STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
PALM COURT ASSOCIATION d/b/a ) PALM COURT NURSING CENTER, )
)
Petitioner, )
)
vs. ) CASE NO. 84-0611
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, this cause came on for hearing before P. MICHAEL RUFF, duly designated Hearing Officer in Tallahassee, Florida on June 7, 1984. The appearances were as follows:
APPEARANCES
For Petitioner: Robert S. Cohen, Esquire
MADIGAN, PARKER, GATLIN, SWEDMARK & SKELDING
318 North Monroe Street Tallahassee, Florida 32302
For Respondent: Douglas L. Mannheimer, Esquire
CULPEPPER, TURNER & MANNHEIMER
Post Office Drawer 11300 Tallahassee, Florida 32302
This cause was initiated upon the attempted revocation of a Certificate of Need (CON) issued to the petitioner by the Department of Health and Rehabilitative Services (HRS) because of Petitioner's alleged failure to timely commence construction of a 120-bed nursing home in Plant City, Florida. "Commencement of construction" for purposes of this cause is defined in Section 381.493(3)(u), Florida Statutes (1983). The Petitioner was issued CON No. 1863 authorizing construction of the nursing home on July 1, 1982. Petitioner requested and was granted a six month extension for CON No. 1863 such that it had a total of 18 months for commencement of construction, with a termination date for the CON being December 31, 1983. On January 19, 1984, HRS notified the Petitioner by letter that CON No. 1863 was no longer valid due to Petitioner's alleged violation of the provisions of Section 381.494(8)(f), Florida Statutes (1983).
At the hearing held in this cause the Petitioner presented four witnesses and the Respondent presented two. One of the Petitioner's witnesses, Mr.
Sharpe, was recalled as a rebuttal witness by Petitioner. The Petitioner presented Exhibits 1 through 11, all of which were admitted into evidence. Respondent presented Exhibits A through U, all of which were admitted into
evidence. At the conclusion of the proceeding the parties ordered a transcript and elected to file proposed findings of fact and conclusions of law.
Subsequent to the hearing an extended briefing schedule was agreed upon and the parties waived the requirement of Rule 28-5.4 02. Thereafter, proposed findings of fact and conclusions of law were timely filed.
All proposed findings of fact, conclusions of law, and supporting arguments have been considered. To the extent that they are in accordance with the findings, conclusions and views stated herein, they are accepted. To the extent that the proposed findings, conclusions and arguments asserted are inconsistent herewith, they are rejected. Certain proposed findings and conclusions are omitted as not relevant nor as necessary to a proper determination of the material issues presented. To the extent that the testimony of various witnesses is not in accord with the findings herein, it is not credited. See, Sonny's Italian Restaurant v. Department of Business Regulation, 414 So.2d, 1156, 1157 (Fla. 3rd DCA 1982); Sierra Club v. Orlando Utilities Commission, 436
So.2d 383 (Fla. 5th DCA 1983).
The issue in this proceeding concerns generally whether the petitioner was delayed or prevented (by HRS or otherwise) from meeting the requirements of the above-cited statute defining "commence construction" and, concomitantly, whether Petitioner made a good faith effort to meet the 18-month timetable.
FINDINGS OF FACT
The Petitioner is the holder of CON No. 1863 authorizing construction of a 120-bed nursing home in Plant City, Hillsborough County, Florida. The original CON was issued November 30, 1981, but due to protracted litigation, the CON was not finally effective until July 1, 1982. In the meantime, an initial conference was held between the CON holder, Palm Court, and the Office of Licensing and Certification on February 23, 1982. As a result of that meeting, preliminary plans for the nursing home were submitted to the Office of Licensure and Certification (OLC) on March 29, 1982. These plans were not approved but comments were suggested concerning HRS' position as to changes to be made. On May 20, 1982, revised preliminary plans were approved subject to comments. On April 11, 1983, final plans were initially submitted for approval. These were received on April 14, 1983 by Respondent HRS. Palm Court received no communication regarding these plans from HRS until June 10, 1983,_at which time they were denied approval with certain "comments and suggestions" attached to the denial communication. While in the process of responding to the June 10, 1983 letter of denial, Palm Court filed for a six month extension of its Certificate of Need's validity period, which was granted by HRS on June 28, 1903. Palm Court thereafter submitted its response to the "denial with comments" on June 30, 1983.
