STATE ex rel. OKLA. STATE DEPT. OF HEALTH v. ROBERTSONAnnotate this Case
STATE ex rel. OKLA. STATE DEPT. OF HEALTH v. ROBERTSON
2006 OK 99
152 P.3d 875
Case Number: 102241
THE SUPREME COURT OF THE STATE OF OKLAHOMA
STATE OF OKLAHOMA, ex rel., The OKLAHOMA STATE DEPARTMENT OF HEALTH, Petitioner,
THE HONORABLE VICKI L. ROBERTSON, Judge of the District Court of Oklahoma County, Seventh Judicial District, Respondent,
PATRICK G. WALTERS, CPA, Real Party in Interest.
ON APPEAL FROM THE DISTRICT COURT IN OKLAHOMA COUNTY, OKLAHOMA,
THE HONORABLE VICKI L. ROBERTSON, DISTRICT JUDGE
¶0 This case is an appeal from the District Court of Oklahoma County, where the trial judge granted a writ of prohibition, enjoining the Department of Health (the "Department") from maintaining an administrative action against Patrick G. Walters ("Walters") for alleged violation of provisions of the Nursing Home Care Act,
Carl Hughes, Hughes & Goodwin, Oklahoma City, Oklahoma, for real party in interest, Patrick G. Walters, CPA.
N. Kay Bridger-Riley, P. Craig Bailey, Bridger-Riley & Associates, P.C., Tulsa, Oklahoma, for real party in interest, Patrick G. Walters, CPA.
Gary W. Gardenhire, General Counsel, Nick E. Slaymaker, Deputy General Counsel, Charles L. Broadway, Assistant General Counsel, Office of the General Counsel, Oklahoma State Department of Health, Oklahoma City, Oklahoma, for petitioner, State of Oklahoma, ex rel., the Oklahoma State Department of Health.
¶1 Two issues are raised in this appeal: (1) Is the Nursing Home Care Act ("NHCA"),
I. FACTS AND PROCEDURE
¶2 In 2000, the Department of Health (the "Department") investigated a nursing home management company, Medical Management Group, Inc. ("MMGI"), regarding allegations the owner of the company, E.W. Jiles ("Jiles"), had bribed former Deputy Commissioner of Health, Brent VanMeter ("VanMeter"). The Department learned of a conspiracy between VanMeter and Jiles wherein VanMeter appointed Jiles' company, MMGI, and Christopher Wakely as "temporary managers" of certain nursing homes. Through a federal investigation the Department learned that Jiles, despite alleged attempts to conceal his identity as owner of MMGI, misdirected funds derived from the operation of those nursing homes for his own personal use. Subsequently, the Department ordered the termination of MMGI and Wakely as temporary managers and requested them to provide a full accounting of the funds derived from the operation of the subject homes. The attorney for the parties under investigation hired Walters, a certified public accountant, to perform the requested accounting. Walters provided the accounting to the Department in June 2000.
¶3 On March 3, 2005, nearly five years after Walters provided the accounting, the Department commenced an administrative proceeding against Walters, seeking a civil penalty in excess of $5,000,000.00, for alleged violations of
¶4 On March 16, 2005, Walters filed a petition in district court seeking a writ to prohibit the Department from proceeding with its pending administrative action. Walters argued the Department was without authority to proceed against him as the NHCA did not apply to him and that, even if it did, the Department could not enforce administrative penalties against him under § 1-1916(A), a criminal statute which provides for violations to be prosecuted by the district attorney or Attorney General. The Department moved to dismiss the petition, countering that it could seek penalties against anyone found to have violated the provisions of the NHCA. It is undisputed that Walters is not a licensee, owner, or operator of a nursing home facility as defined by
II. APPLICATION OF THE NHCA TO WALTERS
¶5 In this matter of first impression, we must determine whether the Department's regulatory authority provided by the NHCA extends to the entire population, as urged by the Department, or is, instead, limited to licensees, owners and facilities. The interpretation to be given to a statute is a question of law, subject to our plenary, independent and non-deferential examination. State ex rel. Dept of Transportation v. Little,
¶6 Legislative intent governs statutory interpretation and this intent is generally ascertained from a statute's plain language. The Pentagon Academy, Inc. v. Independent Sch. Dist. No. 1 of Tulsa County,
¶7 In the interpretation of statutes, we do not limit our consideration to a single word or phrase. Instead, we construe together the various provisions of relevant enactments, in light of their underlying general purpose and objective, to ascertain legislative intent. World Publishing Co. v. Miller,
¶8 The purpose of the NHCA is to provide a "comprehensive system of licensure and certification for facilities" in order to, primarily, protect "the health, welfare and safety" of its residents.
¶9 In its administrative petition, the Department contended Walters provided false and misleading information to the Department and was part of the conspiracy to conceal Jiles' involvement in the VanMeter bribe, all violations of
¶10 In response, Walters argues the Department had no authority under the NHCA to impose an administrative civil monetary penalty against him as an accountant, and independent contractor, for a nursing home management company. Walters further responds that even if he could be liable for a violation of § 1-1916, only a district attorney or the Attorney General can prosecute such a violation.
