STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MENTAL HEALTH BOARD NO. 9, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 80-092

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, R. L. Caleen, Jr., held a formal hearing in this case on March 20, 1980, at West Palm Beach, Florida.

APPEARANCES

For Petitioner: Robert V. Romani, Esquire

Denco Building, 316 1st Street West Palm Beach, Florida 33402

For Respondent: K. C. Collette, Esquire

District IX Legal Counsel

111 Georgia Avenue

West Palm Beach, Florida 33401 ISSUES PRESENTED

1. Whether general revenue funds appropriated to the Department of Health and Rehabilitative Services, Office of the Assistant Secretary, for purchase of residential services for emotionally disturbed children are State mental health funds which must, by law, be distributed to and administered by the various District mental health boards (such as Petitioner Mental Health Board No. 9), and cannot be directly administered by the Department.

   
   

2. Whether principles of contract law compel the Department to contract with Petitioner Mental Health Board No. 9 in order to provide residential services to emotionally disturbed children within District 9.

CONCLUSIONS AND RECOMMENDATION CONCLUSIONS

1. Funds appropriated to the Department's central Office of the Assistant Secretary for purchase of residential services for emotionally disturbed children are not State mental health funds which must be distributed to and administered by the various district mental health boards under Part IV, Chapter 394, Florida Statutes (1979).

2. Contract principles do not compel the Department to contract with Petitioner Mental Health Board No. 9 to provide residential services to emotionally disturbed children located in District 9.

RECOMMENDATION

That Petitioner Mental Health Board No. 9's request for relief be DENIED and the Department's actions under challenge be UPHELD.

BACKGROUND

On November 28, 1979, the Petitioner, Mental Health Board No. 9, Inc. (hereinafter "Board"), through its counsel, mailed a written request to the Respondent, Department of Health and Rehabilitative Services (hereinafter "Department") for a Section 120.57, supra, bearing. The purpose of its request was to review the Department's October 9, 1979, decision to distribute State funds for the purchase of residential treatment services for emotionally disturbed children directly to the mental health centers within District 9, rather than to the Mental Health Board for its administration and redistribution.

In response to the Department's assertion that it had no record of having received the Board's November 28, 1979, request for hearing, the Board reiterated its request on December 27, 1979.

On January 8, 1980, the Department forwarded the Board's request for a hearing to the Division of Administrative Hearings.

By Notice of Hearing, dated February 5, 1980, the final hearing gas scheduled for March 20, 1980.

At hearing, the Board called as its witnesses Robert K. Quam, Terry B. Allen, Clifford John Bodarky, Ph.D., and offered Petitioner's Exhibit Nos. 1 through 9, each of which was received into evidence. The Department called Kenneth M. Bray, as its only witness, and introduced no exhibits into evidence.

At the close of the Board's presentation of evidence, the Department moved to dismiss the request for hearing on the ground that the Department was bound by contracts it had previously entered with the various providers of residential services to emotionally disturbed children. The Motion was denied.

The parties requested and were given the opportunity to submit memoranda in support of their positions. The Department's reply to the Board's memorandum was received on April 21, 1980.

FINDINGS OF FACT

Based on the Prebearing Stipulation executed by the parties, and the evidence submitted at hearing, the following facts are determined:

1. Mental Health Board No. 9 ("Board") coordinates mental health programs within the Department's Service District 9-a geographic area encompassing Indian River, Okeechobee, St. Lucie, Martin, and Palm Beach Counties. Three community mental health centers provide services to meet the mental health needs within District 9. (Testimony of Robert Quam)

2. The Board, by contract with the Department's Administrator of District 9, coordinates and disburses State funds specifically appropriated for the purpose of supporting community treatment programs for persons suffering from mental illness, alcoholism and drug abuse. The current contract between the District Administrator and the Board was executed during June, 1979, and contains no allocation to the Board for the provision of residential treatment services for emotionally disturbed children. (Testimony of K. Bray)

   
   

3. In 1979, the Florida Legislature appropriated to the Department's central Office of the Assistant Secretary for Operations, Office of Assistant Secretary, a lump sum of $1,295,000.00 for the purchase of residential treatment services for emotionally disturbed children during fiscal year 1979-80. In addition, $705,000.00 was provided, in lump sum, to the Florida Department of Education for education of emotionally disturbed children. (Testimony of K. Bray, Petitioner's Exhibit Nos. 2 and 9)

   
   

4. On July 19, 1979, the Department distributed to over 50 providers of social services, a Request for Proposals for the purchase of residential services for emotionally disturbed children. The Request indicated the Department was "seeking to expand its services for emotionally disturbed children and adolescents through the development of residential. treatment- orientation programs," 1/ outlined the features of the program, including statewide standards and other criteria, and invited recipients to submit to the Department's Assistant Secretary for Operations, proposals to provide such services by contractual purchase. (Testimony of K. Bray, Petitioner's Exhibit Nos. 1 and 2)

