Justia.com Opinion Summary:Download as PDF
Cite as 2012 Ark. 40
SUPREME COURT OF ARKANSAS
ARKANSAS DEPARTMENT OF
HUMAN SERVICES, DIVISION OF
February 2, 2012
APPEAL FROM THE SALINE
COUNTY CIRCUIT COURT,
HONORABLE GRISHAM A.
PHILLIPS JR., JUDGE
CIVITAN CENTER, INC.
REVERSED AND DISMISSED.
COURTNEY HUDSON GOODSON, Associate Justice
Appellant Division of Developmental Disabilities Services of the Arkansas Department
of Human Services (DDS) appeals an order of the Saline County Circuit Court granting a
motion for summary judgment filed by appellee Civitan Center, Inc. and denying a motion
for summary judgment filed by DDS. For reversal, DDS argues that the circuit court erred
in granting Civitan’s request for declaratory relief, in finding a due-process violation, and in
ruling that DDS violated the Administrative Procedure Act by denying Civitan a hearing.
We reverse and dismiss.
Pursuant to Arkansas statutes, DDS administers community services benefitting
individuals with mental retardation and developmental disabilities, and DDS licenses providers
of these services. In 2000, DDS licensed Civitan to operate an adult developmental daytreatment clinical-services (DDTCS) center in Benton. Civitan also offered DDTCS in
Cite as 2012 Ark. 40
Bryant. In 2004, DDS began implementing a policy to define when an area was unserved or
underserved in order to clarify the process for expansion of services. On October 17, 2004,
DDS drafted Policy 1089, which DDS later promulgated. This policy established the criteria
for the expansion of DDS services, including the following provisions:
(a) Underserved: Requested services are available within one hour of the
consumer’s home but there are unduplicated service requests amounting to at
least 5% of the total number of people receiving that service within that county,
or 5% of the total number of people receiving that service in that particular
county have indicated they are unhappy with the manner in which their
services are provided and want to choose a service provider other than those
existing in the count [sic]. Any combination of the two categories described
above reaching at least the 5% threshold will also cause an area to be deemed
(b) Existing Provider: A DDS licensed entity that is authorized to
provide a service in a particular county by having it included in its contract as
of 7/1/03 will be considered an existing provider.
(c) DDS may initiate the expansion of the number of service providers
in a specific county if it is identified as underserved based upon the number of
existing providers and their capacity in relationship to documented service
requests. In the event that an area is determined to be underserved, or if
services cannot be accessed through providers active within a county, DDS will
issue an RFP [Request For Proposal] soliciting entities to provide services in
Before 2005, Friendship Community Care, Inc. (Friendship) did not provide DDTCS
and did not have a site in Saline County; however, Friendship served as a Medicaid waiver
provider there. Friendship employed individuals working as special-education teachers and
aides in the Bryant School District and had relationships with many potential DDTCS clients
Pursuant to Arkansas Code Annotated section 20-48-105 (Repl. 2001), which
establishes the requirements for the expansion of services, and DDS Policy 1089, DDS
Cite as 2012 Ark. 40
notified community providers, including Civitan, on May 3, 2005, that it listed Saline County
as underserved for DDTCS. DDS invited licensed providers to add services and gave licensed
providers thirty days to state their intent to expand. On May 18, 2005, Civitan informed
DDS that it served as an existing provider of DDTCS and was qualified to serve Saline
County. Pursuant to the Freedom of Information Act (FOIA), Civitan requested documents
related to DDS’s determination that Saline County was underserved in DDTCS. Civitan also
requested a hearing on DDS’s May 3 determination that Saline County was underserved.
In a letter dated May 25, 2005, DDS produced documentation showing that more than
five percent of the recipients informed DDS that they were unhappy with the manner in
which their services were provided and wanted “to choose a new provider – one that [did]
not presently serve Saline County.” Civitan subsequently responded to DDS by requesting
that DDS grant Civitan a hearing prior to making any finding that existing service providers
were not qualified to extend their services before licensing new service providers in the area.
Civitan also reiterated its desire to meet any unmet needs of persons with developmental
disabilities in Saline County and reasserted its FOIA request for copies of documents related
to DDS’s May 3 determination. DDS informed Civitan that it would take its request for a
hearing under advisement and asked Civitan to cite the applicable law for its request.
Civitan informed DDS, by a letter dated June 6, 2005, that its calculation of five
percent dissatisfaction was incorrect because that figure was based on the number of DDTCS
recipients that Civitan served instead of the total number for Saline County. Civitan again
requested a hearing from DDS of the May 3 determination and restated its willingness to
Cite as 2012 Ark. 40
resolve any recipient dissatisfaction.
