ROSEWOOD LIVING CENTER V BUREAU OF HEALTH SYSTEMS
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STATE OF MICHIGAN
COURT OF APPEALS
ROSEWOOD LIVING CENTER,
UNPUBLISHED
November 20, 2008
Petitioner-Appellant,
v
No. 277127
Wayne Circuit Court
LC No. 06-614423-AA
BUREAU OF HEALTH SYSTEMS,
Respondent-Appellee.
Before: Servitto, P.J., and Donofrio and Fort Hood, JJ.
PER CURIAM.
Petitioner, Rosewood Living Center, appeals by leave granted a circuit court order
affirming the revocation of petitioner’s nursing home license by defendant, Bureau of Health
Systems (Bureau). Because the administrative hearing record included competent, material, and
substantial evidence on the record as a whole of many dangerous violations of the nursing home
rules such that a reasonable person applying a “common sense approach” could conclude the
established violations seriously affected the health, safety, and welfare of the residents of the
nursing home, the circuit court properly affirmed the ALJ’s decision revoking respondent’s
license to operate its Rosewood facility, and we affirm.
I. Substantive Facts and Procedural History
This case arises out of on-site inspections made by respondent Bureau of Health Systems1
at petitioner’s facility on Seven Mile Road in Detroit in July 2003. At that time, the nursing
home housed 104 resident patients. Respondent’s surveyors found a multitude of violations of
protocol that respondent’s surveyors detailed in a 79-page report. The surveyor’s report shows
that petitioner committed the following violations2:
1
When the inspections were performed, the Department of Consumer & Industry Services
oversaw the inspections.
2
Because of the volume and detail included in the report, not all of the violations detailed in the
report are summarized here.
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· Failed to document the facility’s policies by setting them forth on letterhead
with signatures and dates.
· Failed to initiate and implement preventative measures for pressure sores for
patient #603 who was diagnosed as “severely impaired” and as “totally
dependent on others for all activities of daily living.” Left the patient lying on
her back without turning her every two hours contrary to her resident
assessment protocol which required repositioning at least every two hours.
Patient #603’s skin was also to be kept clean and dry but surveyors observed
her wearing a brief saturated with urine contrary to her protocol. Patient #603
developed a stage two pressure ulcer measuring two centimeters in her coccyx
area.
· Failed to provide physical therapy for patient #603 with only one documented
session in June 2003 when she was to receive passive range of motion
treatment therapy at least three to five times per week. There was no
documented evidence that patient #603 had a physical therapy or occupational
therapy evaluation in May, June, or July 2003. Since arriving, patient #603
had a marked decline in her functional abilities.
· Stored poisonous material in the kitchen area, specifically a red metal can of
gasoline underneath the steam table in the dish room.
· Posted inconsistent meal menus resulting in residents not being aware of meal
choices at meal times. Facility had less than half the number of bowls (44)
required to serve all 104 patients.
· Left kitchen equipment, including a blender, large mixing bowl, deep fryer,
and oven, grossly soiled with old food and other matter. Surveyors observed
dark, stained, ceiling tiles with mold growth present over the prep sink
adjacent to the meat slicer in the kitchen. On testing, the dish machine did not
reach 180 degrees and did not properly sanitize dishes used to serve residents.
The dish room floor was flooded with water due to the trap being plugged
with food and other debris. The walk-in refrigerator contained uncovered,
unlabelled, and undated luncheon meat as well as two spilled juice containers
on the floor.
· Failed to conduct and document fire drills for over a year and a half since
October 2001.
· Facility failed to establish an infection control program to investigate possible
causes of infections, develop and implement corrective measures to decrease
incidents of infection, and, ensure staff adherence to control practices despite
the prevalence of infections in the facility. Records showed that the facility
experienced in January 2003, a wound infection with Methicillin Resistant
Staphylococcus Aureus (MRSA); in February 2003, nine upper respiratory
infections and four urinary tract infections (UTI); in March 2003, four UTIs;
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in April 2003, three UTIs; and in June 2003, three eye infections.
infection surveillance logs existed for May 2003.
No
· Left a fluorescent light in a shower stall hanging by black and red electrical
wires, with a constant water drip from the corner of the ceiling and from the
light fixture itself resulting in standing water on the floor, thereby leaving
staff and residents at risk for electrocution. While being interviewed, two
charge nurses reported that the shower room was being used by nursing
assistants to shower residents at that time.
· The fire door that also acted as a smoke barrier to the third floor was not
locked and had at least three holes in it.
· Approximately 43 resident rooms revealed exposed red and black wires
hanging from ceilings where lights used to hang or protruding from walls that
used to power outlets, call lights, and light switches. The wires were not
capped.
· Left resident #12 unobserved in the smoking area, where she had no ashtrays
and instead stamped out cigarettes on the floor.
· Individual resident’s night-lights were not operational throughout entire first
and second floor. Many more lights were not functional throughout the
facility including in the medical records room, laundry room, shower room,
occupational therapy room, and activity room.
· Broken light bulbs and broken glass were present on the floors in resident
rooms and in hallways.
· An electrical cord connected to a commercial floor fan was covered with
standing water. Water was penetrating an open junction. There were obvious
water leaks from multiple pipes in the boiler room.
· Inadequate ventilation was observed in several rooms including at least four
resident rooms, two restrooms, and a utility room that resulted in the pervasive
odor of fecal matter and urine.
