Opinion
No. 07A-01-003 JRS.
Date Submitted: August 13, 2007.
Date Decided: November 5, 2007.
Upon Appeal from a decision of the Division of Long-Term Care.
AFFIRMED.
This 5th day of November 2007, upon consideration of the appeal of Carelink Community Support Services ("Carelink"), from the decision of the Division of Long Term Care Resident's Protection (the "Division") imposing a $1,250 per day monetary penalty upon Carelink, it appears to the Court that:
See Docket Item ("D.I.) 3, Division of Long-Term Care Resident's Protection decision (the "Division), at 1 (Dec. 18, 2006).
1. Debra Rice ("Ms. Rice") is a 34 year-old woman with cerebral palsy. She was a resident at Pioneer House, a state-licensed assisted living facility operated by Carelink, when the events giving rise to the regulatory investigation at issue here first arose.
2. On May 30, 2006, Ms. Rice received a letter from Carelink informing her that she was being discharged from Pioneer House due to repeated hospitalizations that resulted from a reoccurring unstable medical problem. According to Carelink's letter, Ms. Rice was hospitalized five times in 2004, twelve times in 2005, and eight times from January to April in 2006. Carelink justified its discharge decision by citing to § 63.409C of the Delaware Regulations for Assisted Living Facilities, which states: "An assisted living facility shall not admit, provide services to, or permit the provision of services to individuals who, as established by the resident assessment: Require monitoring of a chronic medical condition that is not essentially stabilized through available medications and treatments." The letter went on to explain that Ms. Rice would have sixty days to make other living arrangements, but could stay as long as necessary until such arrangements were made.
D.I. 9, at Ex. 1.
3. Ms. Rice was admitted to Christiana Hospital on June 20, 2006 and was discharged later that day back into the care of Pioneer House. The following day, June 21st, Ms. Rice was admitted to St. Francis Hospital. On June 26, 2006, St. Francis Hospital attempted to discharge Ms. Rice and return her to Pioneer House. St. Francis discovered, however, that Pioneer House had officially discharged Ms. Rice on June 22, 2006 and was refusing to allow her to return. With nowhere else to go, Ms. Rice was placed in The Arbors, a skilled nursing home facility.
Appellant's brief states that St. Francis Hospital unilaterally made the decision to send Ms. Rice to a nursing home facility. The letter from Carelink dated June 26, 2006, however, indicates that Ms. Rice was discharged from Pioneer House on June 22, 2006, and was not allowed to return to Pioneer House upon her release from St. Francis.
4. After learning of Ms. Rice's discharge, Carol Ellis ("Ms. Ellis"), director of the Division sent a compliance nurse, Pat Alt ("Ms. Alt"), to determine whether a medical basis existed for the discharge. Ms. Alt performed a nursing assessment on Ms. Rice and concluded that there were no medical grounds for the discharge. Specifically, she determined that Ms. Rice's medical condition was the same at the time of her assessment as it had been throughout Ms. Rice's long residency at Pioneer House. Ms. Alt also concluded that Pioneer House continued to be an appropriate placement for Ms. Rice.
5. After Ms. Alt's assessment, Ms. Ellis began a series of communications with Eileen Joseph ("Ms. Joseph"), President and CEO of Carelink, meant to secure Ms. Rice's return to Pioneer House. On August 17, 2006, Ms. Joseph sent a letter to Ms. Ellis reiterating Carelink's position that Ms. Rice was discharged for medical reasons. Ms. Joseph also explained in the letter that the facility would need a review of Ms. Rice's current medical condition and an independent medical evaluation to determine Ms. Rice's eligibility for return to Pioneer House.
6. Ms. Ellis responded in a letter dated August 18, 2006[,] informing Ms. Joseph that the Division was imposing civil money penalties on Carelink, in the amount of $1,250 per day, for its failure to allow Ms. Rice to return to Pioneer House. As support, Ms. Ellis cited to 16 Del. C. § 1109(e), which states "Each day of a continuing violation constitutes a separate violation . . . No penalty for a nonhealth and safety violation shall exceed $1,250 per day beyond the initial day." The letter also explained that an assessment conducted by the compliance nurse revealed that Pioneer House was still an appropriate living arrangement for Ms. Rice because her medical condition was unchanged. Ms. Ellis concluded the letter by informing Ms. Joseph of her opportunity to request an informal dispute resolution process regarding the imposition of the penalty.
