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NEW CHRISTIAN HOSPITAL, INC. vs. DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES (CON NO. 2323), 85-002917 (1985)

Court: Division of Administrative Hearings, Florida Number: 85-002917 Visitors: 15
Judges: LARRY J. SARTIN
Agency: Department of Health
Latest Update: Dec. 05, 1985
Summary: Case number 85-2917 arose as a result of the filing of an Administrative Complaint by the Respondent against the Petitioner, New Christian Hospital, Inc., declaring that Petitioner's certificate of need 2323 was null and void. The Petitioner timely filed a Petition for Formal Administrative Hearing in response to the Administrative Complaint. Case number 85-2918 arose as a result of the denial by the Respondent of Petitioner's application for expedited review of a cost over-run, certificate of n
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85-2917.PDF

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS


NEW CHRISTIAN HOSPITAL, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 85-2917

) STATE OF FLORIDA, DEPARTMENT ) OF HEALTH AND REHABILITATIVE ) SERVICES, )

)

Respondent. )

) NEW CHRISTIAN HOSPITAL, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 85-2918

) STATE OF FLORIDA, DEPARTMENT ) OF HEALTH AND REHABILITATIVE ) SERVICES, )

)

Respondent. )

)


RECOMMENDED ORDER


Pursuant to written notice a formal bearing was held in these cases before Larry J. Sartin, duly designated Hearing Officer of the Division of Administrative Hearings, on September 30, 1985 and October 3, 1985, in Tallahassee, Florida and on

October 1, 1985 in Miami, Florida.


APPEARANCES


For Petitioner: Gary C. Matzner, Esquire

Frank R. Olsavsky, Esquire HAYT, HAYT & LANDAU

Suite 1200, Datran Center 9100 South Dadeland Boulevard Miami, Florida 33156

For Respondent: John F. Gilroy, Esquire

Assistant General Counsel Department of Health and

Rehabilitative Services Building One, Suite 407 1323 Winewood Boulevard

Tallahassee, Florida 32301 STATEMENT OF THE CASE

Case number 85-2917 arose as a result of the filing of an Administrative Complaint by the Respondent against the Petitioner, New Christian Hospital, Inc., declaring that Petitioner's certificate of need 2323 was null and void. The Petitioner timely filed a Petition for Formal Administrative Hearing in response to the Administrative Complaint.


Case number 85-2918 arose as a result of the denial by the Respondent of Petitioner's application for expedited review of a cost over-run, certificate of need number 3933. The Petitioner timely filed a Petition for Formal Administrative Hearing challenging the denial of its application.


The cases were consolidated by order dated September 6, 1985, and proceeded to final hearing on September 30, 1985.


At the final hearing, the Petitioner presented the testimony of the following individuals who were accepted as expert witnesses in the fields noted:


Name Expertise

W. Eugene Nelson Health Planning.

Daniel J. Sullivan Health care financial feasibility and health care planning.


  1. A. Reasoner Health care facility construction and cost.


    John Berenyi Health care financing and health care underwriting.


    Frank Castenada Urban Development Action Grant program administration.


    The Petitioner also presented the testimony of George A. Simpson, M.D., and Marta Hardy.


    The Petitioner offered the following exhibits: NCH Exhibits 5, 8-11, 13, 15-17, 21, 23-38, 40, 41, 48, 51,52 and 55. All

    were accepted into evidence.


    The Respondent presented the testimony of Charles E. Gottlieb, William Wayne McDaniel, Marta Hardy and Reid Jaffe.


    Mr. Jaffe was accepted as an expert in health planning and certificate of need review.


    The Respondent offered DHRS Exhibits 1-3 and 5-8. All were accepted into evidence.


    The parties also offered Joint Exhibits 1-3, which were accepted into evidence.


    The parties entered into and filed a Prehearing Stipulation. Among other things the parties stipulated to certain facts and the issues to be litigated. Findings of fact in this Recommended Order which are based upon the facts stipulated to by the parties have been identified as "Prehearing Stipulation Facts" and have been quoted.


    The parties have submitted proposed findings of fact pursuant to Section 120.57(1)(b)4, Florida Statutes (1984 Supp.). A ruling on each proposed finding of fact has-been made either directly or indirectly in this Recommended Order, except where a proposed finding of fact has been rejected as subordinate, cumulative, immaterial or unnecessary.

    Additionally, attached to this Recommended Order is an Appendix which indicates where proposed findings of fact which have been accepted have been made in this Recommended Order and why proposed findings of fact which have not been accepted have been rejected.


    ISSUES


    Based upon the Prehearing Stipulation filed by the parties, the issues to be resolved are as follows:


    1. Whether Respondent DHRS, which acknowledged on August 15, 1984, that Petitioner was currently in compliance with Sections 381.493 - 381.497, Fla. Stat., and which has subsequently cooperated with Petitioner in Petitioner's efforts to

      complete CON Project 2323 by transferring CON 2323 from Christian Hospital, Inc. to New Christian Hospital, Inc., via CON Action No. 3639 and by assisting Petitioner in completing refinancing of CON Project 2323, is estopped from declaring on July 8, 1985, that the Petitioner's CON 2323 is null and void.


    2. Whether DHRS may revoke the CON of a CON holder that has commenced construction, subsequently lost financing through circumstances beyond its control, and has made a good faith effort to reacquire said lost financing and to meet all project timetables as set forth in its CON.


    3. Whether DHRS impermissibly conducted a "review" outside the scope provided for in Rule 10-5.04(11), F.A.C. for CON Project 3933, a cost overrun not caused by a change in services or scope otherwise reviewable.


    4. Whether Petitioner's CON Application 3933 for a cost overrun met all requirements for approval.


    5. Whether Petitioner's CON Application 3933 should have been approved by DHRS, as are nearly all other similar expedited applications for CON review of cost overruns.


FINDINGS OF FACT


  1. Prehearing Stipulation Fact:


    Christian Hospital, Inc. ("CHI"), on August, 1982, filed an application for a Certificate of Need ("CON") with the State of Florida, Department of Health and Rehabilitative Services, Office of Community Medical Facilities ("DHRS"), to build a 150 bed acute care hospital in Model City, Dade County, Florida. On November 28, 1982, DHRS denied OON application 2250 by CHI to construct a 150 bed acute care hospital.

    CHI filed a Petition for Formal Administrative proceedings pursuant to Section 120.57(1)(b), Fla. Stat. The case was assigned Division of Administrative Hearings Case #82-3420.


    The parties entered into a Stipulation. .

    . on December 13, 1982 (the "Stipulation") in order to amicably resolve case #82-3420.


  2. Prehearing Stipulation Fact:


    CON 2323 . . . was issued on December 16, 1982.