· Facility left a dumpster overflowing with trash including 46 wooden pallets,
as well as the loading dock, which was covered with garbage, including a 24yard dumpster filled to capacity emanating a foul odor with gnats and flies
buzzing around it.
· Failed to properly sort and launder clothes and linens soiled with bodily fluids
and fecal matter. Newly laundered clothes and linens were in a pile on the
floor.
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· Floors throughout the facility presented trip hazards including broken or
cracked tiles and heavily soiled, scuffed, or sticky floors, as well as various
grossly stained and soiled carpeted areas.
· Left dead bugs, flies, debris and “crud” in the activity room, with two window
shades stored underneath the heaters. Many windows had heavy condensation
or smoke stains that did not allow residents to see out of them.
· Failed to maintain proper air temperatures in excessive heat conditions. On
July 20, 2003 surveyors measured the temperature in the middle of the
residents’ main dining room at 90 degrees.
As a result of the July 2003 survey, respondent’s Director, Walter Wheeler, issued an
emergency license revocation order. Wheeler found that petitioner had not been in compliance
with state and federal law regulating long-term nursing homes since 1995. He found that the
level of noncompliance, on numerous occasions since 1995, placed the residents’ health, safety,
and welfare at risk. Also, he found that petitioner had not complied with state and federal law
for fire alarms, smoke detection, and sprinkler systems. He stated that the most recent survey
included three immediate jeopardy violations, two harm citations and 53 citations3 of potential
risk. He did not, however, specifically identify those violations though we assume that the
immediate jeopardy violations might include the storage of gasoline in the kitchen and the two
areas with bare wires and standing water. Wheeler directed that the residents should be
immediately transferred and directed that petitioner stop operating as a nursing home. Finally,
per the Emergency License Revocation Order, petitioner’s license would be revoked once the
last resident was transferred. Petitioner transferred all residents by August 14, 2003, and its
license was revoked.
Petitioner challenged the emergency revocation order and the matter proceeded to
hearing before Administrative Law Judge Robert H. Mourning (ALJ). The ALJ held a series of
hearings where it heard arguments and took a voluminous amount of testimony.4 Ultimately,
the ALJ issued a lengthy and very detailed proposed decision of 117 pages. The decision
separately sets out 171 findings of fact5 with regard to the proceedings. The ALJ then applied
the relevant law to its explicit findings of fact and concluded that respondent had proven by a
preponderance of the evidence that petitioner had violated two dozen rules and had not proven
3
That number was later amended to 56 citations in an amended emergency license revocation
order issued on January 14, 2004.
4
The ALJ hearing commenced on October 7, 2004, and was continued on October 8, 2004,
October 21-22, 2004, November 4-5, 2004, December 2-3, 2004, January 20-21, 2004, and was
finally concluded on February 3, 2005.
5
Many with multiple subsections.
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violations of seven more rules.6 In accordance with its findings, the ALJ then concluded that
Director Wheeler had properly revoked petitioner’s license stating specifically that:
The central issue in this hearing is whether, under MCL 333.20168,
Director Wheeler, on August 6, 2003, properly made a finding that deficiencies or
6
In the order addressed by the ALJ, the ALJ specifically found that respondent had proven by a
preponderance of the evidence that petitioner had violated:
1. MCL 333.20201(2)(e).
2. Michigan Administrative Code, R 325.20115(4)(a), (c), (c)(vi), (f).
3. Rule 325.20117(6).
4. Rule 325.20401(1).
5. Rule 325.20501.
6. Rule 325.20502(1).
7. Rule 325.20502(3), (4).
8. Rule 325.20507(a).
9. Rule 325.20604(1), (2).
10. Rule 325.20707(1), (4)(a) and MCL 325.20708(1), (4).
11. Rule 325.20707(4)(d).
12. Rule 325.20707(4)(i).
13. Rule 325.20710.
15. Rule 325.20711(3)(b), (4)(a).
16. Rule 325.20711(7).
18. Rule 325.20804.
19. Rule 325.21001(1).
21. Rule 325.21306(1).
25. Rule 325.21321(1), (2).
26. Rule 325.21322(5).
27. Rule 325.21322(10).
28. Rule 325.21322(15).
29. Rule 325.21325(1).
30. Rule 325.22003a.
Again, in the order addressed by the ALJ, the ALJ also specifically found that respondent had
not proven by a preponderance of the evidence that petitioner violated:
14.
17.
20.
21.
22.
23.
24.
Rule 325.20711(1)(c).
Rule 325.20803(3).
Rule 325.21304(2).
Rule 325.21306(2), (3).
Rule 325.21309(a).
Rule 325.21317(7), (8), (9).
Rule 325.21319(1).
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violations of state law and administrative rules for nursing homes seriously
affected the health, safety, and welfare of residents receiving care or services at
Rosewood. Further, whether it was appropriate and reasonable for Director
Wheeler to issue an emergency order revoking the license of Rosewood.
In 1999, Mohammad Qazi, the president of Ciena, met with Director
Wheeler and assured him that Rosewood would comply with the applicable
operating standards of license by BHS.[7] The members of the survey team,
assigned to Rosewood, had a substantial amount of education, experience, and
training in the evaluation of nursing homes. When the survey team arrived on
July 20, 2003, they found that Rosewood was substantially in non-compliance
with the state law and administrative rules for nursing homes. Moreover, on July
20, 2003, there was no social worker working in the facility. In addition, during
the survey, the maintenance director, Mr. Lafferty, and the bookkeeper decided to
resign.