On September 6, 1983 HRS communicated with Palm Court informing it that the drawings had been approved subject to additional "comments. The September 6, 1983 comments raised for the first time certain additional new items or matters HRS Plan reviewers were concerned about. The comments raised by HRS on September 6, 1983 were responded to by letter by the Petitioner on September 27, 1983. HRS rejected the proposals contained in the September 27, 1983 response letter on November 1, 1983. Thereafter, on November 28, 1983, after it had received another informal interpretation by HRS of the comments and suggestions
in its September 6 letter, Palm Court responded to the November 1st HRS rejection letter. The plans ultimately were not approved by HRS until January 10, 1984. In the meantime, on December 31, 1983, the 18-month period of validity for the petitioner's CON expired. On January 19, 1984, Palm Court received a letter from HRS declaring its CON null and void as of December 31, 1983.
All parties acknowledge that Chapter 100-29, Florida Administrative Code applies to the submission and approval of construction plans and that contained in these rules is the incorporation of standard publications which, at the time of Palm Court's plan review, included the "1976 NFPA Life Safety Code." Contained in this Life Safety Code are references to corridors to be contained in nursing home facilities and their descriptions and dimensions.
Preliminary plans for Palm Court's project were submitted at a conference on, March 19, 1982. On April 5, 1982 the OLC denied approval of those plans with the "comment, No. A 5," which read "provide a six-foot staff corridor to med-prep."
Subsequent to that April 5, 1982 letter of denial, Palm Court resubmitted the preliminary plans, making no change concerning corridors or the med-prep room. These plans were then approved by OLC subject to comment, none of which related to corridors or the med-prep room. No testimony by Petitioner or HRS has explained why comment A-5 was not mentioned either in the resubmittal of Palm Court or the approval with further comments by HRS.
Due to litigation contesting Palm Court's CON entitlement and delays surrounding the hearing process, construction plans were not submitted for final approval until April 11, 1983. These plans again contained the layout for the nurses station, med-prep room and corridor as originally submitted March 29, 1982 and preliminarily approved on May 20, 1982. HRS did not respond until June 10, 1983 as mentioned above, at which time it withheld approval with comments. The comments submitted with the June 10, 1983 letter denying approval made no reference to the nurses station, med-prep room or corridor. The Petitioner responded to the June 10, 1983 comments of HRS on June 30, 1983 submitting responses to all comments raised in HRS' June 10, 1983 letter of denial.
On September 6, 1983, more than 60 days after Petitioner's response of June 30, OLC responded to Petitioner's June 30, 1983 letter, this time granting conditional approval of Petitioner's final construction plans, subject to "comments." The September 6, 1983 letter however, contained a section labeled "new comments", one of which was "A-17." Comment A-17 stated: "Provide 6'-0" circulation space to Med Prep room in addition to space required to work behind nurses station. Revise plan as required. . ." Comment A-17 contained no reference to comment A 5 which had been contained in the April 5, 1982 letter from OLC to Petitioner. Comment A-17 contained no reference to any area on the drawings, HRS rules, or the 1976 Life Safety Code. Mr. Levin, the Petitioner's architect and drafter of Petitioner's plans, made numerous attempts to contact personnel at OLC after the September 6, 1983 letter to learn what would be required to satisfy comment A-17. He was given to understand that only an explanation of the med-prep room was required to satisfy comment A-17. He learned that in a conversation with Mr. Joseph Alcure of the OLC. Mr. Levin also informed Mr. Alcure that an exact duplicate of the plans had already been submitted and finally approved without comment to construct a similar nursing home in New Port Richey, Florida. The New Port Richey facility was nearly completed as of the time of this hearing. In spite of Petitioner submitting a response on September 27, 1983 referring to the fact that the New Port Richey
facility had already been approved with a duplicate set of plans, on November 1, 1983 the OLC again gave petitioner only conditional approval with comments again, including comment A-17, without definitive explanation. The reassertion of comment A-17 in the November 1, 1983 conditional approval letter was as follows: "Respond correctly to the previous comments. 6'0" is required in addition to the required 100 square foot nurses station."
