author: WHIPPLE, J.

text:
    Elgrie LEWIS v. TEMPLE INLAND.
    Nos. 2011 CA 0729, 2011 CA 0730.
    Court of Appeal of Louisiana, First Circuit.
    Nov. 9, 2011.

      Jennifer Cortes Poirier, Covington, LA, for Plaintiff/Appellee, Elgrie Lewis.
    Leslie E. Hodge, Lindsay F. Louapre, New Orleans, LA, for Defendant/Appellant, Temple Inland.
    Before WHIPPLE, KUHN, and GUIDRY, JJ.
   WHIPPLE, J.

|2In this workers’ compensation case, the employer appeals a judgment awarding the injured employee supplemental earnings benefits, vocational rehabilitation services, and mileage reimbursement and assessing various penalties and attorney’s fees. For the following reasons, we reverse in part, amend in part, and affirm as amended.

FACTS AND PROCEDURAL HISTORY

Elgrie Lewis was employed by Temple Inland as a process operator and had been employed by Temple Inland for thirty-three years at the time of the accident at issue. On July 5, 2009, Elgrie Lewis tripped over a hose while working for Temple Inland and fractured his right ankle. Lewis was treated by Dr. H. Reiss Plauche, an orthopedic surgeon, and he ultimately underwent two surgeries, an open reduction with internal fixation on July 8, 2009, and open hardware removal on January 13, 2010. Dr. Plauche restricted Lewis from work through the date of the second surgery on January 13, 2010.

Meanwhile, Dr. Plauche recommended that Lewis undergo a functional capacity evaluation (FCE). The evaluation, performed on December 10, 2009, indicated that Lewis could return to light- to medium-duty work for six to eight hours a day with various restrictions. The restrictions included working a six- to eight-hour workday, occasional lifting of up to thirty-four pounds, occasional modified squatting, occasional climbing and use of stairs, and standing for up to six hours a day.

On February 9, 2010, a rehabilitation conference was held with the Temple Inland case manager, Lewis, and Dr. Plauche in attendance. |sDespite the fact that the physical requirements of Lewis’s job at Temple Inland exceeded the restrictions set forth in the FCE, the parties agreed that Lewis would attempt to go back to work, although Temple Inland would not make a job within his restrictions available to him. Dr. Plauche considered this to be a conditional release to return to work to determine if Lewis could tolerate the job.

Thereafter, on February 15, 2010, Lewis attempted to return to work with a walking cane, which he had been using since the surgery and the use of which had been approved by Dr. Plauche for pain relief. However, taking the position that the release to return to work did not indicate that Lewis was cane-dependent, and that Temple Inland only allows employees to return to work when they can work at full-duty capacity, the safety manager informed Lewis that he would not be allowed to enter the mill with the cane. Thus, Lewis was not allowed to return to his job that day. Temple Inland subsequently terminated Lewis’s weekly indemnity benefits as of that date, taking the position that he had been released to full duty by Dr. Plauche.

Lewis then returned to Dr. Plauche on February 22, 2010. At that visit, Lewis related to Dr. Plauche that his boss would not allow him to use the cane at work, and that there was no diminished work schedule and no adjustments at work. While Dr. Plauche believed that Lewis could perform work within the FCE restrictions, because nothing within those restrictions |4was available to Lewis at Temple Inland, he again restricted Lewis from work on that date.

Despite the fact that Dr. Plauche again restricted Lewis from work, Temple Inland refused to reinstate his weekly indemnity benefits. Accordingly, on March 12, 2010, Lewis filed a Disputed Claim for Compensation, seeking, among other things, reinstatement of weekly indemnity benefits and vocational rehabilitation services. Lewis later amended his claim to request reimbursement for mileage expenses and penalties and attorney’s fees for failure to timely pay mileage reimbursement, failure to pay indemnity benefits, and failure to timely provide Lewis with the FCE report. Subsequently, Lewis filed a second Disputed Claim for Compensation, seeking penalties and attorney’s fees pursuant to LSA-R.S. 23:1208, based on certain fraudulent misrepresentations of the employer, Temple Inland. This claim was based on the statements of Robin Chapman and Timony Winstead, the claims adjuster and supervisor of the nurse case manager handling the claim for Temple Inland. This second claim was consolidated with his prior claim, and both matters proceeded to trial together.

Following a trial on October 7, 2010, and November 19, 2010, the workers’ compensation judge rendered judgment dated January 11, 2010, in favor of Lewis as follows:

(1) ordering Temple Inland to pay Lewis $1,070.25 in mileage reimbursement, together with interest, a penalty of $2,000.00, and attorney’s fees of $5,000.00 for failure to reasonably controvert the claim for mileage reimbursement;
ls(2) ordering Temple Inland to pay Lewis supplemental earnings benefits (SEBs) in the amount of $2,366.00 per month, retroactive to February 15, 2010, and continuing, together with interest, and a penalty of $2,000.00 and attorney’s fees of $5,000.00 for failure to reasonably controvert Lewis’s claim for SEBs;
(3) ordering Temple Inland to provide vocational rehabilitation services to Lewis and assessing a $2,000.00 penalty and $5,000.00 in attorney’s fees for failure to provide prompt vocational rehabilitation services;
(4) ordering Temple Inland to pay Lewis a $250.00 penalty and $1,000.00 in attorney’s fees for failure to timely provide Lewis with a copy of the FCE report;
(5) ordering Timony Winstead and Robin Chapman to each pay a $1,000.00 civil penalty to the Kids Chance Scholarship Fund, Louisiana Bar Foundation, for violating the provisions of LSA-R.S. 23:1208; and
(6) ordering Temple Inland to pay costs.

From this judgment, Temple Inland appeals, contending that the workers’ compensation judge erred in: (1) assessing a penalty and attorney’s fee for the failure to provide prompt vocational rehabilitation services; (2) assessing a penalty and attorney’s fee for failure to reasonably controvert Lewis’s claim for SEBs; (3) failing to address Temple Inland’s retirement argument; and (4) finding that Robin Chapman and Timony Winstead violated the provisions of LSA-R.S. 23:1208. Lewis answered the appeal, contending that the workers’ compensation judge erred in failing to award penalties and attorney’s fees pursuant to LSA-R.S. 23:1201(1) for Temple Inland’s improper termination of benefits and seeking an additional award of attorney’s fees for the work performed on appeal.

^PENALTIES AND ATTORNEY’S FEES

Regarding penalties and attorney’s fees for failure to commence payment of benefits, LSA-R.S. 23:1201(F) provides, in pertinent part:

Failure to provide payment in accordance with this Section ... shall result in the assessment of a penalty in an amount up to the greater of twelve percent of any unpaid compensation or medical benefits, or fifty dollars per calendar day for each day in which any and all compensation or medical benefits remain unpaid ..., together with reasonable attorney fees for each disputed claim; however, the fifty dollars per calendar day penalty shall not exceed a maximum of two thousand dollars in the aggregate for any claim. The maximum amount of penalties which may be imposed at a hearing on the merits regardless of the number of penalties which might be imposed under this Section is eight thousand dollars.... Penalties shall be assessed in the following manner:
(2) This Subsection shall not apply if the claim is reasonably controverted....

Thus, pursuant to LSA-R.S. 23:1201(F), an employer or insurer may be assessed with penalties and attorney’s fees for failure to timely pay weekly indemnity or medical benefits where the employer or insurer has failed to reasonably controvert the claim. Clark v. Godfrey Knight Farms, Inc., 2008-1723 (La.App. 1st Cir.2/13/09), 6 So.3d 284, 297, writ denied, 2009-0562 (La.5/29/09), 9 So.3d 163. A claim is reasonably controverted when the employer has sufficient factual and/or medical information to counter evidence presented by the employee. Clark, 6 So.3d at 297.

With regard to the discontinuation of benefits, on the other hand, LSA-R.S. 23:1201(1) applies and provides, in pertinent part:

Any employer or insurer who at any time discontinues payment of claims due and arising under this Chapter, when such discontinuance is found to be arbitrary, capricious, or without probable cause, shall be subject to the payment of a penalty not to exceed eight thousand dollars and a reasonable attorney fee for the prosecution and collection of such claims....

Arbitrary and capricious behavior consists of willful and unreasoning action, without consideration and regard for facts and circumstances presented, or of |7seemingly unfounded motivation. The crucial inquiry is whether the employer has an articulated and objective reason for discontinuing benefits at the time it took that action. Life Flight of New Orleans v. Homrighausen, 2005-2538 (La.App. 1st Cir.12/28/06), 952 So.2d 45, 52, writ denied, 2007-0558 (La.5/4/07), 956 So.2d 615.

Penalties and Attorney’s Fees for Failure to Initiate Vocational Rehabilitation Services (Temple Inland’s Assignment of Error No. 1)

In its first assignment of error, Temple Inland contends that the workers’ compensation judge erred in assessing a penalty and attorney’s fees for its failure to initiate vocational rehabilitation services where the Louisiana Workers’ Compensation Act does not provide for a sanction on the employer or insurer for failure to timely provide such services.

The Louisiana statutory scheme provides that when the employee has suffered a work injury, which precludes him from earning wages equal to the wages earned prior to the injury, the employee “shall be” entitled to prompt rehabilitation services. LSA-R.S. 23:1226(A). However, while LSA-R.S. 23:1226 provides for the reduction of the employee’s weekly indemnity benefits for refusal to accept rehabilitation, see LSA-R.S. 23:1226(B)(3)(c), it does not specifically authorize, or preclude, an assessment of a penalty or attorney’s fees against the employer for failure to provide such services. See Dubois v. Louisiana Forest Industries, Inc., 98-895 (La.App. 3rd Cir.12/9/98), 722 So.2d 409, 417, writ denied, 99-0049 (La.2/26/99), 738 So.2d 586. Thus, the legal question presented in this assignment of error is whether the penalty and attorney’s fee provisions of LSA-R.S. 23:1201 apply to an employer’s failure to initiate vocational rehabilitation services.