The Administrative Law Judge finds that deficiencies or violations found
during the current survey and the past record of non-compliance with licensing
requirements warrants the revocation of Rosewood’s license by BHS. In this
case, BHS provided Rosewood with multiple opportunities to comply with the
licensing requirements for nursing homes. However, standard surveys, complaint
surveys, and life safety code surveys demonstrate that Rosewood continued to fail
as a nursing home. Therefore, it is reasonable and appropriate for Director
Wheeler to conclude that this facility cannot meet the licensing standards
provided in state law and administrative rules and that the license should be
revoked.
The ALJ then recommended that the Director of the Department of Community Health affirm the
Bureau of Health System’s August 6, 2003 decision to revoke petitioner’s license to operate
Rosewood Living Center.
On September 22, 2005, petitioner filed objections to the proposed opinion of the ALJ,
along with a very lengthy supporting brief of 113 pages and several exhibits. Petitioner asserted
in part that it appeared that the department intended from the beginning of the survey to shut
down the nursing home; petitioner’s staff testified that the same inspectors had seen the same
conditions the previous year and had not flagged them as violations. Amongst other objections,
petitioner claimed with regard to the gas can, that it was in the dish room, not the kitchen, and
there was no heat source and no flames in the dish room and thus there was no flame risk;
further, when notified of the deficiency, staff immediately removed the can and placed it in the
garage. Petitioner asserted that, in contrast to the survey, it actually did conduct fire drills; it
merely could not locate the binder in which the drill documentation was kept, but staff members
7
“BHS” is respondent Bureau of Health Systems (Bureau).
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testified that drills were indeed conducted. Petitioner denied that the shower room, where the
surveyors had found the loose wiring, was used to shower patients.
On March 21, 2006, the Director of the Department of Community Health rejected
petitioner’s objections to the ALJ opinion. The director affirmed the emergency license
revocation order and adopted the ALJ’s proposed opinion in its entirety except for the ALJ’s
interpretation of Rule 325.21306(2).
Petitioner appealed to the circuit court, arguing in general that it had not received due
process because respondent had never promulgated specific standards of what constituted a
situation that endangered the health and safety of residents. Petitioner also contended that
Director Wheeler had merely used an arbitrary, common sense standard.8 After entertaining oral
argument on the matter, the circuit court ruled as follows:
If the rules and regulations promulgated by the State, that is, the standards
and licensing for the nursing homes and nursing care facilities were so vague, that
is, the rules and regulations, so vague, so overly broad, if you will, that one could
not determine what would or would not violate the rules, I might agree with
Rosewood. One need only look, I think, at the nature of many of the violations to
see that common sense would dictate, probably even compel the result reached in
8
Petitioner advanced the following arguments before the circuit court on appeal:
1. The Bureau violated the facility’s constitutional due process rights by revoking
petitioner’s license without the proper legal authority.
2. The Bureau exceeded its statutory authority in issuing the emergency
revocation.
3. The amended order is improper.
4. The final order is arbitrary, capricious, and clearly an abusive and unwarranted
exercise of discretion.
5. The ALJ set forth no justification for his vague credibility determinations of
witnesses.
6. The final order is not supported by competent, material, and substantive
evidence.
7. The final order’s reversal of a single finding of the ALJ is erroneous.
8. The ALJ erroneously granted the Bureau’s motion to quash subpoena and for a
protective order.
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this case. I don’t think there could be a reasonable, rational dispute that wire or
wires hanging in a shower that was apparently being used because there was a
shampoo container and it appeared that the floors or the walls of the shower stall
were wet, would represent a danger to the health and safety of the residents of
Rosewood. I think common sense would tell pretty much anyone that if someone
who is in danger of developing decubitus ulcers and, in fact, had a stage 2 ulcer, is
not being turned at least every two hours, that represents a danger certainly to that
patient.
If one is to get physical – to have physical therapy – I went back through
my notes because I couldn’t remember the number of times the resident actually
received therapy in June of ’03 and July of ’03, she was supposed to – I believe it
was a female – receive the therapy three to five times per week. There was no
notation reflecting that she had therapy in June of ’03, none in July of ’03. I don’t
think a reasonable argument could be made that that didn’t represent, if not an
absolute hazard, some real concern for the health and safety of that particular
resident. The fact that there was no effective infection control committee. There
was a coordinator, but there was a dearth of documentation that anyone, including
this coordinator, had actually coordinated anything with respect to controlling
infection or contamination within the Rosewood facility. The third floor
crammed with all kinds [of] material, including broken furniture and the like, and
apparently, at least according to one of the surveyors, had been used as a smoking
area, cigarette butts and the like found. That represents a potential fire hazard. I
haven’t even gotten through half of the list, my own list, from reading the list of
violations that the surveyor[s] found in this case.
As I indicated, there is a set of rules. They don’t say, nor should they, that
every time you have a resident who is not being turned who is at risk of
developing decubitus ulcers, that’s a violation. If it doesn’t – one would not think
that they would, that is, the regulations, say it’s important for the health and safety
of residents to not have clean linen stored on the floor of a closet and so forth. I
think in practically every instance, I can’t think of one where it wouldn’t apply,
but in practically every instance, common sense is to be applied in determining
whether violations have occurred and whether certain standards have or have not
been met. It is true, that Director Wheeler said in part that he based it on his
feelings, but he also indicated that he was operating under [MCL] 333.20168.