Petitioner's architect, Mr. Levin, again made repeated attempts at clarification of what this meant. He eventually was contacted by OLC's architect, John DeLoe, on or about November 21, 1983. Mr. DeLoe finally explained the problem to which he had been referring, namely that he interpreted the Life Safety Code (which all parties agree is applicable to the issues and facts of this case) to mean that the space behind the nurses station "counter" was corridor or exit access because the med prep room was required to open onto a six-foot corridor. Mr. DeLoe suggested that the problem could be solved by reversing existing plans to the extent that the nurses lounge and the med prep rooms would be exchanged in the positions they occupied on the plans and ultimately as they would be built. The Petitioner made the suggested revisions and submitted the final set of plans incorporating this change on November 28, 1983. The OLC finally approved that November 28, 1983 submission without comment on January 10, 1984.
There was significant confusion between the Petitioner and HRS as to what the comment concerning the six-foot corridor space, into which the med-prep room was required to open, actually required. There was conflicting testimony by representatives of both petitioner and Respondent concerning the application of the Life Safety Code to the condition referred to by OLC as "A-5" in the April 5, 1982 letter and "A-17" in the letters dated September 6, 1983 and November 1, 1983, concerning the "flip-flop" of the med-prep room's location and the nurses lounge location. The provisions of the Life Safety Code raised by the petitioner and Respondent are vague and it is difficult to determine whether the six-foot requirement actually exists.
Mr. Bruce Sharp, project manager for the construction of Palm Court Nursing Center, testified on behalf of petitioner. Mr. Sharp moved to St. Petersburg, Florida in August, 1983 to manage the development of the project. Mr. Sharp began taking bids and doing visual site work immediately after his arrival at the construction site. As a result of engineering studies performed, he determined that the site was too low in elevation, which could cause flooding. Because of this, on or about October 29, 1983, another site was selected at which Mr. Sharp continued his work of selecting subcontractors and vendors to develop the project. Mr. Sharp did not have to begin work entirely anew, however, and engineering previously performed was transferred to the new site to the extent applicable. Because of the higher elevation at the new site, it was far more suitable for the project than the original site had been.
As part of his site preparation, Mr. Sharp had numerous discussions concerning acquisition of a building permit for the project from the Plant City Building Department. These discussions began in mid-September, 1983 and continued until a foundation permit ultimately was secured on December 29, 1983. Initially the Building Department was reluctant to issue the permit because of the proposed municipal annexation and improper zoning of the new building site. These problems were resolved on or about November 1, 1983. Mr. Sharp, at that
point, could have taken an approved set of construction plans to the Plant City Building Department for their review and could have had a permit issued.
However, he did not yet have an approved set of plans from HRS. Thus, the Plant City Building Department refused to issue any type of building permit at that time.
Upon failing to get a full building permit because he did not yet have an approved set of construction plans, Mr. Sharp attempted to obtain a foundation permit so that he could operate within the local building code and commence construction and thus be able to comply with his 18-month deadline with HRS. Efforts to obtain a foundation permit from the Plant City Building Department were not initially successful, but finally, after a great deal of difficulty, he was able to obtain a "foundation only" construction permit, after he was able to convince the director of the Building Department that an approved set of construction plans was imminently forthcoming from HRS.
In the meantime, Mr. Sharp had tentatively scheduled a subcontractor to pour concrete and commence construction prior to December 31, 1983. The concrete could not legally have been poured prior to December 29, 1983 because the foundation permit (nor a full building permit) had not been secured before that date. Between December 29, 1983 and December 31, 1983, concrete could not actually have been poured because of the physical condition of the site having deteriorated due to severe rains. Concrete was eventually poured on January 10, 1984 and continuous construction work was performed until and including January 19, 1984 when the OCMF notified the principals of the project that the CON was considered "terminated." There is no question that the building permit could have been obtained from the Plant City Building Department and the necessary concrete and steel could have been erected to conform with the statutory definition of "commence construction" prior to December 31, 1983 if the Building Department could have been supplied plans approved by the Office of Licensure and Certification "without comment."
