In the Matter of the License Revocation of Woodlyn Court, L.L.P.

In the Matter of the License Revocation of Woodlyn Court, L.L.P. A06-1449, Court of Appeals Unpublished, July 31, 2007.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2006).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A06-1449

 

 

In the Matter of the License Revocation of

Woodlyn Court, L.L.P.

 

 

Filed July 31, 2007

Affirmed

Lansing, Judge

 

Minnesota Department of Health

OAH Docket No. 2-0900-16778-2

 

John F. Bonner III, Thomas F. DeVincke, 1950 US Bank Plaza, 220 South Sixth Street, Minneapolis, MN 55402 (for relator Woodlyn Court, L.L.P.)

 

Lori Swanson, Attorney General, Kristen M. Olsen, Assistant Attorney General, 1800 Bremer Tower, 445 Minnesota Street, St. Paul, MN 55101  (for respondent Minnesota Department of Health)

 

            Considered and decided by Halbrooks, Presiding Judge; Lansing, Judge; and Hudson, Judge.

U N P U B L I S H E D   O P I N I O N

LANSING, Judge

            The commissioner of health revoked Woodlyn Court, L.L.P.'s license to operate a manufactured-home park and imposed a $10,000 administrative penalty.  Because the record establishes that Woodlyn Court violated sewage regulations and that the imposition of the $10,000 penalty was not arbitrary and capricious, we affirm.

F A C T S

            Woodlyn Court, L.L.P. operates a manufactured-home park in Anoka County.  Between September 2004 and June 2005, the Minnesota Department of Health repeatedly notified Woodlyn Court that its sewage-disposal system failed to comply with applicable regulations.  The department had received complaints about a strong smell of sewage on the property and discovered that the sewage system failed to comply with the requirements for sewage-treatment systems in Minn. R. 7080.0600 (2005).  The department informed Woodlyn Court that under Minn. R. 4630.0800 (2005) the park either needed to connect to a municipal sewage system or upgrade to a system acceptable to the department.

            In June 2005 Woodlyn Court had still not submitted a plan for bringing its sewage system into compliance and informed the department that it intended to sell the property.  Woodlyn Court requested an additional extension of two years to sell the property.  During that time, Woodlyn Court planned to market the property informally to avoid losing revenue from existing residents.  The department rejected the plan and informed Woodlyn Court that its license was being revoked and that a previously imposed $10,000 administrative penalty was now due.

            Woodlyn Court challenged the decision.  An administrative law judge granted the department's motion for a summary disposition and recommended that the department affirm the revocation and the penalty.  The department followed the recommendation, and Woodlyn Court appeals that decision.

D E C I S I O N

            Our review of agency decisions is guided by the state Administrative Procedure Act.  Minn. Stat. § 14.69 (2006).  We will reverse or modify the agency's decision only if the decision was (1) in violation of constitutional provisions, (2) in excess of statutory authority or jurisdiction, (3) made upon unlawful procedure, (4) affected by other error of law, (5) unsupported by substantial evidence, or (6) arbitrary and capricious.  Id.; Hy-Vee Food Stores, Inc. v. Minn. Dep't of Health, 705 N.W.2d 181, 184 (Minn. 2005).  When reviewing an agency's summary disposition, we view the evidence in the light most favorable to the relator.  In re Rate Appeal of Benedictine Health Ctr., 728 N.W.2d 497, 500 (Minn. 2007).

            Woodlyn Court challenges the decision of the Minnesota Department of Health's decision on three grounds.  First, Woodlyn Court argues that substantial evidence does not support the conclusion that it violated Minn. R. 4630.0800 (2005).  Second, Woodlyn Court argues that it was arbitrary and capricious to impose the $10,000 administrative penalty.  Third, Woodlyn Court argues that the application of Minn. R. 4630.0800 involved an error of law.

I

            Under the department's regulations, all sewage at a mobile-home park must be "discharged into a municipal sewage system . . . whenever such a system is available."  Minn. R. 4630.0800, subp. 1 (2005).  When a municipal sewage system is not available, then "a sewage disposal system acceptable to the [department] and the Minnesota Pollution Control Agency shall be provided."  Id.

            Because the administrative law judge (ALJ) considered the case based on a motion for summary disposition, the ALJ was required to view the facts in the light most favorable to Woodlyn Court.  Benedictine Health Ctr., 728 N.W.2d at 500.  The ALJ concluded that, viewing the facts in that light, he could not find that a municipal sewage system was available for Woodlyn's discharge.  Nonetheless, the ALJ found that Woodlyn Court had failed to provide a sewage-disposal system acceptable to the department.

            Woodlyn Court argues that the ALJ could not base his decision on this finding.  According to Woodlyn Court, the department's license revocation was based on its position that a municipal sewage system was available.  Woodlyn Court argues that the ALJ could therefore only grant summary disposition if it agreed that a municipal sewage system was available.  But Woodlyn Court's argument is not supported by the facts.  When the department revoked Woodlyn Court's license, it did so for "failure to comply with Minnesota Rules, part 4630.0800, which requires that all sewage and other water-carried wastes be discharged into a municipal sewage system or a sewage disposal system acceptable to the [department of health] and the Minnesota Pollution Control Agency."  Similarly, the department had previously informed Woodlyn Court that it needed to "hook up to the city sewer system or provide an alternate system that is approved by the local sewer authority."  Thus, the department's decision to revoke Woodlyn Court's license, was based on both the failure to connect to a municipal sewage system and the failure to provide a system acceptable to the department.