And during the course of the administrative hearing reference was made to the
rules promulgated by the State as it pertains to the standards for licensing of
nursing homes and nursing care facilities. I don’t believe that there is an
argument or a viable meritorious argument that Rosewood’s constitutional right to
due process was violated in this case.
Rosewood should have been aware of the standards to which it was being
held. There were numerous violations, most of which could easily be determined
to be – to cause risk of endangering the residents or affecting adversely their
health, safety and welfare. There was no abuse of discretion in determining that
Rosewood’s license should be revoked and that the facility should be shut down
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and the residents moved. In Spalding v Spalding, 355 Mich 382 (1959), the
Michigan Supreme Court discussed the standard for reviewing a claim of abuse of
discretion in a civil matter and it said, as counsel pointed out: In order to have an
abuse, the result must be so palpably and grossly violative of fact and logic – kind
of sounds like common sense, doesn’t it – that it evidences not the exercise of
will, but the perversity of will; not the exercise of judgment, but the defiance
thereof; not the exercise of reason, but rather of passion and bias. I cannot find
and do not find, given that standard, that there was an abuse of discretion. The
determination of the ALJ is affirmed.
In an order dated March 12, 2007, the circuit court affirmed the revocation of petitioner’s
nursing home license. It is from this order that petitioner sought leave to appeal from this Court,
and we granted petitioner’s application.
. Standard of Review
“This Court reviews a lower court's review of an administrative decision to determine
whether the lower court applied correct legal principles and whether it misapprehended or
misapplied the substantial evidence test to the agency’s factual findings, which is essentially a
clearly erroneous standard of review.” VanZandt v State Employees' Retirement Sys, 266 Mich
App 579, 585; 701 NW2d 214 (2005). A finding is clearly erroneous when, on review of the
whole record, this Court is left with the definite and firm conviction that a mistake has been
made. Boyd v Civil Service Comm, 220 Mich App 226, 234; 559 NW2d 342 (1996).
Accordingly, this Court will overturn a circuit court decision if this Court is left with a definite
and firm conviction that a mistake was made. VanZandt, supra at 585. This Court gives due
deference to the expertise of an administrative agency, and will not “invade the province of
exclusive administrative fact-finding by displacing an agency’s choice between two reasonably
differing views.” Widdoes v Detroit Public Schools, 218 Mich App 282, 286; 553 NW2d 688
(1996).
III. Analysis
A.
Petitioner first argues that the circuit court erred when it incorrectly applied the abuse of
discretion standard of review. Petitioner also asserts that had the circuit court applied the proper
standard of review, the trial court would have been required to find the emergency revocation
unlawful. Respondent responds that it is clear from the record that the circuit court considered
more than just whether there was an abuse of discretion. Respondent also asserts that given the
circuit court’s emphatic rejection of petitioner’s arguments, the outcome of this appeal did not
turn on how the trial court articulated the abuse of discretion standard of review.
A final agency decision is subject to court review but it must be upheld if it is not
contrary to law, is not arbitrary, capricious, or a clear abuse of discretion, is not otherwise
affected by a substantial and material error of law, and is supported by competent, material, and
substantial evidence on the whole record. Const 1963, art 6, § 28; MCL 24.306(1)(d); VanZandt,
supra at 583-584; Dignan v Michigan Pub School Employees Retirement Bd, 253 Mich App 571,
576; 659 NW2d 629 (2002). “‘Substantial evidence is that which a reasonable mind would
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accept as adequate to support a decision, being more than a mere scintilla, but less than a
preponderance of the evidence.’” VanZandt, supra at 584 (citation omitted). “If there is
sufficient evidence, the circuit court may not substitute its judgment for that of the agency, even
if the court might have reached a different result.” Id. With regard to whether an agency
decision is arbitrary or capricious, the circuit court must determine whether the decision lacks
adequate determining principle, reflects an exercise of will or caprice without acknowledgment
of principles, circumstances, or significance, reflects an absence of a principled and reasoned
outcome, or reflects a freakish, whimsical, or humorous outcome. Id. at 584-585.
Our review of the record reveals that although the circuit court announced its intention to
apply the abuse of discretion standard and even framed its conclusion in abuse of discretion
terms, the trial court’s analysis of the issues reflects that the circuit court actually applied the
substantial evidence test to respondent’s factual findings. The circuit court pointed out that the
record contained facts to support the ALJ’s decision and the director’s decision. The circuit
court specifically referenced the loose wiring in the shower, the bed sores on a patient who was
not moved every two hours as she was supposed to have been managed given her susceptibility
to decubitus ulceration, the complete lack of physical therapy for a patient, the failure of
petitioner to have an infection control procedure, the fire hazard of patients smoking on the
cluttered third floor and the storage of clean linen on the floor. The circuit court observed that
those items comprised fewer than half of the violations noted when reviewing the file. After
reviewing the record, it is obvious to us that the circuit court considered whether the record
contained competent, material, and substantial evidence on the whole record to support the
agency’s decision. Thus, we cannot conclude that the court misapplied the standard of review.
Accordingly, the trial court did not rule contrary to the applicable standard of review.