The statutory provisions governing the assessment of penalties and attorney’s fees were amended in 2003. Prior to amendment by La. Acts | s2003, No. 1204, § 1, subsection (F) of LSA-R.S. 23:1201 similarly provided for penalties and attorney’s fees based upon the employer’s failure to pay “compensation or medical benefits” where the claim was not reasonably controverted. On the other hand, LSA-R.S. 23:1201.2, prior to repeal by La. Acts 2003, No. 1204, § 2 provided only for attorney’s fees where the employer arbitrarily or capriciously discontinued payment of “claims due.” Poole v. Guy Hopkins Construction, 2007-0079 (La.App. 1st Cir.11/2/07), 984 So.2d 43, 51. With the repeal of LSA-R.S. 23:1201.2, the legislature also enacted subsection (I) of LSA-R.S. 23:1201, as set forth above, which subjects the employer to both penalties and attorney’s fees for the arbitrary and capricious discontinuance of “claims due.” Thus, one notable change effected by the 2003 amendments was the addition of a claim for penalties for the arbitrary and capricious discontinuance of “claims due.” However, as reflected in the jurisprudence both prior and subsequent to the 2003 amendment, the courts have recognized a distinction between the failure to initiate payment as opposed to discontinuance of payment, as well as a distinction between payment of “compensation and medical benefits” and payment of “claims due.”

As noted by the Louisiana Supreme Court in Chelette v. Riverwood International USA, Inc., 2003-1483 (La.10/17/03), 858 So.2d 412, 413 (per curiam), subsection (F) of LSA-R.S. 23:1201 addresses penalties and attorney’s fees where the employer fails to commence payment of certain benefits. Specifically, the penalties and attorney’s fees available pursuant to LSA-R.S. 23:1201(F) apply to the failure to commence payment of weekly indemnity benefits and medical benefits, not to the failure to initiate vocational rehabilitation. See Chelette, 858 So.2d at 413, and Clark, 6 So.3d at 297.

|aOn the other hand, while the term “claims due,” as set forth in LSA-R.S. 23:1201(1), has been more broadly interpreted to include vocational rehabilitation services, the language of LSA-R.S. 23:1201(1) is structured such that it addresses only the arbitrary and capricious discontinuance of payment of “claims due,” and not the failure to commence payment of claims such as vocational rehabilitation. See Haynes v. Williams Fence and Aluminum, 2002-0442 (La.4/21/03), 851 So.2d 917, 918 (on rehearing) (per curiam) (holding that the phrase “claims due” in prior LSA-R.S. 23:1201.2 included claims for vocational rehabilitation), and Life Flight of New Orleans, 952 So.2d at 52 (affirming a $2,000.00 penalty for the arbitrary and capricious termination of vocational rehabilitation services).

In the instant case, Temple Inland failed to commence vocational rehabilitation services for Lewis. Thus, because this claim arose from the failure to commence, rather than the discontinuance of, payment of a claim due, we are constrained to find that the penalty and attorney’s fee provisions of LSA-R.S. 23:1201(1), governing discontinuance of payment of a claim due, are not applicable to this claim. Moreover, the provisions of LSA-R.S. 23:1201(F), governing failure to commence payment, also do not apply, |inbecause this claim involves a request for vocational rehabilitation services, rather than weekly indemnity or medical benefits.

While we candidly recognize that a statutory framework where penalties and attorney’s fees are recoverable for the arbitrary and capricious discontinuance of vocational rehabilitation services, but are not recoverable for the failure to initiate or commence vocational rehabilitation appears to be patently inequitable and would seemingly encourage employers to simply refuse to initiate such services, we are required to apply the statutes as enacted by the legislature. Moreover, statutes providing for penalties and attorney’s fees are penal in nature and must be strictly construed. Life Flight of New Orleans, 952 So.2d at 52. Accordingly, after strictly construing and applying the clear language of LSA-R.S. 23:1201(F), as we are required to do, we are constrained to conclude that the workers’ compensation judge committed legal error in awarding penalties and attorney’s fees for Temple Inland’s failure to commence vocational rehabilitation services for Lewis. Accordingly, that portion of the judgment must be vacated.

This assignment of error has merit.

Penalties and Attorney’s Fees for Failure to Reasonably Controvert Claim for SEBs (Temple Inland’s Assignment of Error No. 2)

In this assignment of error, Temple Inland challenges the workers’ compensation judge’s factual finding that it failed to reasonably controvert Lewis’s entitlement to SEBs. Specifically, Temple Inland contends that although Dr. Plauche’s February 22, 2010 report restricted Lewis to work within the restrictions set forth in the FCE, Dr. Plauche also completed a return-to-work slip that same date in which he stated that Lewis could perform “no work until further notice.” Thus, Temple Inland argues that based on the February 22, 2010 report only, SEBs would be appropriate, h,However, if it referred to the slip showing that Lewis could perform “no work,” then temporary total disability benefits (TTDs) would have been appropriate. Accordingly, Temple Inland contends that its failure to pay was justified and excusable, because it was “unfair for the Workers’ Compensation Court to expect the [defendants to have concluded that [Lewis] was entitled to [SEBs],” as “[t]he confusion was such that [it] could not have reasonably known the type of benefits, if any, that [Lewis] was owed.” Temple Inland argues that it was accordingly justified in paying nothing to Lewis and was “reasonable in not initiating [SEBs] until clarification had been obtained regarding disability status and ability to work from Dr. Plauche.” On review, after considering the applicable legal precepts and the record before us, we reject these arguments as meritless.

The workers’ compensation judge’s determination of whether an employer or insurer should be cast with penalties and attorney’s fees is essentially a question of fact subject to the manifest error or clearly wrong standard of review. See Clark, 6 So.3d at 297, and Life Flight of New Orleans, 952 So.2d at 52. As set forth above, Lewis underwent an FCE on December 10, 2009, which documented that he could perform light- to medium-duty work for six to eight hours a day, with various restrictions, and that the requirements of Lewis’s pre-accident job at Temple Inland exceeded those restrictions. Nonetheless, at a February 9, 2010 rehabilitation conference attended by Lewis, the Temple Inland case manager and Dr. Plauche, the parties agreed that Lewis would be allowed to attempt to return to work despite the fact that the physical requirements of Lewis’s job at Temple Inland exceeded the restrictions set forth in the FCE. The record further reveals that Dr. Plauche considered this to be a conditional release to | ^return to work to see if Lewis could tolerate the job, and that he believed that Temple Inland would accommodate Lewis.

However, Dr. Plauche noted that Lewis attempted to return to work with a cane, and that this became “a big issue.” Thus, although he stated in his February 22, 2010 report that Lewis could work within the physical restrictions outlined in the December 10, 2009 FCE, Dr. Plauche again restricted Lewis from work that date, considering: (1) the only type of work then available to Lewis with Temple Inland exceeded his physical restrictions, and (2) that Lewis would probably need retraining to be able to perform some other type of job.

With regard to Temple Inland’s explanation that its conduct was reasonable, and that it justifiably discontinued weekly indemnity benefits because Dr. Plauche’s February 22, 2010 report and return-to-work restriction purportedly created “confusion” as to whether Lewis was entitled to TTDs or SEBs, we again find no merit. In rejecting the explanation offered by Temple Inland, we note that the law is clear that where an employer fails to properly investigate a claim, it subjects itself to penalties and attorney’s fees. Guillory v. Bofinger’s Tree Service, 2006-0086 (La.App. 1st Cir.11/3/06), 950 So.2d 682, 692. To simply choose to discontinue any form of weekly indemnity benefit based on alleged “confusion” was not warranted under the known facts herein. Thus, considering the foregoing and the record as a whole, including the credibility determinations made by the factfinder below in weighing the testimony offered to support Temple Inland’s defense and to explain its action, we not only find no manifest error in the workers’ compensation judge’s finding | ,3that Temple Inland failed to reasonably controvert Lewis’s continued entitlement to weekly indemnity benefits, but we also conclude that its actions in discontinuing payment of weekly benefits were arbitrary and capricious.

This assignment of error lacks merit.

VOLUNTARY WITHDRAWAL FROM THE WORKFORCE (Temple Inland’s Assignment of Error No. 3)

In its third assignment of error, Temple Inland contends that the workers’ compensation judge erred in failing to address its argument that Lewis had voluntarily withdrawn from the workforce and, thus, was retired. At the outset, we note that the mere fact that the workers’ compensation judge’s reasons for judgment are silent as to the retirement argument raised by Temple Inland does not reflect or establish that the judge failed to consider the argument. Rather, we view the workers’ compensation judge’s silence as to this argument presented by Temple Inland as a rejection of the argument. See Anthony’s Auto Sales, Inc. v. Shephard, 600 So.2d 125, 128 (La.App. 2nd Cir.1992), and Reilly v. Gene Ducote Volkswagen, Inc., 549 So.2d 428, 433 (La.App. 5th Cir.1989). Thus, on appeal, we consider the issue before us to be whether the workers’ compensation judge erred in rejecting the argument that Lewis had voluntarily retired from the workforce.

Louisiana Revised Statute 23:1221(3)(d)(iii), which addresses an employee’s entitlement to SEBs when the employee retires, provides:

(d) The right to supplemental earnings benefits pursuant to this Paragraph shall in no event exceed a maximum of five hundred twenty weeks, but shall terminate:
|14(iii) When the employee retires; however, the period during which supplemental earnings benefits may be payable shall not be less than one hundred four weeks.