7. Ms. Joseph and Ms. Ellis eventually spoke about Ms. Rice's return to Pioneer House and the additional measures that would be needed to address her health issues. Ms. Ellis explained that the Division did not believe Ms. Rice needed a new care plan, but Ms. Joseph disagreed. Ms. Joseph stated that because Ms. Rice had not resided at Pioneer House since June 22, 2006, she felt it was unethical for the facility to re-admit a resident who had received treatment for a serious medical condition without having a revised care plan. In response, Ms. Ellis reiterated that Ms. Rice did not need a new care plan to return to Pioneer House.
8. In the meantime, Ms. Rice had appealed her discharge from Pioneer House. A hearing on the appeal was held on September 8, 2006. The issues addressed at that hearing were: (1) whether, according to the requirements of 16 Del. C. § 1121(18), the facility's discharge was necessary for Ms. Rice's welfare, or the welfare of other residents; (2) whether the facility's refusal to allow Ms. Rice to return to Pioneer House on June 26, 2006 violated 16 Del. C. § 1121(18) because the facility's discharge was not necessary due to medical reasons and because the facility did not inform Ms. Rice about her right to request a hearing to contest the discharge; and (3) whether 16 Del. C. § 3225 provides a basis for discharge under Delaware law and, if so, whether Pioneer House met the statutory requirements for discharge.
D.I 3, Division's Sept. 20, 2006 decision, at 1.
9. The hearing officer released his 17 page (single spaced) decision on September 20, 2006. With respect to the first issue, the hearing officer concluded that 16 Del. C. § 1121(18) did not support Carelink's decision to discharge Ms. Rice. The hearing officer explained that while Ms. Rice's condition did require periodic hospitalizations, that did not change the way in which the facility and her treating doctors cared for her. Regarding the second issue, the hearing officer determined that Carelink violated 16 Del. C. § 1121(18) because the statute requires that residents be given thirty days notice prior to discharge. The hearing officer also pointed out that although the May 30, 2006 letter from Carelink stated Ms. Rice would have sixty days to vacate, she was discharged on June 22, 2006, eight days shy of the required thirty days. Finally, as to the third issue, the hearing officer stated that 16 Del. C. § 3225 did not provide a basis for Pioneer House to discharge Ms. Rice because the statute was not intended by the General Assembly to serve as a basis for discharging residents from long term care facilities. That statute alone did not establish grounds for Ms. Rice's discharge.
D.I 3, Division's Sept. 20, 2006 decision, 14-16.
10. By letter dated September 22, 2006, Ms. Joseph exercised the facility's right to challenge the imposition of the penalty at an informal dispute resolution proceeding. She argued that Pioneer House's discharge of Ms. Rice was supported by 16 Del. C. § 1121(18), which gives a facility authority to discharge a resident for medical reasons. Thereafter, representatives from Carelink, including Ms. Joseph, met with the Division to discuss Ms. Rice's discharge and her stay at The Arbors. After the discussion concluded, Ms. Joseph asked the division to rescind the penalties, but the Division declined the request.
11. At some point after Carelink made the request to rescind the penalties, Carelink filed a license renewal application with the Division. Ms. Ellis informed Ms. Joseph in a letter dated October 6, 2006 that before a license renewal would issue, Carelink would have to pay whatever penalty had accrued as a result of the violation in addition to the annual licensing fee. The letter also addressed Ms. Joseph's request for an informal dispute resolution on the amount of the penalties. Ms. Ellis emphasized that there would be no further discussion regarding the merits of Ms. Rice's discharge at the informal resolution proceedings on the penalties. Ms. Ellis also pointed out that the September 20, 2006 decision of the hearing officer was binding, not advisory. The record does not reflect any further response from Ms. Joseph regarding Ms. Ellis' October 6th letter.