Petitioner also points out that not only did the circuit court erroneously apply the abuse of
discretion standard, but it applied the wrong abuse of discretion standard when it cited Spalding v
Spalding, 355 Mich 382; 94 NW2d 810 (1959), as a result of our Supreme Court’s decision in
Maldonado v Ford Motor Co, 476 Mich 372; 719 NW2d 809 (2006). An issue is not properly
preserved if it is not raised before, addressed by, and decided by the trial court. ISB Sales Co v
Dave’s Cakes, 258 Mich App 520, 532-533; 672 NW2d 181 (2003). Because petitioner did not
object and bring this issue to the circuit court’s attention during the hearing, it is not preserved
and we could decline to review this issue. But, even were this argument properly before us, to
the extent that the circuit court referenced Spalding, supra, that asserted error was not
dispositive. As respondent correctly points out in its brief on appeal, the Maldonado abuse of
discretion standard explores whether a given outcome in a case fits within a reasonable,
principled range of possible outcomes. Maldonado, supra at 388. The trial court, in examining
the findings in the appeal emphasized that due to the conditions at the Rosewood facility,
“common sense would dictate, probably even compel, the result reached in this case.” Hence the
record plainly shows that in its review of the record, the trial court certainly engaged in an
analysis that endeavored to determine whether the revocation of petitioner’s license fell within
the principled range of outcomes based on the record before it. For these reasons, we find no
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merit to petitioner’s argument that had the trial court applied the proper standard of review it
would have been compelled to find the emergency revocation unlawful.9 No error occurred.
B.
Petitioner next contends that the circuit court’s finding of no due process violation was
clearly erroneous. Specifically, petitioner asserts that the trial court analyzed the wrong laws in
deciding that petitioner’s due process rights were not violated and also that the trial court erred in
permitting respondent to use unpromulgated rules. Respondent argues that the circuit court
properly recognized that MCL 333.20168, which incorporated violations of statutes and rules
regulating nursing home operations, gave Rosewood sufficient notice that the conditions found at
that facility could result in license revocation. Respondent also explains that it promulgated an
extensive set of rules that give nursing homes adequate notice of operation requirements and
when significant and dangerous violations of these requirements were discovered at Rosewood,
its license was properly revoked.
We review de novo whether a trial court violated a defendant’s right to due process.
Dep't of Community Health v Risch, 274 Mich App 365, 377; 733 NW2d 403 (2007). Statutory
construction is a question of law that this Court also reviews de novo. General Motors Corp v
Dep't of Treasury, 466 Mich 231, 236; 644 NW2d 734 (2002).
In its brief on appeal petitioner argues specifically that respondent “refus[ed] to
promulgate regulations informing regulated nursing homes how an alleged violation of the
Licensure Regulations may be found to rise to the level of ‘seriously affects,’ thus justifying an
emergency revocation.” In support of its argument, petitioner relies on the following statute:
(1) Upon a finding that a deficiency or violation of this article or the rules
promulgated under this article seriously affects the health, safety, and welfare of
individuals receiving care or services in or from a licensed health facility or
agency, the department may issue an emergency order limiting, suspending, or
revoking the license of the health facility or agency. . . . [MCL 333.20168(1).]
The main goal of judicial construction of a statute is to “ascertain and to give effect to the
intent of the Legislature.” United Parcel Service, Inc v Bureau of Safety & Regulation, 277
Mich App 192, 202; 745 NW2d 125 (2007). The first step in the analysis is to review the
language of the statute. Id. If the statutory language of the statute is unambiguous, then we
assume that the Legislature intended its plain meaning, and the statute must be enforced as
written. Roberts v Mecosta Co Gen Hosp, 466 Mich 57, 63; 642 NW2d 663 (2002). “A
9
Because the trial court’s analysis satisfied the Maldonado standard we need not discuss the
continued use of the Spalding abuse of discretion standard. We do however note that MCL
24.306(1)(e) specifically provides that the trial court’s review of an agency decision is “if
substantial rights of the petitioner have been prejudiced because the decision or order is . . .
[a]rbitrary, capricious or clearly an abuse or unwarranted exercise of discretion.” In satisfying
the Maldonado standard, the standard set out in MCL 24.306(1)(e) has also been satisfied.
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necessary corollary of these principles is that a court may read nothing into an unambiguous
statute that is not within the manifest intent of the Legislature as derived from the words of the
statute itself.” Id.; see also Lash v Traverse City, 479 Mich 180, 194; 735 NW2d 628 (2007)
(The judiciary may not speculate regarding the Legislature’s intent beyond those words
expressed in the statute.).
After reading the plain language of the statute, we conclude that petitioner’s limited
interpretation of MCL 333.20168(1) does not comport with the plain language of the statute.
The statute is unambiguous. It does not require that respondent set forth rules specifically
defining the phrase “seriously affects the health, safety, and welfare” of patients as argued by
petitioner. That the statute does not define the phrase does not mean that respondent must set
forth a definition. Instead, the plain language of the statute requires only a violation, and a
finding that the violation seriously affects the health, safety, and welfare of the patient. As such,
we decline to read more into the statute as suggested by petitioner.
