author: Barnes, Presiding Judge.

text:
    A11A0730.
    A11A0731.
    A11A0732.
    A11A0733.
    PALMYRA PARK HOSPITAL, INC. v. PHOEBE SUMTER MEDICAL CENTER. GEORGIA DEPARTMENT OF COMMUNITY HEALTH v. PHOEBE SUMTER MEDICAL CENTER. PALMYRA PARK HOSPITAL, INC. v. PHOEBE PUTNEY MEMORIAL HOSPITAL. GEORGIA DEPARTMENT OF COMMUNITY HEALTH v. PHOEBE PUTNEY MEMORIAL HOSPITAL.
    (714 SE2d 71)
   Barnes, Presiding Judge.

We have consolidated for review these cases appealing two superior courts’ decisions to reverse the grant of a hospital certifícate of need (CON) issued by the Georgia Department of Community Health (DCH). The primary issue on appeal is whether DCH properly applied the applicable statutes and rules when it granted Palmyra Park Hospital’s application for a CON to provide basic perinatal services. A 2008 amendment to the CON statute, OCGA § 31-6-42 (b.2), provides that a hospital seeking a CON for these services does not have to establish a “need” for them. In deciding Palmyra’s application, DCH considered how the exclusion of the “need” consideration affected its determination. Two competing hospitals opposed the application and appealed DCH’s final decision to the superior courts in their counties. Both courts held that DCH erred in granting the CON, and both Palmyra and DCH appeal these superior court decisions. After reviewing the record, briefs, statutes, and case law, we conclude that the superior courts erred in reversing the final agency decision approving the CON.

Neither the superior nor the appellate courts review DCH decisions de novo. Dept. of Community Health v. Gwinnett Hosp. System, 262 Ga. App. 879, 882 (586 SE2d 762) (2003). Instead, the reviewing court determines whether “substantial evidence” supports the agency’s findings of fact, and whether the conclusions of law drawn from those findings of fact are sound. Pruitt Corp. v. Ga. Dept, of Community Health, 284 Ga. 158, 161 (3) (664 SE2d 223) (2008). The reviewing courts may reverse an agency decision if it was based on legal error and unlawful procedures, was arbitrary and capricious, or prejudiced the opposing parties’ substantial rights. OCGA § 31-6-44.1 (a) (formerly OCGA § 31-6-44 (m)).

The CON program, OCGA § 31-6-40 et seq., establishes a comprehensive system of planning for the orderly development of adequate health care services throughout the state. OCGA § 31-6-1. HCA Health Svcs. v. Roach, 263 Ga. 798, 801 (3) (b) (439 SE2d 494) (1994). DCH is the “lead planning agency for all health issues” in Georgia. OCGA § 31-2-1 (1). OCGA § 31-6-42 (a) specifies that DCH will issue a CON that is “consistent with” a list of general considerations, including the establishment of a need for the services. Under DCH regulations, “need” is based on several factors, including area population and the use of existing services. OCGA § 31-6-42 (a) (2); Ga. Comp. R. & Regs. r. 111-2-2-.24 (3) (b).

The Georgia General Assembly overhauled the CON statute in 2008. Among other things, the 2008 legislation added three additional criteria for consideration, for a total of seventeen, OCGA § 31-6-42 (a) (15)-(17), and introduced a second subsection addressing CON applications for “Destination Cancer Hospitals,” OCGA § 31-6-42 (b.l). The amendments revised the appeals process, abolishing the former Health Planning Review Board and creating a State Certificate of Need Panel, “an agency separate and apart from the department” consisting of a panel of independent hearing officers “to review the department’s initial decision to grant or deny a certificate of need application.” OCGA § 31-6-44 (a). They also added a third level of administrative review, which did not exist previously, allowing an aggrieved party to appeal the hearing officer’s decision to the commissioner of community health. OCGA §§ 31-6-42 (a), 31-6-44 (i); Ga. Comp. R. & Regs. r. 274-1-.12 (2).

As part of the overhaul, the General Assembly also included a new subsection specifically relevant to a CON application for basic perinatal services. OCGA § 31-6-42 (b.2). “Basic perinatal services” are defined as basic inpatient care and follow-up for pregnant women and newborns without complications, as well as community education on prenatal care and the identification and transfer of high-risk patients. OCGA § 31-6-2 (3).

One of the seventeen considerations in OCGA § 31-6-42 (a) is that a CON applicant must show that the population to be served has a “need” for the services under certain circumstances. OCGA § 31-6-42 (a) (2). The new subsection related to CON applications for basic perinatal services provides that under some circumstances, DCH shall not apply the “need” consideration. OCGA § 31-6-42 (b.2) (the “Areawide Need Exception”). Those circumstances are that only one facility in the applicant’s county, and fewer than three facilities in contiguous counties, offer basic perinatal services. Id.

Palmyra Park Hospital in Dougherty County sought a CON in August 2008 for basic perinatal services. The application met the requirements for the Areawide Need Exception in OCGA § 31-6-42 (b.2), as only one other facility in Dougherty County, Phoebe Putney Memorial Hospital, and fewer than three in contiguous counties, one of which is Phoebe Sumter Medical Center in Sumter County, offers this service. Palmyra sought to renovate unused hospital space and convert seven of its existing 248 beds to “labor/delivery/recovery/ postpartum” (LDRP) beds, which allow a new mother to remain in the same room with her baby and family during her hospital stay. No other hospital in the area offers LDRP rooms. The project would primarily serve Dougherty County residents, and secondarily serve nine other counties, including Sumter County.

Phoebe Putney and Phoebe Sumter opposed Palmyra’s application. DCH staff reviewed the application and awarded a CON to Palmyra for basic perinatal services. The Phoebe hospitals appealed the initial decision to the Certificate of Need Panel, which appointed a hearing officer. OCGA § 31-6-44 (d).

The hearing officer conducted a de novo review and considered Palmyra’s application in light of the general considerations in OCGA § 31-6-42 (a) and Ga. Comp. R. & Regs. r. 111-2-2-.09 (1), the Areawide Need Exception in OCGA § 31-6-42 (b.2) and Ga. Comp. R. & Regs. r. 111-2-2-.09 (3), and DCH’s specific review considerations for perinatal services, Ga. Comp. R. & Regs. r. 111-2-2-.24. In a 37-page opinion containing 95 findings of fact and 35 conclusions of law, the hearing officer determined that Palmyra met the requirements for a CON allowing it to offer basic perinatal services.

Upon further request for review from the Phoebe hospitals, the commissioner of community health affirmed the hearing officer’s decision, adopting his findings of fact and conclusions of law as the final DCH agency decision. The Phoebe hospitals filed suit in their respective counties, enumerating errors involving the merits of the decision and the propriety of the administrative procedures applied.

Both superior courts reversed DCH’s grant of a CON to Palmyra to deliver basic perinatal services, holding, among other things, that DCH exceeded the scope of its statutory authority by improperly interpreting the effect of the 2008 Areawide Need Exception amendment to the CON statute, and that the initial staff decision granting the CON was insufficient in scope and content. The Sumter County Superior Court also found as error DCH’s failure to consider the project’s adverse effect on Phoebe Sumter’s staffing, which was severely affected by a tornado that destroyed the hospital in 2007.

Palmyra and DCH argue on appeal that the trial courts erred in failing to defer to the agency’s interpretation of the applicable rules and statutes, improperly interpreted the 2008 CON statute amendment that applies specifically to applications for basic perinatal services, OCGA § 31-6-42 (b.2), and erred in finding prejudicial procedural deficiencies in DCH’s 13-page initial staff decision.

1. Palmyra and DCH argue that the trial courts erred in failing to defer to DCH’s interpretation of the statute and in concluding that DCH exceeded its statutory authority by improperly expanding the scope of the Areawide Need Exception in OCGA § 31-6-42 (b.2). They also argue that the trial court erred in interpreting the Areawide Need Exception based on the more-specific 2008 amendments related to the requirements for Destination Cancer Hospitals in OCGA § 31-6-42 (b.2).

While reviewing courts defer to agency interpretations of the statutes they are charged with administering, that deference applies only as far as the agency interpretation is consistent with the statute. Administrative agencies may not “change a statute by interpretation, or establish different standards within a statute that are not established by a legislative body.” (Footnote omitted.) North Fulton Med. Center v. Stephenson, 269 Ga. 540, 544 (1) (501 SE2d 798) (1998). DCH “is authorized only to adopt and implement rules sufficient to administer the Act’s provisions, including the CON program.” (Citation and punctuation omitted.) Id. The judicial branch determines independently whether the agency’s interpretation “correctly reflects the plain language of the statute and comports with the legislative intent.” Handel v. Powell, 284 Ga. 550, 553 (670 SE2d 62) (2008).