    This certificate of need was originally issued to Christian Hospital, Inc. (hereinafter referred to as "Christian"), pursuant to a Stipulation agreement entered into by the parties on December 13, 1982 (hereinafter referred to as the "December 13, 1982 Stipulation").


  3. In the December 13, 1982 Stipulation, the parties agreed to the following:


    1. The Respondent agreed to issue a certificate of need to Christian to construct a 150-bed acute care hospital in Model City, Dade County, Florida, at a cost of $17,372,113.00; and

    2. Christian agreed to:


      1. Firmly secure project financing no later than March 31, 1983;


      2. Firmly secure a site for the hospital no later than April 13, 1983;


      3. Resolve foundation plan review comments and secure approval of final construction documents by the Respondent's Office of Licensure and Certification no later than July 31, 1983;


      4. Submit approved construction documents to general contractors for bids no later than August 15, 1983;


      5. Execute a building construction contract no later than April 20, 1983;


      6. Secure a building permit approving the use of approved construction documents no later than May 12, 1983;


      7. Commence construction of the building (in addition to foundation construction) before May 12, 1983;


      8. Complete construction by July 15, 1985; and


      9. Have the facility available for occupancy and ready for use no later than August 1, 1985.


        Christian failed to comply with most, if not all, of the dates. set out above. Despite this fact, the Respondent took no action. against Christian or the Petitioner for a failure to comply with. the December 13, 1982 Stipulation until July 8, 1985.


  4. The scope of the December 13, 1982 Stipulation is unusual Christian was given only 5 months to commence construction instead of 12 months which is the normal period allowed for construction commencement.


  5. The terms "commencing construction were defined in the December 13, 1982 Stipulation as follows:


    Commencing Construction means the commencement of and continuous activities

    beyond site preparation associated with erecting or modifying a health care facility and shall include all of the following: (a) procurement of a building permit applying the use of Department approved (including "foundation only" approved) construction documents, (b) proof of an executed owner - contractor agreement or an irrevocable or binding forced account, (c) completion of sufficient work to warrant a contractor's initial progress payment as certified by an architect, and (d) actual undertaking of foundation forming, steel installation and concrete placing.


  6. The December 13, 1982 Stipulation also contained the following:


    Time is of the essence as to the fulfilling of the condition [sic] of this stipulation. Failure of the holder of the Certificate of Need to timely fulfill each and every condition in this agreement shall automatically result in the certificate becoming null, void and of no effect as of the date the conditions were to occur. Proof that each and every one of the conditions contained in this agreement have been met, shall be made by actual receipt of documentor's evidence at the Department of Health and Rehabilitative Services, Office of the Deputy Assistant Secretary for Health Planning and Development, no later than 5:00

    p.m. on the fifth working day following the date of the condition.


  7. Prehearing Stipulation Fact:


    On June 2, 1983, CHI had not yet commenced construction on CON project 2323. George A. Simpson, M.D., Chairman of CHI, sent Thomas

    J. Konrad, then Administrator of the Office of Community Medical Facilities of DHRS, a letter requesting modification of CON 2323 pursuant to Section 381.494(8)(g) Fla. Stat and Rules 10-5.10(5)(f) and 10-5.13(6),

    F.A.C . . . .


  8. Prehearing Stipulation Fact:


    On June 15, 1983, Thomas J. Konrad issued Amended CON 2323 to Christian Hospital, Inc. Amended CON 2323 required that construction commence on December 15,1983

    . . . .


    The second sentence of the above stipulated fact is incorrect. December 15, 1383 was the date of termination of amended (certificate of need 2323. Amended certificate of need 2323 actually required that construction commence "no later than December 10, 1983."


  9. Amended certificate of need 2323 was issued with the following specific pertinent conditions:


    *Christian Hospital, Inc., referred to hereafter as CHI, shall present evidence of site control no later than July 30, 1983, which shall secure the availability of the land at the time-of closing.


    *CHI shall firmly secure the financing no later than September 30, 1983.


    *CHI shall obtain a firm construction and design bid from a general contractor which shall include the design, construction documents, and construction of the hospital facilities and a binding contract shall be executed no later than October 30, 1983.


    *CHI shall secure a building permit, applying the use of approved construction documents, no later than December 1, 1983.


    *CHI shall obtain approval of the foundation design (first stage) of the construction and shall submit final construction documents no later than December 1, 1983.


    *CHI shall commence construction no later than December 10, 1983.

    *CHI shall complete facility construction no later than November 10, 1985.


    *CHI shall have the facility available for occupancy and ready for use no later than January 15, 1986.


  10. The Petitioner, in requesting this amended certificate of need, and the Respondent, in issuing the amended certificate of need, did not treat their actions as amending the December 13, 1982 Stipulation.


  11. The amended certificate of need included language almost identical to the 1anguage contained in the December 13, 1982 Stipulation quoted in Finding of Fact 5. The definition of the terms "commencing construction" contained in the December 13, 1982 Stipulation was not, however, included in the amended certificate of need.


  12. Prehearing Stipulation Fact:


    Buchanan and Company provided Ms. Marjorie R. Turnbull, then Deputy Assistant Secretary for Health Planning and Development of DHRS, a letter on February 23, 1983, stating that it would underwrite a proposed Twenty-One Million Dollar ($21,000,000) City of Miami Health Facility Authority revenue bond issue. . . .


  13. Prehearing Stipulation Fact:


    On September 12, 1983, the City of Miami Health Facility Authority resolved to approve a Memorandum of Agreement between the Authority and CHI for the issuance of revenue bonds totaling Ten Million Dollars ($10,000,000). . . .

    Additionally, George Simpson, Chairman of the Board of Christian Hospital and President of New First Horizans, Inc. had entered into a Contract for Sale of Land for private Development with Metropolitan Dade County on January 22, 1981.


  14. Prehearing Stipulation Fact:


    On September 12, 1983, Buchanan and Company sent George Simpson, M.D., a letter indicating its intention to underwrite a proposed revenue bond

    issue of approximately Fifteen Million Dollars ($15,000,000) to be issued by the City of Miami Health Facilities f Authority. . . .


  15. On September 22, 1983, Christian was awarded an Urban Development Action Grant (hereinafter referred to as an "UDAG")in the amount of $3,000,000.00. The UDAG was awarded by the United States Department of Housing and Urban Development(hereinafter referred to as "HUD").


  16. Prehearing Stipulation Fact:


    On November 4, 1983, Nathaniel M. Ward, then Medical Facilities Consultant Supervisor of DHRS, advised Marjorie R. Turnbull that CON 2323 should receive a new project timetable . . . .


