Ala. Dep't of Mental Health v. Nobles Grp. Homes, Inc.

343 So.3d 1140

ALABAMA DEPARTMENT OF MENTAL HEALTH

v.NOBLES GROUP HOMES, INC.

2200138

Court of Civil Appeals of Alabama.

June 25, 2021

Thomas B. Klinner and Edward C. Hixon, Department of Mental Health, Montgomery, for appellant.

Alvin L. (Peck) Fox, Jr., of The Fox Law Firm, LLC, Montgomery; and Raymond L. Bell, Jr., of Maynard, Cooper & Gale, PC, Mobile for appellee.

FRIDY, Judge.

This case arises under the Alabama Administrative Procedure Act ("the AAPA"), § 41-22-1 et seq., Ala. Code 1975. The Alabama Department of Mental Health ("the Department") appeals from a judgment of the Montgomery Circuit Court ("the circuit court") reversing the Department's order revoking the authority of Nobles Group Homes, Inc. ("Nobles"), to provide residential intellectual-disability services in Alabama. We affirm.

Background

The Department is an agency of the State of Alabama, § 22-50-2, Ala. Code 1975, tasked by statute with providing mental-health services to the people of Alabama. § 22-50-9, Ala. Code 1975. In addition, the Department is statutorily authorized to certify for licensure mental-health facilities, to create minimum standards for their operation, and to inspect such facilities and certify their compliance with those standards. § 22-50-11(11) - (13), Ala. Code 1975. No person or entity may operate a mental-health facility without being certified by the Department. § 22-50-17(a), Ala. Code 1975. Relevant to the present matter, the Department is "authorized and directed to provide hearings for anyone claiming to be damaged by decisions of its employees or agents, and it may delegate the holdings of such hearings to administrative hearing officers." 22-50-11(15).

Under the Department's certification program, the Department can issue a certificate for the operation of a mental-health facility for up to two years. Ala. Admin. Code (Dep't of Mental Health), r. 580-3-23-.07(2). If a facility does not meet the Department's certification standards, the Department can issue to the operator a provisional certification for no more than sixty days. Id. An operator receiving a provisional certificate is required to submit a plan of action to the Department for correcting the problems identified in the facility inspection. Ala. Admin. Code (Dep't of Mental Health), r. 580-3-23-.13. At the times relevant to this appeal, the Department utilized a point system for inspecting mental-health facilities when making certification determinations.

If an operator receives a provisional certification at least twice in a twelve-month period, a recommendation to decertify the provider is made to the Department's commissioner ("the commissioner"). Ala. Admin. Code (Dep't of Mental Health), r. 580-3-23-.16(1). The operator then can seek an administrative hearing regarding the recommendation, which hearing is to be conducted in accordance with the AAPA. Ala. Admin. Code(Dep't of Mental Health), rr. 580-3-23-.15, - .16. After the hearing, the commissioner renders a final determination, which the operator can then appeal to a circuit court under the AAPA.

Nobles, which has been in business since the mid-1990s, operates mental-health facilities in the Mobile area. In May 2015, following an evaluation by the Department, Nobles was recommended for decertification, and it sought an administrative hearing of that recommendation. After that hearing was held in March 2016, but before the commissioner issued a final decision, the Department and Nobles entered into a settlement agreement under which the Department permitted Nobles to submit a certification application without taking into consideration the Department's past reviews of Nobles's facilities. Nobles thereafter continued to operate its facilities, and the Department did not enforce its 2015 decertification determination.

In August 2017, personnel from the Department made a site visit to inspect Nobles's facilities. Based on the scores Nobles received from that visit, the Department granted Nobles only a provisional certification and required it to submit a plan of action to address the issues raised by the inspection. The Department conducted a follow-up site visit in January 2018, and the result of that inspection was the issuance of another provisional certification to Nobles and the requirement that it prepare another plan of action to address the problems the Department had identified. The Department thereafter approved the plan of action Nobles submitted.