If reviewing courts find that DCH has acted within the authority granted the agency by statute, they defer to DCH’s interpretation and application of the CON statute and the rules and regulations it has enacted to fulfill the function given it by the legislative branch. Pruitt Corp., 284 Ga. at 159 (2). The courts defer to agency interpretation when appropriate because

[a]gencies provide a high level of expertise and an opportunity for specialization unavailable in the judicial or legislative branches. They are able to use these skills, along with the policy mandate and discretion entrusted to them by the legislature, to make rules and enforce them in fashioning solutions to very complex problems. Thus, their decisions are not to be taken lightly or minimized by the judiciary. Review overbroad in scope would have the effect of substituting the judgment of a judge or jury for that of the agency, thereby nullifying the benefits of legislative delegation to a specialized body.

Bentley v. Chastain, 242 Ga. 348, 350-351 (1) (249 SE2d 38) (1978). The courts must construe statutes in a way that “square with common sense and sound reasoning. It is the duty of the court to consider the results and consequences of any proposed construction and not so construe a statute as will result in unreasonable or absurd consequences not contemplated by the legislature.” (Citation and punctuation omitted.) Gwinnett Hosp. System, 262 Ga. App. at 886.

The administration of the CON program requires a particularly high level of expertise and specialization. The DCH rules promulgated to administer the program are detailed and lengthy. See, e.g., Ga. Comp. R. & Regs. r. 111-2-2-.07, which describes the review procedures for CON applications. Both the hospital seeking a CON and the hospitals opposing it gather and organize vast amounts of data, expert testimony, and other evidence which are presented to the agency staff, which then interprets and synthesizes the evidence and applies it to the agency rules. See OCGA § 31-6-43. The initial staff decision must be issued within a relatively short period of time, at most 150 days after the CON application is complete. OCGA § 31-6-43 (d), (i).

Further administrative review is also highly specialized. The hearing officer who reviews the initial DCH staff decision is one of five members of the CON Panel, all of whom are appointed by the Governor and are attorneys “who are familiar with the health care industry but who do not have a financial interest in or represent or have any compensation arrangement with any health care facility.” OCGA § 31-6-44 (a), (b). The commissioner of community health then reviews the hearing officer’s decision upon request and issues the final agency decision. OCGA § 31-6-44 (k), (m).

Against this backdrop, we turn to the final agency decision in this case, which is the commissioner’s decision adopting the detailed findings of fact and conclusions of law in the hearing officer’s decision. After the initial decision by DCH staff granting Palmyra’s CON application, the hearing officer accepted pre-hearing evidence and then held a four-day hearing, during which the Phoebe hospitals and Palmyra presented additional evidence. In his decision affirming the grant of Palmyra’s CON application, the hearing officer extensively reviewed the evidence presented, including the personnel, patients, services, finances, and parent corporations of Palmyra, Phoebe Putney, and Phoebe Sumter, in addition to the facilities’ current market share of services in the affected counties. He also reviewed the details of Palmyra’s proposed project, including the specific services it sought to offer, its current patient population, its projected obstetric population, the service areas of the three hospitals, and the opposing parties’ disputed evidence regarding the growth rate of the population to be served.

After addressing the 2008 Areawide Need Exception in OCGA § 31-6-42 (b.2), the hearing officer reviewed the other 16 general considerations in OCGA § 31-6-42 (a) and Ga. Comp. R. & Regs. r. 111-2-2-.09. He addressed the opposing hospitals’ contentions that Palmyra failed to establish the absence of “existing alternatives” to its proposed services, as required by OCGA § 31-6-42 (a) (3). For example, only three hospitals in Palmyra’s proposed service area offer obstetrical services: the two Phoebe hospitals and Crisp Regional Hospital. The patient populations of two of those three hospitals had little overlap with Palmyra, and only three percent of patients from Palmyra’s proposed service area go to the other five facilities offering perinatal services in the ten rural counties in State Service Delivery Region 10, in which Palmyra is located.

The hearing officer also addressed in detail Phoebe hospitals’ assertions that Palmyra’s project would have a negative relationship with the existing health care delivery system, would have an adverse impact under the Perinatal Services Rule, and would hinder Phoebe Sumter’s ability to recruit health care professionals. The officer found that basic perinatal service providers play an important community role by promoting access and education to low-risk patients and identifying high-risk patients, factors the legislature recognized by creating the Areawide Need Exception Rule in OCGA § 31-6-42 (b.2). Further, citing to specific evidence in the record, the officer found that the new services would promote competition, which typically leads to lower costs and greater innovation, and “will give residents a choice of perinatal providers in the community. Consumer surveys indicate that having choice in health care is important and leads to greater patient satisfaction.”

The hearing officer addressed the consideration of lower health care costs, and Phoebe’s claims that the project would have an adverse impact on Phoebe’s finances and make it unable to sustain its unprofitable clinics and training programs. Analyzing the financial statements of the corporation that owns Palmyra, the hearing officer also concluded that Palmyra had established that its project was financially feasible, and would use Palmyra’s facilities more efficiently.

In his conclusions of law, the hearing officer determined that, while Palmyra could not establish the numeric need for more obstetrical beds based on DCH’s service-specific methodology or the general need consideration in OCGA § 31-6-42 (a) (2), the 2008 amendment made that consideration inapplicable. The hearing officer also observed, logically, that if the statutory need exception applied — that is, only one facility offered basic perinatal services in the same county and fewer than three facilities offered those services in contiguous counties — there would always be two facilities that provide basic perinatal services within a single county. In other words, there would always be a choice of providers, and the existence of such a choice affects “the evaluation of other general considerations relating to existing providers, particularly those pertaining to existing alternatives, unnecessary duplication, and a project’s relationship with the health care delivery system as a whole.” Again, the hearing officer did not find that those other considerations were inapplicable, only that they were affected by the absence of the “need” consideration. While DCH rules required “strong justification under other criteria” to grant a CON if existing providers had significant unused capacity, the Areawide Need Exception provided that justification.

The hearing officer held that no alternatives existed to the proposed new services because Phoebe Putney does not offer LDRP services, and the patient base of the other basic perinatal service providers in Palmyra’s service delivery region only minimally overlaps Palmyra’s patient base. Additionally, without Palmyra’s basic perinatal services, patients had no choice of providers and thus Phoebe could not offer an existing alternative. “It logically follows that a CON applicant is not required to show deficiencies in the existing provider[’]s program to demonstrate the absence of existing alternatives to the proposed project, particularly in the context of [the 2008 amendment] exception’s emphasis on choice and competition,” he held.

The hearing officer then analyzed the evidence regarding duplication of services. First, the services did not duplicate basic perinatal services by providers outside Dougherty County because of the minimal overlap between their patient populations and Palmyra’s. Second, in addition to noting that any duplication of Phoebe’s services is not “unnecessary” given that the Areawide Need Exception emphasized choice and contemplated such duplication, the officer also found that Phoebe’s occupancy rate and utilization percentage established that it did not have “significant unused capacity” under Ga. Comp. R. & Regs. r. 111-2-2-.09 (1) (c) (3).

The proposed new service’s relationship with the health care delivery system was also influenced by the need exception, the officer held, although the applicant is not exempt from the need to establish a positive relationship. Palmyra’s new service would have a positive relationship with the system, he held, because it would deliver prenatal education and family support services and attract additional obstetrical doctors and nurses, which will improve access to prenatal care and address the high rate of infant mortality in the area. The project will help lower health care costs in the area, and although it would potentially decrease the number of deliveries at Phoebe, its overall impact on the health care system would be positive, the hearing officer concluded.

The officer thoroughly analyzed the financial evidence and concluded that Palmyra’s project would have only minimal and not unreasonable adverse effects on existing service providers, specifically on Phoebe, which would remain the dominant area provider. The project would not adversely affect the accreditation or funding of Phoebe’s family practice residency program, its Medical College of Georgia medical student training program, the midwifery program at Albany Area Primary Health Care, or Phoebe’s status as a Regional Perinatal Center. Finally, the hearing officer individually addressed all the remaining applicable provisions of DCH’s review considerations for perinatal services applications and the general considerations, including financiad feasibility, the effect on payors, the fostering of competition without harming quality of care, the needs of health maintenance organizations, the efficient use of existing space, and the access to and distribution of indigent care. Ga. Comp. R. & Regs. r. 111-2-2-.24; OCGA § 31-6-42 (a).