  17. Prehearing Stipulation Fact:


    Subsequently, CHI encountered difficulties in meeting the commencement of construction deadline set forth in amended CON 2323 and requested a CON six month validity extension pursuant to Section 381.494(8)(f), Fla. Stat. and Rule 10-5.13(4)

    on November 28, 1983 . . . .


  18. Prehearing Stipulation Fact:


    On December 12, 1983, Marjorie R. Turnbull advised Representative Claude Pepper that CON 2323 had been extended for six months until June 15, 1984 . . . .


  19. Prehearing Stipulation Fact:


    On December 12, 1983, Mr. W. Eugene Nelson, then Administrator of DHRS Office of Community Medical Facilities, sent Dr. Simpson correspondence granting a six month extension of CON 2323

    The extension letter stated that the new termination date was June 15, 1984. The extension letter further advised that CON 2323 would terminate under provisions of Florida law in the event that construction had not commenced by or before June 15, 1984.

    Mr. Nelson's letter contained the following definition of the terms "commence construction":


    initiation of activities beyond site preparation associated with erecting or modifying a health care facility, including . . . .


  20. The Respondent, in approving the June 15, 1984 commence construction date, did not treat the extension as an amendment to the December 13, 1982 Stipulation. Instead, the Respondent treated Christian's request as a request to extend the date it was required to commence construction pursuant to Section 381.494(8)(f)1, Florida Statutes.


  21. The Respondent also informed Christian that "[i]n the event construction has not commenced by or before June 15, 1984, the certificate of need will terminate under provisions of Florida law." [Emphasis added]. The Respondent did not refer to the December 13, 1982 Stipulation.


  22. In February of 1984, representatives of the Respondent (met with representatives of Christian, the local health council, HUD and the City of Miami. The purpose of the meeting was to determine what progress Christian was making toward commencing construction and to determine ways in which the Respondent could assist Christian in commencing construction by June 15, 1984.


  23. Prehearing Stipulation Fact:


    On March 22, 1984, Nathaniel M. Ward sent Dr. Simpson correspondence indicating that Plaintiff must commence construction as defined by statute

    . . . .


  24. Prehearing Stipulation Fact:


    On June 5, 1984, Plaintiff obtained Permit #84- 4246 from the City of Miami in order to commence construction (foundation only) of CON project 2323 . . . . Plaintiff also entered into a Hold Harmless Agreement with Dade County on June 5, 1984 . . . . On June 8, 1984, Plaintiff entered into a construction agreement with McDevitt & Street Company for construction of CON project 2323

  25. Prehearing Stipulation Fact:


    On June 6, 1984, Lee F. Lasris, Esquire, counsel for Plaintiff, requested that Mr. Wayne McDaniel be present at the CON 2323 construction site for commencement of construction on June 12, 1984 . .

    . .


  26. At the invitation of Christian, Mr. Wayne McDaniel, Supervisor of the Monitoring Section of the Office of Community Medical Facilities of the Respondent, traveled to Miami and visited the proposed site of the new hospital on June 12, 1984. Based upon what Mr. McDaniel witnessed at the site on June 12, 1984, Mr. McDaniel recommended to Mr. Nelson, his supervisor at the time, that the Respondent conclude that Christian had not commenced construction. Despite Mr. McDaniel's recommendation, the Respondent ultimately determined that the Petitioner had in fact timely commenced construction and so informed Christian.


  27. On June 15, 1984, Christian's UDAG for $3,000,000.00 was rescinded by HUD because of the failure of the City of Miami to respond to a letter from HUD. In July of 1984, Christian notified the Respondent of the loss of the UDAG.


  28. Because of the loss of the UDAG, Christian requested that the Respondent inform Christian as to whether its certificate of need was still valid. By letter dated August 15, 1984, the Respondent informed Christian that its certificate of need was currently in compliance with Sections 381.493- 381.497,Florida Statutes. The Respondent also stated in the August 15,1984 letter that the confirmation could be provided to federal officials.


  29. Subsequent to August 15, 1984, when the Respondent informed Christian that it had a valid certificate of need, Christian or the Petitioner took the following actions in an effort to complete the project:


    1. On November 11, 1984, Christian obtained a revised Memorandum of Agreement from the City of Miami Health Facilities Authority. This agreement essentially provided that if certain conditions, including proof of financial feasibility, were met by Christian the Authority would consider issuing $15,000,000.00 in bonds for the construction of the proposed hospital. The Authority has not agreed that it will issue bonds for the project. Even if the Petitioner is awarded a UDAG it is possible that the Authority wi11 not agree to issue bonds;


    2. On November 26, 1984, Christian obtained a resolution from the City of Miami. The resolution provided that the City of Miami would provide $300,000.00 working capital for the construction of the proposed hospital if a UDAG was obtained;


    3. On December 4, 1984, the Petitioner obtained an Agreement for Deed wherein Dade County agreed to convey land for the construction of the proposed hospital to the Petitioner if it maintained its certificate of need and obtained bond financing from the City of Miami within one year;


    4. On December 17, 1984, the Petitioner entered into an Agreement for Management Services with NNIE Hospital, Inc. NME has also agreed to guarantee a working capital loan of approximately $800,000.00;


    5. The Petitioner obtained an Internal Revenue Service tax exemption determination letter dated December 20, 1984;


    6. On January 11, 1985, Petitioner entered into two agreements with L. F. Rothschild, Unterberg, Towbon. In one agreement, L. F. Rothschild, Unterberg, Towbon gave a "firm private commitment" to underwrite tax exempt bonds of at least

      $15,000,000.00 and in the other it gave a "firm private commitment" to arrange additional financing in the amount of

      $7,000,000.00;


    7. On March 15, 1985, Petitioner entered into a contract with Walk Jones & Francis Mah, Inc., for new architectural plans;


    8. On April 10, 1985, the Petitioner obtained a financial feasibility study of the proposed hospital from Amherst Associates, Inc.


    9. On April 22, 1985, the Petitioner obtained a resolution from the City of Miami Zoning Board allowing a special exception for the construction of the proposed hospital on the land provided for the hospital by Dade County; and


    10. On May 1, 1985, the Petitioner entered into a Construction Manager Agreement with Stolte, Inc.


  30. Following the loss of the UDAG, unsuccessful efforts were made to get the UDAG reinstated.

  31. A decision was made to attempt to transfer the certificate of need to a new corporation in order to enhance the ability to obtain financing. Therefore, the Petitioner, a Florida corporation, was formed.