On June 9, 2005, DDS notified Civitan by letter that its original calculation of the five
percent figure in its May 3 determination was incorrect and withdrew its determination of
underserved status. However, in that same letter, DDS issued a second determination that,
based upon subsequent reports, Saline County indeed was underserved. DDS then notified
Civitan and other community providers that DDS was promulgating a new Policy 1089. In
response, Civitan repeated its request for a hearing in order to challenge the existing Policy
1089 and the proposed Policy 1089. In a letter dated July 8, 2005, DDS requested that
Civitan state the adverse action as the basis for that request and stated that the total number
of DDTCS recipients in Saline County was eighty-five and that DDS had “6 unduplicated
service requests or statements of dissatisfaction with regard to Saline County adult services.”
In July 2005, DDS licensed Friendship to provide DDTCS in Saline County. By
August 1, 2005, six of Civitan’s clients allegedly withdrew to receive services at Friendship.
Shortly thereafter, Civitan notified DDS that it would file a preliminary injunction. Civitan
then filed a complaint and a request for a preliminary injunction in Saline County Circuit
Court. On August 2, 2005, the circuit court held a hearing on the preliminary injunction.
The dispute focused on whether DDS applied the correct law in determining that Saline
County was underserved. The circuit court issued an order granting Civitan’s request for a
preliminary injunction, ruling that section 20-48-105 governed the extension and expansion
of services for community-based providers, and the court issued a preliminary injunction that
prohibited Friendship from taking any new clients in Saline County. DDS then performed
Cite as 2012 Ark. 40
an analysis and arrived at the same conclusion that Saline County was underserved. On
October 18, 2005, by letter order, the circuit court reviewed DDS’s analysis, determined that
DDS complied with section 20-48-105 when it approved Friendship to open a disabilities
services site in Benton, and dissolved the injunction. Civitan did not appeal the circuit court’s
On September 20, 2006, Civitan filed its third amended complaint against DDS, its
director, and Friendship. In its complaint, Civitan sought (1) a permanent injunction
prohibiting Friendship from accepting any additional clients until it had received a valid
license in Saline County; (2) a permanent injunction prohibiting DDS from treating
Friendship as a licensed provider in Saline County; from treating Friendship as an existing
provider in Saline County; and from paying further government funds to Friendship for
providing adult DDTCS in Saline County; (3) a permanent injunction prohibiting Friendship
from further solicitation of Civitan’s clients; (4) a ruling ordering Friendship to repay all
government funds to DDS that Friendship received for providing adult DDTCS in Saline
County; and (5) a declaratory judgment stating that DDS may not lawfully license a new
provider in Saline County, pursuant to the proposed Policy 1089, until the policy had been
properly promulgated and published as required by Arkansas Code Annotated section 25-15203 (Repl. 2002).
DDS answered and filed a motion for summary judgment. In its motion for summary
judgment, DDS argued, among other things, that Civitan was not deprived of a property
interest and could not claim a procedural due-process violation; that Civitan had no right to
Cite as 2012 Ark. 40
a hearing, pursuant to the Administrative Procedure Act; and that the case was nonjusticiable
because Civitan was solely seeking declaratory relief, and the litigation would have no
practical effect. On June 4, 2010, Civitan filed its motion for summary judgment, seeking
declaratory judgment, findings on allegations of violations of due process, and attorney’s fees
and costs. On November 24, 2010, by a joint order of dismissal, the circuit court dismissed
Civitan’s and Friendship’s claims against each other.
Subsequently, the circuit court held a hearing on the motions for summary judgment.
After hearing oral argument, the court granted Civitan’s motion for summary judgment and
denied DDS’s motion for summary judgment. On February 16, 2011, the court entered an
order ruling that DDS failed to comply with its own procedures and state law; that DDS
denied Civitan due process; and that Civitan was denied a hearing in violation of the
Administrative Procedure Act. From this order, DDS brings its appeal.
On appeal, DDS argues that the circuit court erred in granting Civitan’s motion for
summary judgment. DDS seeks appellate review of three questions of law: (1) whether
declaratory relief was justiciable if Civitan no longer sought any “tangible relief” from the
circuit court; (2) whether Civitan was entitled to procedural due process when DDS declared
its service area “underserved” and allowed a competitor to enter its service area without a
hearing; and (3) whether DDS violated the Administrative Procedure Act in failing to provide
Civitan with a hearing on the “underserved” declaration.