Both superior courts held that DCH exceeded the scope of its statutory authority in interpreting and applying the 2008 Areawide Need Exception amendment to Palmyra’s CON application. The courts held that the “plain and unambiguous” language of the Areawide Need Exception only eliminated one of seventeen considerations, and that DCH was not authorized to consider how the exception affected any other consideration. Specifically, the Sumter County Superior Court held that DCH enlarged the scope of the exception beyond its plain terms,

based on its own, unauthorized interpretation of the legislative purpose underlying the [Areawide Need Exception and] applied the Exception to influence and modify its evaluation of Palmyra’s application under several review considerations other than the one consideration set forth in OCGA § 31-6-42 (a) (2).

The Dougherty County Superior Court held that the “sum total of what the General Assembly changed . . . regarding CON applications for basic perinatal services” was to eliminate a single consideration. Despite the very limited change, however, DCH impermissibly interpreted the Areawide Need Exception as embodying the importance of “choice” in applying considerations related to existing providers, existing alternatives, and unnecessary duplication, the court held.

To determine whether DCH acted within the scope of its statutory authority and thus whether we should defer to its interpretation of the statute, we first look at the plain language of the statute. Handel, 284 Ga. at 553. The cardinal rule in statutory construction is to ascertain the legislature’s intention and effectuate the purpose of the statute. Five Star Steel Contractors v. Colonial Credit Union, 208 Ga. App. 694, 696 (431 SE2d 712) (1993). “[T]he literal meaning of the statute prevails unless such a construction would produce unreasonable or absurd con sequences not contemplated by the legislature.” (Citation omitted.) Johnson v. State, 267 Ga. 77, 78 (475 SE2d 595) (1996). “Moreover, in construing language in any one part of a statute, a court should consider the entire scheme of the statute and attempt to gather the legislative intent from the statute as a whole” and give all of the words meaning. (Citation and punctuation omitted.) Ga. Society of Ambulatory Surgery Centers v. Ga. Dept. of Community Health, 309 Ga. App. 31, 35 (1) (710 SE2d 183) (2011) (agency requests exceeded scope of information that DCH was authorized to obtain under statute).

Thus, in considering the agency’s interpretation of OCGA § 31-6-42 (b.2), we “look diligently for the intention of the General Assembly, keeping in view at all times the old law, the evil, and the remedy.” OCGA § 1-3-1 (a). If the language of the authorizing statute is plain and the agency’s interpretation of it reflects that plain language and comports with the legislative intent, we will defer to the agency’s statutory interpretation and affirm the administrative decision. See Handel, 284 Ga. at 553.

The superior courts held that the plain language of OCGA § 31-6-42 (b.l) limits its application to only one consideration. They held that the Areawide Need Exception amendment simply eliminated the consideration of need and nothing else, especially when considered in light of the more explicit and detailed amendments regarding Destination Cancer Hospitals in OCGA § 31-6-42 (b.l). In that subsection, the legislature excluded eight of the seventeen general considerations, and replaced them with eight considerations specific to that kind of facility. Id. The superior courts reasoned that, if the legislature had intended the Areawide Need Exception for basic perinatal services to affect any other considerations, it would have said so, as it did in the Destination Cancer Hospitals amendment. The courts concluded that in granting Palmyra’s CON, the agency improperly expanded its authority by interpreting why the legislature eliminated the “need” consideration and how its absence affected other considerations, such as whether alternatives to the proposed service exist and whether the proposed service will duplicate existing services.

In contrast, Palmyra and DCH assert that the superior courts erred in finding that the agency exceeded its statutory authority and that its interpretation of the Areawide Need Exception was not entitled to deference. We agree. While the “plain language” of the statute merely removes from consideration the existence of “need,” the statute does not prohibit DCH from considering how this omission affects the other considerations. Further, the specificity of the Destination Cancer Hospitals amendment in OCGA § 31-6-42 (b.l) does not establish the legislature’s intentions related to the basic perinatal services amendment in OCGA § 31-6-42 (b.2), nor does the former make the latter plain and unambiguous.

A Destination Cancer Hospital is by definition designed to serve a patient base composed largely of residents from other states. OCGA § 31-6-2 (13). It must be located within twenty-five miles of a commercial airport with five or more runways, and its beds, services, and equipment are not counted as department inventory when determining the need for those items by other providers. OCGA § 31-6-40 (d). Thus, the application of review criteria related to the state-wide health plan and service areas is completely different, as reflected by the legislation. Rather than consider the existence of alternatives in the service area under OCGA § 31-6-42 (a) (3), for example, a Destination Cancer Hospital must demonstrate that at least 65 percent of its patient base will come from outside the state. OCGA § 31-6-42 (b.l) (2). Rather than show that the proposed facility would have a positive relationship with the existing health care system “in the service area,” under OCGA § 31-6-42 (a) (10), a Destination Cancer Hospital applicant must show a positive relationship with the health care system “on a regional basis,” OCGA § 31-6-42 (b.l) (6), and must also show that it has a transfer agreement with a nearby hospital with adequate emergency services. OCGA § 31-6-42 (b.l) (6.1). Because the considerations applicable to such a facility differ radically from those applicable to services designed primarily for residents, OCGA § 31-6-42 (b.l) had to be very specific about changes in the applicable considerations.

In contrast, a CON application for basic perinatal services must be reviewed in light of the statute as a whole, and in light of the considerations applicable to a health care system designed primarily for Georgia residents. In considering Palmyra’s CON application, DCH did not exclude any considerations other than the “need” consideration specified in OCGA § 31-6-42 (b.2). Rather, it determined that some of the considerations were affected by the Areawide Need Exception.

In determining whether a given application is consistent with the considerations set forth in OCGA § 31-6-42 and [DCH’s] rules, the [Department] was entitled to place more emphasis on one consideration than another absent some mandatory language to the contrary. Moreover, such emphasis is entitled to great deference by a reviewing court.

(Citation and punctuation omitted.) Gwinnett Hosp. System, 262 Ga. App. at 889-890 (3).

The general considerations in OCGA § 31-6-42 (b) are broad, and the agency rules provide the level of detail required to consider CON applications with some level of consistency. Thus, DCH uses not only the general considerations listed in OCGA § 31-6-42 (b), but also its

standards and criteria interpreting those [considerations]. Implicit in the interlocking parts of the statutory scheme is the legislative intent that [DCH] use the considerations as a base, filling the interstices of the statutory considerations with the agency’s rules interpreting and implementing them.

North Fulton Community Hosp. v. State Health &c., 168 Ga. App. 801, 804 (2) (310 SE2d 764) (1983).

Both superior courts found error in the agency’s discussion of the apparent legislative intent to create a “choice” of basic perinatal providers in enacting the Areawide Need Exception. The courts also found that DCH exceeded its statutory authority by determining that the presence of a choice of providers was a factor that affected other considerations in OCGA § 31-6-42 (b). The agency did not, however, conclude that any other considerations were inapplicable because of the Areawide Need Exception; it only examined how they were affected by the absence of a need requirement. The considerations do not apply in a vacuum.

Just as we consider the entire statute to gather the legislative intent when construing language in part of the statute, giving all of the words meaning, Ga. Society of Ambulatory Surgery Centers, 309 Ga. App. at 35 (1), when reviewing whether an agency exceeded its statutory authority, we look at not only a portion of the agency decision but at the decision as a whole. In this case, the findings and conclusions that refer to “choice” are but a fraction of the final DCH decision, and our previous detailed review of the hearing officer’s decision establishes that the agency did not improperly enlarge the scope of the Areawide Need Exception or exceed its authority by approving Palmyra’s CON application.

While it is true, as the superior courts noted, that the plain language of the statute provides only that the applicant need not prove the “need” for the service, DCH did not improperly extend the exception to other considerations such as existing alternatives and a positive relationship with the health care system. It simply factored the consequences of the Areawide Need Exception into its analysis. That the application of the exception results in a “choice” of providers is unquestionable. How the existence of a choice of providers affects other considerations is exactly the kind of statutory interpretation to which reviewing courts must defer. See Pruitt Corp., 284 Ga. at 159.

After a careful review of the parties’ arguments, the record, the statutes, and the case law, we conclude that DCH did not exceed its statutory authority in its interpretation of the legislative intent behind the Areawide Need Exception in OCGA § 31-6-42 (b.l), or in its application of the statute in this case. Because the agency did not exceed its authority, we defer to its interpretation and application of OCGA § 31-6-42 (b) and (b.l), mindful that the purpose of the CON program is best fulfilled through a regulatory agency such as DCH.

[A]n attempt to achieve the goals of the act through random litigation in the courts would likely result in more confusion rather than the orderliness mandated by the statute. Furthermore, we are unable to construe this statute as a mechanism for determination of the respective rights of competitors.

(Citation and punctuation omitted.) Diversified Health Mgmt. Svcs. v. Visiting Nurses &c., 254 Ga. 500, 501-502 (2) (330 SE2d 885) (1985).