  32. The City of Miami filed a new UDAG application for$3,000,000.00 on behalf of the Petitioner in the November, 1984UDAG review cycle. This was the earliest cycle after the loss of the UDAG for which a new application could be filed. Funds for applicants in this cycle were to be awarded in January of1985. In December of 1984, representatives of HUD recommended that Petitioner seek Federal Housing Authority "242" mortgage Insurance (hereinafter referred to as "FHA 242 Insurance") for the bonds to be issued in conjunction with the project. In order to seek FHA 242 Insurance, the UDAG application had to be rolled over to the May of 1985 UDAG review cycle.


  33. On November 29, 1984, Christian filed an application for expedited certificate of need review with the Respondent. The application sought approval of a transfer of the certificate of need from Christian to the Petitioner. In a letter dated December 14, 1984, the Respondent requested certain omitted information necessary to complete the Respondent's review of the application. Among other things, the Respondent requested the following:


    Please complete the timetable projections on Page 4 of your application, as the original application for Certificate of Need Number 2323 provides 1982 dates for all steps through completion of construction, and the most recent amendment provides 1983 dates for these same steps.


    On January 9, 1985, the Respondent provided the requested information. In pertinent part, the Respondent indicated it would be offering services in "July 1986."


  34. The UDAG application filed by the Petitioner in the November review cycle was rolled over to the next review cycle-- May of 1985. The roll over was necessitated in order to allow time for modifications of the proposal.


  35. On February 14, 1985, the Respondent was requested to confirm the validity of certificate of need 2323. In response to this request, the Respondent provided an executed Certificate

    of Need for Health Facility and Assurance of Enforcement of State Standards form (HUD form 2576) indicating that a certificate of need had been issued to the Petitioner. The space on the form for the number of months the certificate of need was in effect was left blank and the termination date on the form was listed as "June 15, 1984."


  36. Sometime during the early part of 1985, the Respondent was asked by federal officials to indicate whether the dates established for completion of construction of the proposed hospital (November 11, 1985) and for availability for occupancy and use (January 1, 1986) included in the amended certificate of need could be amended to provide sufficient time for the completion of the project. These dates, which were established in the June 15, 1983 amended certificate of need, had never been modified by the parties. The Respondent refused to give such assurances.


  37. On April 11, 1985, the Respondent issued certificate of need 3639 approving the transfer of the certificate of need from Christian to the Petitioner. The letter from the Respondent to the Petitioner approving the transfer specifically provided that"[o]nly ownership title is affected by this amendment, all other elements and timeframes related to the hospital project are unaffected." [Emphasis added]. The date suggested by Petitioner for offering services -- July of 1986 (see Finding of Fact 28)was not approved by the Respondent.


  38. It generally takes eighteen to twenty-four months to complete the construction of a hospital of the type the Petitioner's certificate of need authorized.


  39. Between June 12, 1984, and July 8, 1985, there was very little construction on the proposed hospital. On June 12, 1984the construction activities consisted of the placing of two concrete pads approximately three feet square and eighteen inches deep on top of an asphalt parking lot. Concrete was then poured into the boxes. The only activities associated with the construction of the hospital after June 12, 1984 consisted of the erection of a chain-link fence around the property and the placing of a trailer on the property.


  40. As of July 8, 1985, it was not possible for the Petitioner to complete construction of the hospital by November 10, 1985 or for the hospital to be available for occupancy and use by January 15, 1986.

  41. Christian and the Petitioner could not complete construction of the hospital because of the loss of the UDAG on June 15, 1984.


  42. Once construction on a project has commenced, the Respondent recognizes that events may occur which necessitate a cessation of construction. It is the policy of the Respondent to allow certificate of need holders that have commenced construction an opportunity to resume and complete construction if an event occurs which stops construction.


  43. On August 13, 1985, HUD advised the Petitioner that its application for FHA 242 Insurance was complete except for the Respondent's approval of its certificate of need. If the certificate of need is restored to the Petitioner, it is possible that the FHA 242 Insurance may be approved. It is also possible that with a valid certificate of need and approval of the FHA 242 Insurance that the UDAG are approved it is possible that the City of Miami Health Facilities Authority may approve bond financing of the project.


  44. On April 12, 1985, the Petitioner sought an expedited certificate of need review of a cost over-run on its project. The amount of the over-run was approximately $10,425,787.00. The total cost of the project was raised to in excess of

    $27,000,000.00.


  45. On July 8, 1985, the Respondent sent an Administrative Complaint to the Petitioner indicated that certificate of need 2323 was considered null and void for failure to comply with the December 13, 1982 Stipulation.


  46. On or about July 22, 1985, the Petitioner filed a Voluntary Petition under Title 11, Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court in and for the South District of Florida.


  47. On July 25, 1985, the Petitioner was advised that its UDAG application had been rolled over to the September, 1985, review cycle.


  48. On August 7, 1985, the Respondent denied the Petitioner's application, certificate of need 3933, for a cost over-run. The denial was based upon the fact that the Petitioner's certificate of need had been declared null and void on July 8, 1985.

  49. In support of the application for a cost over-run, the Petitioner indicated that the additional costs were attributable to inflation, additional construction costs, medical equipment, financing charges and professional fees.


  50. The rate of inflation since 1982 has been relatively

    1ow.


  51. Additional professional fees were incurred by Christian and the Petitioner after the UDAG was rescinded.


  52. The proposed hospital will be financially feasible if the cost over-run is approved.


  53. The total cost of the project, including the cost over-run, would be reasonable.


    CONCLUSIONS OF LAW


  54. The Division of Administrative Hearings has jurisdiction of the parties to, and the subject matter of, these proceedings. Section 120.57(1), Florida Statutes (1984 Supp.).


    Case Number 85-2917


  55. Case number 85-2917 involves the question of whether the Respondent has the authority to determine that certificate of need 2323 authorizing the construction of a 150 bed acute care hospital is null and void. The Respondent has argued that its action in declaring the Petitioner's certificate of need null and void was proper based upon the December 13, 1982 Stipulation or, in the alternative, under the provisions of Section 381.494(8)(f)1, Florida Statutes (1984 Supp.).


  56. The December 13, 1982 Stipulation provided that Christian was to "commence construction" by May 12, 1983. In pertinent part, the terms 'commencing construction" were defined in the December 13, 1982 Stipulation as ". . . . commencement of and continuous activities beyond site preparation associated with erecting or modifying a health care facility "

    Emphasis added. The December 13, 1982 Stipulation also provided that failure of Christian to timely commence construction would automatically result in its certificate of need being considered null, void and of no effect "as of the date the [condition] was to occur."