12. An administrative hearing regarding the Division's imposition of civil money penalties on Carelink occurred on November 22, 2006 before the same hearing officer that issued the September 20, 2006 decision on Ms. Rice's discharge. During the course of the hearing, the Division sought to introduce as evidence the September 20, 2006 decision regarding Ms. Rice's discharge. Carelink objected to the introduction of the decision on the ground that the Division was attempting unfairly to exploit the discharge issue. The Division responded that it was not attempting to reargue the merits of Ms. Rice's discharge, but instead was offering the September 20,2006 decision as a basis to justify the imposition and amount of the civil monetary penalty. The Division also pointed out that collateral estoppel prevented a reargument of the discharge issue. Carelink disagreed that collateral estoppel applied and argued that the imposition of the penalties was a separate matter from Ms. Rice's discharge. The hearing officer took the matter under advisement and asked for additional briefing from both parties by December 15, 2006. The Division submitted its brief on December 12, 2006, but Carelink never submitted any supplemental briefing on the matter.
The Court gathers that this administrative hearing was the "informal dispute resolution process" to which Ms. Ellis referred in her August 18, 2006 letter.
D.I. 3, Hr'g Tr. at 51.
D.I. 3, Hr'g Tr. at 52.
D.I. 3, Hr'g Tr. at 52-53.
D.I. 3, Hr'g Tr. at 56.
D.I 3, Division's Dec. 18, 2006 decision, at 8.
13. The evidence presented at the hearing consisted mainly of testimony from Ms. Ellis and Ms. Joseph. The Division also submitted letters into evidence that memorialized the communications between Carelink and the Division. Ms. Ellis testified about the factors used in determining whether to impose a penalty and how the Division calculated the amount of $1250 a day for the violation. Specifically, in response to questioning about how t he Division came up with the figure of $1,250 per day, Ms. Ellis responded that in circumstances where a facility refuses to comply with the law, the Division will impose the maximum penalty allowed by the statute in hopes the facility will promptly comply to prevent accumulation of the penalties.
14. Ms. Joseph also testified at the hearing and again maintained that Carelink's discharge of Ms. Rice was proper given her reoccurring medical condition. She maintained that Carelink's requests for a new care plan and medical releases were intended as safeguards to ensure Ms. Rice received the proper level of care. Ms. Joseph did admit on cross-examination that she had read the September 20, 2006 decision requiring that Ms. Rice be readmitted to Pioneer House, but stated that she did not agree with the hearing officer's interpretation of 16 Del. C. § 1121(18).
D.I. 3, Hr'g Tr. at 37.
15. The hearing officer issued his decision regarding the imposition of the penalty on December 18, 2006. The hearing officer applied the four part test set out in Higgins v. Walls to determine whether collateral estoppel applied to the underlying discharge issues. Specifically, Walls held that collateral estoppel will apply when:
901 A.2d 122 (Del.Super.Ct. 2005).
(1) the issue previously decided is identical to the issue at bar; (2) the prior issue was finally adjudicated on the merits; (3) the party against whom the doctrine was invoked was a party or in privity with a party to the prior adjudication; and (4) the party against whom the doctrine is raised had a full and fair opportunity to litigate the issue in a prior action.
901 A.2d 122, 137-138 (Del.Super.Ct. 2005).
901 A.2d 122, 137-138 (Del.Super.Ct. 2005).
After an analysis of the first factor, the hearing officer found that Carelink's violation of 16 Del. C. § 1121(18) for improperly discharging Ms. Rice and the resulting civil money penalties implicated the same factual issues. With regard to the second factor, the hearing officer determined that Ms. Rice's discharge was finally adjudicated on the merits because he had issued a final, binding decision on the matter. Additionally, the hearing officer stated that the party against whom the doctrine is being invoked, Carelink, was a party in the previous matter. Finally, the hearing officer relied on his own observations of the previous hearing to determine that Carelink had a full and fair opportunity to litigate the matter. After considering these elements, the hearing officer found that the September 20, 2006 decision on the discharge issue was admissible under the doctrine of collateral estoppel as evidence that the discharge was improper.