The record includes substantial evidence to support the agency’s findings of fact, and the conclusions of law drawn from those findings of fact are sound. Pruitt Corp., 284 Ga. at 161. Accordingly, because the agency’s decision to grant Palmyra’s CON application was not based on legal error or unlawful procedures, was not arbitrary or capricious, and did not prejudice the opposing parties’ substantial rights, we reverse the superior courts’ orders to the contrary. OCGA § 31-6-44.1 (a).

2. While the Sumter County Superior Court agreed with Phoebe Sumter that the DCH final order disregarded the adverse effect the new service would have on Phoebe Sumter’s ability to recruit medical staff, a review of the decision shows that Phoebe Sumter’s concerns were taken into account. The hearing officer specifically noted that several of Phoebe’s witnesses testified that their primary concern about the new project is that it would dilute the number of qualified staff in the area. While the hearing officer made no specific finding regarding the effect of Palmyra’s project on Sumter’s ability to recruit medical staff, he did not disregard the issue. He noted that a tornado destroyed Phoebe Sumter, formerly known as Sumter Medical Center, in March 2007, and that the hospital was operating out of a temporary facility as of October 2009. Phoebe had dedicated $25 million to rebuild and restaff the hospital, which is now part of Phoebe’s three-hospital system.

In response to the opposing hospitals’ staffing concerns, Palmyra presented evidence that it already had nurses on staff with obstetrics experience, has access to its parent company’s in-house nurse staffing agency, and has employees at other locations who have expressed interest in working at Palmyra after the new service begins. The hearing officer found that Palmyra has approximately 150 physicians on staff, including “virtually all local obstetricians and gynecologists who are also already members of Phoebe’s medical staff.” HCA, Inc., which owns Palmyra, operates 111 perinatal service programs throughout the country, including six in Georgia hospitals. Palmyra presented evidence that its LDRP model of obstetrical services is more efficient and requires fewer staff than the traditional model offered by Phoebe Putney and Phoebe Sumter, and the hospital already has lab, pharmacy, respiratory therapy, anesthesia, and pediatricians on staff to support a Level 1 obstetrics service. After reviewing the final decision, we conclude that DCH did not ignore Phoebe Sumter’s staffing concerns.

3. Palmyra and DCH assert that the superior courts erred in finding prejudicial procedural deficiencies in DCH’s 13-page initial staff decision. While OCGA § 31-6-42 (e) directs DCH to specify “its reasoning as to and evidentiary support for its evaluation of each . . . applicable consideration and rule,” the less-specific OCGA § 31-6-43 (i) simply directs DCH to include in its initial decision “a detailed statement of the reasons and evidentiary support” for its grant or denial of the CON. DCH rules provide that the decision letter shall contain a “detailed statement of the findings related to each applicable consideration and standard relevant to the decision to issue or deny a Certificate of Need.” (Emphasis supplied.) Ga. Comp. R. & Regs. r. 111-2-2-.07 (2) (c) (1).

The Dougherty County Superior Court found that the initial DCH decision issued before the hearing officer’s review contained insufficient analysis or evidentiary support for its conclusions about several considerations, including the project’s impact on HMOs and the “positive relationship,” “existing alternatives,” and “unnecessary duplication of services” factors. The Sumter County Superior Court also found that the initial decision made no findings about the effect of the proposed new service on existing services and staffing, or about the “unnecessary duplication” and “unused capacity” considerations, and provided only cursory conclusions about other considerations. The superior courts concluded that the initial decision was based on legal error and unlawful procedures, was arbitrary and capricious, and prejudiced the opposing parties’ substantial rights, which are grounds for reversal under OCGA § 31-6-44.1 (a).

DCH argues that the initial decision was sufficient, and that even if it was not, any deficiency was cured by the hearing officer’s subsequent administrative review, during which the opposing parties challenged Palmyra’s evidence and submitted extensive evidence of their own.

When an agency neglects to follow a procedural rule but its failure inflicts no significant injury on the party entitled to observance of the rule, the error does not prevent further administrative or judicial action. For a procedural defect to violate due process, the defect must be shown to be prejudicial.

(Citations omitted.) Lentz v. State Personnel Bd., 146 Ga. App. 366, 367 (247 SE2d 145) (1978) (procedural defects cured by a hearing).

In response, Phoebe Putney and Phoebe Sumter argue that they were prejudiced by the defects in the initial decision, and that the defects were substantive, not procedural. They argue that they were harmed because they had the burden of proof before the hearing officer, and without a more detailed initial decision they were “left with the unfair, if not impossible, task of disproving something that was not previously found and supported.” Phoebe Sumter contends that much of the reasoning and evidence offered by DCH witnesses was introduced after the opponents presented their main case. Palmyra responds that the Phoebe hospitals made essentially the same challenges to Palmyra’s application during all three levels of administrative review, and thus were not prejudiced by any deficiency in the initial agency decision.

It is difficult if not impossible for this court to thoroughly review the timing and substance of the evidence the parties submitted during the administrative review process. As is usual in administrative appeal cases, the appellate record index simply lists “Department of Community Health Administrative Record” at page 39, followed by a “Supplement to Administrative Record” at page 4128. The index at the beginning of the administrative record lists only the beginning and ending page numbers for four pleadings, the administrative decisions, and 340 pages of “Pre-Hearing Documents.” The last two index entries, “Exhibits” and “Transcript,” have no page references at all. The only way for a court to review the substance and timing of all the evidence submitted to the agency would be to sift through thousands of pages in the record without a road map.

Pretermitting whether the initial 13-page decision granting Palmyra’s CON application was sufficient, neither Phoebe Putney nor Phoebe Sumter has shown harm in the alleged deficiency. With exceptions not applicable here, OCGA § 31-6-44 (g) provides that “[a] party or intervenor may present any relevant evidence on all issues raised by the hearing officer or any party to the hearing or revealed during discovery and shall not be limited to evidence or information presented to the department prior to its decision.” While both Phoebe Putney and Phoebe Sumter assert that “much of the reasoning and evidence offered by DCH witnesses during the appeal hearing as to considerations ignored in the initial decision was raised for the first time after the opponents put on their main case,” they do not describe what they would have done differently if the initial staff decision had been more detailed. Further, a party appealing the hearing officer’s decision to the commissioner may seek leave to submit additional evidence. OCGA § 31-6-44 (k) (2). If satisfied that the new evidence “is material and there were good reasons for failure to present it in the proceedings before the hearing officer,” the commissioner may order the hearing officer to accept the additional evidence and reconsider the decision. Id. Neither CON application opponent has argued that it sought leave but was denied the opportunity to submit additional post-hearing evidence because DCH surprised it at the hearing.

Decided July 5, 2011

Nelson, Mullins, Riley & Scarborough, Stanley S. Jones, Jr., Keri F. Conley, Thurbert E. Baker, Attorney General, Isaac Byrd, Deputy Attorney General, Sidney R. Barrett, Senior Assistant Attorney General, E. Tandy Menk, Alex F. Sponseller, Assistant Attorneys General, for appellants.

Gatewood, Skipper & Rambo, James M. Skipper, Jr., Parker, Hudson, Rainer & Dobbs, John H. Parker, Jr., David L. Fenstermacher, June G. Veazey, Thomas D. Watry, Joshua B. Belinfante, for appellees.

Robert C. Threlkeld, amicus curiae.

Accordingly, Phoebe Putney and Phoebe Sumter have not shown harm resulting from a deficiency in the initial decision which prejudiced their ability to present their case to the hearing officer. We conclude, therefore, that the superior courts erred in reversing DCH’s decision on this ground.

Judgments reversed.

Adams and Doyle, JJ., concur.

       St. Francis Hospital, Inc., located in Muscogee County, has filed amicus briefs stating that its CON application for basic perinatal services was approved in March 2010, and that the appeal in that case is being stayed pending the outcome of these cases.

       The three new considerations are that the proposed new service meets the department’s minimum quality standards, that it can obtain the necessary resources, including personnel, and that it is “an under[-]represented health service, as determined annually by the department.” OCGA § 31-6-42 (a) (15)-(17).

       In 2009, the General Assembly “recreated” DCH, which assumed the duties and powers of the former DCH, the Division of Public Health of the Department of Human Resources (“DHR”), and the Office of Regulatory Services of the Department of Human Resources, which were not otherwise specifically transferred to DHR. OCGA § 31-2-4 (a) (1). DCH remains responsible for administering the CON statute. OCGA § 31-6-43.

       OCGA § 31-6-40.2 defines perinatal services other than “basic” as those relating to high-risk pregnancies, complications, moderately ill newborns, and neonatal intensive care.