The “retirement” referred to in LSA-R.S. 23:1221(3)(d)(iii) is not the failure to work because of disability. Instead, it refers to the worker who has no intention of returning to work regardless of disability. See Allen v. City of Shreveport, 637 So.2d 123, 126-127 (La.1994); Peters v. General Motors Corporation, 39,279 (La.App. 2nd Cir.1/26/05), 892 So.2d 717, 723. Where a worker has retired from a heavy work duty job, but is still willing to take on light duty employment within the scope of the limitations imposed by his disabilities, then that worker is not deemed to have withdrawn from the workforce and is not considered to have retired under that statute. Oestringer v. City of New Orleans, 2003-2213 (La.App. 4th Cir.6/2/04), 876 So.2d 240, 243. Whether a worker has retired within the meaning of LSA-R.S. 23:1221(3)(d)(iii) is a question of fact reviewable on appeal under the manifest error standard of review. Palisi v. City of New Orleans Fire Department, 95-1455 (La.App. 4th Cir.3/12/97), 690 So.2d 1018, 1048, writs denied, 97-0953, 97-1293 (La.6/20/97), 695 So.2d 1352, 1363.

In support of its argument that Lewis has “retired” within the meaning of LSA-R.S. 23:1221(3)(d)(iii), Temple Inland contends that Lewis’s trial testimony that he would not accept any employment paying only ninety percent of his pre-injury wage and, additionally, his decision to accept early retirement from Temple Inland in August 2010 demonstrate an intention to permanently withdraw from the workforce. We disagree.

At trial, Lewis testified that he does want to go back to work, but that he cannot physically perform his pre-injury job because of his ankle injury. He further testified that he had requested that Temple Inland provide him |15with vocational rehabilitation so that he could obtain a new job, but that Temple Inland had not authorized those services.

When questioned on cross-examination as to whether he would be willing to return to work at Temple Inland or another employer at a rate of ninety percent of his pre-injury wages, Lewis did respond, “no.” Lewis explained that his previous co-workers at Temple Inland had received a raise since he had been off of work, and he indicated that he would accept a job at Temple Inland or elsewhere if the wage rate was ninety percent of what his pre-injury job presently pays. However, as further reflected in Lewis’s testimony, Temple Inland had fired him and had made no offers to him to return to any job. While Lewis’s belief that he should not have to accept less than ninety percent of the current wage rate of his former job upon his return to work perhaps reveals a misunderstanding of the workers’ compensation scheme, his misunderstanding does not establish or equate to proof of an intent to permanently withdraw from the workforce. Thus, we find no manifest error in the workers’ compensation judge’s rejection of this argument by Temple Inland.

Moreover, regarding Lewis’s decision to accept early retirement from Temple Inland, we note that an employee’s decision to accept early retirement does not necessarily equate to retirement as contemplated by LSA-R.S. 23:1221(3)(d)(iii). See Tynes v. Gaylord Container Corporation, 2002-0519 (La.App. 1st Cir.2/14/03), 844 So.2d 80, 88-89, writ denied, 2003-0769 (La.5/9/03), 843 So.2d 404. Clearly, Lewis was unable to return to his previous job due to his work-related injury. Nonetheless, Temple Inland terminated all weekly indemnity benefits effective February 15, 2010, and then subsequently terminated Lewis’s employment effective July 15, 2010. Moreover, Temple Inland refused to authorize vocational | ^rehabilitation for Lewis to assist him in finding employment within his physical limitations, leaving Lewis in a position where he was receiving no compensation payments or income. Accordingly, we find no manifest error in the workers’ compensation judge’s rejection of Temple Inland’s argument that Lewis’s decision to accept early retirement from Temple Inland in August 2010, after thirty-three years of employment with Temple Inland, was a truly voluntary decision or that this demonstrated a decision to permanently withdraw from the workforce.

Thus, we also find no merit to this assignment of error.

LSA-R.S. 23:1208 FRAUDULENT MISREPRESENTATION (Temple Inland’s Assignment of Error No. 4)

In its final assignment of error, Temple Inland contends that the workers’ compensation judge manifestly erred in finding that Robin Chapman, the claims adjuster handling Lewis’s claim for Temple Inland, and Timony Winstead, the regional manager of the company providing case management services for Temple Inland who supervised nurse case manager Tara Bordelon, violated the provisions of LSA-R.S. 23:1208 with regard to Lewis’s claim for mileage reimbursement for travel to and from his medical appointments. While acknowledging that Chapman and Winstead made untruthful and inaccurate statements in affidavits, Temple Inland nonetheless argues that there “was never a willful intent” to defeat Lewis’s entitlement to benefits.

The workers’ compensation statutory scheme provides for the imposition of civil penalties when a person, for the purpose of defeating any workers’ compensation benefit or payment, willfully makes a false statement 117or representation. LSA-R.S. 23:1208(A) & (D); Davis v. Farm Fresh Food Supplier, 2003-1381 (La.App. 1st Cir.5/14/04), 879 So.2d 215, 221. Additionally, LSA-R.S. 23:1208 makes it sanctionable for “any person, whether present or absent, directly or indirectly to aid and abet an employer” in willfully making a false statement or representation. LSA-R.S. 23:1208(B) & (D). The statute is broadly worded and encompasses any false statement or misrepresentation made to anyone when made willfully or deliberately for the purpose of obtaining or defeating benefits. Magee v. Abek, Inc., 2004-2554 (La.App. 1st Cir.4/28/06), 934 So.2d 800, 808, writ denied, 2006-1876 (La.10/27/06), 939 So.2d 1287. The relationship between the false statement and the pending claim is probative in determining whether the statement was made willfully for the purpose of defeating benefits. Davis, 879 So.2d at 221.

In the instant case, Lewis’s claim for penalties due under LSA-R.S. 23:1208 centered around his claim for mileage reimbursement and Temple Inland’s assertion that he made no such request for mileage reimbursement prior to August of 2010. Lewis contended in his first amending and supplemental Disputed Claim for Compensation that Temple Inland had failed to timely pay his mileage reimbursement and, accordingly, that he was entitled to penalties and attorney’s fees pursuant to LSA-R.S. 23:1201(F). In response, Temple Inland answered and denied the allegations of the amended claim.

Additionally, in preparation of its defense against this claim by Lewis, Temple Inland obtained affidavits from Chapman and Winstead. In her affidavit, Winstead attested that she had reviewed Bordelon’s case management file for Lewis, and that there were no mileage logs or mileage reimbursement requests for the period of July 7, 2009 through February 9, |1S2010. Similarly, Chapman attested under oath that she had “reviewed the complete claims file and notes for Elgrie Lewis,” and that “there is no mileage reimbursement request or mileage log for the period of July 7, 2009 through February 9, 2010 contained therein until on or about August 24, 2010,” when it was forwarded to her by defense counsel. Chapman further attested that if such mileage reimbursement requests had been submitted by Lewis prior to that time, these would have been placed in his claims file. Temple Inland listed these affidavits in its Witness and Exhibit List filed in the proceedings below on October 7, 2010, the day of trial. However, at the commencement of trial, counsel for Temple Inland sought to withdraw the two affidavits from its defense exhibits, prompting Lewis’s counsel to move for their introduction as plaintiffs exhibits. Defense counsel objected to plaintiffs counsel’s request to be allowed to introduce the affidavits, stating that he had just been informed by plaintiffs counsel that there was a claim for mileage reimbursement in Lewis’s claims file, and that the two affiants would “repudiate their statement[s].” Ultimately, however, the workers’ compensation judge recognized that these affidavits were highly relevant and probative and allowed plaintiffs counsel to introduce the affidavits. In further support of his LSA-R.S. 23:1208 claim, Lewis also introduced into evidence the claims file maintained by Temple Inland’s agents, which had been produced by defense counsel and furnished to plaintiffs counsel in response to discovery requests, and which clearly revealed therein that Lewis had submitted requests for mileage reimbursement as early as October 2, 2009, the date on which nurse case manager Tara Borde-lon had faxed the request to Chapman.

Considering the foregoing, and especially considering the clear relationship between the blatantly false statements made by Chapman andJ^Winstead and the relevance of this information to the determination of Lewis’s claim against Temple Inland for unwarranted failure to timely pay mileage reimbursement, we find no error in the workers’ compensation judge’s ultimate conclusion that these were false statements and were made willfully or deliberately for the purpose of defeating Lewis’s claim. See Davis, 879 So.2d at 221.

REFORMATION OF THE JUDGMENT

Although not raised by the parties, we note, however, that the portion of the judgment assessing LSA-R.S. 23:1208 penalties was rendered only against Chapman and Winstead, who do not appear to have been named as defendants, nor apparently were served with Lewis’s disputed claim wherein he sought these penalties. Pursuant to LSA-C.C.P. art. 2002, if a judgment is rendered against a defendant who has not been served and has not entered a general appearance, that judgment is an absolute nullity and can be collaterally attacked by an adversely affected party at any time. However, given the record as it presently exists herein, and because the parties have not been afforded the opportunity to brief this issue, see generally Wooley v. Lucksinger, 2009-0571, 2009-0584, 2009-0585, 2009-0586 (La.4/1/11), 61 So.3d 507, 562-563, we decline to vacate the portion of the judgment rendered only against these individuals.

As noted above, on appeal, only Temple Inland has challenged this portion of the judgment. Further, its challenge is based solely on the merits, [2qie., whether the “factual finding of fraud on behalf of the defendants” should be allowed to stand. Herein, Lewis sought penalties against defendant Temple Inland based on its acts, including its reliance on the misrepresentations of its agents and representatives, namely, the adjuster and the supervisor of the nurse case manager, who were handling Lewis’s workers’ compensation claim for Temple Inland, and who executed the untruthful affidavits to be used by Temple Inland in its defense. However, Lewis did not seek judgment against those individuals personally.