16. The hearing officer then turned to the propriety of the penalty and found that the penalties were proper under the six factor test set forth in 16 Del. C. § 1109(b)(1)-(6). The pertinent provisions of § 1109 provide:
(b) In determining the amount of the penalty to be assessed under subsection (a) of this section, the Department shall consider:
(1) the seriousness of the violation, including the nature, circumstances, extent, and gravity of the violation and the hazard or potential hazards created by the violation to the health or safety of a resident or residents;
(2) the history of violations committed by the person or the person's affiliate(s), employee(s), or controlling person(s);
(3) the efforts made by the facility to correct the violation(s);
(4) the culpability of the person or persons who committed the violation(s);
(5) A misrepresentation made by the Department or to another person regarding:
a.) the quality of services provided by the facility;
b.) the compliance history of the facility; or
c.) the identity of an owner or controlling person of the facility;
(6) Any other matter that affects the health, safety, or welfare of a resident or residents.
The hearing officer found that Carelink's actions amounted to a serious violation because "anytime an assisted living resident's patients [sic] rights are violated, it constitutes a serious matter because the effect is to erode the dignity and lifestyle of a vulnerable member of our community."
D.I 3, Division's Dec. 18, 2006 decision, at 9.
17. A large section of the decision focused specifically on the fifth and final factor, the extent to which the facility misrepresented facts relating to the facility or the care rendered to the resident. In this regard, Ms. Ellis testified that throughout her interactions with the facility she believed that Carelink never intended to allow Ms. Rice to return to Pioneer House. She further testified that Carelink's continued insistence on a new care plan and medical releases were only roadblocks to prevent Ms. Rice's return. The hearing officer agreed. He concluded that Carelink's ongoing statements that Ms. Rice might be permitted in the future to return to Pioneer House were false, material and relied upon by Ms. Rice and the Division.
18. On appeal to this Court, Carelink challenges the sufficiency of the evidence supporting the hearing officer's decision to uphold the civil money penalty. Specifically, Carelink argues that: (1) the hearing officer committed legal error when he determined that Carelink made misrepresentations; (2) the charge that Carelink violated 16 Del. C. § 1109(b)(4) is without merit; (3) the hearing officer improperly failed to consider Carelink's efforts to correct the deficiency in accordance with 16 Del. C. 1109(b)(4); and (4) the penalty upheld by the hearing officer was arbitrary, vindictive and without factual basis. The Division responds that the hearing officer's decision is grounded in sound legal analysis and supported by substantial factual evidence.
Carelink has not appealed the hearing officer's September 20, 2006 decision with respect to the propriety of Carelink's decision to discharge Ms. Rice.
Carelink asserted a fifth argument in the summary of the argument section of the brief, that "the hearing officer, by virtue of being employed by the agency for whom he is hearing the Administrative Hearing, has a conflict of interest." This argument, however, was not developed in the brief and will therefore not be addressed by the Court. Appellant's Br. at 1.
19. This Court repeatedly has emphasized the limited extent of its appellate review of administrative determinations. The Court's review is confined to ensuring that the hearing officer made no errors of law and determining whether "substantial evidence" supports the hearing officer's factual findings. Questions of law that arise from the hearing officer's decision are subject to de novo review, pursuant to Superior Court Civil Rule 3(c), which requires that the Court must determine whether the hearing officer erred in formulating or applying legal precepts. Substantial evidence means "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." It is "more than a scintilla but less than a preponderance of the evidence." The "substantial evidence" standard of review contemplates a significant degree of deference to the hearing officer's factual conclusions and its application of those conclusions to the appropriate legal standards. In its review, the Court will consider the record in the light most favorable to the prevailing party below.
Canyon Const. v. Williams, 2003 WL 1387137, at *1 (Del.Super.Ct. Mar. 5, 2003); Hall v. Rollins Leasing, 1996 WL 659476, at *2-3 (Del.Super.Ct. Oct. 4, 1996).
See Anchor Motor Freight v. Ciabattoni, 716 A.2d 154, 156 (Del. 1998); Hudson v. State Farm Mut. Ins. Co., 569 A.2d 1168, 1170 (Del. 1990).
Breeding v. Contractors-One, Inc., 549 A.2d 1102, 1104 (Del. 1998).
Id.
Hall, 1996 WL 659476, at *2 (citing DEL. CODE ANN. tit. 29, § 10142(d)).