The dispute concerning the OLC approval of the plans concerned the location of the med-prep room and the nurses lounge. If the Petitioner could have obtained a permit from Plant City to pour the foundation based on the construction plan "approved subject to" comment A-17, then later was required to flip-flop the two rooms, several problems would have arisen. This would not be merely a cosmetic change. If the Petitioner had obtained a building permit from the Plant City Building Department based on construction plans approved subject to that comment and then later was required to actually flip-flop the two rooms, the concrete slab involved would have to be removed, the electrical work removed and the plumbing removed. Concrete would be removed in order to relocate a doorway into a corridor and to relocate certain engineered structural posts required to bear the weight of the four-ton air conditioning unit on the roof. The electrical wiring would have to be reworked since the decision had been made, pursuant to an option in the project 7 specifications, to locate the wiring underground in the interest of limiting electrical exposure to patients. The plumbing would require removal which also involves destroying the concrete slab in order to reinstall the plumbing for the changed location of the two rooms. The air conditioning unit was shown to be most efficient when located above the nurses station because that permits locating the monitor or thermostat in close proximity to the nurses station and away from the patient corridor.
The Respondent HRS presented, through Mr. Richard Rosenvold, its architect supervisor, an informal, unpublished non-rule policy to the effect that an applicant can request a letter from HRS authorizing the issuance of a "foundation only" permit and that this would be in compliance with the statute cited above. Admittedly, however, constructing under such a "foundation only" permit would be at the applicant's peril if the conditional comments of HRS, when ultimately complied with, would affect the structural foundation of the building. There is no question that the comment A-17 concerning the "flip-flop" of the two rooms clearly affected the foundation, the electrical and plumbing installations and so forth. Inconsistent interpretations of the Life Safety Code provisions, together with the ambiguous comments themselves, put the petitioner in an uncertain position regarding the wisdom of proceeding with construction even if it could have obtained a foundation permit.
A foundation permit is not the same as a building permit. A building permit authorizes construction of the entire facility while a foundation permit only authorizes approval of the foundation or concrete and steel protruding from the ground of the site. Mr. Eugene Nelson, the Administrator of the Office of Community Medical Facilities (OCMF), testifying concerning agency policy and practice, knows of no prior case where issuance of a foundation permit has been held to fulfill the requirement of the definition of "commencement of construction" enunciated in the above statute.
If the petitioner had received a foundation permit and been able to pour concrete prior to December 31, 1983, it could not have maintained continuous activity on the site, which is another requirement of the definition of "commencement of construction." A full building permit would be required to actually conduct continuous activity on the site culminating in the erection of the structure. In all likelihood, if Petitioner had relied upon Mr. Rosenvold's enunciated policy concerning a request for a letter authorizing issuance of a foundation only permit and then had obtained a foundation permit in reliance thereon and proceeded to the point of pouring the concrete slab prior to resolving the issue about the corridor and room location and dimensions, then the Petitioner would have run the risk of having to tear out part of the foundation slab because of Mr. DeLoe's suggested change. This would have placed an absurd burden on the Petitioner, merely in the interest of ensuring compliance with the 18-month deadline, especially in view of the Petitioner's good faith effort otherwise, in the course of its preparation and development of the project, to comply with that deadline. Such a course of action would have defeated the cost containment purpose behind enactment of Chapter 381, Florida Statutes.