Thus, given that the record before us reflects that these individuals were acting as agents for and on behalf of Temple Inland, in the interests of justice, we amend the judgment to provide that the LSA-R.S. 23:1208 penalties are assessed against Temple Inland as well, as the party at whose behest the affidavits were confected and on whose behalf the false statements were made. See Davis, 2003-1381 (La.App. 1st Cir.5/14/04), 879 So.2d 215, 218-219 (wherein the false statement of the injured employee’s “boss,” Lionel Dufour, resulted in the employer, Farm Fresh Food Supplier, Inc., being held liable for the R.S. 23:1208 penalty).

LEWIS’S ANSWER TO THE APPEAL

In his answer to the appeal, Lewis contends that the workers’ compensation judge erred in failing to award the maximum penalties allowed by LSA-R.S. 23:1201(1) and appropriate attorney’s fees for Temple Inland’s improper discontinuance of weekly indemnity benefits. He also 12i seeks an additional award of attorney’s fees for the work performed on appeal.

With regard to penalties and attorney’s fees for Temple Inland’s discontinuance of weekly compensation benefits, as reflected in reasons for judgment, the workers’ compensation judge assessed $2,000.00 in penalties and $5,000.00 in attorney’s fees for Temple Inland’s “failure to reasonably controvert” Lewis’s claim for SEBs. In doing so, the workers’ compensation judge applied the standard set for in LSA-R.S. 23:1201(F), for the imposition of penalties and attorney’s fees based on the employer’s failure to commence payment of weekly indemnity benefits, ie., failure to reasonably controvert the claim. See Chelette, 858 So.2d at 413. However, because Lewis was already receiving weekly indemnity benefits, we agree with Lewis that LSA-R.S. 23:1201(1), which governs the discontinuance of payment of benefits, was the appropriate statute to be applied to this claim. Subsection (I) of LSA-R.S. 23:1201 provides for a penalty of up to $8,000.00 and a reasonable attorney’s fee when such discontinuance is found to be arbitrary, capricious, or without probable cause. Accordingly, we agree that the workers’ compensation judge committed legal error by applying the wrong standard to determine Lewis’s entitlement to penalties and attorney’s fees for the discontinuance of weekly compensation benefits and, thus, in limiting the penalty assessment to the $2,000.00 cap provided for therein.

As stated above in our discussion of Temple Inland’s second assignment of error, considering the facts known by Temple Inland at the time, we conclude Temple Inland was arbitrary and capricious and acted without actual or legal cause in discontinuing all weekly compensation benefits under the pretext of purported “confusion” as to whether Lewis was Identified to receive TTDs or SEBs. Accordingly, we amend the portion of the judgment assessing the $2,000.00 penalty against Temple Inland for its arbitrary and capricious discontinuance of Lewis’s weekly compensation benefit to increase the award to Lewis to $8,000.00. See Lanthier v. Family Dollar Store, 2006-779 (La.App. 3rd Cir.11/2/06), 942 So.2d 732, 736-737. However, we find that the attorney’s fee award of $5,000.00 was appropriate and, thus, decline to increase that amount.

Finally, with regard to Lewis’s request for additional attorney’s fees for work performed on appeal, this court has held that such an increase is appropriate when the employer appeals, obtains no relief, and the appeal necessitates additional work for the employee’s counsel, provided that the employee properly requests the increase. Guillory, 950 So.2d at 694. In the instant case, Temple Inland has prevailed, in part, on appeal, ie., with regard to its claims that the assessment of penalties and attorney’s fees for Temple Inland’s failure to initiate vocational rehabilitation services is not provided for in the statute. Accordingly, an award of additional attorney’s fees to Lewis for work performed on appeal is not appropriate herein.

CONCLUSION

For the above and foregoing reasons, the portion of the January 11, 2010 judgment ordering Temple Inland to pay a $2,000.0 penalty and $5,000.00 in attorney’s fees for its failure to provide prompt rehabilitation services is hereby reversed. The portion of the January 11, 2010 judgment ordering Timony Winstead and Robin Chapman to each pay a $1,000.00 civil penalty to the Kids Chance Scholarship Fund, Louisiana Bar Foundation, for violating the provisions of LSA-R.S. 23:1208 is amended to provide that Temple Inland shall be jointly liable for the $2,000.00 civil penalty due to the Kids Chance Scholarship Fund, Louisiana Bar [^Foundation, for the LSA-R.S. 23:1208 violation. The portion of the January 11, 2010 judgment ordering Temple Inland to pay a maximum penalty for its failure to reasonably controvert Lewis’s claim for supplemental earnings benefits is hereby amended to provide that Temple Inland is ordered to pay a penalty of $8,000.00 for its arbitrary and capricious discontinuance of all weekly compensation benefits to Lewis. In all other respects, the judgment is affirmed. All costs are assessed against defendant, Temple Inland.

REVERSED IN PART, AMENDED IN PART, AND AFFIRMED AS AMENDED.

      . According to the FCE, Lewis was able to accomplish only a partial squat due to pain.

      . The job description for Lewis’s job at Temple Inland indicated that in a typical work day, which required a 12-hour shift, Lewis was required to stand for 8 hours, walk for 3 hours, occasionally lift up to 100 pounds, occasionally carry up to 50 pounds, and frequently squat and climb.

      . Cynthia Lee, Temple Inland's occupational health nurse, testified that Temple Inland had a full-duty-only return-to-work policy, meaning that it does not offer transitional duty or partial return to work. Thus, while there are light- and medium-duty job positions at Temple Inland, Lewis would only be allowed to return to his job position at the time of the accident, which Lee stated was heavy duty.

      .Although the judgment is dated January 11, 2010, it is clear from the record that it was actually rendered on January 11, 2011.

      . We note that in Scott v. Autozone # 0208, 2005-1948 (La.App. 1st Cir.9/20/06), 943 So.2d 1177, another panel of this court summarily affirmed an OWC award, which included an award of penalties for failure to order vocational rehabilitation. However, because the opinion is a summary opinion, it is unclear whether the employer therein challenged the assessment of penalties or attorney's fees and, more specifically, whether it set forth a legal challenge as to whether such an assessment was allowable under the statutory scheme for penalties and attorney’s fees.
      Also, in Lollis v. Shaw Global Energy Services, 2007-395 (La.App. 3rd Cir.10/3/07), 966 So.2d 1118, 1126-1127, writ not considered, 2007-2169 (La.1/7/08), 973 So.2d 742, the Third Circuit Court of Appeal affirmed an award of $2,000.00 in penalties and $7,500.00 in attorney's fees for failure to provide vocational rehabilitation services. However, it appears from the opinion that the employer challenged only the workers’ compensation judge’s determination that it had not reasonably controverted the employee’s entitlement to vocational rehabilitation services, and not whether such an award was legally proper under the statutory framework of the Workers' Compensation Act.

      . Dr. Plauche stated that use of the cane was beneficial in helping Lewis take pressure off of the ankle when he walked, and he did not see any reason to tell Lewis that he should not use the cane anymore.

      . See our discussion of Lewis’s answer to the appeal below.

      . Nor are we persuaded by Temple Inland's argument that Lewis's failed attempt to return to his pre-injury job, which exceeded his physical restrictions, somehow demonstrated an intent to withdraw from the workforce.

      . When the appellate court notices an absolute nullity, the court is likewise empowered to vacate or correct the judgment on its own motion. See Mack v. Wiley, 2007-2344 (La.App. 1st Cir.5/2/08), 991 So.2d 479, 486, writ denied, 2008-1181 (La.9/19/08), 992 So.2d 932; see also Winder v. George, 2007-0314, p. 5 & n. 6 (La.App. 1st Cir. 12/21/07), 2007 WL 4532139 (unpublished) (Pursuant to LSA-C.C.P. art. 2164 the appellate court is authorized to render a judgment “which is just, legal, and proper upon the record on appeal.” Thus, pursuant to that authority, the court therein amended a judgment to vacate the absolutely null portion.).

      . In doing so, we further note that on the record before us, although Temple Inland filed its brief and made its arguments on behalf of "the defendants,” Chapman and Winstead do not appear to have been named as defendants nor, does the record clearly reflect they were served with a copy of Lewis's claim. Thus, by our opinion herein, we do not address the procedural or jurisdictional issues that would arise if enforcement of the civil penalties were attempted solely against individuals who were not made parties to the proceeding. See Phillips v. Lowe's Home Center, Inc., 2003-0660 (La.App. 1st Cir. 4/28/04), 879 So.2d 200, 203-204 & n. 6.


source: Caselaw Access Project

author: MeCLENDON, J.

license: Public Domain

text:
    Amanda RELLE v. Charles J. MAYFIELD, U.S. Agencies Casualty Insurance Company and United Services Automobile Association (USAA).
    No. 2011 CA 0727.
    Court of Appeal of Louisiana, First Circuit.
    Nov. 9, 2011.
    Jay A. Parker, Jr., Baton Rouge, LA, Mark D. Plaisance, Baker, LA, for Plaintiff/Appellant Amanda Relie.
    Valerie Bargas, Myron A. Walker, Jr., Baton Rouge, LA, for Defendant/Appellee United Services Automobile Association (USAA).
    Before PETTIGREW, MeCLENDON, and WELCH, JJ.
   MeCLENDON, J.

lain this personal injury case, the plaintiff appeals a judgment awarding certain funds deposited into the registry of the trial court to the plaintiffs underinsured motorist (UM) carrier. We affirm.