  57. The construction commencement date provided for in the December 13, 1982 Stipulation was modified twice by mutual agreement of the parties. Ultimately, the parties agreed that Christian was to commence construction on or before June 15,1984. The Respondent determined that Christian did in fact commence construction on June 12, 1984. The Respondent argues, however, that there was no continuous construction associated with the erection of the facility after June 15, 1984, and that the Petitioner had therefore failed to commence construction as defined in the December 13, 1982 Stipulation. The Respondent argues that the Petitioner's certificate of need was therefore null and void under the terms of the December 13, 1982 Stipulation.


  58. The facts in this case clearly establish that the December 13, 1982 Stipulation was not enforced by the Respondent until July, 1985 despite the fact that none of the conditions established in the December 13, 1982 Stipulation were met by the Petitioner or Christian. Even when the original construction commencement date provided for in the December 13, 1982 Stipulation was not met by Christian the Respondent took no action to enforce the terms of the stipulation. The original commencement date was May 12, 1983. It was not until June 2,1983, that Christian requested an extension of this date. On June 15, 1983, the Respondent issued an amended certificate of need approving the request of Christian to extend the construction commencement date. It therefore appears that neither of the parties took the December 13, 1982 Stipulation very seriously.


  59. Additionally, the manner in which the Respondent approved Christian's first request for an extension of time to commence construction ignored the December 13, 1982 Stipulation. Instead of amending the December 13, 1982 Stipulation, the Respondent issued an amended certificate of need. The amended certificate of need provided that Christian was required to "commence construction no later than December 10, 1983." The amended certificate of need also included almost all of the substantive provisions of the December 13, 1982 Stipulation, including the language pertaining to the effect of a failure of Christian to meet the new time requirements. The amended certificate of need did not, however, include the definition of the terms "commencing construction" included in the December 13, 1982 Stipulation.


  60. On December 13, 1983, the Respondent granted a six month extension of the date Christian was required to commence

    construction. The Respondent's witnesses all testified that this six month extension was granted pursuant to the Respondent's authority to grant such extensions under Section 381.494(8)(f)1, Florida Statutes (1984 Supp.). Again, the Respondent did not treat this change in the construction commencement date as a modification or amendment of the December 13, 1982 Stipulation. Additionally, the Respondent informed Christian that the terms "commence construction" meant:


    initiation of activities beyond site preparation associated with erecting or modifying a health care facility, including

    . . .


  61. It was not until July, 1985, two and a half years after the December 13, 1982 Stipulation was entered into, that the Respondent treated the December 13, 1982 Stipulation as having any effect at all.


  62. Based upon the foregoing, it appears that the parties, and especially the Respondent, considered the December 13, 1982 Stipulation to have been superceded by the amended certificate of need issued by the Respondent at the request of Christian on June15, 1983. That amended certificate of need and subsequent communications from the Respondent did not include the definition of the terms "commencing construction" contained in the December13, 1982 Stipulation which the Respondent relies on in support of its action in declaring the Petitioner's certificate of need null and void.


  63. Additionally, even if it were concluded that the December 13, 1982 Stipulation is still effective and that the amended certificate of need simply constitutes an amendment thereto, the Respondent's December 12, 1983 letter to Christian approving Christian's request to move the date for construction commencement back to June 15, 1984, should also be treated as an amendment to the December 13, 1982 Stipulation. In that December12, 1983 letter, the Respondent modified the definition of the terms "commencing construction" to only require "initiation" of construction activities. The portion of the definition of the terms "commencing construction" contained in the December 13,1982 Stipulation pertaining to continuous construction activities which the Respondent relies upon to justify its actions was clearly modified by the Respondent.


  64. Based upon the foregoing, it is concluded that the December 13, 1982 Stipulation was superceded by the parties upon

    the issuance by the Respondent, at the request of Christian, of the amended certificate of need of June 15, 1983. Therefore, the Respondent's authority to declare the Petitioner's certificate of need null and void or to revoke the Petitioner's certificate of need, if it has at all, must be based upon its authority under Florida law.


  65. Section 381 494(8)(f)1, Florida Statutes (1984 Supp.),governs the Respondent's authority to declare a certificate ofneed null and void or to revoke a certificate of need. Section381.494(8)(f)1, Florida Statutes (1984 Supp.), provides:


    (f)1. A certificate of need shall terminate

    1 year after the date of issuance unless the applicant has commenced construction, if the project provides for construction, or has incurred an enforceable capital expenditure commitment for a project, or unless otherwise specified in subparagraph 2., not involving construction or unless the certificate-of-need validity period is extended by the department for an additional period of up to 6 months, upon a showing of good cause, as defined by rule, by the applicant for the extension. The department shall monitor the progress of the holder of the certificate of need in meeting the timetable for project development specified in the application and may revoke the certificate of need, if the holder of the certificate is not meeting such timetable and is not making a good faith effort, as defined by rule, to meet it.


    The first sentence of this provision provides that a certificate of need will terminate unless the applicant has "commenced construction" within one year (plus an approved six month extension) after the certificate of need is issued. In this case, Christian was essentially given a year to commence construction when the initial construction date was changed from May 12, 1983 to December 10, 1983. Christian was then granted a six month extension of time to commence construction on December12, 1983. These conclusions are consistent with the testimony of Respondent's witnesses to the effect that the extensions of the original construction commencement date were

    granted by the Respondent pursuant to the provisions of Section 381.494(8)(f)1, Florida Statutes (1984 Supp.).


  66. Based upon these conclusions, the Respondent could have determined that the Petitioner's certificate of need terminated if Christian had not commenced construction by June 15, 1984. The terms "commenced construction" are defined essentially the same as they were defined in the December 13, 1982 Stipulation by Section 381.493(3)(d), Florida Statutes (1984 Supp.):


    (d) "Commenced 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/contractor agreement or an irrevocable or binding forced account, and actual undertaking of foundation forming with steel installation and concrete placing.


    Pursuant to this definition and the first sentence of Section381.494(8)(f)1, Florida Statutes (1984 Supp.), the certificate of need held by the Petitioner could have been declared null and void on June 16, 1984, if Christian had not initiated and carried out continuous activities associated with erecting its proposed hospital on June 15, 1984.


  67. The facts in these cases clearly prove that the Respondent determined that Christian had in fact commenced construction on June 15, 1984. This conclusion is supported by the testimony of Respondent's witnesses and Mr. Nelson, the fact that the Respondent did not take any action to terminate Christian's certificate of need until July, 1985, and the actions of the Respondent subsequent to June 15, 1984 which indicate that the Respondent considered the certificate of need to be valid.


  68. The Respondent waited until July, 1985, over a year after the Petitioner was required to commence construction, to treat the Petitioner's certificate of need as being terminated for failure to commence construction. Under Section 381.494(8)(f)1, Florida Statutes (1984 Supp.), the Petitioner's certificate of need could be declared null and void only if

    Christian had failed to commence construction on June 15, 1984. It is therefore concluded that the Respondent did not have the authority in July of 1985 to determine that the Petitioner's certificate of need was null and void for failure to commence construction.