General Motors Corp. v. Guy, 1991 WL 190491, at *3 (Del.Super.Ct. Aug. 16, 1991).
A. The Hearing Officer Correctly Applied The Applicable Statute.
20. In reviewing the hearing officer's decision for any errors of law, the Court is bound by the language of 16 Del. C. § 1109(b)(1-6), which gives the Division authority to impose a civil monetary penalty in the event of a violation. Delaware courts will not engage in statutory construction if the statute is not ambiguous and the meaning of the statute is clearly ascertainable. When applying a statute that is clear on its face, "the Court's role is [ ] limited to an application of the literal meaning of the words." A statute is deemed ambiguous only if it could reasonably be interpreted in more than one way or if the literal interpretation would lead to an unreasonable result not intended by the legislature.
Newtowne Village Service Corp. v. Newtowne Road Development Co., 772 A.2d 172, 175 (Del.Super.Ct. 2001).
Coastal Barge Corp. v. Coastal Zone Industrial Control Bd., 492 A.2d 1242, 1246 (Del. 1985).
Id.
21. The statute governing the Division's imposition of civil monetary penalties is clear on its face and neither side has challenged the statute or highlighted any ambiguities. Given this determination, the hearing officer's decision contained no errors of law because he applied the statute in accordance with its plain meaning. The statute gives the Division substantial discretion in assessing penalties upon a finding of violation and in determining the amount of such penalties. The statute simply requires that the Division "consider" the six factors enumerated therein and that the penalty not exceed $1,250 per day beyond the initial day. The statute prescribes no further analysis. In his decision, the hearing officer clearly "considered" these six factors and, in doing so, followed the plain meaning of the statutory provisions. Accordingly, the Court will not disturb the legal grounds upon which the hearing officer based his decision.
The Court was unable to uncover any case law interpreting the statute in the course of its research, and the parties have cited none.
B. The Hearing Officer's Decision Is Supported By Substantial Evidence.
22. Moving on to the second step of the analysis, whether the hearing officer's findings were supported by substantial evidence, it is important to note that direct testimony from Ms. Ellis and Ms. Joseph comprised the majority of the evidence presented at the hearing. Testimonial evidence necessarily implicates an inquiry by the factfinder into the credibility of the witnesses testifying before him. The hearing officer is in the best position to make that inquiry. Credibility determinations made by a hearing officer will not be disturbed on appeal unless the Court determines that the hearing officer abused his discretion. On appeal, the Court will no t independently "weigh the evidence, determine questions of credibility, and make its own factual findings and conclusions."
Simmons v. Delaware State Hosp., 660 A.2d 384. 388 (Del. 1994)
Johnson v. Chrysler Corp., 213 A.2d 64, 66 (Del.Super. 1965).
23. To support its claim that Carelink misrepresented material facts under section 1109, the Division was obliged to prove that: (1) Carelink stated a fact that was material to the transaction; (2) that fact was state falsely; (3) with knowledge of its falsity or recklessness as to whether it is true or false; and (4) with the intent to mislead another who justifiably relies on the misrepresentation. Misrepresentations do not necessarily result from overt acts, but may also arise out of "deliberate concealment of material facts, or by silence in the face of a duty to speak."
Antamian v. Nemours Health Clinic, 2001 WL 1474819 *1 (Del.Super.Ct. Nov. 14, 2001).
Stephenson v. Capano Development, Inc., 462 A.2d 1069, 1074 (Del.Super.Ct. 1983).
24. Ms. Ellis' testimony, in addition to the correspondence between Carelink and the Division, provided the hearing officer with substantial evidence upon which to conclude that Carelink made misrepresentations. During direct examination, Ms. Ellis testified that Carelink repeatedly implied that Ms. Rice could return to Pioneer House when either a new care plan was drafted or a medical release was signed. She further testified that Carelink, through its ongoing delay tactics, demonstrated its true intention of obstructing Ms. Rice's return to the facility (notwithstanding her medical eligibility to return) at all costs. The fact that Carelink continued to refuse to take Ms. Rice back even after the hearing officer's September 20, 2006 decision ordering it to do so, and after declining to seek further review of this decision (by appeal or otherwise) further supports the conclusion that Carelink's promises to work toward Ms. Rice's return were hollow and misleading. The hearing officer determined that Ms. Ellis' testimony in this regard was credible, and Carelink has offered no persuasive basis upon which the Court could conclude that the hearing officer abused his discretion. Because the original violation that sparked the imposition of the penalty resulted from Ms. Rice's unlawful discharge from Pioneer House, and Carelink's misrepresentations pertained to Ms. Rice's return to Pioneer House, the hearing officer correctly found that the misrepresentations were material to the underlying issue before him.