FACTUAL AND PROCEDURAL HISTORY

This matter has previously been before this court. On September 8, 1999, the plaintiff, Amanda Relie, was rear-ended by a truck while she was driving her employer’s automobile on a work-related errand. Her employer’s automobile was insux-ed by United Services Automobile Association (USAA). Subsequently, she filed this lawsuit, and following a two-day bifurcated bench trial, the trial court issued oral i*ea-sons for judgment on March 23, 2005, awarding to Ms. Relie $59,104.00 for medical expenses, $1,378.80 for past lost wages, and $75,000.00 for general damages. Regarding Ms. Relle’s claim that USAA failed to make a timely and adequate UM tender pursuant to its statutory obligations, that poi-tion of the trial was held on May 11, 2006. On May 30, 2006, the trial court issued oral reasons, concluding that USAA acted in an arbitrai-y and capricious manner in failing to pay more than its total tender of $60,000.00 over and above the $10,000.00 underlying insurance. The court awarded Ms. Relie $6,548.37 in penalties and $36,000.00 in attorney fees. A judgment reflecting both rulings was signed on February 9, 2007. Thereafter, Ms. Relie filed a devolutive appeal, and USAA answered the appeal.

Pending the appeal, USAA issued a check on March 6, 2007, in the amount of $48,152.12 payable to “Ms. Relie and her former counsel.” The 13check was never endorsed by Ms. Relie, and ultimately, on January 9, 2009, it was l'eturned to USAA. Because the check was not endorsed by Ms. Relie and never negotiated, and because Ms. Relle’s former counsel desired to assei't his claim on the funds, USAA filed a motion to deposit the funds into the registry of the couxt “without admission of liability” and to declare the judgment satisfied. On February 25, 2008, the tidal court signed its order for the deposit of the funds into the registry of the court with the additional language that “said funds not to be withdrawn without further order from this coui't, following mutual agreement of the parties or contra-dictoiy hearing.”

On March 26, 2008, this court issued its opinion that affirmed in part and x-eversed in part the February 9, 2007 judgment of the trial coui’t. Specifically, we reversed that portion of the trial court’s judgment regarding penalties and attorney fees after concluding that the record did not support a finding that USAA was arbitrary and capiicious in failing to tender more than the $60,000.00 amount over the $10,000.00 underlying insurance. Relle v. Mayfield, 07-1167 (La.App. 1 Cir. 3/26/08), 978 So.2d 1261 (unpublished), writ denied, 08-0857 (La.6/6/08), 983 So.2d 924. The supreme court denied writs.

Thereafter, USAA attempted to withdraw the funds on two occasions, but its motion to withdraw the funds on deposit was denied by the trial court on July 18, 2008, and its motion for summary judgment seeking a declaration that it be permitted to withdraw said funds was denied on November 30, 2009.

On May 3, 2010, Ms. Relie and her attorneys filed an ex parte motion to withdraw the funds filed into the registry of the court. USAA opposed the motion and filed its own motion to withdraw the funds. Following a hearing on September 7, 2010, the motion of Ms. Relie was denied, and the motion of USAA |4was granted. A judgment to that effect was signed on October 6, 2010, allowing USAA to “withdraw all sums on deposit in the Court’s registry in this case, including any accrued interest.” The judgment further ordered that the execution and effect of this judgment be stayed pending the outcome of any appeal. Following the denial of her motion for new trial, Ms. Relie appealed.

DISCUSSION

In her appeal, Ms. Relie asserts that the trial court erred in failing to find that the voluntary payment by USAA was a discharge of a natural obligation that rendered USAA’s payment to Ms. Relie nonrecoverable by USAA. Specifically, Ms. Relie contends that the payment made by USAA, as a UM insurer, to Ms. Relie, as the UM insured, was pursuant to its obligations under LSA-R.S. 22:658. As such, this duty gave rise to a natural obligation under LSA-C.C. art. 1760, et seq. USAA contends, however, that its deposit was made pursuant to the trial court’s judgment, rendered as a statutory penalty, not as a natural obligation. It asserts that once that judgment was reversed, the basis for the payment ceased to exist. Thus, according to USAA, the deposit was payment of a thing not owed, and the trial court did not err in granting its motion for the withdrawal of the funds.

In support of her position that USAA’s deposit into the registry of the court was a good faith unconditional tender under USAA’s UM coverage, Ms. Relie cites the supreme court case of State Farm Mut. Auto. Ins. Co. v. Azhar, 620 So.2d 1158, 1160 (La.1993). However, we find the facts of Azhar | ¿clearly distinguishable, as the payment in that case was made prior to trial, was accepted, and was unconditional. In this matter, payment for the statutory penalties and attorney fees was not attempted until after judgment, was never accepted by Ms. Relie, and was being made with a reservation of the right to appeal the judgment.

The trial court, in oral reasons, recognized that the payment into the registry of the court was not a UM tender, but rather a payment of a judgment. The trial court also recognized that the deposit was “not an attempt to put an end to the entire case, but to just put the money up and allow the appeal to go forward.” Accordingly, it granted USAA’s motion to withdraw the funds.

Louisiana Civil Code article 2299 provides:

A person who has received a payment or a thing not owed to him is bound to restore it to the person from whom he received it.

In Gootee Const., Inc. v. Amwest Sur. Ins. Co., 03-0144 (La.10/10/08), 856 So.2d 1203, the supreme court interpreted Article 2299 in light of the question of whether funds paid in satisfaction of a judgment which is subsequently reversed must be refunded. The court concluded that the funds had to be returned because the judgment creditor did not have a judgment authorizing it to retain the funds once the judgment was overturned. The court stated:

In the instant case, it is clear that at the time Amwest paid Gootee, the payment was made pursuant to a valid judgment. However, once that judgment was reversed on appeal, the basis for the payment ceased to exist. Therefore, Gootee has no legal right to retain the funds and must refund them to Am-west’s subrogee, Mr. Owen.

Gootee Const., Inc., 03-0144 at p. 5, 856 So.2d at 1207. See also Orgeron v. Security Indus. Funeral Homes, Inc., 96-2127, p. 5 (La.App. 4 Cir. 2/26/97), 690 So.2d 243, 246 (“Implicit in the rules that authorize the execution of judgments appealed devol-utively is the obligation of the judgment creditor to | ^return voluntary payments made by a judgment debtor to avoid execution of the judgment during the pen-dency of a devolutive appeal if the judgment is reversed.”), and List Realty, Inc. v. Plaisance, 306 So.2d 920, 921 (La.App. 1 Cir.1974), writ denied, 310 So.2d 640 (1975) (“Even though a judgment creditor may proceed with the execution of a judgment only after the delay for a suspensive appeal therefrom has elapsed, or, inferentially, during the pendency of a devolutive appeal, such creditor is subject to an action for the return of the funds received through such execution if the judgment is reversed.”)

We agree with the reasoning in these decisions. Ms. Relie has no legal right to the funds deposited into the registry of the court, and the trial court did not err in denying her motion to withdraw the funds and granting USAA’s motion ordering a return of the funds to USAA.

CONCLUSION

For the reasons assigned, the October 6, 2010 judgment of the trial court denying the motion of Ms. Relie to withdraw the funds filed into the registry of the court and granting the motion of USAA to withdraw the funds filed into the registry of the court is affirmed. Costs of this appeal are assessed to Amanda Relie.

AFFIRMED.

      .At the first phase of the trial, the parties stipulated that 1) the accident was caused solely by the fault of the tortfeasor, Charles Mayfield, 2) Mr. Mayfield had insurance with U.S. Agencies in the amount of $10,000.00, 3) the $10,000.00 amount from U.S. Agencies had been exhausted, 4) there was no other available underlying insurance, 5) Ms. Relie was operating the vehicle with her employer’s permission, 6) the medical records and invoices were authentic, 7) USAA paid its medical payments coverage limit of $10,000.00 and tendered $50,000.00 under its UM coverage, and 8) the trial would be limited to the issue of compensatory damages, with the issue of whether USAA timely tendered a proper amount to Ms. Relie to be determined in a subsequently scheduled trial.

      . The check amount included interest on the judgment through March 8, 2007, and court costs. Further, although Ms. Relle’s counsel had withdrawn at this point, counsel for USAA continued to copy counsel on his correspondence to Ms. Relie, in proper person, and subsequently, to her appellate counsel, in his attempts to get the check endorsed by Ms. Relie.

      . Apparently, the check was given to counsel for USAA by appellate counsel for Ms. Relie at the oral arguments of the original appeal.

      . The court also set for hearing the motion to declare the February 9, 2007 judgment satisfied as a consequence of the deposit. A minute entry in the record indicates that the hearing was passed without date. It does not appear that it was rescheduled.

      . The panel rendering the opinion consisted of Judges Gaidry, McDonald, and McClendon. Judge Gaidry agreed in part and concurred on the issue of statutory penalties and attorney fees.

      . Louisiana Revised Statute 22:658 (now LSA-R.S. 22:1892) provided, in pertinent part:
      A. (1) All insurers issuing any type of contract ... shall pay the amount of any claim due any insured within thirty days after receipt of satisfactory proofs of loss from the insured or any party in interest.

      .Louisiana Civil Code article 1760 provides:
      A natural obligation arises from circumstances in which the law implies a particular moral duty to render a performance. Additionally, LSA-C.C. art. 1761 provides, in pertinent part:
      A natural obligation is not enforceable by judicial action. Nevertheless, whatever has been freely performed in compliance with a natural obligation may not be reclaimed.

      . The trial court explained that prior to the September 7, 2010 hearing it had not seen the proposed Receipt and Satisfaction of Judgment that included the reservation of the right to appeal.


author: LAMAR, Justice for the Court:

text:
    QUEEN CITY NURSING CENTER, INC., Community Living Centers, LLC d/b/a Meridian Community Living Center, and Beverly Enterprises-Mississippi, Inc. d/b/a Golden Living Center-Meridian v. MISSISSIPPI STATE DEPARTMENT OF HEALTH and Meadowbrook Health and Rehab, LLC.
    No. 2010-CC-01077-SCT.
    Supreme Court of Mississippi.
    Dec. 1, 2011.
    Rehearing Denied March 1, 2012.