  69. This conclusion does not, however, resolve this dispute. Section 381.494(8 (f)l, Florida Statutes (1984 Supp.), also requires that the Respondent continue to monitor the progress of a certificate of need holder after the construction commencement date and provides that the Respondent may revoke a certificate of need if two conditions are met:


  1. The holder of the certificate of need is not meeting its specified project accomplishment timetable; and


  2. The holder of the certificate of need is not making a good faith effort, as defined by rule, to meet the specified project accomplishment timetable.


  1. The facts in this case clearly prove that Christian and the Petitioner were not meeting the specified timetable for its project accomplishment. The amended certificate of need held by the Petitioner provided that the Petitioner was required to complete construction of its project "no later than November 10, 1985" and to have its hospital available for occupancy and ready for use "no later than January 15, 1986." As of July, 1985 and even earlier, it was apparent that the Petitioner could not meet these deadlines.


  2. It takes eighteen to twenty-four months to construct a

    150 bed general acute care hospital. In July of 1985, the Petitioner only had four months left to complete construction of its hospital. In light of the minimal construction which had taken place as of July, 1985, it was virtually impossible for the Petitioner to timely complete construction and to timely occupy the hospital. It is therefore concluded that the first condition of Section 381.494(8)(f)1, Florida Statutes (1984 Supp.), for revocation of the Petitioner's certificate of need was met.


  3. The second condition for revocation is more troublesome. It is clear that very little had been accomplished toward construction of the hospital since Christian initiated construction on June 12, 1984. In fact, the only activity on the property since that date had been to erect a chain-link fence around the property and to locate a trailer on the

    property. Therefore, there had been no construction activity of any significance on the property since June 12, 1984.


  4. The portion of Section 381.494(8)(f)1, Florida Statutes(1984 Supp.), providing for the revocation of a certificate of need does not, however, specifically provide that a certificate of need may be revoked if there is not continuous construction on the project once the holder of the certificate of need has "commenced construction." What is required to revoke a certificate of need is a lack of good faith effort to meet the specified project accomplishment timetable.


  5. It is clear from the facts of this case that Christian and the Petitioner were making an effort to complete the project. Findings of fact detailing the efforts which were made by Christian and the Petitioner after June, 1984, have been made and need not be restated here. It is also clear that the Respondent recognizes that once a certificate of need holder has commenced construction events may occur which result in the cessation of construction activities. The facts prove that generally, when events occur which stop construction activities, the Respondent does not revoke a certificate of need as long as the holder of the certificate of need is making good faith efforts to resolve the problem and resume construction. The problem in these cases is that the event which caused a cessation of construction activities was the loss of the Petitioner's ability to finance the project. Also of significance is the fact that financing was lost only three days after Christian had commenced construction and therefore very little construction on the project had been accomplished.


  6. There is no doubt that the problems which the Petitioner must overcome to complete its project are significant and that very little construction has been completed on the project. Section 381.494(8 (f)l, Florida Statutes, (1984 Supp.), however, does not authorize the Respondent to revoke a certificate of need, once construction has been commenced, simply because it will be difficult for the holder of the certificate of need to complete the project or because a problem which hampers completion of the project occurs very soon after construction commences. What the statute requires is a lack of good faith effort on the part of the holder of the certificate of need to meet the specified project accomplishment timetable.


  7. As stated, supra, the Petitioner has been making an effort. It is also clear that those efforts have been-made in good faith. The Respondent, however, has cited a number of

    factors which it argues evidence a lack of good faith. First, the Respondent argues that the Petitioner did not notify the Respondent that its UDAG application had been rolled over from the November, 1984 review cycle to the May, 1985 cycle. The facts do not prove whether this is true.


  8. The Respondent also suggests that the type of activities the Petitioner has engaged in are so substantial as to raise a question as to whether they have been in good faith. There is no { doubt that the Petitioner has engaged in a number of activities normally taken care of shortly after, if not before, a certificate of need is issued. All of those activities, however, were caused by the loss of the UDAG, through no fault of the Petitioner. Therefore, the nature of the Petitioner's activities in trying to resecure its financing does not lead to a conclusion that the Petitioner has not been acting in good faith.


  9. The evidence supports a conclusion that the Petitioner has been making good faith efforts to complete its project. It is therefore concluded that the Respondent did not have the authority to revoke the Petitioner's certificate of need as of July 8, 1985.


  10. If the Petitioner is given a reasonable period of time, the Petitioner may be able to complete the construction of its hospital. Upon proof that the Petitioner has a valid certificate of need the Petitioner's application for FHA 242 Insurance from HUD can be acted upon. If the mortgage insurance is approved, the UDAG application can then be acted on. If the mortgage insurance and the UDAG are approved, the Petitioner can then attempt to obtain final approval from the City of Miami Health Facilities Authority for bond financing of its project. If bond financing is approved it appears that the Petitioner can then proceed to complete its project.


  11. In light of the fact that there is a reasonable possibility that the Petitioner may be able to resecure financing for its project if it has a valid certificate of need and the fact that the Petitioner has been making good faith efforts to proceed with its project, it is concluded that the Respondent did not have the authority to revoke the Petitioner's certificate of need on July 8, 1985. This conclusion recognizes that the Petitioner may not retain its certificate of need simply by making efforts to secure financing and to resume and complete construction of its project. In order for the Petitioner's efforts to secure financing to be considered good

    faith efforts, it must be possible that the Petitioner will succeed. Although the Petitioner may be a long way from completing its project, the facts support a conclusion that the Petitioner may be able to succeed in its efforts to resecure its financing if it has a valid certificate of need and is assured that it will be given a reasonable period of time to complete the construction of its hospital.


  12. In addition to arguing that the Respondent lacked the authority to revoke its certificate of need, the Petitioner has argued that the Respondent is equitably estopped from declaring that the Petitioner's certificate of need is null and void. Although the conclusion that the Respondent lacked the authority to declare the certificate of need void or to revoke it renders this issue moot, this question will be resolved in an abundance of caution.


  13. In order to find that the Respondent is equitably estopped from revoking the Petitioner's certificate of need, the parties agree that the following must be shown:


  1. There has been a representation by the Respondent of a material fact that is contrary to a later asserted position;


  2. Reliance by the Petitioner on that representation; and


  3. A change in position by the Respondent detrimental to the Petitioner.


See Department of Revenue v. Anderson, 403 So. 2d 397 (Fla. 1981) and Kuge v. Department of Administration, 449 So. 2d 389 (Fla. 3d DCA 1984).