Petitioner also relies on MCL 333.20171 as mandating that respondent was obligated to
define “seriously affects the health, safety, and welfare.” MCL 333.20171 provides in pertinent
part:
(1) The department, after obtaining approval of the advisory commission, shall
promulgate and enforce rules to implement this article, including rules necessary
to enable a health facility or agency to qualify for and receive federal funds
available for patient care or for projects involving new construction, additions,
modernizations, or conversions.
(2) The rules applicable to health facilities or agencies shall be uniform insofar as
is reasonable.
(3) The rules shall establish standards relating to:
(a) Ownership.
(b) Reasonable disclosure of ownership interests in proprietary corporations and
of financial interests of trustees of voluntary, nonprofit corporations and owners
of proprietary corporations and partnerships.
(c) Organization and function of the health facility or agency, owner, operator,
and governing body.
(d) Administration.
(e) Professional and nonprofessional staff, services, and equipment appropriate to
implement section 20141(3).
(f) Policies and procedures.
(g) Fiscal and medical audit.
(h) Utilization and quality control review.
(i) Physical plant including planning, construction, functional design, sanitation,
maintenance, housekeeping, and fire safety.
(j) Arrangements for the continuing evaluation of the quality of health care
provided.
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(k) Other pertinent organizational, operational, and procedural requirements for
each type of health facility or agency.
Contrary to petitioner’s argument, the plain language of MCL 333.20171 merely
indicates that respondent “shall promulgate and enforce rules to implement this article,” and does
not specifically require respondent to define the phrase “seriously affects the health, safety, and
welfare.” The majority of MCL 333.20171 discusses standards relating to ownership and
ownership interests; the facility’s organization and administration; appropriate staff and
equipment; policies and procedures; fiscal and medical audits; quality control review; the
physical surroundings including design, sanitation, maintenance, housekeeping, and fire safety;
arrangements for the continuing evaluation of the quality of health care provided and other
pertinent requirements. Nowhere does that statute require respondent to define precisely what
constitutes a violation that seriously affects the health, safety, and welfare of patients. The plain
language of the statute belies petitioner’s argument.
Despite the foregoing, the basic thrust of petitioner’s due process argument is not lost on
us. Petitioner complains that a basic tenant of due process is missing here where it claims that
there were no clear standards to be utilized in performing tasks as a nursing home. Due process
enforces the rights enumerated in the Bill of Rights and includes both substantive and procedural
due process. Kampf v Kampf, 237 Mich App 377, 381-382; 603 NW2d 295 (1999). Procedural
due process serves as a limitation on government action and requires government to institute
safeguards in proceedings that affect those rights protected by due process, including life, liberty,
or property. Id. at 382. Due process is a flexible concept applied to any adjudication of
important rights. Thomas v Pogats, 249 Mich App 718, 724; 644 NW2d 59 (2002).
The essence of due process is to ensure fundamental fairness. Reed v Reed, 265 Mich
App 131, 159; 693 NW2d 825 (2005) (internal citations omitted). The procedural protections,
which include fundamental fairness, are based on what the individual situation demands.
Thomas, supra at 724. Fundamental fairness includes: (1) consideration of the private interest at
stake; (2) the risk of an erroneous deprivation of such interest through the procedures used; (3)
the probable value of additional or substitute procedures; and (4) the interest of the state or
government, including the function involved and the fiscal or administrative burdens imposed by
substitute procedures. Dobrzenski v Dobrzenski, 208 Mich App 514, 515; 528 NW2d 827
(1995). “Due process in civil cases generally requires notice of the nature of the proceedings, an
opportunity to be heard in a meaningful time and manner, and an impartial decisionmaker. The
opportunity to be heard does not mean a full trial-like proceeding, but it does require a hearing to
allow a party the chance to know and respond to the evidence.” Hinky Dinky Supermarket, Inc v
Dep't of Community Health, 261 Mich App 604, 606; 683 NW2d 759 (2004), quoting Cummings
v Wayne Co, 210 Mich App 249, 253; 533 NW2d 13 (1995).
While it is true that both MCL 333.20168(1) and MCL 333.20171 do not specifically
require respondent to define the phrase “seriously affects the health, safety, and welfare” and do
not require respondent to define precisely what constitutes a violation that seriously affects the
health, safety, and welfare of patients, the Michigan Department of Consumer and Industry
Services, Bureau of Health Systems, Division of Health Facility Standards and Licensing has
promulgated myriad administrative rules that address nursing homes and nursing care facility
standards. These administrative rules are published in the Michigan Administrative Code.
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Michigan Administrative Code, R 325.20101, et seq. These administrative rules are separated
into twenty separate parts and contain a comprehensive set of guidelines addressing nursing
home standards.10
Petitioner’s argument fails considering the existence of these administrative rules. The
rules are categorized into parts for ease of use and the parts are further separated into individual
rules with subparts providing specific guidance on individual subject areas. The record shows
here that the ALJ concluded that respondent had proven by a preponderance of the evidence that
petitioner had violated two dozen rules when the ALJ concluded that Director Wheeler had
properly revoked petitioner’s license. For example, Rule 325.20401 provides specifically that
nursing homes must make policy manuals available to inspectors, which petitioner did not do in
this case. As just one other example, Rule 325.20507 provides that nursing homes should have
an infection control committee, another action that petitioner did not take. Petitioner’s argument
10
The twenty parts include the following sections:
1. General Provisions, Rule 325.20101 – Rule 325.20118.
2. Licensure, Rule 325.20201 – Rule 325.20215.
3. Access to Nursing Homes and Patients, Rule 325.20301 – Rule 325.20304.
4. Administrative Management of Homes, Rule 325.20401 – Rule 325.20407
5. Patient Care, Rule 325.20501 – Rule 325.20509.
6. Physician Services, Rule 325.20601 – Rule 325.20606.
7. Nursing Services, Rule 325.20701 – Rule 325.20714.
8. Dietary Services, Rule 325.20801 – Rule 325.20806.
9. Pharmaceutical Services, Rule 325.20901 – Rule 325.20906.
10. Other Services, Rule 325.21001 – Rule 325.21003.
11. Records, Rule 325.21101 – Rule 325.21105.
12. Medical Audit, Utilization Review, and Quality Control, Rule 325.21201 – Rule
325.21204.