The law is well settled regarding the standard of review used by this court in reviewing
a grant of summary judgment. Crockett v. C.A.G. Invs., Inc., 2011 Ark. 208, ___ S.W.3d
Cite as 2012 Ark. 40
___. A trial court will grant summary judgment only when it is apparent that no genuine
issues of material fact exist requiring litigation and that the moving party is entitled to
judgment as a matter of law. Id. On appeal, this court determines if summary judgment was
appropriate based on whether the evidentiary items presented by the moving party leave a
material question of fact unanswered. Bryan v. City of Cotter, 2009 Ark. 172, 303 S.W.3d 64.
Summary judgment is also appropriate when the trial court finds that the allegations, taken
as true, fail to state a cause of action. Cottrell v. Cottrell, 332 Ark. 352, 965 S.W.2d 129
(1998). We view the evidence in a light most favorable to the party against whom the
motion was filed, resolving all doubts and inferences against the moving party. Harrisburg Sch.
Dist. No. 6 v. Neal, 2011 Ark. 233, __ S.W.3d ___.
For the first point on appeal, DDS argues that the circuit court improperly rendered
declaratory judgments. DDS contends that Civitan moved for summary judgment and sought
only declaratory relief, requesting the court to make a ruling upon the applicability of section
20-48-105 and that DDS’s conduct did not comply with the statute. DDS asserts that a
justiciable controversy no longer existed because Civitan no longer sought an administrative
hearing on the issue, did not seek any compensatory damages, and did not seek injunctive
In response, Civitan argues that its claim for declaratory judgment is a justiciable
controversy. Civitan maintains that, in accordance with Arkansas Code Annotated section
25-15-207 (Repl. 2002), it brought the present declaratory-judgment action because DDS’s
application of section 20-48-105 allegedly injured its business. Civitan states that it requested
Cite as 2012 Ark. 40
declaratory relief in the form of findings that section 20-48-105 was applicable to DDS’s
conduct that allegedly did not comply with the statute. Civitan asserts that “[t]his is not a case
requesting declaratory judgment because of anticipated future harm but a case in which harm
A declaratory-judgment proceeding is reviewed in the same manner as any other
judgment, and if there is any substantial evidence to support the finding upon which the
judgment is based, it will be affirmed. Commercial Printing Co. v. Rush, 261 Ark. 468, 549
S.W.2d 790 (1977). In determining whether there is any substantial evidence to support the
circuit court’s finding, we must view the record in the light most favorable to the appellee.
Id. (citing Power v. Howard, 253 Ark. 1052, 490 S.W.2d 435 (1973)). The presumptions on
appeal are all in favor of the validity of the judgment of the trial court. Id. (citing Woodman
of Union of Am. v. Henderson, 186 Ark. 524, 54 S.W.2d 290 (1932)).
Declaratory judgments are used to determine the rights and liabilities of respective
parties. Stilley v. James, 345 Ark. 362, 48 S.W.3d 521 (2001). Our statute on the right to a
declaratory judgment states:
Any person interested under a deed, will, written contract, or other writings
constituting a contract or whose rights, status, or other legal relations are
affected by a statute, municipal ordinance, contract, or franchise may have
determined any question of construction or validity arising under the
instrument, statute, ordinance, contract, or franchise and obtain a declaration
of rights, status, or other legal relations thereunder.
Ark. Code Ann. § 16-111-104 (Repl. 2006). The purpose of the declaratory-judgment
statutory scheme “is to settle and to afford relief from uncertainty and insecurity with respect
to rights, status, and other legal relations.” Ark. Code Ann. § 16-111-102(b) (Repl. 2006).
Cite as 2012 Ark. 40
While our declaratory-judgment statute recognizes a party’s right to a declaratory
judgment, a justiciable controversy is required. Neely v. McCastlain, 2009 Ark. 189, 306
S.W.3d 424. We have observed that, in order to obtain declaratory relief, the requisite
precedent facts or conditions generally held to be required include:
(1) [A] justiciable controversy; that is to say, a controversy in which a
claim of right is asserted against one who has an interest in contesting it; (2) the
controversy must be between persons whose interests are adverse; (3) the party
seeking declaratory relief must have a legal interest in the controversy; in other
words, a legally protectable interest; and (4) the issue involved in the
controversy must be ripe for judicial determination.
MacSteel Div. of Quanex v. Ark. Okla. Gas Corp., 363 Ark. 22, 35, 210 S.W.3d 878, 886
(2005) (citing Andres v. First Ark. Dev. Fin. Corp., 230 Ark. 594, 606, 324 S.W.2d 97, 104
(1959)). As we stated in Nelson v. Ark. Rural Med. Practice Loan & Scholarship Bd., 2011 Ark.