  1. The Petitioner has argued that the following actions of the Respondent were contrary to its later determination that the Petitioner's certificate of need was null and void: (1) the August 15, 1984 letter from the Respondent indicating that the certificate of need was in compliance with Florida law; (2) the Respondent's completion of HUD form 2576 in 1985 indicating that the certificate of need was valid; and (3) the Respondent's approval of the transfer of the certificate of need from Christian to the Petitioner. The Petitioner also argues that it relied upon these representations in detrimental reliance thereon.


  2. The Petitioner's argument overlooks one key fact: the Petitioner knew, or should have known, throughout the period

from June, 1984, to July, 1985, that it was required to complete construction of its facility "no later than November 10, 1985" and to have its facility available for occupancy and ready for use "no later than January 15, 1986." Therefore, when the Respondent indicated that the Petitioner's certificate of need was valid in August, 1984, and on HUD form 2576, there was no need to also state that the certificate of need was subject to revocation if the Petitioner failed to make good faith efforts to meet the project accomplishment timetable, including the completion of construction date and the occupancy date. The construction completion date and the occupancy date had been established on June 15, 1983. These dates were never modified by the Respondent. Therefore, when the Respondent took the position that the certificate of need was valid on August 15, 1984 and in early 1985, the Petitioner should have known that, if it failed to make a good faith effort to complete construction and occupy the hospital by the previously established deadlines, the certificate of need could later be revoked.


85 The same conclusions apply to the Respondent's approval of the transfer of the certificate of need from Christian to the Petitioner in April, 1985. Additionally, the Petitioner was specifically told by the Respondent at the time the transfer was approved that the Respondent was only approving a change in ownership of the certificate of need and that " all other elements and timeframes related to the hospital project are unaffected." [Emphasis added].


  1. Based upon the foregoing, it is concluded that the Respondent did not make a representation to Christian or the Petitioner of a material fact that was contrary to the Respondent's later action in declaring the Petitioner's certificate of need null and void. All the Respondent did was to tell the Petitioner on August 15, 1984 that it had a valid certificate of need. As of that date, the certificate of need was in fact valid. By completing HUD form 2576, the Respondent again only stated what was true at that time: the certificate of need was still valid. Finally, by approving the transfer of the certificate of need from Christian to the Petitioner in April of1985, the Respondent specifically told the Petitioner that all it was doing was approving a transfer of ownership of the certificate of need. At no time did the Respondent tell the Petitioner that the certificate of need would never be revoked or, more importantly, that the certificate of need would not be revoked if the Petitioner did not meet other deadlines

    established for the completion of the Petitioner's project, i.e., completion of construction.


  2. Mr. Nelson testified that there was an "understanding" between the Respondent and the Petitioner that the dates for completion of construction and occupancy would not be enforced by the Respondent. Dr. Simpson also indicated that he thought it was logical to assume that these dates would be moved back when he informed the Respondent of the difficulties that Christian and the Petitioner were having with financing. This testimony does not, however, refute the fact that the dates for completion of construction and occupancy had been clearly established and had never been expressly modified. What Mr. Nelson and Dr. Simpson believed or assumed cannot change what the parties had previously expressly agreed to.


  3. Based upon the foregoing it is concluded that the Respondent was not equitably estopped from determining that the Petitioner's certificate of need was null and void. Absent good faith efforts ( by the Petitioner to proceed with its project between June, 1984 and July, 1985, the Respondent could have revoked the certificate of need of the Petitioner. Because there were good faith efforts to complete the project, however, the Respondent did not have the authority to revoke the certificate of need.


    Case Number 85-2918


  4. Case number 85-2918 involves the question of whether the Respondent's denial of certificate of need 3933 was proper.


  5. In an application dated April 12, 1985, the Petitioner requested approval of a cost over-run for certificate of need 2323. The amount of the cost over-run was $10,425,787.00. The Petitioner's justification for the over-run was explained in its application as follows:


    The project has, since the original issuance of its Certificate of Need, suffered the effects of inflation and other costs of building materials, medical equipment, financing charges and professional fees.

    Such charges has [sic] had the effect of increasing the costs of the project by approximately $8 million.

  6. On August 7, 1985 the Respondent denied the cost over- run application. The Respondent denied the cost over-run because certificate of need 2323 authorizing construction of the hospital had been declared null and void as of July 8, 1985.


  7. If the Respondent ultimately determines in case number 85-2911 that certificate of need 2323 is null and void or has been properly revoked, it is concluded that the Respondent's denial of the Petitioner's application for a cost over-run was proper. Without a valid certificate of need there is not any project for which costs can be increased.


  8. If the Respondent ultimately determines that it does not have the authority to declare certificate of need 2323 null and void or to revoke it, as recommended in this Recommended Order, it must be determined whether certificate of need 3933 should be issued based upon a complete review of the evidence presented at the final hearing of these cases concerning the cost over-run. See McDonald v. Department of Banking and Finance, 346 So. 2d 569 (1st Fla. DCA 1977).


  9. Pursuant to Section 10-5.04(11), Florida Administrative Code, the Petitioner's request for a cost over- run on its hospital project is a project subject to review and is treated as an application for a certificate of need. Section 10-5.04(11), Florida Administrative Code, in defining what projects are subject to review, provides:


    An increase in the approved cost of a project for which a Certificate of Need has been issued when such increase in cost is itself a capital expenditure under Rule 10- 5.04(3) herein. Such review shall be limited to the cost increase itself as opposed to the project as a whole. [Emphasis added].


    Section 10-5.04(3), Florida Administrative Code, provides that capital expenditures which exceed a certain sum are projects subject to review. The Petitioner's proposed increase in the cost of its project of in excess of $10,000,000.00 constitutes a capital expenditure in excess of the sum requiring review under Section 10-5.04(3), Florida Administrative Code.


  10. As a project subject to review, the Petitioner's proposed cost over-run is subject to review under the applicable provisions of Section 381.494(6)(c), Florida Statutes (1984

    Suppl.). Because the Respondent's review is limited by Section 10-5.04(1), Florida Administrative Code, to a review of the cost increase and not the project as a whole, most of the criteria of Section 381.494(6)(c), Florida Statutes (1984 Supp.), do not apply.


  11. In applying the portions of Section 381.494(6)(c), Florida Statutes (1984 Supp.), applicable to a cost over-run, there are essentially three questions which must be answered:

    (1) is the cost over-run justified or necessary; (2) will the project be financially feasible if the cost over-run is approved; and (3) will the total cost of the project be reasonable if the cost over-run is approved?