       We note that the statute describing the new institutional services that require the issuance of a CON provides that DCH shall not accept any applications for new Destination Cancer Hospitals beginning January 1, 2010, although existing ones may still seek to upgrade, replace, or buy diagnostic or therapeutic equipment. OCGA § 31-6-40 (d).


source: Caselaw Access Project

author: Andrews, Judge.

license: Public Domain

text:
    A11A1072.
    ALDRIDGE v. THE STATE.
    (713 SE2d 682)
   Andrews, Judge.

On appeal from his conviction for aggravated assault, robbery, and kidnapping, Jamarole Aldridge argues that the evidence was insufficient to prove venue and kidnapping and that the trial court erred in its charge concerning venue and in failing to merge the robbery and kidnapping convictions. We find no error and affirm.

“On appeal from a criminal conviction, we view the evidence in the light most favorable to the verdict, with the defendant no longer enjoying a presumption of innocence.” Reese v. State, 270 Ga. App. 522, 523 (607 SE2d 165) (2004). We neither weigh the evidence nor judge the credibility of witnesses, but determine only whether, after viewing the evidence in the light most favorable to the prosecution, a “rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.” Jackson v. Virginia, 443 U. S. 307, 319 (III) (B) (99 SC 2781, 61 LE2d 560) (1979).

So viewed, the record shows that on January 15, 2007, as the victim was filling up her car at a gas station located on Metropolitan Parkway in Atlanta, Fulton County, a young woman named Mesa Copeland approached the victim and asked if she could use the victim’s cell phone and if she would drive her and Aldridge to a house nearby. After the victim agreed, Aldridge pointed a gun at her head and ordered her into the car with the victim driving, Copeland in the front passenger seat, and Aldridge in the rear. Aldridge eventually directed the victim down a steep gravel road with an abandoned house at its end. At the bottom of the hill, Aldridge told the victim to stop the car. When she did so, Aldridge took Copeland’s place in the front seat and told her that they would be back in five minutes.

When the victim turned the car around and headed back up the road, Aldridge leaned over her, grabbed the car keys, and told her that she was “not going anywhere” and that he would “blow [her] head off.” He ordered the victim into the front passenger seat, drove the car back down the hill to pick up Copeland, and began driving through a series of residential neighborhoods, telling the victim that he was going to introduce her to some people. The victim repeatedly asked to be released, but Aldridge ignored her. Eventually, Aldridge stopped at a park in Fulton County, forced the victim out of the car, and refused to return her purse, cell phone, or books. Aldridge and Copeland were apprehended in the victim’s car a few weeks later. The victim identified both assailants in a photo lineup.

Aldridge was charged with carjacking (Count 1), armed robbery (Count 2), aggravated assault with intent to rob (Count 3), possession of a firearm during the commission of a felony (Count 4), possession of a firearm by a convicted felon (Count 5), and kidnapping (Count 6). After Count 5 was dead-docketed, the jury acquitted Aldridge of carjacking and the remaining firearm charge, but found him guilty of Count 2’s lesser included offense of robbery by intimidation as well as aggravated assault and kidnapping. After the trial court merged the aggravated assault and robbery by intimidation convictions, it sentenced Aldridge to 40 years to serve. His motion for new trial was denied.

1. (a) Aldridge first argues that because he did not take the victim’s keys away until she was driving downhill toward the abandoned house, and because there was no evidence as to that location, the evidence was insufficient as to venue. The evidence shows, however, that Aldridge pointed a gun at the victim and ordered her into the car at a gas station located in Fulton County, and that the victim was also released in Fulton County. See Epps v. State, 297 Ga. App. 66 (676 SE2d 791) (2009) (evidence showing that kidnapping victim was abducted from Douglas County was sufficient to prove venue in that county); OCGA § 17-2-2 (e) (if a crime is committed in a car or other vehicle “traveling within this state and it cannot readily be determined in which county the crime was committed, the crime shall be considered as having been committed in any county” through which the vehicle “has traveled”).

(b) Under Garza v. State, 284 Ga. 696 (670 SE2d 73) (2008), the question whether a kidnapping has occurred requires an assessment of the following four factors as to the element of asportation:

(1) the duration of the movement; (2) whether the movement occurred during the commission of a separate offense; (3) whether such movement was an inherent part of that separate offense; and (4) whether the movement itself presented a significant danger to the victim independent of the danger posed by the separate offense.

Id. at 702 (1); see also OCGA § 16-5-40 (a).

Even assuming that the kidnapping did not occur until Aldridge grabbed the victim’s keys on the road to the abandoned house, the evidence shows that he then drove the victim through other neighborhoods before forcing her out of the car at a park. This movement (i) was of more than minimal duration; (ii) was not part of either the armed robbery, which was not complete until the victim was ejected from the car, or the carjacking, which was completed either at the gas station or when Aldridge grabbed the keys; (iii) was not an inherent part of either of these crimes, since Aldridge’s apparent purpose during the drive was to exhibit control over the victim rather than her property; and (iv) presented a significant and independent danger to the victim, including the risks that she would injure herself if she attempted to escape from the moving car and that she might be taken to a second location not known to her. See Horne v. State, 298 Ga. App. 601, 604 (1) (680 SE2d 616) (2009) (affirming kidnapping conviction where the victim was taken on a car trip “of more than minimal duration” and after the completion of an assault); Epps, 297 Ga. App. at 69 (evidence showed asportation when defendant “held [the victim] for a significant period after the initial assault and robbery were completed” but before a second robbery and beating, and when travel in the car driven by defendant posed a danger independent of any assault or robbery).

2. Aldridge also argues that the charge on venue was burden-shifting. We disagree.

The trial court charged the jury as follows:

In a prosecution in any case in which it cannot be determined what county the crime was committed in, venue is proper and may be proved in any county in which the evidence shows beyond a reasonable doubt that it might have been committed.

As the Supreme Court of Georgia has held, such a charge is not erroneous “where the charge taken as a whole plainly informs the jury that venue is a material allegation as to each crime charged and that, as such, the State bears the burden to prove venue as to each crime beyond a reasonable doubt.” Owens v. State, 286 Ga. 821, 828 (3) (693 SE2d 490) (2010), citing OCGA § 17-2-2 (c) (concerning venue in homicide cases); see also Downs u. State, 257 Ga. App. 696, 698 (2) (572 SE2d 54) (2002) (applying the Owens holding to cases not arising under OCGA § 17-2-2 (c)). There was no error here.

3. Aldridge also argues that his convictions for kidnapping and robbery by intimidation should merge as a matter of law and fact. We disagree.

Under the “required evidence” test set out in Drinkard v. Walker, 281 Ga. 211, 215 (636 SE2d 530) (2006), “where the same act or transaction constitutes a violation of two distinct statutory provisions, the test to be applied to determine whether there are two offenses or only one, is whether each provision requires proof of a fact which the other does not.” (Citation and punctuation omitted.)

Even assuming that the kidnapping was complete at the time Aldridge grabbed the car keys on the road to the abandoned house rather than when he abducted the victim at the gas station, the later moment occurred well before the victim was forced out of the car at the park, at which time Aldridge specifically refused to return most of the victim’s personal belongings, including her purse, to her. It follows that the two crimes do not merge as a matter of law or fact. See OCGA §§ 16-5-40 (defining kidnapping as abducting “another person without lawful authority”), 16-8-40 (defining robbery by intimidation as “tak[ing] property of another . . . [b]y intimidation, by the use of threat or coercion, or by placing such person in fear of immediate serious bodily injury”); Hickey v. State, 267 Ga. App. 724, 727-728 (6) (601 SE2d 157) (2004) (kidnapping and robbery by intimidation convictions did not merge where robbery took place after kidnapping was complete).

Decided July 5, 2011.

Jennifer A. Trieshmann, for appellant.

Paul L. Howard, Jr., District Attorney, Christopher M. Quinn, Paige R. Whitaker, Assistant District Attorneys, for appellee.

Judgment affirmed.

Phipps, P. J., and McFadden, J., concur.

       As the State concedes, Garza applies because the crimes at issue here took place before July 1, 2009, on which date a relevant amendment to OCGA I 16-5-40 took effect.


author: Ellington, Chief Judge.

text:
    A11A0255.
    WILHELM v. HOUSTON COUNTY et al.
    (713 SE2d 660)
   Ellington, Chief Judge.

In 2004, Cheryl Wilhelm filed suit against Houston County and the Houston County Health Department and against the builders of her home, Neal Waller, Jeanette Francis, and Sussex Construction Company (collectively “Sussex”), asserting claims for fraud and nuisance arising from a malfunctioning septic tank system. In four orders, the trial court granted each of the defendants’ motions for summary judgment. Wilhelm appeals from the orders, contending that the trial court erred in finding that her claims against Sussex and the health department were barred by the statute of repose codified in OCGA § 9-3-51; that she had failed to show that Sussex and the health department committed fraud; and that there was no evidence that the county had any control over the creation or maintenance of the alleged nuisance. For the following reasons, we affirm.