To reiterate, the Court need not find that the hearing officer's decision in this regard is supported by a preponderance of the evidence; it is sufficient to discern that more than a scintilla of evidence exists in order to justify a finding that the hearing officer's decision on the misrepresentation claim is supported by substantial evidence. See Breeding, 549 A.2d at 1104.
Hearing Transcript at 10-11
D.I. 3, S-6, Letter from Eileen Joseph, President and CEO, Carelink, to Carol Ellis, Director, Division of Long Term Care Residents Protection (September 22, 2006). Here again, the Court notes that Carelink never took an appeal of the September 20 decision.
B. Substantial Evidence Supports The Finding That Carelink Is The Culpable Party.
25. The Court is also satisfied that the hearing officer had an adequate factual foundation upon which to consider the appropriate amount of the penalty assessed by the Division. Ms. Ellis testified at length regarding the degree of Carelink's culpability in committing the violation. During cross examination, Ms. Ellis testified that throughout her involvement in the case, Carelink possessed the means and opportunity to return Ms. Rice to Pioneer House and to come into compliance with the law. It simply chose not to allow her to return. Contrary to Carelink's argument, the hearing officer's September 20, 2006 decision requiring Carelink to accept Ms. Rice in no way limited or qualified Carelink's culpability.
Hearing Transcript at 22.
Indeed, Carelink's failure to comply with the decision, or properly appeal it, framed the legal basis for the imposition of the penalty in the first instance. The ongoing accrual of the penalty was a direct result of Carelink's ongoing recalcitrance. Carelink cannot blame Ms. Rice's failure to return to Pioneer House on the lack of a new care plan or not having medical approval because these were self-imposed restrictions that the Division had previously determined were unnecessary.
Id.; D.I. 3. Hearing Officer's Dec. 18, 2006 Decision, at 10.
26. The hearing officer also properly considered Carelink's efforts to correct the deficiency and accurately determined that Carelink had not made any serious effort to return Ms. Rice to Pioneer House. In this regard, Carelink misses the mark when it argues that the Division could not point to anything the facility could have undertaken to correct the deficiency. The Division made one suggestion that was repeatedly ignored by Carelink: allow Ms. Rice to return to Pioneer House. Carelink's insistence on a new care plan and medical releases were not genuine efforts to facilitate Ms. Rice's return and remedy the violation because the Division repeatedly told Carelink that such steps were unnecessary. The efforts Carelink did make only hindered Ms. Rice's return to Pioneer House.
C. The Penalty Upheld by the Hearing Officer was not Arbitrary or Vindictive.
27. There was sufficient evidence in the record to support the penalty imposed by the Division. To reiterate, the statute only requires that the Division "consider" the six factors in determining the amount of penalty, and specifies that the penalty may not exceed the $1,250 per day ceiling. In this case, the Division considered all of the factors and found that Carelink's conduct specifically implicated three of them. The hearing officer's decision was not arbitrary because he relied upon and specifically referenced the evidence presented at the hearing, mainly the testimony of Ms. Ellis and Ms. Joseph, and found Ms. Ellis's testimony to be more credible. When asked how she calculated the amount of $1,250 per day for the penalty, Ms. Ellis responded that the Division will impose the maximum amount when a facility improperly denies care to a resident in order to coerce prompt compliance. Ms. Ellis' testimony was supported by the exhibits submitted into evidence by the Division that documented the correspondence between Carelink and the Division. Carelink did not submit any evidence other than Ms. Joseph's testimony.
28. Based on the foregoing, the decision of the hearing officer upholding the imposition of the $1,250 per day civil monetary penalty upon Carelink is
AFFIRMED.
IT IS SO ORDERED.