  12. The justification for the cost over-run the Petitioner proposes, as set out in its application, is insufficient to support a conclusion that the cost over-run is justified or necessary. The only justification for the cost over-run included in the Petitioner's application has been quoted, supra. No further explanation for the proposed $10,425,787.00 increase was given in its application. Additionally, the Petitioner did not include any break-down by category of the cost over-run in its application.


  13. Evidence presented at the final hearing to establish that the Petitioner's proposed cost over-run is justified, in addition to information included in its application, also fails to establish that the cost over-run is justified. The other evidence presented at the final hearing in support of the cost over-run consists primarily of the testimony of Mr. Nelson. According to Mr. Nelson, the cost over-run is necessary because of inflation and increases in construction costs necessitated by the Petitioner's compliance with "life and safety code" requirements which were deemed necessary to strengthen the Petitioner's application for FHA 242 Insurance. Insufficient evidence was presented, however, to establish how much of the

    $10,425.787.00 cost increase is attributable to the various reasons given by Mr. Nelson for the increase. The Petitioner, as it did in its application for approval of the cost over-run, failed to present a break-down of the total cost increase by category.


  14. The evidence does establish that the rate of inflation since the original costs of the project were established has been relatively low. The evidence also establishes that the Petitioner has incurred additional professional fees because it had to replace several of the professionals working on the

    project when it lost its UDAG. The amounts attributable to inflation and increases in professional fees appear to-be a relatively small part of the $10,425,787.00 increase.

    Therefore, the bulk of the increase is attributable to increases in construction costs, the cost of medical equipment and financing charges. Although it is possible that the increase in costs attributable to these items is justified, the Petitioner has failed to present sufficient evidence upon which to base such a conclusion. No explanation has been given of what the life and safety code requirements are or the nature of the construction costs necessary to meet the requirements. Nor has any explanation been given of what additional medical equipment or additional equipment costs, or additional financing charges are necessary.


  15. The weight of the evidence does support a conclusion that the Petitioner's proposed hospital will be financially feasible if the cost over-run is approved. The evidence also supports a conclusion that the total cost of the project, including the cost over-run, would be reasonable. The evidence does not, however, establish that the cost over-run is justified or necessary.


RECOMMENDATION


Based upon the foregoing Findings of Fact and Conclusions of Law, it is


RECOMMENDED:


That the Administrative Complaint be withdrawn and that the Petitioner be given a reasonable period of time to continue its good faith efforts to resecure financing and to complete its project. It is further


RECOMMENDED:


That Certificate of need 3933 be denied.


DONE and ENTERED this 5th day of December, 1985, in Tallahassee, Florida.



LARRY J. SARTIN

Hearing Officer

Division of Administrative Hearings

The Oakland Building 2009 Apalachee Parkway

Tallahassee, Florida 32301


Filed with the Clerk of the Division of Administrative Hearings this 5th day of December, 1985.


APPENDIX


The parties have submitted proposed findings of fact. It has been noted below which proposed findings of feet have been generally accepted and the paragraph number(s) in the Recommended Order where they were accepted. Those proposed findings of fact which have been rejected and the reason for their rejection has also been noted. Paragraph numbers in the Recommended Order are referred to as "RO _."

Petitioner's Proposed Findings of Fact:


Paragraph 1: RO 1.

Paragraph 2: RO 2.

Paragraph 3: RO 6.

Paragraph 4: RO 9.

Paragraph 5: RO 10.

Paragraph 6: RO 11.

Paragraph 7: RO 12.

Paragraph 8: RO 13.

Paragraph 9: RO 14.

Paragraph 10: RO 15.

Paragraph 11: RO 16.

Paragraph 12: RO 18.

Paragraph 13: RO 19.

Paragraph 14: RO 19.

Paragraph 15: RO 20 and 21.

Paragraph 16: RO 22 and 36.

Paragraph 17: RO 23.

Paragraph 18, Page 5: RO 24 and 27.

Paragraph 18, Page 6: RO 28.

Paragraph 19: RO 30.

Paragraph 20: RO 31.

Paragraph 21: RO 32.

Paragraph 22: RO 39 and 44.

Paragraph 23: RO 40. Although the Respondent did declare certificate of need 2323 null and void, the evidence does not support a finding of fact that the Respondent "reversed itself."

Paragraph 24: RO 41.

Paragraph 25: RO 42.

Paragraph 26: RO 43.

Paragraph 27: RO 38.


Respondent's Proposed Findings of Fact:


Paragraph 1: RO 26, 28 and 32.

Paragraph 2: RO 2, 3, 4 and 5.

Paragraph 3: RO 3. The last sentence of this proposed finding of fact is not relevant.

Paragraph 4: RO 7 and 8. The amendments mentioned in this proposed finding of fact were changed by a request for, and the granting of, an amended certificate of need, not by "request and agreement."

Paragraph 5: RO 16. The last sentence of this proposed finding of fact is not relevant.

Paragraph 6: RO 17.

Paragraph 7, Page 5: RO 20, 21 and 34.

Paragraph 7, Page 6: RO 22 and 23.

Paragraph 8: RO 27.

Paragraph 9: RO 31. To the extent this proposed finding of fact discusses Mr. Nelson's testimony, no finding of fact is made. Mr. Nelson's testimony concerning an "understanding" does not support a finding of fact that the construction completion date and the occupancy date established for the project on June 15, 1983 did not apply. Paragraph 10: RO 30 and 31. The evidence supports a finding that federal officials sought a representation from the Respondent that the construction completion date would be extended. The evidence does not support a finding that the Petitioner or Christian sought such a representation.

Paragraph 11: RO 10, 24, 27 and 39.

Paragraph 12: RO 40.

Paragraph 13: RO 24 and 46.

Paragraph 14: RO 41.

Paragraph 15: RO 39, 43 and 44.


COPIES FURNISHED:


Gary C. Matzner, Esquire Frank R. Olsavsky, Esquire HAYT, HAYT & LANDAU

Suite 1200, Datran Center 9100 South Dadeland Blvd. Miami, Florida 33156


John F. Gilroy, Esquire Assistant General Counsel Department of Health and

Rehabilitation Services Building One, Suite 407 1323 Winewood Boulevard

Tallahassee, Florida 32301


David Pingree, Secretary Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32301


Docket for Case No: 85-002917
Issue Date Proceedings
Dec. 05, 1985 Recommended Order (hearing held , 2013). CASE CLOSED.

Orders for Case No: 85-002917
Issue Date Document Summary
Dec. 05, 1985 Recommended Order Petitioner lost financing for project and Department of Health and Rehabilitation (DHRS) revoked Certificate of Need (CON) after assuring it was still valid. DHRS' action is unauthorized.
Source:  Florida - Division of Administrative Hearings

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