In order to prevail on a motion for summary judgment under OCGA § 9-11-56, the moving party must show that there exists no genuine issue of material fact, and that the undisputed facts, viewed in the light most favorable to the nonmoving party, demand judgment as a matter of law. Moreover, on appeal from the denial or grant of summary judgment],] the appellate court is to conduct a de novo review of the evidence to determine whether there exists a genuine issue of material fact, and whether the undisputed facts, viewed in the light most favorable to the nonmoving party, warrant judgment as a matter of law.

(Citations omitted.) Benton v. Benton, 280 Ga. 468, 470 (629 SE2d 204) (2006).

So viewed, the record shows the following undisputed, relevant facts. Wilhelm purchased a newly constructed home from Sussex in November 1995; she did not hire an independent inspector to inspect the house before she purchased it. At the time of closing, Wilhelm received a printed plat of the property that had been filed with the county in July 1995, that showed the area surrounding her house was within a 100-year flood plain, and that included a note stating that the rear portion of the property was subject to holding water after periods of heavy rain. Shortly after Wilhelm moved into the house, she began having problems with her plumbing and septic tank system, including constantly clogged toilets and intermittent sewage backup into her home. She also noticed that the grass around her septic tank was brown and did not grow properly, that the lawn in that area was consistently wet and uneven, and that some of her trees were dying.

Over the next eight years, Wilhelm attempted to fix the problems by having her septic tank pumped out repeatedly and through various modes of self-help, including using a “snake” to unclog the sewage pipes and adding top soil to the uneven areas of her lawn. When she had a tree company employee remove some of her dying trees in 1996, the employee informed her that there was fill dirt in her yard that may have contributed to the loss of her trees. However, she did not contact Sussex or anyone else to determine why the fill dirt had been placed in her yard. In 2000, though, Wilhelm called Sussex about sewage backup in her master bathroom garden tub, and Sussex suggested that she contact the county and the man who installed the septic system. She had the septic tank pumped out after consulting with them, and the septic system worked properly for about two years. Wilhelm admitted that, although she repeatedly called Sussex about various, unrelated construction problems with her home, she never asked Sussex to change or repair the septic system prior to filing suit, nor did she hire an independent plumber or other professional to examine her plumbing and septic system in order to determine why she was having problems with it.

Then, in 2004, Wilhelm learned that, before her home was built in 1995, the county engineer had been concerned about potential drainage problems on her lot; that, as a result, the county had initially refused to approve the lot for residential construction and had asked the builders to address the drainage problems; and that the county approved the lot after the builders added fill dirt to the lot, elevating it above the 100-year flood plain, and took other measures to address the drainage problems. Wilhelm also contacted the Army Corps of Engineers, which determined that, at that time (2004), portions of her lot met the Corps’ definition of “wetlands.”

Based upon her belief that the problems with her septic system resulted from the fact that her home was built on wetlands with a history of drainage problems, Wilhelm sued Sussex, the county, and the health department in December 2004, contending that the defendants committed fraud by concealing the property’s designations as being located in wetlands and within a 100-year flood plain. In addition, she claimed that Sussex created a continuing nuisance by installing the septic system in unsuitable conditions and that the county and the health department were also liable for the continuing nuisance because they approved the installation of the septic system despite their knowledge of the drainage problems on her property. The trial court granted summary judgment to each of the defendants, finding that Wilhelm’s claims against Sussex and the health department are barred by the eight-year statute of repose in OCGA § 9-3-51; that, even if the claims were not barred, Wilhelm had failed to show that Sussex made any fraudulent representations to her; and that she had failed to show that the county had any control over the creation or maintenance of the alleged nuisance.

1. Wilhelm contends that the trial court erred in concluding that her claims against Sussex and the health department are barred by OCGA § 9-3-51. Under OCGA § 9-3-51 (a) (1) and (2),

[n]o action to recover damages ... [f] or any deficiency in the survey or plat, planning, design, specifications, supervision or observation of construction, or construction of an improvement to real property ... [or for] injury to property, real or personal, arising out of any such deficiency . . . shall be brought against any person performing or furnishing the survey or plat, design, planning, supervision or observation of construction, or construction of such an improvement more than eight years after substantial completion of such an improvement.

(a) In this case, Wilhelm’s house (and the septic system) were completed before she moved in in November 1995, but she did not file suit for damages allegedly resulting from construction defects in the septic system and/or the development of the property until December 2004, more than nine years later. Thus, her claims against Sussex and the health department are barred by OCGA § 9-3-51.

(b) Wilhelm argues, however, that OCGA § 9-3-51 does not apply to her claims, because the septic system is not an “improvement to real property” as that term is used in the statute. She argues that, because the system was “faulty” and did not perform properly, it did not “add value” to the property, suggesting that only improvements which perform properly and do not cause damage “add value” to the property and, therefore, only those improvements would be subject to the limitation period in OCGA § 9-3-51. This argument lacks merit, however, because the statute specifically applies to “deficiencies” in the design or construction of an improvement to real property that causes personal injury or property damage, such as the septic system in this case. It follows that, while an improvement that works properly and does not cause any damage arguably “adds value” to the property, it could not be deemed as having a “deficiency” and, because it caused no damage, no cause of action would arise from its use. Therefore, the statute would not apply in such a case. See Armstrong v. Royal Lakes Assoc., 232 Ga. App. 643, 645 (1) (502 SE2d 758) (1998) (ruling that OCGA § 9-3-51 (a) did not apply to the case because it “did not involve a deficiency in the construction of an improvement to real property”) (citation omitted).

(c) Further, although Wilhelm asserted a cause of action for fraud in her complaint, a fraudulent act or statement by a defendant does not toll the statutory repose period of OCGA § 9-3-51, because “the statute of repose abrogates the action, and fraud under OCGA § 9-3-96[] does not toll the statute of repose.” Esener v. Kinsey, 240 Ga. App. 21, 23 (522 SE2d 522) (1999). However, a defendant may be equitably estopped from raising the defense of the statute of repose if the plaintiff reasonably relied on a fraudulent act or statement by the defendant that occurred after the plaintiffs injury accrued and, as a result of that fraud, the plaintiff did not file suit until after the repose period expired. Id. at 22-24.

In this case, though, Wilhelm failed to allege or to present evidence of any fraudulent act or statement to her by any of the defendants regarding the property’s history of drainage problems, or the possible causes thereof, that occurred after she purchased the property or of any fraud that prevented her from filing her cause of action before 2004. Consequently, the defendants were not equitably estopped from raising a defense based upon the expiration of the statutory repose period of OCGA § 9-3-51. Esener v. Kinsey, 240 Ga. App. at 24.

2. Wilhelm also argues that her nuisance claim is not barred by OCGA § 9-3-51, because the sewage backup from her negligently installed septic system constituted a “continuing nuisance” that is not subject to the eight-year statute of repose limitation period.

(a) This argument fails, however, because Wilhelm could not maintain a nuisance action under the facts asserted in her complaint. In Morgan Constr. Co. v. Kitchings, 110 Ga. App. 599 (139 SE2d 417) (1964), this Court held that a plaintiff cannot maintain a nuisance claim that is based upon damage to a house resulting from a defect constructed into the house that was concealed from the plaintiff by the builder and/or the seller. Instead, the applicable causes of action are fraud (against the seller) and/or negligent construction (against the builder). Cendant Mobility Financial Corp. v. Asuamah, 285 Ga. 818, 820-822 (684 SE2d 617) (2009); Morgan Constr. Co. v. Kitchings, 110 Ga. App. at 599.

(b) Moreover, in her complaint, Wilhelm alleged that, “with knowledge of the hydric soil and/or wetland condition of the property and the placement of fill dirt on the property,” Sussex “negligently and willfully pushed for and received the approval of the lot for a septic tank” and negligently installed the septic tank on the property, and the county and the health department “negligently and willfully approve[d] the lot for a septic tank.” The complaint alleged that these actions, both individually and in concert, resulted in the maintenance of a continuing nuisance on her property that amounted to a taking of her private property right. However, although the “continuing nuisance” (the sewage backup and related problems) began appearing shortly after Wilhelm purchased the property, she failed to allege any acts by the defendants after the installation of the septic system that could conceivably constitute their “maintenance” of either the septic system or the problems it created.

Decided June 21, 2011

Reconsideration denied July 6, 2011

Thus, the defendants’ acts that, according to Wilhelm, resulted in the problems she experienced were not just related to the “construction of an improvement to real property,” they were essential to such construction and occurred prior to the substantial completion of the improvement. Accordingly, any cause of action for damage to real property that resulted from the deficiencies in such construction is subject to the eight-year statute of repose in OCGA § 9-3-51. Wilhelm’s argument to the contrary is without merit.

