STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
FIRST HOSPITAL CORPORATION, )
)
Petitioner, )
)
vs. ) CASE NO. 83-3086
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
)
RECOMMENDED ORDER
After both parties waived formal written notice, R.L. Caleen, Jr., Hearing Officer with the Division of Administrative Hearings, held a formal hearing in this case on October 17, 1983, in Tallahassee, Florida.
APPEARANCES
For Petitioner: Thomas F. Hancock, Esquire
Crews, Hancock & Dunn 700 Building, Suite 1015 700 East Main Street
Richmond, Virginia 23219
and
John Radey, Esquire Holland & Knight
Post Office Drawer 810 Tallahassee, Florida 32301
For Respondent: Frank R. Olsavsky, Legal Intern
Department of Health and Rehabilitative Services
1317 Winewood Boulevard
Building 2, Room 256
Tallahassee, Florida 32301 STATEMENT OF THE ISSUES
Whether the Department of Health and Rehabilitative Services ("DHRS") should exclude First Hospital Corporation's ("FHC") pending application (for a certificate of need) from the August 15, 1983, batching cycle because FHC's letter of intend (to submit an application) was not filed with the Local Health Council by the required date, July 18, 1983.
PROCEDURAL BACKGROUND
By letter of September 7, 1983, respondent DHRS excluded FHC's pending application (for a certificate of need) from the August 15, 1983, application review or batching cycle, contending that FHC's letter of intend was not filed
with the Local Health Council by the required date--July 18, 1983. On September 22, 1983, FHC requested a Section 120.57(1) hearing to contest DHRS' decision.
On September 29, 1983, DHRS forwarded this case to the Division of Administrative Hearings for assignment of a hearing officer. FHC requested an expedited hearing and, with the parties' agreement, hearing was set for October 17, 1983.
At hearing, the parties jointly offered a written stipulation and Exhibits 1-7. FHC offered Exhibit No. 8 and presented the testimony of Betty Genereux.
Both parties filed proposed findings of fact and conclusions of law by October 20, 1983.
Based upon the parties' stipulation and the evidence presented at hearing, the following facts are determined:
FINDINGS OF FACT
By stipulation of fact, the parties agree that:
On July 14, 1983, FHC mailed its letter of intent to file an application for a certificate of need to establish a psychiatric hospital near Orlando. This letter of intent was for an application to be considered in the August 15, 1983, batching cycle.
The DHRS deadline for a letter of intent for the August 15, 1983, batching cycle was July 18, 1983.
The FHC letter of intent was received by DHRS on July 18, 1983.
In mailing a copy of the letter of intent to the Local Health Council of East Central Florida ("Local Health Council") on July 14, 1983, FHC inadvertently and unintentionally failed to enclose a copy of the letter of intent; the Local Health Council therefore received an empty envelope from FHC on July 18, 1983.
The handwritten notes on the empty envelope are the notes of Clifton R. Carter, who is the Executive Director of the Local Health Council. Mr. Carter called FHC on July 18, 1983, and indicated that FHC should send to the Local Health Council a copy of its letter of intent by Federal Express.
FHC sent a copy of its letter of intent to the Local Health Council via Federal Express on July 18, 1983. The Local Health Council reviewed a copy of FHC's letter of intent on July 19, 1983.
DHRS acknowledged receipt of FHC's letter of intent and gave FHC instructions as shown in a letter dated July 20, 1983, from DHRS' Porter to FHC's Jones.
Executive Director Carter sent a letter to HRS dated August 2, 1983, where he states that the Local Health Council did not timely receive FHC's letter of intent.
FHC timely submitted its certificate of need application on or before August 15, 1983. Other competing applications were also timely filed and are not being processed by DHRS. DHRS' Thomas Porter sent a letter to FHC's
Stanley Jones dated September 7, 1983, which advised FHC that its application was being returned and would not be processed in the August 15, 1983, batching cycle.