   
   

5. The Department required proposed residential services for emotionally disturbed children to emphasize short term treatment designed to meet the social, emotional, and educational (including vocational) needs of children. Since the Department concluded that there was "no concrete evidence that one specific therapeutic modality works best at reducing or eliminating a child's emotional disturbance," 2/ applicants were invited to propose a wide range of treatment modalities. While successful treatment for emotionally disturbed children includes a therapeutic mental health element, it also must include educational, vocational, recreational, and social components. (Testimony of E. Bray, Dr. Clifford J. Bodarky, Petitioner's Exhibit No. 2)

   
   

6. Upon receiving the Department's Request for Proposals for the purchase of residential services for emotionally disturbed children, the Executive Director of the Board met with representatives of the three mental health centers within District 9. They concluded that there was an urgent need for such services within their area, and agreed to submit, through the Board, a coordinated proposal to the Department. The Board's Executive Director drafted the initial proposal, and, after approval by the mental health centers and Board, submitted it to the Department's Assistant Secretary for Operations. The Board's proposal, which would be supported and administered by the three mental health centers, provided for the establishment of 45 therapeutic foster care homes, with close supervision by professional case workers. (Testimony of R. Quam, Petitioner's Exhibit Nos. 3 and 4)

   
   

7. The Department received in response to its July 19th request, 20 proposals from providers of social services throughout the State, including one mental health board (Mental Health Board No. 9, Inc.), several mental health centers, a hospital, university, Little River Boys Ranch and Boystown of South Florida. By letter of August 31, 1979, the Department's Assistant Secretary for Operations notified the Board that its proposal had been selected for further

   review. During September, the Board's Executive Director discussed its proposal with Department representatives in Tallahassee, including Ms. Phyllis Roe, Assistant Secretary for Operations. They specifically discussed one attribute of the proposal-- that it would be a coordinated effort under the Board, with the Board serving as the applicant. Although Board representatives left that meeting with a belief that the Department was amenable to such a role for the Board, Department representatives did not expressly approve, or commit to approval of this feature of the proposal. (Testimony of Terry H. Allen, and Robert K. Quam)

   
   

8. By letter dated October 8, 1979, Assistant Secretary Roe informed the Executive Director of the Board that its proposal had been approved, and concluded:

   
   

   "Because your plan involves therapeutic foster homes in three separate Mental Health Center catchment areas and each Center

   may focus its program a little differently, we will need to execute three separate contract.. I believe the process will be expedited if we deal directly with the Center staff responsible, with your par- ticipation in the process and, with space provided on the contract for your con- currence." (Petitioner's Exhibit No. 7)

   
   

9. By letter of October 25, 1979, the Board objected to the Department's decision to bypass it and implement the proposal by contracting directly with each mental health center involved. The Department subsequently executed separate contracts with the three mental health centers included in the Board's proposal. No evidence was introduced to indicate that the program is not being effectively administered pursuant to the provisions of those contracts. (Petitioner's Exhibit No. 8)

   
   

   CONCLUSIONS OF LAW

   
   

10. By enactment of the "Community Mental Health Act" ("Act") Part IV, Chapter 394, Florida Statutes (1979), the Legislature intended to, inter alia:

    
    

    "Section 394.66

    1. Organize and finance community, mental health services in local communi- ties throughout the state through locally administering and locally controlled community mental health programs.

    2. Better utilize existing resources at both the state and local levels in order to improve the effectiveness of necessary mental health services.

       
       

    3. Integrate state-operated and com- munity mental health programs into a unified mental health system.

       1. establish a uniform ratio of state government responsibility and local partici- pation in financing mental health services.

       2. Provide a means of allocating state

       mental health funds according to community needs.

       (8) Include community mental health care as component of the integrated delivery system of the Department of Health and Rehabilitative Services."

       
       

11. The Act further provided for the establishment of mental health boards in each Department Service District. Section 394.69, Florida Statutes (1979). Subject to the regulations of the Department, inter alia, the mental health boards:

    
    

    1. Shall review and evaluate the

       mental health needs, services, and facilities of the area of jurisdiction and prepare a district plan and budget based on its eval- uation.

    2. Shall receive and disburse such funds as are entrusted to it by law or

       otherwise, including funds from both private and public sources, charitable foundations, and agencies of the Federal Government.

    3. Shall contract for state funds with the district administrator for the coordina- tion and disbursement of such funds as provided in this part. 394.71, supra.