      Thomas L. Kirkland, Jr., Allison C. Simpson, Andy Lowry, Ridgeland, attorneys for appellants.
    Betty Toon Collins, Douglas E. Levan-way, Elizabeth G. Hooper, Jackson, Bea M. Tolsdorf, attorneys for appellees.
    Before DICKINSON, P.J., LAMAR and KITCHENS, JJ.
   LAMAR, Justice for the Court:

¶ 1 Meadowbrook Health and Rehab, LLC, filed an application for a certificate of need (“CON”) with the Mississippi Department of Health (“DOH”) to build a nursing home in Lauderdale County. The DOH staff recommended that the application be approved. Several surrounding nursing homes contested the application and requested a hearing. After three days of testimony, the hearing officer recommended that the application be denied. But the State Health Officer (“SHO”) disagreed and granted the CON. The contestants appealed to the Hinds County Chancery Court, which affirmed the SHO’s decision. The contestants now appeal to this Court, arguing that the SHO’s decision is arbitrary and capricious and that the CON violates the statutory moratorium on new nursing home construction. We affirm the Hinds County Chancery Court.

FACTS AND PROCEDURAL HISTORY

¶ 2 In January 2009, Meadowbrook applied to the DOH for a CON to construct a sixty-bed nursing home facility in Laud-erdale County. The facility was to be a “replacement facility” for a Kemper County nursing home — Kemper Homeplace— which had contained twenty-one beds before it was closed. Bruce Kelly — the owner of Meadowbrook and another Laud-erdale County nursing home, Poplar Springs — also planned to relocate thirty-nine beds from Poplar Springs to Meadow-brook to fulfill the DOH’s requirement that no new nursing home facility be opened with fewer than sixty beds.

¶ 3 The DOH staff conducted a review and in April 2009 recommended that the application be approved. Specifically, the staff review concluded that:

The project is in substantial compliance with the overall objectives as contained in the FY 2009 State Health Plan; the Mississippi Certificate of Need Review Manual, revised 2008; and all adopted rules, procedures, and plans of the Mississippi State Department of Health. The Division of Health Planning and Resource Development recommends approval of this application submitted by Meadowbrook Health and Rehab, LLC for replacement of the Kemper County Nursing Home and Relocation of 39 Nursing Facility Beds from [Poplar] Springs Nursing and Rehab to [the] Northpointe Health & Rehab[] project in Lauderdale County.

Several surrounding Lauderdale County nursing homes — Queen City Nursing Center, Meridian Community Living Center and Golden Living Center (“contestants”) — opposed the application and timely requested a hearing, as “affected persons” under the governing statute. See Miss.Code Ann. § 41-7-197 (Rev.2009).

¶ 4 At a three-day hearing in September 2009, the designated hearing officer heard evidence presented by the DOH, Meadowbrook, and the contestants. After review, the hearing officer issued her findings, disagreeing with the DOH staff analysis and recommending that Meadow-brook’s CON application be denied. The hearing officer found that the application was “not in substantial compliance” with the relevant rules, regulations and statutes, that the DOH staff analysis was “incorrect in its findings,” and that the application should be disapproved by the SHO. But the SHO disagreed with the hearing officer and issued a final order approving Meadowbrook’s application. The SHO found that the application was “in substantial compliance with the State Health Plan and General Review Criteria found in the Certifícate of Need Review Manual,” and she stated that she “eoncur[red] with and adopt[ed] the [DOH] staffs findings and recommendation.”

¶ 5. The contestants timely appealed to the Hinds County Chancery Court, which affirmed the SHO’s decision. The chancellor found that the SHO’s decision “was supported by substantial evidence, was not contrary to the manifest weight of the evidence, was not in excess of the statutory authority or jurisdiction of the [DOH], and did not violate any vested constitutional rights of any party involved in the appeal.” The contestants now appeal to this Court, arguing that:

(1) this Court should apply a heightened standard of review because the SHO merely “adopted a staff analysis” with no explanation and no separate opinion; and that this Court should grant the DOH no deference in its interpretation of the moratorium on new nursing home construction because it “farmed out” the interpretation of that law to the Attorney General’s Office;
(2) it was arbitrary and capricious for the SHO to grant the CON when there was “no evidence that the [DOH’s] need policy was met”;
(3) it was arbitrary and capricious for the SHO to grant the CON when there was no evidence that Meadowbrook considered available alternatives, met the State Health Plan’s objectives, or proved economic viability; and
(4)the application does not fall within one of the exceptions to the moratorium on new nursing home construction enumerated by the Attorney General; or, in the alternative, the Attorney General’s interpretation of the moratorium violates the plain language of the statute.

We disagree with the contestants and find that the chancellor correctly ruled that the SHO’s decision to grant the CON was supported by substantial evidence and thus was not arbitrary and capricious. And although neither the staff analysis nor the SHO discussed the statutory moratorium on new nursing home construction, we find that the DOH’s interpretation of the moratorium is not “repugnant” to the plain meaning of the statute, and we agree with its interpretation.

ANALYSIS

I. The SHO’s decision that there was a need for the Meadowbrook Project was not arbitrary and capricious.

A. Standard of Review

¶ 6 Section 41-7-201(2)© of the Mississippi Code sets forth the standard of judicial review for a final order of the DOH and provides that it shall be vacated only upon an error of law, or if the order “is not supported by substantial evidence, is contrary to the manifest weight of the evidence, is in excess of the statutory authority or jurisdiction ... or violates any vested constitutional rights of any party involved in the appeal.”

¶ 7 “If an administrative agency’s decision is not based on substantial evidence, it necessarily follows that the decision is arbitrary and capricious.” Miss. State Dep’t of Health v. Natchez Cmty. Hosp., 743 So.2d 973, 977 (Miss.1999). “An administrative agency’s decision is arbitrary when it is not done according to reason and judgment, but depending on the will alone.” Id. “An action is capricious if done without reason, in a whimsical manner, implying either a lack of understanding of or disregard for the surrounding facts and settled controlling principles.” Id.

¶ 8 As administrative agencies are given much deference, “the burden of proof rests on the challenging party to prove that the department erred.” Greenwood Leflore Hosp. v. Miss. State Dep’t of Health, 980 So.2d 931, 934 (Miss.2008). And “the same deference due the department’s finding must also be given to the chancellor who, on appeal, affirms and adopts the department’s finding.” Id.

¶ 9. In sum, we will neither reweigh the evidence nor conduct a de novo review of contested facts. Rather, our review is limited to whether substantial evidence existed to support the SHO’s decision.

B. Analysis

¶ 10 Kelly’s proposal would establish a sixty-bed facility in Lauderdale County by relocating thirty-nine beds from Poplar Springs (a Lauderdale County facility) and replacing the twenty-one beds from the closed Kemper County facility. In other words, no new beds would be established, but the twenty-one beds that had been held in abeyance for two years would be reestablished. The contestants argue that the SHO’s decision to grant the CON was arbitrary and capricious because there was no substantial evidence of General Review Criterion 5— Need for the Project. We therefore examine the record to determine whether substantial evidence exists to support the SHO’s conclusion that there was a need for the Meadowbrook project.

¶ 11 Don Eicher, the Director of the Office of Health Policy and Planning at the DOH, testified that there was a need for 738 beds in Long-Term Planning District IV, which includes both Lauderdale and Kemper Counties. He testified that Lauderdale County contained 572 licensed beds, but had a need for 591, for a total of nineteen needed beds. Eicher testified that:

The other part and principle is that there’s a greater bed need in the county where it’s being moved to ... Kemper County, the 2009 State Health Plan shows a need for two beds, as opposed to Lauderdale having a need of 19. And, therefore, you’re moving from having less need to a county that has greater need. So that’s our other principle that we wouldn’t allow you to move the other direction. If you were moving from Lauderdale to Kemper, you would not be recommended for approval because you are moving from a county with a higher need to one that has a lesser need.

¶ 12 Meadowbrook also presented testimony from Dan Sullivan, who was accepted as an expert in “healthcare planning, healthcare financial projections and CON preparations.” Sullivan testified that if the twenty-one Kemper County beds held in abeyance were not used within five years, they would be “lost to the system” because of the moratorium, and that “from a health planning perspective,” that “would be something we don’t want to see happen.” And, based on his calculations, “there ought to be significantly more demand over the next five years for nursing home beds in Lauderdale County and having that additional twenty-one bed capacity available should be beneficial,” and that “it would take us almost 20 years to generate enough incremental need to support 39 additional beds in Kemper County.”

¶ 13 Sullivan also gave his opinion about whether the twenty-one beds should stay in Kemper County or be relocated to Lauderdale County:

So clearly, then, looking at this, in terms of where you’d end up, from a county-by-county perspective, you would create a more disproportionate need in Lauder-dale County if you moved 39 beds to Kemper than you would — in Kemper County, if you moved 21 beds to Lauder-dale. ... If the project is not approved, we’re still going to have a need for 23 beds in Kemper County because those beds are going to go out of existence. So it’s almost a given that we’re going to end up with a bed need of 23 in Kemper County. And then the question is: Do we try to solve that by moving 39 beds over, or do we move those beds into Lauderdale County? ... So, whether you are using 572 beds or 602 beds, you’re still better off from a net bed need standpoint in moving the beds to Laud-erdale County.

(Emphasis added.) Sullivan testified that the need criteria is based on cfóíncí-wide planning, not county-wide planning, and that the district encompassing Lauderdale and Kemper Counties needed more than 700 beds. Additionally, the administrators of the three contesting nursing homes testified that, during the last couple of years, their occupancy rates had been at ninety-five percent or above. And finally, as discussed above, while the staff analysis conceded that moving the twenty-one beds into Lauderdale County would leave Kem-per County underbedded by twenty-three and Lauderdale County overbedded by two, it also noted that the alternative— leaving the twenty-one in Kemper County and relocating the thirty-nine Poplar Springs beds there — would leave Lauder-dale County underbedded by fifty-eight.