In summary, the CON holder here accomplished substantially all of the "indicia of construction", accepted in the construction industry as establishing the point when construction begins, prior to December 31, 1983. Financing was arranged, site preparation was arranged, initial site development work had begun several months before that date and, in essence, the only remaining hurdles to overcome in order to actually pour concrete were the lack of a building permit and the lack of unconditional approval of the final construction plans because of the events discussed above. It was not shown to be entirely the fault of the CON holder, the Petitioner, for failing to obtain its building permit so that it could timely start physical construction on the site before December 31, 1983, inasmuch as the building permit was denied Petitioner because of HRS' failure to approve the plans on a timely basis.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the parties to and the subject matter of this proceeding. Section 120.57(1), Florida Statutes (1983).
Section 381.494(8)(f), Florida Statutes (1983), provides, in part, as follows:
A certificate of need shall terminate 1 year after the date of issuance unless the applicant has commenced construc- tion, if the project provides for construction, or has incurred an enforce- able capital expenditure commitment for a project or unless otherwise specified in subparagraph 2., not involving construc- tion or unless the certificate-of-need validity period is extended by the Department for an additional period of
up to 6 months, upon showing of good cause, as defined by rule, by the applicant for the extension.
Section 381.493(3), Florida Statutes (1983), defines "commenced construction" as follows:
'Commence construction' means initiation of and continuous activities beyond site preparation associated with erecting or modifying a health care facility, including procurement of a building permit applying the use of Department-approved construction documents, proof of an executed owner/con- tractor agreement or an irrevocable or binding forced account, and actual under- taking of foundation forming with steel installation and concrete placing.
This statute may thus be construed as having four requirements:
Initiation of and continuous activities beyond site preparation;
Procurement of a building permit applying the use of Department- approved construction documents;
Proof of an executed owner/contractor agreement; and
Actual undertaking of foundation forming with steel and concrete installation.
It is the Department's position that if an applicant submits final construction plans for approval by OLC and has a good faith reasonable dispute over certain conditions or requirements imposed by OLC for improvement of the plans then such dispute cannot toll the running of the 18-month period after which a CON becomes invalid. HRS apparently takes the position that the statute concerning expiration of CONs after 12 months or after 18 months if the 6-month
statutory extension is granted, is self-executing, causing the CON to automatically expire at the end of the 18 month period involved herein. If this were the case however, the Respondent's argument would lead to the result that, if a valid objection to conditions imposed by HRS is raised by an applicant, then HRS could force compliance and deny further review of those disputed issues with the OLC by forcing the dispute to extend beyond the date of the CON termination. Such a position could lead to an unfair, unjust result and thus constitute an exercise in arbitrariness and capriciousness. This is so because, if the OLC, one arm of HRS, imposes conditions or requirements on an applicant who submits construction plans for approval and the OCMF, another arm of the same agency, invalidates the CON under which the plans were submitted because construction was not timely started (due to the plans not being approved by the other arm of the same agency) the agency's total requirements would be impossible to be complied with since they are conflicting and inconsistent (assuming, as here, that the applicant or CON holder had not unreasonably delayed submission of the plans such that the agency could not reasonably approve them within the 18-month period). Here, the plans were submitted in ample, reasonable time for the agency to approve them after the last comment had been adequately responded to by the Petitioner, CON holder. HRS simply did not approve the plans within a reasonable time after the last comment had been dealt with by the Petitioner. Here, the applicant worked continuously and in good faith to attempt to secure a building permit which would permit it to commence construction, pursuant to Section 381.493(3)(d), Florida Statutes, prior to the end of the 18th month after which the CON would be ineffective.
The preponderant evidence and the above Findings of Fact clearly establish that Petitioner did virtually everything in its power to have construction commenced by December 31, 1983, and, in fact, was able to meet the final requirement of commencing construction, namely, the laying of steel and pouring of concrete by January 10, 1984, certainly not an inordinate delay beyond the 18-month CON validity period. The Petitioner did not wait until the last minute and then attempt to pour concrete simply to attempt to toll the 18- month CON validity period. The construction manager moved to St. Petersburg, Florida, in August of 1983 to begin the on-site management and development of the project. His on-site work was continuous, even after the site had to be moved on or about October 29, 1983, due to terrain problems. The evidence clearly demonstrates that Petitioner had constant problems in attempting to secure a building permit from the Plant City Building Department, since the Building Department would not accept a set of plans "approved subject to comments" for the issuance of the permit. The petitioner employed its best efforts in seeking the building permit and was finally able to secure a foundation permit only, on December 29, 1983. Thereafter, unseasonably heavy rains ensued, so that petitioner was unable to pour concrete and install steel reinforcing between the dates of December 29 and December 31, 1983. Petitioner commenced work however, thereafter, and was pouring concrete on January 10, 1984.