       
       

12. The Department is charged with the responsibility of administering the Act, and promulgating rules necessary for its administration. Section 394.78, supra. In discharging its statutory responsibility, the Department has adopted rules which, in pertinent part, provide as follows:

    
    

    Section 10E-4.09(3)(a)

    "All state funds for mental health and alcoholism services shall be distributed directly from the Department District Office to the District Board." (Emphasis Supplied)

    
    

13. First, she Board contends that the funds appropriated by the 1979 Appropriations Act, Chapter 79-212, Law of Florida (1979), for "purchased residential services for emotionally disturbed children" constitute "state funds for mental health" and therefore must, by virtue of the above Department rule, be distributed to the District Board for their administration. The Department counters that the operative phrase in the above rule, "all state funds for mental health . . . refers only to funds designated or specifically earmarked by the Legislature for mental health services and channel led to the various mental health boards through the Department's District Officer The Department's interpretation of its own rule, unless plainly erroneous or inconsistent, should be accorded considerable weight. Fla. Jur. 2d, Administrative Law, Section 58, page 617; U.S. v. Larionoff, 431 U.S. 864 (1977). Here, the Legislature appropriated funds for the purchase of residential services for emotionally disturbed children to the Department's central Office of the Assistant Secretary for Operations, Office of the Assistant Secretary. If the Legislature had intended that these funds be administered within the confines of the Community Mental Health Act, it would have specifically so provided. E.g., Items 610 through 622, Chapter 79-212, supra.

14. The Department's actions in requesting proposals were consistent with its interpretation of the Appropriation Act and Department rules. Requests for proposals were directed to all major providers of social services in the State. Under the Community Mental Health Act, mental health boards are not . ` direct providers of care; and no mental health board submitted a proposal in response to the Department's requests, except Mental Health Board No. 9. The Request for Proposals expressed the Department's conclusion that residential services for emotionally disturbed children must include not only treatment for mentally disturbance, but a variety of treatment modalities such as education, vocational training, and recreation.

    
    

15. The Department's position is supported by Part III Chapter 394, entitled "Children's Residential and Day Treatment Centers' which establishes children's residential and day treatment centers under the supervision and control of the Department. The purpose of these centers is to provide for the residential treatment and care of emotionally disturbed children. Section 394.50, supra. The Legislature's 1979 appropriation of funds to the Department is, therefore, consistent with the Department's existing comprehensive authority and responsibility in this area. By appropriating the funds to the Department's Office of Assistant Secretary for Operations, the Legislature ensured that they would be administered by an individual with the authority over, and responsibility for all service program operations of the Department, including residential treatment programs. Section 20.19(3)(b), supra.

    
    

16. Finally, the Department's rule in question, 10E-4.09(3), on its face, is intended to set minimum standards for district mental health boards. Its purpose is not to limit, or otherwise restrict the Department's range of discretion in carrying out its important statutory responsibilities. The Board's attempt to use this rule for such purpose is not well founded.

    
    

17. Secondly, the Board contends that, in any case, the Department is compelled to contract directly with it, since the Department accepted the Board's proposal. This contention also lacks merit.

    
    

18. The October 8, 1979, letter from Assistant Secretary Roe to the Board clearly indicates the Department's intention to contract directly with the throe mental health centers involved, and the reasons underline such action. There was obviously never a meeting of the minds or mutual assent by the parties on this question of the Board's role in implementing the proposal. See Fla. Jur.2d, Contracts, Section 10, page 302. Therefore, no express contract was formed.

    
    

19. The Board argues, finally, that, in the absence of an express agreement, the facts of this case justify imposition of a contract implied in law, or a quasi contract. Such contracts are based upon a benefit flowing to the person sought to be charged, or upon unjust enrichment. Fla. Jur. 2d Contracts, Section 17, page 310. The application of such a legal doctrine in this case is unwarranted and inappropriate. Here, the Board assisted in coordinating, developing, and presenting a proposal for providing residential treatment services to emotionally disturbed children residing within its five county district. Due, in large part, to its efforts, the proposal was ultimately funded by the Department, and is now being implemented; the beneficiaries of the proposal should be emotionally disturbed children residing in District 9. However, the Department has a statutory right to expect and receive, cooperation from mental health boards on matters pertaining to providing mental health services without undue "score keeping" on their part, or

resort to fictional devices of the law, such as quasi contracts. See Sections

394.66 and 394.78, supra.

RECOMMENDATION

Based upon the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED:

That Mental Health Board No. 9, Inc.`s request for relief be DENIED, and the Department's actions, under challenge be UPHELD.

DONE and ENTERED this 15th day of May, 1980, in Tallahassee, Florida.

R. L. CALEEN, JR. Hearing Officer

Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301

(904) 488-9675

ENDNOTES

1/ Petitioner's Exhibit No. 2, page 1. 2/ Petitioner's Exhibit No. 2, page 3.

COPIES FURNISHED:

Robert V. Romani, Esquire Denco Building, 316 1st Street

West Palm Beach, Florida 33402

K. C. Collette, Esquire District IX Legal Counsel Department of HRS

111 Georgia Avenue

West Palm Beach, Florida 33401

Docket for Case No: 80-000092

Orders for Case No: 80-000092