            Even if the department's revocation decision was based solely on the availability of the municipal sewage system, the summary disposition was still appropriate.  Minn. R. 4630.0800 establishes a legal standard for operating a manufactured-home park, not a procedure that the department must follow before revoking the license.  The legal standard is violated if a manufactured-home park does not either discharge its sewage into a municipal sewage system that is available for discharge or the nonmunicipal sewage-disposal system provided is not acceptable to the department.  Minn. R. 4630.0800, subp. 1.  Thus, the ALJ could base its decision solely on its finding that the sewage-disposal system is not acceptable to the department.

            Furthermore, the ALJ's decision to grant the summary disposition was supported by the evidence.  Woodlyn Court argues that the department incorrectly claimed that it uses "cess pools."  If we view the evidence in the light most favorable to Woodlyn Court, then Woodlyn Court may be correct.  But that does not mean that its sewage system wasacceptable to the department or that the sewage system complied with Minn. R. 7080.0600.  See Minn. R. 7080.0600 (2005) (defining requirements for sewage-treatment systems).  There is no real dispute that Woodlyn Court has failed to provide an acceptable sewage system.  Therefore, the ALJ could grant the motion for summary disposition and the department could properly accept his recommendation.

II

            An agency action is arbitrary and capricious if it relies on improper factors, fails to consider an important aspect of the problem, offers an explanation that runs counter to the evidence, or is "so implausible that it could not be explained as a difference in view or the result of the agency's expertise."  Citizens Advocating Responsible Dev. v. Kandiyohi County Bd. of Comm'rs, 713 N.W.2d 817, 832 (Minn. 2006).

            Woodlyn Court's argument that the $10,000 administrative penalty was arbitrary and capricious has no merit.        First, contrary to Woodlyn Court's claims, the department convened a penalty-calculation forum and filled out the penalty-calculation worksheet.  Thus, the department followed the proper procedures for imposing the penalty.  Second, Woodlyn Court incorrectly claims that it was not a repeat offender, it only violated a single regulation, and it had not been previously advised of its need to change its sewage-disposal system.  Woodlyn Court was repeatedly warned about its violations and failed to remedy the situation after being given ample time.  Furthermore, even if these claims were correct, the department's penalty would still be permissible under the guidelines.  The penalty guidelines permit a $10,000 penalty based on the seriousness of the offense alone.  Therefore, the $10,000 administrative penalty was not arbitrary and capricious.

III

            Woodlyn Court argues that Minn. R. 4630.0800 does not apply to it because it is a manufactured-home park, not a mobile-home park.  The interpretation of an administrative rule involves a question of law, which we review de novo.  Benedictine Health Ctr., 728 N.W.2d at 503.  If the meaning of a regulation is unambiguous, we will apply its plain meaning.  See Citizens Advocating Responsible Dev., 713 N.W.2d at 827 (stating that courts cannot ignore regulation's plain meaning by deferring to agency's contrary interpretation).  If a regulation is ambiguous, we will defer to an agency's reasonable interpretation of the rule.  St. Otto's Home v. Minn. Dep't of Human Servs., 437 N.W.2d 35, 40 (Minn. 1989).

            A "manufactured home" is defined as a transportable structure "designed to be used as a dwelling with or without a permanent foundation."  Minn. Stat. § 327.31, subd. 6 (2006) (emphasis added).  In 1982, the term "mobile home" was replaced by "manufactured home" in the statute giving the department the authority to issue Minn. R. 4630.0800.  See 1982 Minn. Laws, ch. 526, art. 3, § 3.  But "mobile home" had a different definition.  A "mobile home" was defined as a transportable dwelling "having no foundation other than wheels, jacks or skirtings."  Minn. Stat. § 327.14, subd. 2 (1980).

            In this case, Woodlyn Court's homes are all placed on permanent block foundations.  Therefore, Woodlyn Court qualifies as a "manufactured-home park" under the current statutory definition.  But it would not have qualified as a "mobile-home park" under the previous statutory definition.

            The current rule is essentially identical to the rule the department had before the statutory changes in 1982.  Minn. Reg. MHD 187(g) (1974).  Before the changes in 1982, the statute only provided the power to regulate mobile-home parks and the Minnesota Department of Health apparently would not have been able to apply the rule to Woodlyn Court.  Under the current version of Minn. Stat. § 327.20 (2005), the department certainly has the power to regulate manufactured-home parks such as Woodlyn Court.  The question is whether the department has actually exercised that power.

            We conclude that revocation of Woodlyn Court's license was a proper use of the department's power.  First, we defer to an agency's reasonable interpretation of its rule if the language of the rule is unclear.  St. Otto's Home, 437 N.W.2d at 40.  The department has reasonably interpreted Minn. R. 4630.0800 to apply to Woodlyn Court.  Second, the department has authorityindependent of Minn. R. 4630.0800to regulate sewage systems at manufactured-home parks and to impose the administrative penalties.  See Minn. Stat. §§ 327.20, subd. 1(2) (imposing by statute same sewage-system requirements), .35, subd. 1 (2005) (providing power to impose administrative penalties).  Therefore, the department properly exercised its authority when it revoked Woodlyn Court's license and imposed the administrative penalty.

            Affirmed.