3. Although the trial court did not rule on whether Wilhelm’s nuisance claim against the county is barred by OCGA § 9-3-51, its grant of summary judgment to the county on the claim should be affirmed for the reasons given in Divisions 1 and 2 under the “right for any reason” rule. See McPherson v. McPherson, 307 Ga. App. 548, 550 (1) (705 SE2d 314) (2011).

4. Having determined that Wilhelm’s claims are barred, her remaining alleged errors are moot.

Judgment affirmed.

Miller, P. J., and Doyle, J., concur.

Daniel, Lawson, Tuggle & Jerles, Robert R. Lawson, William R. Jerles, Jr., for appellant.

Lumley & Howell, Jerry A. Lumley, O’Neal, Long, Hall & Gurd, Michael J. Long, Buckley Brown, Timothy J. Buckley HI, Kelly L. Christopher, H. David Moore, for appellees.

       The undisputed evidence shows, however, that, in 1993, when Sussex originally submitted a proposed plat for the subdivision and the county approved the plat for development, Wilhelm’s lot was not designated as wetlands by the Army Corps of Engineers.

       Wilhelm sued the county and the county’s health department separately, although it is unclear whether they are separate entities. It is unnecessary to determine whether they are the same entity or not, however, because it would not change the outcome of the appeal and, therefore, it is immaterial.

       The words “improvement to real property” must be given a commonsense interpretation. An improvement, as contemplated by the statute, denotes a fixed alteration to the real estate. Several factors have arisen as being important to a commonsense analysis of what constitutes an improvement to real property. These factors are (1) is the improvement permanent in nature; (2) does it add to the value of the realty, for the purposes for which it was intended to be used; (3) was it intended by the contracting parties that the “improvement” in question be an improvement to real property or did they intend for it to remain personalty.
      (Citations and punctuation omitted; emphases in original and supplied.) Id.

       Under OCGA § 9-3-96, “[i]f the defendant or those under whom he claims are guilty of a fraud by which the plaintiff has been debarred or deterred from bringing an action, the period of limitation shall run only from the time of the plaintiffs discovery of the fraud.”

       Under OCGA § 41-1-1, a nuisance is “anything that causes hurt, inconvenience, or damage to another and the fact that the act done may otherwise be lawful shall not keep it from being a nuisance. The inconvenience complained of shall not be fanciful, or such as would affect only one of fastidious taste, but it shall be such as would affect an ordinary, reasonable man.”

       See Shaheen v. G & G Corp., 230 Ga. 646, 648 (2) (198 SE2d 853) (1973) (“In the case of nuisances which are transient rather than permanent in their character, the continuance of the injurious acts is considered a new nuisance, for which a fresh action will lie; and[,] although the original cause of action is barred, damages may be recovered for the continuance of the nuisance.”) (citation and punctuation omitted).

       In Cendant Mobility, the Supreme Court of Georgia stated as follows:
      Caveat emptor (“Let the buyer beware”) is a common-law doctrine which serves as the general rule with regard to the purchase of realty. The long-standing recognition of the existence of an exception to the application of caveat emptor where the seller’s fraud induced a purchaser of realty to buy the land makes caveat emptor unavailable as a defense to a seller, whether a builder or non-builder, when the seller engages in fraud, whether it be “active fraud” or “passive concealment fraud.” Thus, where the seller of a house knows the house has serious defects and fails to disclose the defects to the buyer who is unaware of the defects and could not have discovered them in the exercise of due diligence, the suppression of the facts constitutes fraud to which caveat emptor is not a viable defense.
      (Citations and footnotes omitted.) 285 Ga. at 819-820. Further, the Court held that the defense of caveat emptor is not available to builders against claims for negligent construction because, “where a dwelling is sold containing latent defects which the builder in the exercise of ordinary care knew or should have known and which the buyer could not have reasonably discovered in the exercise of ordinary care, it is only right that the builder should be liable in negligence.” (Citations and punctuation omitted.) Id. at 820.

       The trial court granted summary judgment to the county on the nuisance claim based upon its finding that there was no evidence that the county had any control over the creation or the maintenance of the nuisance.

       As for Wilhelm’s fraud claim, the court properly found that the county is protected by sovereign immunity. Wilhelm concedes this issue. Further, although the court did not rule upon whether the health department was also entitled to sovereign immunity on the fraud claim, this Court’s decision in Fielder v. Rice Constr. Co., 239 Ga. App. 362, 367-368 (2) (522 SE2d 13) (1999), suggests that it would have been.


author: Smith, Presiding Judge.

text:
    A10A2195.
    DAVIS v. DAVIS.
    (713 SE2d 694)
   Smith, Presiding Judge.

This is an action in equity seeking imposition of a constructive trust on a one-half interest in community property, later amended to an action seeking to domesticate a foreign judgment. The property was allegedly acquired during a marriage that ended in divorce in Louisiana in 1996. The trial court sat as the finder of fact; it took evidence and heard testimony from both parties concerning the divorce, their alleged settlement agreement, and the property at issue. It concluded that the petitioner, the former wife, failed to exercise reasonable diligence in pursuing her equitable claim and dismissed the petition. Because the trial court did not abuse its discretion in so concluding, we affirm.

This case has a convoluted history on appeal. The trial court, in accordance with the procedure outlined in Troup v. Loden, 266 Ga. 650, 651 (2) (469 SE2d 664) (1996), addressed the “factual defense” of laches by “sitting as a chancellor in equity, and without the intervention of a jury to hold an evidentiary hearing and issue findings of fact.” (Punctuation omitted.) Id. The trial court concluded that Mrs. Davis had failed to exercise reasonable diligence in pursuing her claim and dismissed the petition. She appealed to this court, which transferred the case to the Georgia Supreme Court on the basis that the claim arose from the parties’ divorce as well as equity and was thus within the Supreme Court’s jurisdiction. The Supreme Court, in a published opinion, returned the case to this court, concluding that the claim did not arise from the divorce and was not an equity case because the equitable remedy was “merely ancillary to underlying issues of law.” (Punctuation omitted.) Davis v. Davis, 287 Ga. 897, 899 (700 SE2d 404) (2010). We now address the merits.

The Davises were divorced in Louisiana in 1996. Louisiana is a community property state, Davis, supra, 287 Ga. at 897, but the judgment of divorce is silent as to the division of any community property. Mrs. Davis was served with the pleadings but filed no answer, and judgment was entered on the default. In 2008, she filed this action seeking equitable relief in the form of a constructive trust as to certain real estate and Mr. Davis’s military pension. Mr. Davis asserted a plea of laches and moved to dismiss the petition. At a hearing on the motion to dismiss, the trial court took evidence and heard testimony from both Mr. and Mrs. Davis. The parties were cross-examined, and the trial court questioned Mrs. Davis.

Mrs. Davis testified that she and Mr. Davis discussed his pension as part of their divorce. She asserted that they reached a verbal agreement that she would receive $550 per month from his pension for life or until she remarried. She acknowledged that she received a copy of the divorce decree, however, and “it’s not in there.” When questioned regarding her failure to act on this omission, she testified:

Q. All right. And — so you objected to the papers. You acknowledged service. Is that what you’re saying?
A. I acknowledged the service, sir, and with that paper I let him know what I wanted from the divorce, but when I got it, it was not there. He agreed to it, what I wrote on the paper, but when I got the actual divorce, I mean, acknowl-edgement, it was not there what I wanted. I listed the things I wanted, but he did not put it on there.
Q. You did not file a response. You never filed an answer to the Court to let the Court know what you wanted.
A. I thought he was a gentleman and would do the right thing.
Q. Just answer my question, ma’am.
A. No, I did not, sir.
Q. Never filed a response to ask for anything.
A. No, sir, I did not.

Mrs. Davis expected the payments to start in February 2003, upon Mr. Davis’s retirement. She testified that he began making only sporadic payments beginning in November 2004, stopping for a period in 2004 and again in 2006. A witness from the Defense Finance Accounting Services, however, testified that regular monthly payments of $400 were made to Mrs. Davis “for the period of January 2004 through March 2006.” These were not in the form of an “allotment” with a start-stop date, or a designated share of Mr. Davis’s pension, but discretionary payments from his retirement account at his direction.