¶11 The Department's statutory construction argument relies strictly on the use of the term "any" in § 1-1916.1 which provides that any person who has been determined by the Department to have violated any provision of the NHCA may be liable for an administrative penalty for each day the violation continues.
¶12 Indeed, a review of several other provisions of the NHCA reveals that the Legislature intended the NHCA to apply only to licensees (and applicants for licenses), owners and specifically-defined facilities. See, e.g.,
¶13 We have previously recognized that the NHCA "is not a model of clarity and precision". Morgan v. Galilean Health Enter., Inc.,
In our view, the "profit or lose" language in the second sentence does not extend liability beyond the specific person or entity which has responsibility for providing the relevant services. We believe the Legislature intended the language to be construed narrowly so that it would not extend liability to other persons and entities which have some sort of legal interest in the facility but are not the "owner". (Emphasis added).
¶14 As we read the sections of the NHCA, it is clear the Legislature intended the application of the NHCA to cover licensees, owners and facilities, and not unsuspecting third parties, such as Walters. The Department is without statutory authority to sanction persons other than those specifically targeted by the NHCA and defined thereunder. As such, the trial court was correct in issuing the writ of prohibition enjoining the Department from further proceeding against Walters.
III. EXHAUSTION OF ADMINISTRATIVE REMEDIES
¶15 The Department asserts Walters has failed to exhaust his administrative remedies and that the trial court erred in denying its motion to dismiss. Generally, a party is required to pursue administrative remedies, when relief is available, before resorting to the courts. Waste Connection, Inc. v. Oklahoma Department of Environmental Quality,
¶16 A recognized exception to the exhaustion doctrine is "where a challenge is made to the power of the agency to act at all under the statutory scheme it is charged with administering." Ledbetter v. Oklahoma Alcoholic Beverage Laws Enforcement Comm'n,
¶17 The Department, as the chosen enforcer of the provisions of the NHCA, alleges it can bring an administrative action against "any" person it believes to have violated the provisions of the NHCA.
ALL JUSTICES CONCUR
1 63 O.S.2001, § 1-1916 provides as follows:
A. No person shall:
1. Intentionally fail to correct or interfere with the correction of a violation within the time specified on the notice or approved plan of correction under this act as the maximum period given for correction, unless an extension is granted and the corrections are made before expiration of extension;
2. Intentionally prevent, interfere with, or attempt to impede in any way the work of any duly authorized representative of the Department in the investigation and enforcement of this act;
3. Intentionally prevent or attempt to prevent any such representative from examining any relevant books or records in the conduct of official duties under this act;
4. Intentionally prevent or interfere with any such representative in the preserving of evidence of any violation of this act or the rules promulgated under this act;
5. Intentionally retaliate or discriminate against any resident or employee for contacting or providing information to any state official, or for initiating, participating in, or testifying in an action for any remedy authorized under this act;
6. Willfully file any false, incomplete or intentionally misleading information required to be filed under this act, or willfully fail or refuse to file any information; or
7. Open or operate a facility without a license.
B. A violation of this section is a misdemeanor.
C. The district attorney of the county in which the facility is located, or the Attorney General, may be requested by the Department to initiate prosecutions under this section.
2 Thus, the only NHCA section the Department claims Walters has violated is § 1-1916, which, on its face, provides a criminal penalty for its violation.
3 Because we find the NHCA inapplicable to Walters, we need not address whether the Department has the authority to administratively enforce penalties against Walters through the criminal provisions of § 1-1916.
4 The Departments seeks an administrative penalty against Walters in excess of $5,000,000.00. The penalty, which may be up to $3,000.00 per day, was apparently derived by multiplying $3,000.00 per day by the number of days that had passed since Walters first provided his accounting to the Department (nearly five years). Walters' first notice of alleged violation of the NHCA came with the Department's filing of the administrative petition.
5 63 O.S.2001, § 1-1916.1(C) provides, in pertinent part:
B. The amount of the penalty shall be assessed by the Department pursuant to the provisions of subsection A of the section, after notice and opportunity for hearing. Within ten (10) working days of the inspection documenting the violation, the facility may appeal this decision pursuant to Article II of the Administrative Procedures Act. In determining the amount of the penalty, the Department shall include, but not be limited to, consideration of the nature, circumstances and gravity of the violation, the repetitive nature of the violation at this facility or others operated by the same entity, the previous degree of difficulty in obtaining compliance with the rules, and, with respect to the person found to have committed the violation, the degree of culpability, the facility's financial condition and substantial show of good faith in attempting to achieve compliance with the provisions of the Nursing Home Care Act.
C. Any license holder may elect to surrender his license in lieu of said fine but shall be forever barred from obtaining a reissuance of the license or any other license issued pursuant to the Nursing Home Care Act.