13. Buildings and Grounds, Rule 325.21301 – Rule 325.21328
14. Child Care Homes and Child Care Units, Rule 325.21401 – Rule 325.21411.
15. Certification, Rule 325.21501 – Rule 325.21515.
16. Nursing Facilities for Care of Mentally Ill Patients, Rule 325.21601 – Rule 325.21605.
17. Nursing Facilities for Care of Mentally Retarded Patients, Rule 325.21701 – Rule
325.21705.
18. Nursing Facilities for Care of Tuberculosis Patients, Rule 325.21801 – Rule 325.21807.
19. Hearing Procedure, Rule, Rule 325.21901 – Rule 325.21922.
20. Education and Training of Unlicensed Nursing Personnel, Rule 325.22001 – Rule
325.22004.
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that without clarification regarding the meaning of the phrase “seriously affects the health,
safety, and welfare” as used in MCL 333.20168, it had no notice whatsoever that the conditions
at its facility could result in the revocation of its license is completely without merit. The
existence of the comprehensive administrative rules specifically applying to nursing homes
promulgated by the Bureau demonstrate that that petitioner had notice of the standards to which
it was supposed to adhere in order to safeguard the health, safety, and welfare of its residents but
did not. Petitioner has not shown that the circuit court’s finding of no due process violation was
clearly erroneous.
C.
Next, petitioner contends that the circuit court erred by deferring to the Bureau’s use of
unpromulgated criteria to support emergency revocation and as a result violated its due process
rights when it improperly based the emergency revocation on a “draft version” of Bureau policy
and Medicaid rules. Respondent argues that petitioner’s argument is false because there is no
factual support in the record for petitioner’s assertion that respondent used unpromulgated
criteria as basis for the revocation of its license. As previously stated, a circuit court’s review of
administrative proceedings is limited to determining whether the decision was authorized by law
and supported by competent, material, and substantial evidence on the whole record. Const
1963, art 6, § 28; VanZandt, supra at 588. And, here, competent, material, and substantial
evidence on the whole record adequately supported the ALJ’s decision that Director Wheeler
based his revocation solely on the authority granted to the Bureau under MCL 333.20168. This
is a factual dispute, and this Court gives due deference to the expertise of an administrative
agency, and will not “invade the province of exclusive administrative fact-finding by displacing
an agency’s choice between two reasonably differing views.” Widdoes, supra at 286.
D.
Petitioner argues that the circuit court erred by applying an abuse of discretion standard
of review and as a result affirming respondent’s agency action that was arbitrary, capricious, and
ultimately an abuse of discretion. In support of its argument, petitioner asserts that Director
Wheeler’s decision was arbitrary, capricious, and an abuse of discretion because he created and
applied his own unwritten standards. Respondent contends that the circuit court found that there
was no abuse of discretion when Rosewood’s license was revoked under MCL 333.20168 after
numerous violations of the nursing home rules put its residents in danger.
A final agency decision is subject to court review but it must be upheld if it is not
contrary to law, is not arbitrary, capricious, or a clear abuse of discretion, is not otherwise
affected by a substantial and material error of law, and is supported by competent, material, and
substantial evidence on the whole record. Const 1963, art 6, § 28; MCL 24.306(1)(d); VanZandt,
supra at 583-584; Dignan, supra at 576. In other words, in reviewing the circuit court’s ruling
on an agency’s decision, this Court considers whether the substantial evidence test was met.
“Substantial evidence is the amount of evidence that a reasonable person would accept as being
sufficient to support a conclusion; it may be substantially less than a preponderance of the
evidence.” Wayne Cty v Michigan Tax Comm, 261 Mich App 174, 186-187; 682 NW2d 100
(2004). Thus, here, the test is whether a reasonable person would agree that Director Wheeler
had sufficient evidence to support his conclusion to revoke petitioner’s license on an emergency
basis. As discussed by the circuit court, the test arguably is a “common sense” test and we agree
that a “common sense approach” should be applied to these circumstances. A “common sense
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approach” is one in which a reasonable person weighing the facts would find the conclusion
clearly evident.
Petitioner first points out that rule violations are common in the industry and that the
average number of violations per nursing home is nine. While the number of violations is
important in the analysis, we agree with petitioner’s contention that the mere existence of “some
number” of violations should not result in license revocation. Though importantly, here, the July
2003 survey revealed that petitioner had over 40 violations, or more than four times the average.