491, ___ S.W.3d ___ (citing Cummings v. City of Fayetteville, 294 Ark. 151, 154–55, 741
S.W.2d. 638, 639–40 (1987)):
The Declaratory Judgment Statute is applicable only where there is a
present actual controversy, and all interested persons are made parties, and only
where justiciable issues are presented. It does not undertake to decide the legal
effect of laws upon a state of facts which is future, contingent or uncertain. A
declaratory judgment will not be granted unless the danger or dilemma of the
plaintiff is present, not contingent on the happening of hypothetical future
events; the prejudice to his position must be actual and genuine and not merely
possible, speculative, contingent, or remote.
Further, we have held that a case becomes moot when any judgment rendered would
have no practical legal effect upon a then-existing legal controversy. Neely, supra (citing Shipp
v. Franklin, 370 Ark. 262, 258 S.W.3d 744 (2007)). In other words, a moot case presents no
justiciable issue for determination by the court. Id.
Cite as 2012 Ark. 40
Turning to the present case, Civitan alleged that DDS did not comply with the
procedural provisions of section 20-48-105, as it existed in 2005, for the expansion of
DDTCS in Saline County. In its motion for summary judgment, Civitan requested the
1. That, pursuant to [section 25-15-207], Civitan be granted declaratory
judgment stating that DDS may not lawfully license a new provider in a county
pursuant to Proposed DDS Policy 1089 until it has been properly promulgated
and published as required by [section 25-15-203].
2. A finding that Civitan’s right to due process was violated by DDS in
the following manners:
3. That the court grant Civitan reasonable costs and attorney fees
pursuant to 42 U.S.C. § 1988 and Ark. Code Ann. § 16-123-105, and for all
other relief to which it may be entitled.
Here, in paragraph one of its motion for summary judgment, Civitan made a request
for declaratory relief regarding DDS’s policy, but its request does not present a justiciable
issue. Civitan does not challenge the validity or applicability of section 20-48-105. Rather,
Civitan improperly sought to declare that DDS refrain from licensing an anonymous new
provider in an unknown county pursuant to a policy that had not yet been promulgated. In
other words, Civitan based its request for declaratory relief upon hypothetical future events
against an unknown party-provider in an unnamed county. Civitan sought a legal, advisory
opinion instead of a resolution of a present, actual controversy. This request does not
comport with our declaratory-judgment statute and precedent.1
To the extent that Civitan argues that its request for attorney’s fees and costs
presents a justiciable controversy, we conclude that, under the circumstances of this case,
Civitan’s requests for attorney’s fees spent in past actions in a moot case does not create a
Cite as 2012 Ark. 40
Further, we note that the gravamen of Civitan’s third amended complaint centered on
Friendship’s actions toward Civitan. However, by a joint order of dismissal, the circuit court
dismissed Civitan’s and Friendship’s claims against each other. Moreover, the circuit court
initially issued a preliminary injunction against DDS, and DDS subsequently reviewed the
extension of Friendship’s service based on section 20-48-105. After filing a motion to dissolve
the preliminary injunction, the court dissolved the injunction and ruled that DDS had
complied with the statute. Civitan never appealed from that order. See Ark. R. App.
P.–Civil 2(a)(6) (2011).
Because Civitan failed to present a justiciable controversy, declaratory judgment in
Civitan’s favor was not proper. In this regard, the requested declaratory relief regarding any
alleged due-process violations, which were based upon the lack of a hearing, is moot. Neely,
supra. For these reasons, we decline to reach the merits of appellant’s remaining arguments.
Thus, we hold that, as a matter of law, the circuit court erred in granting Civitan’s motion
for summary judgment. Accordingly, we reverse the circuit court’s grant of summary
judgment and dismiss, as no justiciable issue was presented to the circuit court and was
Reversed and dismissed.
Civitan Center, Inc. brought a declaratory judgment action against the Division of Developmental Disabilities Services of the Arkansas Department of Human Services (DDS). Civitan, a corporation licensed by DDS to operate an adult developmental center, requested a declaratory judgment stating that DDS could not lawfully license a new provider in the county Civitan was servicing pursuant to a proposed policy authorizing DDS to initiate the expansion of the number of service providers in a specific county until the policy was properly promulgated. The circuit court entered an order granting summary judgment in favor of Civitan, ruling that DDS failed to comply with its own procedures and state law, that DDS denied Civitan due process, and that Civitan was denied a hearing in violation of the Administrative Procedure Act. The Supreme Court reversed, holding (1) because Civitan failed to present a justiciable controversy, declaratory judgment in Civitan's favor was not proper, and (2) therefore, the circuit court erred in granting Civitan's motion for summary judgment.Receive FREE Daily Opinion Summaries by Email