The parties presented evidence which supports the following supplementary findings:
At approximately 11:00 a.m. on July 18, 1983, after receiving the empty envelope from FHC, Clifton Carter, Executive Director of the Local Health Council, called FHC and spoke with Betty T. Genereux, the secretary to Stanley
G. Jones, Vice President for Development of FHC. Mr. Carter advised her that the envelope from FHC had been received without a letter of intent. Ms. Genereux expressed concern, and asked whether the Local Health Council had telecopier equipment. Mr. Carter had told her that none was available. He also told her that the deadline was that day, but if she would "Federal Express" the letter to him and if he received it the next day, the filing equipment would be met. Pursuant to his instructions, she "Federal Expressed" the letter; the Local Health Council received it at approximately 9:00 a.m. the next day.
FHC had an aircraft available to it on July 18, 1983, which could have been used to deliver the letter of intent to the Local Health Council that day. If Mr. Carter had not led Ms. Genereux to reasonably conclude that the filing requirement would be met if the letter was received by Mr. Carter the next day, it is likely that FHC would have used its aircraft or some other means (such as a telegram) to assure delivery on July 18, 1983.
FHC reasonably, and in good faith, relied upon the representation made by Mr. Carter to Ms. Genereux on July 18, 1983, concerning the filing requirement. 1/ Since the question concerned the requirement for filing a document with the Local Health Council, Ms. Genereux was reasonable in believing that Mr. Carter, Executive Director of the Local Health Council, had authority to make such a representation; and she was reasonable in acting on such belief.
Pursuant to its letter of intent, DHRS sent FHC the required application forms. FHC thereafter devoted substantial resources to preparing its application and filing it on or before August 15, 1983, in order to assure that its application would be reviewed in the August 15, 1983, application batching cycle.
FHC was notified of the rejection of its application (because an untimely letter of intent) by letter from Thomas F. Porter, a DHRS Medical Facilities Consultant Supervisor, dated September 7, 1983, postmarked September 13, 1983, and received on September 20, 1983. This rejection was transmitted after the time specified for DHRS to determine the completion of an application. See, Rule 10-5.08(3). Within two days after receiving the rejection, FHC filed its request for a hearing, resulting in this proceeding.
No evidence was presented that DHRS or the Local Health Council were prejudiced as a result of FHC's omission of the letter of intent from its July 18, 1983, filing with the Local Health Council, and its follow-up delivery of the missing letter on the next morning.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the parties and subject matter of this proceeding. Section 120.57(1), Fla.Stat. (1981).
Section 381.494(5), Florida Statutes (Supp. 1982), provides:
(5) NOTICE TO THE LOCAL HEALTH COUNCIL AND THE DEPARTMENT
At least 30 days prior to filing an application, a letter of intent respecting the development of a proposal must be actually received by the local health council and by the department respecting the development of a proposal subject to review. 2/
Rule 10-5.08(1)(b), Florida Administrative Code, similarly states:
At least 30 days prior to filing an application, a letter of intent respecting the development of a proposal must be actually received by the local health council and by the department.
Thus, in order for FHC's application to be considered in DHRS' August 15, 1983, application review cycle, a letter of intent should have been received by both DHRS and the Local Health Council no later than July 18, 1983. This deadline is not a dispute.
FHC's application should be reviewed during the August 15, 1983, application review cycle because (1) DHRS is estopped to do otherwise; and (2) the peculiar circumstances of this case justify deviating from DHRS' strict interpretation of Rule 10-5.08(1)(b) and Section 381.494(5).
Equitable estoppel is an equitable principle which operates to ensure nothing more than application of the rule of fair play. Town of Largo v. Imperial Homes Corp.,, 309 So.2d 571 (Fla. 2d DCA 1975). It is a defense to a legitimate exercise of police power when a person, in good faith, relies upon an affirmative act of government and thereby changes his or her position, or incurs such extensive obligations and expenses that it would be unjust to destroy the acquired right. City of Hollywood v. Hollywood Beach Hotel Co., 283 So.2d 867, 869 (Fla. 4th DCA 1973), rev. in part, 329 So.2d 10 (Fla. 1976). It is a doctrine which can be applied against a government agency only under exceptional circumstances. North American Co. v. Green, 120 So.2d 603 (Fla. 1959).
Estoppel is established by proving: 1) A representation as to a material fact that is contrary to a later-asserted position; 2) Reliance on that representation; 3) A change in position detrimental to the parties and reliance thereon. Department of Revenue v. Anderson, 403 So.2d 397, 400 (Fla. 1981).