¶ 14 After reviewing the record, and without further belaboring this opinion, we find that substantial evidence exists to support the SHO’s finding that there is a need for the Meadowbrook project. So it cannot be said that her decision was arbitrary and capricious, as it was not reached on “will alone,” or through “a lack of understanding of or disregard for the surrounding facts.” Natchez Cmty. Hosp., 743 So.2d at 977.

II. The SHO’s decision that the Mea-dowbrook Project met other relevant criteria was not arbitrary and capricious.

¶ 15 The contestants next argue that Meadowbrook also failed to satisfy other criteria-specifically, that it failed to consider available alternatives, failed to conform to the State Health Plan’s goals, and failed to prove financial feasibility.

A. Availability of Alternatives

¶ 16 The contestants argue that Meadowbrook did not provide evidence of General Criterion 3 — Availability of Alternatives. They point out that Bruce Kelly, the owner of Meadowbrook and Poplar Springs, testified that he bought the Kem-per County beds without ever considering placing them at Poplar Springs. Kelly also testified that he did not obtain any architectural estimates for adding the twenty-one beds to his existing Poplar Springs facility. So, the contestants argue, there was “no substantial evidence that adding the twenty-one beds at Poplar Springs would not be ‘less costly.’ ”

¶ 17 Although Kelly did state at one point that he did not consider placing the beds at Poplar Springs, his testimony as a whole shows that he did consider that option, but then rejected it:

And the thought never really entered my mind to put them at Poplar Springs. At the time, I did not own the property adjacent to [Poplar Springs]. Since then, I’ve acquired about 34 acres around the facility. But, initially, I did not own that land.... I really don’t like to do things halfway, and it’s been a passion of mine as an owner to provide private rooms[] for our patients.... So, with that in mind, my whole intent was to never really put them at [the] Poplar Springs location because we have a huge facility now, and it might would [sic] have accommodated, you know these people with some building, you know, alterations. We really didn’t spend a lot of time looking at that due to the fact that I believe our patient[s], Medicare, the poor, are entitled to a private room, just like the ones that can pay their way. So that’s just been a passion of mine ... I have done renovations, and we have a renovation now. And, you now, it’s very traumatic for the patients ... It’s just traumatic on the residents if their routine is upsetted [sic]....

Kelly also testified that he decided not to simply replace Kemper Homeplace in Kemper County because “[a]fter talking to the state agency people, it was not a doable project because you have to build 60 beds or replace twenty-one, which is not viable ... [y]ou know, twenty-one beds is not, you now, going to survive economically.” The CON application also reflects that these options were considered and rejected.

¶ 18 Dan Sullivan testified that he also had considered alternatives in his review of Meadowbrook’s application. The first option was simply to do nothing — Sullivan dismissed that idea, stating “[w]ith the demographic changes that are occurring in the population, there’s going to be more demand for nursing home beds in the future,” and “[i]t would be a shame to lose any bed capacity when there’s no ability to recapture that bed capacity down the road.” Sullivan also considered adding the twenty-one beds to Poplar Springs, but dismissed that option as well, stating:

[I]t doesn’t accomplish some of the other goals that the project could do in a freestanding building.... What you would be doing is decreasing the number of private rooms because you would have to basically shoehorn these beds into an existing 130-bed facility and create a 151-bed facility. And so what you’d be doing is diminishing the quality of life at the existing facility....

We find that substantial evidence exists to support a finding that no better alternatives were available. Although adding the beds to Poplar Springs might ultimately have been “less costly,” testimony was presented that this option was not a “more effective alternative method.”

B. Conformity to the State Health Plan Goals

¶ 19 General Criterion 1 considers “the relationship of the health services being reviewed to the applicable State Health Plan.” The Health Plan states that Mississippi’s planning and health regulatory activities have four purposes:

1. To improve the health of Mississippi residents;
2. To increase the accessibility, acceptability, continuity and quality of health services;
3. To prevent unnecessary duplication of health resources; and
4. To provide some cost containment.

Miss. State Health Plan, Ch. 1, § 102 (2009), available at http://msdh.ms.gov/ msdhsite/index.cfm/19,2945,184,455,pdf/ StateHealthPlan2009Complete.pdf (last visited Nov. 30, 2011). The contestants argue that Meadowbrook has failed to demonstrate how its application advances these goals, because the new facility was an unnecessary duplication, the Division of Medicaid opposed the project, and moving beds out of underbedded Kemper County does not improve access for Kemper County citizens.

1.Improve Health and Increase Accessibility to Health Services

¶ 20 Meadowbrook’s application states that its new facility would “allow those in need of nursing home care to reside in as pleasant and homelike a setting as possible with private rooms and large spacious areas for daytime activities.” Both Bruce Kelly and Dan Sullivan testified that the trend in the nursing home industry was to provide nursing home residents with privacy and dignity. There also was testimony that relocating Kemper Homeplace to Lauderdale County would greatly improve the residents’ access to acute-care hospitals.

2.Prevent Unnecessary Duplication

¶ 21 Meadowbrook noted in its application that its project furthers this goal because “there are no new nursing home beds that are being added to the State.” And when asked whether the project would unnecessarily duplicate existing services, Dan Sullivan testified:

It does not. First of all, it’s not increasing the bed capacity. And you’re probably tired of me [sic] hearing me say that.... You know, we know we have to replace the twenty-one beds or lose them. And we know we have to build a 60-bed facility in order to accommodate those beds or, as I said before, put them in another facility and make a larger institution-type facility. So I don’t believe it’s unnecessary duplication when you create a facility that’s more desirable from a patient care standpoint, from a quality of life standpoint, and doesn’t result in any increase in beds.

3.Provide Some Cost-Containment

¶ 22 Meadowbrook noted in its application that the relocation of the twenty-one beds furthers this goal because “such replacement of a twenty-one-bed facility with a 60-bed facility allows economies of scale in operation.” And the staff analysis noted that Meadowbrook’s projected construction costs were within the median range for construction of a nursing home. Don Eicher testified that the alternative chosen by the applicant does not have to be the cheapest. And Dan Sullivan testified that the project provided some cost containment, noting that “cost containment doesn’t mean choosing the cheapest alternative,” and that cost containment “means providing an expenditure that achieves stated goals, and it’s still in the most economical manner.”

¶23 Medicaid did oppose the project, claiming that the new facility would cost it $1,157,850 annually. But Meadowbrook presented evidence at the hearing that the actual cost to Medicaid would be much lower. Shane Hariel, who was accepted as an expert in healthcare and nursing home finance, testified that the “lion’s share of that amount is simply due to the twenty-one beds re-entering service.” Hariel also testified that, if all factors were taken into account, such as patient responsibility payments, bed taxes, and matching federal funds, the actual cost to Medicaid would be $189,877.

¶ 24 We find that substantial evidence exists in the record from which the SHO could find that Meadowbrook’s application substantially complied with the State Health Plan’s goals.

C. Financial Feasibility

¶ 25 The contestants claim lastly that Meadowbrook provided no evidence of General Criterion 4 — Economic Viability. The contestants argue that Meadowbrook never produced a cash-flow statement, did not include the cost of the twenty-one beds or the land on which the facility would be built in its capital-expenditure calculation, and that its debt-service ratio was less than one.

¶ 26 The contestants’ expert, Dr. John Hyde, testified that the new facility would not be financially feasible, while two of Meadowbrook’s experts testified that it would be. When asked his opinion about whether the new facility would be financially viable, Shane Hariel stated, “[b]ased on the assumptions that we utilized and that I’m comfortable with, I have no reason to believe that it would not be feasible.” And when asked if the facility would be profitable, Hariel testified:

Yes ... I go back to these are assumptions made. Nobody can predict what’s actually going to happen in the future, but they are reasonable assumptions, based on my work with other facilities. And assuming that these assumptions do come to fruition, there’s no reason that they can’t be quite profitable.

Sullivan also testified that the project would be financially feasible, and that nothing he had heard from the contestants’ expert, Dr. Hyde, “changed [his] opinion about that.” We find that substantial evidence exists in the record from which the SHO could find that Meadowbrook’s project demonstrated financial feasibility.

III. The project does not violate Section 41-7-191(2) of the Mississippi Code.

¶ 27 The contestants argue alternatively that the SHO’s decision to grant a CON to Meadowbrook violates Mississippi Code Section 41-7-191(2), which states, in pertinent part:

The State Department of Health shall not grant approval for or issue a certificate of need to any person proposing the new construction of, addition to, or expansion of any health care facility defined in subparagraphs (iv) (skilled nursing facility)[] ... except as hereinafter authorized!] ...

Miss.Code Ann. § 41-7-191(2) (Rev.2009) (emphasis added). The parties refer to this statute as the “moratorium,” and the DOH has, since its passage in 1990, interpreted it to preclude only “new authorized beds and new facilities where none had previously existed.” The DOH has “always viewed the relocation of existing beds or facilities and/or the replacement of such existing facilities with more modern amenities as outside the parameters of the moratorium.” The DOH “does not interpret the moratorium to prohibit any and all construction when such construction is related to a skilled nursing facility.”

¶ 28 This Court has:

generally accorded great deference to an administrative agency’s construction of its own rules and regulations and the statutes under which it operates .... “an agency’s interpretation of a regulation it has been authorized to promulgate is entitled to great deference and must be upheld unless it is so plainly erroneous or so inconsistent with either the underlying regulation or statute as to be arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law.