Ultimately, after a ten day hearing, the ALJ upheld twenty-four specific violations. But merely
totaling the violations does not address the severity of the violations. Under a “common sense
approach,” the decision maker must consider both the number of violations and the severity of
the violations. For example, although failing to post an alternate lunch menu or having an
operational window-covering in a patient’s room are violations, under a “common sense
approach” they cannot compare to the severity of petitioner’s violations of having exposed
wiring dripping with water in a shower stall used to shower residents, storing gasoline under a
steamer unit in the dish room which is used in meal preparation and service, or having a
nonoperational fire safety door coupled with innumerable uncapped exposed wires throughout
the facility. The risks posed by petitioner’s violations we just mentioned are clearly evident to
any reasonable person. And as evidenced by the record, these examples just barely scratch the
surface of the deplorable and dangerous conditions in the Rosewood facility.
Petitioner also points out that, when questioned, Wheeler could not point to specific
standards on which he based his decision to revoke petitioner’s license. It is impossible to apply
a “bright line” objective rule regarding when licenses can be revoked under MCL 333.20168,
instead, the circumstances require the more subjective “common sense approach” we have
applied. While the “common sense approach” is not one of mathematical certainty, nonetheless
the approach necessarily employs a sliding scale test requiring a searching inquiry into both the
number of violations present as well as the severity level of the individual violations and their
effect on the health, safety, and welfare of the residents of the nursing home. Here, surveyors
found many violations ranging from minor to extremely severe in petitioner’s facility and, the
record contains competent evidence to support those violations, such that a reasonable person
applying a “common sense approach” could decide that those violations were sufficient to
support Director Wheeler’s decision that the patients in petitioner’s facility were endangered. As
a result, the circuit court did not err when it affirmed respondent’s agency action to revoke
petitioner’s license.
E.
Finally, petitioner argues that the circuit court erred by affirming the Bureau’s actions in
excess if its statutory authority. Petitioner asserts in particular that respondent ignored the
statutory presumption found in MCL 333.21799b(6) that the nursing home should remain open.
Respondent argues that since petitioner’s assertion that the Bureau relied on specified
unpromulgated criteria in revoking its license was objectively false, the circuit court did not err
by disregarding petitioner’s assertion.
Interestingly, in its brief on appeal, petitioner fails to quote the entire subsection of MCL
333.21799b(6), the statute on which it relies. MCL 333.21799b(6) provides in its entirety:
(6) If the department determines that a nursing home's patients can be
safeguarded and provided with a safe environment, the department shall make its
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decisions concerning the nursing home's future operation based on a presumption
in favor of keeping the nursing home open. [MCL 333.21799b(6) (emphasis
added).]
Thus, the statutory presumption found in MCL 333.21799b(6) that the nursing home should
remain open applies only in those circumstances where the Bureau determines that the nursing
home’s residents can be “safeguarded and provided with a safe environment[.]”
Given the fire hazards from patients who smoked and the nonoperational fire door, the
uncovered, wet, electrical wires in the shower area, the storage of a poisonous substance in the
kitchen, the unlabeled and uncovered food in the refrigerator, the filthy conditions in the food
preparation areas, the storage of waste, and the failure to have an infection control procedure, the
record reflects that the patients at petitioner’s facility would not have been able to be
“safeguarded and provided with a safe environment” within a reasonable time, as a direct result
of just a few of the serious violations present at petitioner’s facility. The record reflects that the
dangerous conditions present at the facility were too many in number and the severity level so
high that the dangerous conditions were endemic to the facility. Thus, as a practical matter,
petitioner would not have been able to cure the dangerous conditions such that a safe and healthy
living environment would be provided for the patients in a reasonable period of time. Further, in
light of petitioner’s history contained in the administrative record, petitioner cannot demonstrate
that it would have complied with the alternative options it proposes in its brief on appeal that
Wheeler could have taken short of closure, or even that the alternatives could have been
completed in a timely fashion ensuring the health, safety, and welfare of the residents,
particularly given the number and severity of violations.
That being said, we recognize that petitioner did take immediate steps to rectify a few of
the most dangerous violations found by the survey, such as moving the gasoline can from the
dish room to the garage and shutting down the shower stall that was an electrocution hazard.
Petitioner disputes the finding that staff did not turn patient #603 every two hours by arguing in
part that the patient’s other medical conditions made the development of bed sores unavoidable
along with a host of other disputes regarding other survey findings. While we have scoured the
record in this case, this Court’s review rightly does not encompass a point-by-point factual
review. This Court gives deference to an agency’s findings of fact, particularly with regard to
witness credibility and evidentiary questions. A reviewing court does not resolve conflicts in
evidence or decide on witness’ credibility. Black v Dep’t of Social Services, 195 Mich App 27,
30; 489 NW2d 493 (1992). Because the record evidence supports the agency’s findings of fact,
the statutory presumption, MCL 333.21799b(6), simply does not apply to this case and the
circuit court did not err by affirming the Bureau’s exercise of its statutory authority.
IV. Conclusion
Because the administrative hearing record included competent, material, and substantial
evidence on the record as a whole of many dangerous violations of the nursing home rules such
that a reasonable person applying a “common sense approach” could conclude the established
violations seriously affected the health, safety, and welfare of the residents of the nursing home,
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the circuit court properly affirmed the ALJ’s decision revoking respondent’s license to operate
its Rosewood facility on an emergency basis.
Affirmed.
/s/ Deborah A. Servitto
/s/ Pat M. Donofrio
/s/ Karen M. Fort Hood
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