The petitioner received its CON to construct a nursing home from HRS in a free-form decision. Thereafter, the free-form decision was challenged and litigation ensued, brought on by unsuccessful CON applicants, not at the behest of petitioner. Once the litigation was completed and the 18-month time period began to run, the Petitioner clearly made reasonable, timely attempts to have its construction plans approved and commence construction prior to the expiration of the 18-month CON validity period.
It is not the intent of the legislature or HRS to take away approved CONS from applicants who make good faith, reasonable efforts at commencing construction of CON approved projects. Here, a good faith effort was clearly made and a great deal of the delay in obtaining approval of the plans was due to ambiguity and vagueness in the problems expressed by the agency in its comments regarding the question of the width of the corridor and the placement of the two rooms referred to in the above Findings of Fact. The applicant attempted to meet the requirements imposed by those additional comments (as soon as it could get HRS to explain them) and to otherwise obtain approval of its final construction plans as early as possible after the litigation ended.
The CON law is designed to prevent recipients of CONS from shelving their CONS rather than moving forward with their projects. If the CON statutes, particularly the provisions examined in this case, are construed to prohibit the recipient of a CON from disputing the conditions imposed by the OLC while that applicant is making a good faith effort to proceed with his approved project, an absurd or unintended result would occur. Florida courts have held that, where the language of a statute "imports an intent which leads only to absurdity or to an evil result the strict letter of the law might be required to yield to the obvious intent of the legislature. . ." Foley v. State, 50 So.2d 179, 184 (Fla. 1951). See also, Agrico Chemical Co. v. Dept. of Environmental Reg., 365 So.2d 759, 766 (Fla. 1st DCA 1979). Here, a literal construction of Sections 381.494(8)(f) and .493(3), Florida Statutes, so as to preclude the Petitioner's good faith dispute with the OLC over its construction plans and thus terminate its CON, would do an injustice to the intent the legislature and lead to an unfair, evil or absurd result. These statutory provisions were not designed to operate in such a manner.
In summary, it has been demonstrated by a preponderance of the evidence of record that the Petitioner has, in large part complied with its timetable for commencing construction of the project, and to the extent it has not, the delays were largely the fault of the regulatory authorities such as the OLC and the plant City Building Department. Further, even to the extent that the timetable has not been complied with for purposes of the above-quoted authority, Palm Court clearly has established that a good faith effort was made to meet that timetable such that the intent, if not the letter, of the statute has been satisfied. Thus, CON No. 1863 must be concluded to remain in full force and effect. See Mediplex, Inc. v. Dept. of Health and Rehabilitative Services, DOAH Case No. 82-736 (Recommended Order entered September 30, 1983).
Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is, hereby
RECOMMENDED that a Final Order be entered by the Department of Health and Rehabilitative Services providing that Certificate of Need No. 1863 for a 120- bed nursing home in Plant City, Florida, remain valid and in full force and effect.
DONE and ORDERED this 18th day of December, 1984, in Tallahassee, Florida.
R. MICHAEL RUFF, Hearing Officer Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 18th day of December, 1984.
COPIES FURNISHED:
Robert S. Cohen, Esquire Post Office Box 669 Tallahassee, Florida 32302
Douglas L. Mannheimer, Esquire Post Office Drawer 11300 Tallahassee, Florida 32302-3300
David Pingree, Secretary Department of Health and
Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, Florida 32301
| Issue Date | Proceedings |
|---|---|
| Dec. 18, 1984 | Recommended Order sent out. CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Dec. 18, 1984 | Recommended Order | Certificate of Need (CON) remained valid even though project was not completed within time period. Petitioner made good faith efforts to comply with timetable. |