In June 2018, the Department conducted another site visit to Nobles's facilities. The result of that inspection was another score indicating that Nobles had not met the Department's standards. The commissioner notified Nobles that the Department intended to decertify Nobles and that it had the right to seek an administrative hearing as to that proposed action. Nobles requested a hearing, which was held by a hearing officer over two days in January and February 2019. After the hearing, the hearing officer issued a proposed order decertifying Nobles, containing findings of fact and conclusions of law. In January 2020, the commissioner adopted that proposed order and decertified Nobles.

Nobles appealed from the Department's final determination and filed a petition seeking judicial review in the circuit court. See § 41-22-20(b), Ala. Code 1975. The Department answered Nobles's petition, and both Nobles and the Department presented oral and written arguments to the circuit court. On October 7, 2020, the circuit court entered a final judgment reversing the Department's decertification determination. The circuit court made a number of findings and, in its conclusions, gave multiple grounds for reversing the Department's determination. In pertinent part, the judgment provided:

"FINDINGS OF FACT

"....

"12. [Department] employees [Connie] Batiste and [Jimmy] Paulk both testified at the contested case hearing that follow-up site visits are properly intended to focus only upon the deficiencies cited in the site visit report resulting in the need for the follow-up. Despite this, the substantial evidence shows that follow-ups to Nobles went far beyond the deficiencies cited on the immediately earlier site visit report.

"13. Pursuant to Ala. Admin. Code § 580-3-23-.10(5), at the conclusion of a site visit, preliminary findings are given orally to the appropriate agency staff. Under § 580-3-23.10(6), ‘[a]n exit interview will be conducted upon the completion’ of the site visit to provide the entity ‘the opportunity to clarify or present evidence of compliance on issues being cited....’ Paulk testified that all findings were not reported, and attempted to draw a distinction between whether exit interviews were ‘mandated’ or ‘required'; he further made the assertion that he had been ‘told’ that exit reviews were only for new providers, despite the clear language of the regulation.

"14. It is without dispute that the calculations of the site visit scores were incorrectly performed by [Department] personnel. In fact, it is without dispute that [Department] witnesses could not agree as to by whom the scores were calculated, or by whom the scores are appropriately to be calculated.

"15. It was undisputed throughout the testimony of [Department] witnesses that there is a deficit in adequate training for staff charged with regulation of providers, including those who conduct site visits. Batiste, Paulk and Region III Director Kevin LaPorte all testified as to a lack of direct formal training. Despite the clear testimony regarding the lack of training for relevant [Department] employees, the Hearing Officer wrote that ‘[n]o evidence was submitted to substantiate [the] claim [of inadequate training].’ (Recommended Order, p. 31.) This was clear error. Not only was there testimony as set forth above about there being no training regarding the conduct of site visits, but the inability of [Department] personnel to accurately and properly calculate scores, or even to know where responsibility for that action lies, clearly establish a claim of inadequate training.

"16. The score resulting from a site visit is properly calculated based upon the number of deficiencies cited, based upon certain Factors. It is without dispute that it is the pattern and practice of Paulk to write the same deficiency up under multiple Factors resulting in a drastic reduction of the score for the provider. It is also without dispute that Batiste testified that it is not a good practice to cite the same deficiency multiple times under different factors, and that such action would have the effect of double punishing the provider by taking away multiple points for the same infraction.

"17. Although after resolution of the earlier decertification hearing, Nobles had been denied the opportunity to add new residents, Batiste testified that Nobles had been treated by [the Department] as if it had a ‘clean slate’ rather than a provision[al] certification following the resolution of the 2016 decertification hearing. Nobles was never notified of this fact. As a result, Nobles was deprived of the right to compete for new residents during that two year period, in that it believed it was operating under a provisional certification, and providers holding provisional certifications are not eligible to compete for new residents.

"18. In January 2013, Paulk made his first site visit to Nobles. From that point forward, Paulk has been involved in every site visit but one regarding Nobles. During this period, Nobles has filed complaints of bias in Paulk's conduct and behavior, complaints of which he and his supervisor [were] aware. There has been no discipline regarding the complaints, and there is no evidence of any investigation. Batiste, Paulk's supervisor, testified that it is possible for another reviewer to conduct site visits at Nobles, but that such action had not been undertaken.

"19. It is without dispute that Nobles was treated in a disparate manner by [the Department] in connection with investigations of

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