center sought a CON for a facility to be
located on an approximately one-half acre of land situated at the corner of
Hampton and Pulaski Streets in Columbia, South Carolina. The Center provided
the proper assurances that it or Dr. Lloyd owned the property upon which the proposed
facility was to be constructed by fee simple title. See 24A S.C. Code
Ann. Regs. 61-15 § 202 (2)(d)(1) (Supp. 2003).
However, after I issued the Final Order and Decision in this case, Dr.
Lloyd sold the property back to the previous owner, Warren Culbertson, on March
1, 2005, with the right to repurchase the property within 120 days. Dr. Lloyd subsequently
repurchased the property within that time frame. Nevertheless, Dr. Lloyd informed
Mr. Culbertson that if he obtained a suitable buyer, Dr. Lloyd would be
interested in selling the property. On December 14, 2005, Dr. Lloyd sold the
property to the South Carolina Automobile Dealers' Association. Therefore, he
does not own the property that was the subject of the contested case upon which
his facility was to be constructed. Nonetheless, Dr. Lloyd contends that if this
application is subsequently approved on appeal, he will obtain suitable
property.
Effect
of Property Ownership
Respondents
contend that the CON was extinguished when Dr. Lloyd sold the property back to
the seller, Mr. Culbertson. They further contend that even if the brief
transfer of the property does not void the CON, the latest sale to the
Automobile Dealers' Association voids the Center’s CON. The Center, on the
other hand, argues that rather than be saddled with the upkeep of the property
during the pendency of the appeal, it elected to sell the property. However, if
it prevails in its appeal, the Center contends that it should then be able to
select another property upon which to build the facility and the Department can
then determine if the use of that property constitutes a substantial change in the project.
Clearly,
the latest sale of the property to the Automobile Dealers' Association “changed”
the context upon which the application was based. That change, however, would
not effect my decision in this matter. In other words, I still find that the
reasoning set forth in my previous order warrants the denial of the Center’s
CON application.
Furthermore,
the ownership of the property may be an additional factor in denying the
permit. An applicant must furnish written assurances that the facility will be
completed in accordance with the CON application. See Regulation 61-15 §
202 (2)(d)(4) (Supp. 2003). The Center set forth in its case before the ALC
that its facility would be built at the corner of Hampton and Pulaski Streets.
Therefore, if a CON had been granted, it would have been approved only for that
location.
Nevertheless,
the Center’s CON was denied and the case was appealed. Therefore, the
difficulty in definitively answering the effect of the property ownership on
the CON is that there currently is no CON, nor do I now approve of a CON
for the Center. Furthermore, even though this issue has been remanded to the
ALC, this case is still under appeal. It is certainly reasonable to assume
that given the length of the appellate process and the myriad of factors that
are involved in a CON application (e.g., construction or personnel
contracts), factual changes could and do occur in most CON cases during an
appeal. Moreover, Regulation 61-15 § 202(2)(d)(3) (Supp. 2003) provides that
an applicant may “submit to the Department for prior approval, changes that substantially
alter the scope of work, function, utilities, major items of equipment, safety
or cost of the facility during construction.”
Following
Respondents' reasoning, if a change to a CON applicant or the project occurred
during the appellate process, even though they prevailed on appeal, the CON
would ultimately be void because the project is not exactly as originally
approved.
Furthermore, if there is no factual analysis to be made as to whether the
change is significant or not, any change could void a CON. Therefore, an
applicant could prevail on appeal only to face an arbitrary determination that
some change occurred during the appellate process and the CON is void.
“The
interpretation of a term set forth in a statute should support the purpose of
the statute and should not lead to an absurd result.” S.C. Coastal Council
v. S.C. State Ethics Comm'n, 306 S.C. 41, 44, 410 S.E.2d 245, 247 (1991).
Additionally, “[c]ourts will reject the plain and ordinary meaning of statutory
language when to accept it would lead to a result so absurd that it could not
possibly have been intended by Legislature, or would defeat plain legislative
intention; if possible we will construe a statute so as to escape an absurd
result and carry the legislative intention into effect.” State v. Gordon,
356 S.C. 143, 153, 588 S.E.2d 105, 110 (2003). I decline to follow the
approach suggested by Respondents because that interpretation would lead, if
not to an absurd result, to at least one that was not intended by the Legislature.
The
requirement in Section 202 (2)(d)(3) that an applicant seek approval for
changes certainly contemplates the fact that an applicant may make changes
during the CON project. Conversely, the regulations do not provide that
failure to seek approval of a change prior to the construction of a facility is
grounds in and of itself to void a CON application. I therefore find that the
simple fact that a change occurs does not void the approved CON. However, any change
to a CON project requires approval from DHEC. The question in this case is
when must that approval be sought and/or obtained.
I
find that a determination regarding the changes in ownership is not ripe or
appropriate at this stage of the litigation. The specific location of the
proposed site facility was not a reason for which this Court denied the
Center’s CON. Prior to this hearing but while the case was before the Board,
Dr. Lloyd relinquished fee simple ownership of the property. However, before
the hearing upon the remand, he reacquired ownership. But at the time of the remand
hearing he had entered into a contract to sell the property. Pursuant to those
facts, I held the Record open and Dr. Lloyd subsequently sold the property.
Nevertheless, though Dr. Lloyd does not own the property upon which the
facility was approved to be built, he asserts that if he prevails on appeal he
will acquire a suitable location to build the facility and seek DHEC’s approval
for that location.
If the CON is ultimately granted, the property acquisition
could occur before the CON expires. Furthermore, the above regulations provide
the framework to resolve the property issue after the appeal in this case, if
necessary. Therefore, given the uncertainty of the need or location of a
proposed site, making a determination of whether the change was so substantial
as to constitute a new project at this stage of the process would be injudicious. See Clark v. Aiken County Government, 366 S.C. 102, 620 S.E.2d 99
(Ct. App. 2005); Baber v. Greenville County, 327 S.C. 31, 488 S.E.2d 314
(1997) (“Courts generally decline to pronounce a declaration wherein the rights
of a party are contingent upon the happening of some event which cannot be
forecast and which may never take place.”).
ORDER
IT
IS HEREBY ORDERED that the issue of ownership of the property upon which
the Certificate of Need currently under appeal was based and the impact of Dr.
Lloyd's subsequent sale of that property be treated by the Board in a manner
consistent with the language in this Order on Remand.
AND
IT IS SO ORDERED.
______________________________
Ralph
King Anderson, III
Administrative
Law Judge
January 3, 2006
Columbia, South Carolina
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