Here the elements have been satisfied. The Executive Director of the Local Health Council, by positive representation, led FHC to reasonably believe that if the letter of intent was "Federal Expressed" on July 18, 1983, and received by the Local Health Council on the next day, the letter would be deemed timely filed. FHC reasonably relied on this representation, to its detriment. Neither the Local Health Council nor DHRS can avoid the clear effect of that representation after FHC detrimentally relied on it. Although DHRS is a state agency separate from the Local Health Council, both agencies perform supporting roles under the certificate of need law. See, Sections 389.4930494. FHC reasonably believed that a positive representation by the ranking official of a
Local Health Council--concerning a document to be filed with the Council--could be trusted and acted upon. Moreover, the application of equitable estoppel in this case does not result in a transaction forbidden by statute or contrary to public policy. See, Dade County v. Bengis Associates, 257 So.2d 291 (Fla. 3d DCA), cert. den. 261 So.2d 839 (Fla. 1972).
Alternatively, DHRS should accept the application as part of the August 15, 1983, application review cycle because the peculiar factual circumstances of this case justify deviating from its otherwise strict interpretation of Section 381.494(5) and Rule 10-5.08(1)(b). A state agency may depart from its rule on a showing of special circumstances--peculiar to a case-- justifying such departure. See Section 120.68(12)(b), Fla.Stat. (1981); Best Western Tivoli Inn v. Department of Transportation, So.2d (Fla. 1st DCA Case No. AQ-209, Opinion filed July 13, 1983) 4 FALR 450-J. This principle is buttressed by the general principle, recognized by the federal courts, that:
It is always within the discretion of . . . an administrative agency to relax or modify its procedural rules adopted for the orderly transaction of business before it when in a given case the ends of justice require it.
American Farm Lines v. Blackball Freight Service, 397 US 532 (1970). The peculiar facts of this case, unlikely to be repeated, support a conclusion that justice, and principles of fair play, impel--if not require--DHRS to accept petitioner's application for review during the August 15, 1983, batching cycle.
The parties' proposed recommended orders, containing findings of fact, have been considered in preparing this recommended order. To the extent the parties' proposed findings of fact were consistent with the weight of the credible evidence adduced at hearing, they have been adopted and are reflected in this recommended order. To the extent the findings were not consistent with the weight of credible evidence, they have been either rejected or, when possible, modified to conform to the evidence. Additionally, proposed findings which are subordinate, cumulative, immaterial, or unnecessary, have not been adopted.
Based on the foregoing, it is RECOMMENDED:
That DHRS accept First Hospital Corporation's application (for a certificate of need) as part of the August 15, 1983, application review cycle.
DONE AND ORDERED in Tallahassee, Leon County, Florida, this 26th day of October, 1983.
R. L. CALEEN, JR. Hearing Officer
Division of Administrative Hearings Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32301
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 26th day of October, 1983.
ENDNOTES
1/ This is true even though Mr. Carter did not represent himself to be an attorney or employee of DHRS; neither did FHC contact DHRS to confirm Mr. Carter's representation.
2/ Although amended by the 1983 Legislature, these amendments do not affect the outcome in this case. See, Section 2, Chapter 83-244, Laws of Fla. (1983).
COPIES FURNISHED:
Thomas F. Hancock, Esq. Crews, Hancock & Dunn Suite 1015 - 700 Building 700 East Main Street Richmond, Virginia 23219
John Radey, Esq.
Holland & Knight
Post Office Drawer 810 Tallahassee, Florida 32301
Frank R. Olsavsky, Legal Intern Department of Health and
Rehabilitative Services 1317 Winewood Boulevard
Building 2, Room 256
Tallahassee, Florida 32301
James M. Barclay, Esquire Staff Attorney
Health Planning and Development Department of HRS
1321 Winewood Boulevard
Building 2, Suite 256
Tallahassee, Florida 32301
David Pingree, Secretary Department of Health and
Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, Florida 32301
Issue Date | Proceedings |
---|---|
Nov. 22, 1983 | Final Order filed. |
Oct. 26, 1983 | Recommended Order sent out. CASE CLOSED. |
Issue Date | Document | Summary |
---|---|---|
Nov. 21, 1983 | Agency Final Order | |
Oct. 26, 1983 | Recommended Order | Detrimental reliance on local health council as to efficacy of overnight mailing in filing timely application for Certificate of Need (CON) estops denial. |