Mr. Davis testified that these payments were not a property settlement of a share of his pension, but the result of his agreement to assist with their son’s college education. He later discovered that the son was not attending college, however, so he stopped the payments, and the son had to pay the money back. Mrs. Davis acknowledged that the son went to college for one semester but “stopped going December, 2003.” She contended that she asked for $550 as her share of the pension, but Mr. Davis would only pay $400, and that she thought she sent him an e-mail and that they discussed the amount. She did not produce any e-mail or other writing. Mr. Davis denied having discussed any pension amount with her. After the payments stopped in March 2006, Mrs. Davis did not bring this action until February 2008.

The trial court specifically found that the action was brought in equity and that the law of Georgia rather than that of Louisiana applied. We agree, for two reasons. First, neither party pled or proved Louisiana law in proper form. See OCGA §§ 24-7-24, 9-11-43 (c). The requirement that the parties give notice and thereafter prove the law of another state was instituted “to give both the court and opposing party adequate preparation time for the litigation of the foreign law issue. [Cits.]” Samay v. Som, 213 Ga. App. 812, 814 (2) (a) (446 SE2d 230) (1994). In the absence of notice or proof of foreign law, Georgia law applies. Giarratano v. Glickman, 232 Ga. App. 75 (501 SE2d 266) (1998). Compare Wallack v. Wallack, 211 Ga. 745 (88 SE2d 154) (1955), cited by the Georgia Supreme Court in its transfer order, in which the parties properly pled the community property laws of Texas: “The community-property law of Texas being pleaded, the rights of the parties as to the personal property involved in this case will be determined by the pleaded statutes of Texas and the construction placed on such statutes by the courts of that State. [Cits.]” Id. at 747 (1).

Even if we were to apply the laws of Louisiana, however, this action is foreclosed because Louisiana provides a specific, exclusive statutory scheme for the division of community property, and the parties have failed to comply with the provisions of that statute. La. Civ. Code. Ann. art. 2369.8 provides: “A spouse has the right to demand partition of former community property at any time. A contrary agreement is absolutely null. If the spouses are unable to agree on the partition, either spouse may demand judicial partition which shall be conducted in accordance with R.S. 9:2801.” (Emphasis supplied.) That statute establishes a mandatory, detailed process for the resolution of community property claims and claims “arising from matrimonial regimes,” requiring that the parties file a motion and “a sworn detailed descriptive list of all community property, the fair market value and location of each asset, and all community liabilities.” La. Rev. Stat. Ann. § 9:2801 (A) (1) (a). The statute further provides for traverse of the list, appointment of experts, amendment, summary procedure, and the partition of the property according to enumerated, detailed principles of law. See La. Rev. Stat. Ann. § 9:2801 (A) (2), (3), (4).

Golden u. Waterhouse, 953 S2d 927 (La. Ct. App. 2007), demonstrates the proper method for resolution of this dispute. The parties brought an action to partition community property under La. Rev. Stat. Ann. § 9:2801 in the Louisiana district court, and the trial court granted the respondent’s Exception of Lack of Jurisdiction and dismissed the petition. The Court of Appeal of Louisiana, citing the trial court’s continuing jurisdiction, reversed the trial court’s grant of the Exception for Lack of Jurisdiction and dismissal, although neither party was a resident of Louisiana at the time of the petition and the judgment of divorce had been entered 11 years before the petition was filed. Id. at 928, 929. Here, Mrs. Davis failed to comply with the Louisiana statute, and in fact originally alleged that her petition was to impose a constructive trust under former OCGA § 53-12-93 [now OCGA § 53-12-132], although she later amended her petition to assert that it was a complaint “to domesticate a foreign judgment as shown.” Neither she nor Mr. Davis ever asserted, pled, or relied upon the Louisiana Civil Code or the relevant statute providing for a division of community property according to that state’s law.

During the litigation below, Mrs. Davis filed an amendment to her complaint, restyling the complaint “To Domesticate Louisiana Judgment of Divorce” and stating that the amendment was “towards clarifying that it is to domesticate a foreign judgment as shown.” But this amendment is of no avail, because OCGA § 9-3-20 provides: “All actions upon judgments obtained outside this state, except judgments for child support or spousal support, or both, shall be brought within five years after such judgments have been obtained.” See Eickhoff v. Eickhoff, 263 Ga. 498 (435 SE2d 914) (1993) (divorce decree), overruled on other grounds, Lee v. Green Land Co., 272 Ga. 107, 108 (527 SE2d 204) (2000) (“whenever the grant or denial of equitable relief is ancillary to an underlying issue of law, the appeal is not within the Supreme Court’s equitable jurisdiction.”).

The issue before us, therefore, is whether the trial court, sitting in equity, correctly determined under Georgia law that Mrs. Davis “failed to exercise reasonable diligence in the underlying divorce action.”

In determining whether laches should apply, courts consider the length of the delay, the sufficiency of the excuse, the loss of evidence on disputed matters, the opportunity for the claimant to have acted sooner, and whether the plaintiff or defendant possessed the property during the delay. The defendant must show prejudice from the delay.

(Citations and footnotes omitted.) Troup, supra, 266 Ga. at 651 (1).

In determining what constitutes laches, each case must be determined according to its particular circumstances. Additionally, the question of laches is addressed to the sound discretion of the trial court, and on appeal the exercise of that discretion will not be disturbed unless it is so clearly wrong as to amount to an abuse of discretion. We have held that a party is not entitled to an injunction when, with full knowledge of his rights, he has been guilty of delay and laches in asserting them. We have also noted that a factor in determining laches is the sufficiency of the excuse offered in extenuation of the delay.

(Citations, punctuation and emphasis omitted.) McClure v. Davidson, 258 Ga. 706, 708 (2) (373 SE2d 617) (1988). And the statute governing constructive trusts, upon which Mrs. Davis relied in her original complaint, provides that “the person claiming the beneficial interest in the property may be found to have waived the right to a constructive trust by subsequent ratification or long acquiescence.” (Emphasis supplied.) OCGA § 53-12-132 (b).

Furthermore,

[a] court of equity will not act unless it is shown that the party seeking relief has exercised reasonable diligence. In this case the plaintiff was under a positive legal duty to file promptly with the court. . . , and not having done so when ample time was available, [s]he is not entitled to the relief sought in this court.

(Citations and punctuation omitted.) Vinson v. Citizens & Southern Nat. Bank, 223 Ga. 54, 55-56 (153 SE2d 436) (1967). Vinson cites the former equity Code sections now codified as OCGA § 23-2-29 (Ga. Code Ann. § 37-211) (if party’s reasonable diligence could have revealed truth, equity shall not grant relief) and OCGA § 23-2-32 (Ga. Code Ann. § 37-212) (negligence of complaining party preventing relief in equity is want of reasonable prudence in violation of legal duty). See also OCGA § 23-1-25 (laches). The trial court relied upon Vinson in making its ruling.

Decided July 6, 2011.

Louie B. Hendricks, for appellant.

John E. Pirkle, for appellee.

Mrs. Davis’s testimony provides ample basis for the trial court’s conclusion that she slept upon her rights, whether in connection with the divorce action itself or her conduct in the 12 years intervening between the decree and this action. She testified that the alleged settlement agreement was supposed to have been incorporated in the divorce decree, but she failed to take any action to remedy that omission for 12 years. And, under Louisiana law, the court in which the decree of divorce was issued retains “continuing jurisdiction over the subject matter and the parties until final resolution” of retirement or other deferred employment benefits. La. Rev. Stat. Ann. § 9:2801 (B). She took no action for five years after she contended the pension payments became due under the alleged settlement agreement but were not paid. She still failed to act when the payments she alleges were made under that agreement were reduced in amount and paid only sporadically. Finally, she waited an additional two years after the alleged pension payments stopped completely to bring this action. Under these circumstances, we cannot say that the trial court abused its discretion in ruling that Mrs. Davis failed to exercise reasonable diligence to preserve her claim in equity. McClure, supra, 258 Ga. at 708 (2).

Judgment affirmed.

Mikell and Adams, JJ., concur.

       The Supreme Court has also held that the defense of laches does not invoke its jurisdiction. Redfearn v. Huntcliff Homes Assn., 271 Ga. 745, 748 (3) (524 SE2d 464) (1999).

       Louisiana law presents unique challenges for the practitioner unfamiliar with its venerable civil code, based upon the Code Napoléon and having its own interpretive process distinct from that applied at common law. Delaune Estate v. United States, 143 F3d 995, 1002 (IV) (B) (2), n. 6 (5th Cir. 1998). “[UJnder the Louisiana Law Civil, the past is not dead; . . . the past will not die; and . . . , indeed, the past is not even past.” Id. at 998.

       Mrs. Davis’s specific claim or claims are somewhat confusing. Her amended complaint appears to abandon her original cause of action and rely entirely upon the decree of divorce. This does not, however, cure her failure to comply with La. Rev. Stat. Ann. § 9:2801, nor does it address the statute of limitation on the domestication of foreign judgments.