Miss. State Dep’t of Health v. Baptist Mem’l Hosp.-Desoto, Inc., 984 So.2d 967, 981 (Miss.2008) (citations omitted) (emphasis added). And “unless the Department’s interpretation [of a statute] is repugnant to the plain meaning thereof, the court is to defer to the agency’s interpretation.” Ricks v. Miss. State Dep’t of Health, 719 So.2d 173, 179 (Miss.1998) (citations omitted) (emphasis added). We also have ruled that “where an administrative agency’s interpretation is contrary to the unambiguous terms or best reading of a statutory provision, the agency is not entitled to deference.” Sierra Club v. Miss. Envtl. Quality Permit Bd., 943 So.2d 673, 679 (Miss.2006) (citations omitted) (emphasis added). However, we think it important to clarify what we mean by “deference” and “defer” as used in these cases, and in numerous other cases, discussing an agency’s interpretation of its governing statutes. The ultimate authority and responsibility to interpret the law, including statutes, rests with this Court. But in determining the most reasonable and appropriate interpretation of a statute, the agency’s interpretation is an important factor that usually warrants strong consideration. However, we do not defer to the agency’s interpretation in the sense that we yield judgment or opinion.

¶ 29 Meadowbrook argues that, if the Legislature had “intended to apply the moratorium to the construction of replacement nursing homes and the relocation of existing nursing home beds, it would have included such language in the statute.” Meadowbrook notes that, since 1990, the Legislature has passed numerous exceptions to the moratorium, each dealing with either the “creation of new never-before-authorized nursing home beds or the creation of new never-before authorized nursing homes.”

¶ 30 The DOH agrees with Mea-dowbrook and argues that its project is not the “new construction” that the moratorium statute is designed to prohibit:

Although the bricks and mortar Mea-dowbrook will use to construct the building will be new, the actual nursing home itself -will not be considered new for health planning purposes in the State. It will replace a previously operating but still existing nursing home — Kemper. The beds which will be used for the provision of skilled nursing care at Mea-dowbrook will not be new, they will be currently existing beds — twenty-one previously authorized Kemper beds and 39 previously authorized Poplar Springs beds. This CON application does not involve the creation of new beds or the creation of any additional skilled nursing facility and thus the moratorium does not apply.

¶ 31 And we note the chancellor’s order, in which he stated that the “Meadowbrook Application did not propose the ‘new construction of, addition to or expansion of a skilled nursing facility; instead, the Application requested to replace the old, dilapidated building that formerly housed twenty-one existing beds comprising Kemper Homeplaee and to relocate the Kemper beds and 39 Poplar Springs’ beds to a new building....”

¶ 32 After review, we find that the DOH’s interpretation is not “repugnant” to the plain meaning of the statute, nor is it “contrary” to its unambiguous terms, so we therefore find it to be a reasonable and appropriate interpretation. We now turn to whether Meadowbrook’s project properly falls within the DOH’s interpretation.

¶ 33 As mentioned above, the DOH has “always interpreted the moratorium to be expressly prohibiting the increase of two things, new authorized beds and new facilities where none had previously existed,” and it has “always viewed the relocation of existing beds or facilities and/or the replacement of such existing facilities with more modern amenities as outside the parameters of the moratorium.”

¶ 34 The contestants argue that Meadowbrook’s project does not fall within this interpretation. They argue that Mea-dowbrook is not a “replacement” of an “existing” facility, because Kemper Home-place does not “exist.” They also argue that the project is not a “relocation” of an existing facility, as again, Kemper Home-place does not exist, and Poplar Springs “means to continue doing business right where it is.” We disagree.

¶ 35 First, we find that Kemper Home-place is still an “existing” facility for purposes of the CON process. The CON statute does not require a CON if a facility attempts to reopen within sixty months of ceasing to operate. See Miss.Code § 41-7 — 191(l)(a) (Rev.2009). And Don Eicher, the Director of the DOH’s Office of Health Policy and Planning, clearly testified that:

The Legislature amended the Certificate of Need law several years ago, and they required that any healthcare facility that’s been closed or not provided service in 60 months or more be analyzed as a new facility. And so this facility will lose its — after 60 months of being closed and not providing any service, it would not be considered an existing facility. So, despite this facility being closed for three-and-a-half years, it’s still in existence under the Certificate of Need law until that 60-month threshold gets crossed.

So we find that moving the twenty-one Kemper Homeplaee beds to Meadow-brook’s proposed facility is a “replacement” of an “existing healthcare facility,” a project not prohibited by the moratorium under the DOH’s interpretation. Second, we find that moving the thirty-nine beds from Poplar Springs to Meadowbrook’s proposed facility is a “relocation,” as defined by the DOH, as it clearly states that it has “always viewed the relocation of existing beds ” as “outside the parameters of the moratorium.”

CONCLUSION

¶ 36 We find that the SHO’s decision to grant Meadowbrook a CON was not arbitrary and capricious, as her decision was supported by substantial evidence. We find that the DOH’s interpretation of the statutory moratorium is not “repugnant” to the plain meaning of the statute, and we agree with its interpretation. We also find that Meadowbrook’s project falls within that interpretation. We therefore affirm the decisions of the SHO and the Hinds County Chancery Court.

¶ 37 AFFIRMED.

WALLER, C.J., CARLSON AND DICKINSON, P.JJ., RANDOLPH, KITCHENS, CHANDLER, PIERCE AND KING, JJ., CONCUR.

      . Mississippi Code Section 41-7-191 states, in pertinent part:
      'll) No person shall engage in any of the following activities without obtaining the required certificate of need:

        ... (b) The relocation of a health care facility or portion thereof, or major medical equipment, unless such relocation of a health care facility or portion thereof ... is within five thousand two hundred eighty (5,280) feet from the main entrance of the health care facility...."
      Miss.Code Ann. § 41-7-191 (Rev.2009).

      .In November 2005, the DOH Division of Licensure and Certification had determined that the Kemper Homeplace residents were in "immediate jeopardy." All of the residents were relocated, and Kemper Homeplace closed in January 2006. The owner of Kem-per Homeplace sold the beds to Bruce Kelly— the owner of Meadowbrook and Poplar Springs Nursing Home. In March 2007, Kelly placed the beds in "abeyance.” Kelly subsequently formed Meadowbrook as the replacement entity for Kemper Homeplace.

      . Section 106.01 of the Mississippi State Health Plan states, in pertinent part: "The [DOH] shall not approve construction of a new or replacement nursing home care facility for less than 60 beds.” Miss. State Health Plan, Ch. 8, § 106.01(6) (2009), available at http://msdh.ms.gov/msdhsite/index.cfm/19, 2945,184,455,pdf/ StateHealthPlan2009Com-plete.pdf (last visited Nov. 10, 2011).

      . Kelly intended to name the new facility "Northpointe Health & Rehab.”

      . Section 41-7-197(2) of the Mississippi Code gives the SHO the sole authority to grant or deny CONs following the hearing and states, in pertinent part:

        The completed record shall be certified to the State Health Officer, who shall consider only the record in making his decision, and shall

        not consider any evidence or material which is not included therein. All final decisions regarding the issuance of a certificate of need shall be made by the State Health Officer. The State Health Officer shall make his written findings and issue his order after reviewing said record.
      Miss.Code Ann. § 41-7-197(2) (Rev.2009) (emphasis added).

      . We address the contestants’ standard-of-review arguments in the relevant sections.

      . See Miss.Code Ann. § 41-7-191(2) (Rev. 2009): "The State Department of Health shall not grant approval for or issue a certificate of need to any person proposing the new construction of, addition to, or expansion of any health care facility....”

      . The contestants urge this Court to apply a heightened standard of review, because the SHO "rejected” the hearing officer’s recommendation "without making any independent findings or explanation of her own.” But we find that their argument is contradicted by the plain language of Section 41-7-197(2), which states, in pertinent part:
      The completed record shall be certified to the State Health Officer, who shall consider only the record in making his decision, and shall not consider any evidence or material which is not included therein. All final decisions regarding the issuance of a certificate of need shall be made by the State Health Officer. The State Health Officer shall make his written findings and issue his order after reviewing said record.
      Miss.Code Ann. § 41-7-197(2) (Rev.2009). Nowhere in the statute is the SHO required to defer to the findings of the hearing officer, nor is she required to "explain” her reasons for disagreeing with the hearing officer. She is required only to review the entire record, issue an order, and make her written findings, all of which she did in this case.

      . One of the general criteria used to evaluate a CON application is "Need for the Project.” Under that criterion, several items "may be considered” to determine whether a need for the project exists. Pertinent here is item (a), which states:
      The need that the population served or to be served has for the services proposed to be offered or expanded and the extent to which all residents of the area—in particular low income persons, racial and ethnic minorities, women, handicapped persons and other underserved groups, and the elderly—are likely to have access to those services.
      15-991-8 Miss.Code R. § 100.01(5)(a) (Weil 2011), available at http://msdh.ms.gov/ msdhsitelstaticlresourcesl3346.pdf (Last visited Nov. 30, 2011).

      . Eicher’s figures were based on the 2009 State Health Plan, which was the plan in effect at the time Meadowbrook’s CON application was filed.

      . Sullivan was referring to Mississippi Code Section 41-7-191 which states, in pertinent part:
      (1) No person shall engage in any of the following activities without obtaining the required certificate of need:
      (a) The construction, development or other establishment of a new health care facility, which establishment shall include the reopening of a health care facility that has ceased to operate for a period of sixty (60) months or more.
      Miss.Code Ann. § 41-7 — 19l(l)(a) (Rev.2009).

      .Sullivan was referring to the thirty-nine Poplar Springs beds that Kelly planned to relocate.

      . General Criterion 3 is the “Availability of Alternatives: The availability of less costly or more effective alternative methods of providing the service to be offered, expanded or relocated.” 15-991-8 Miss.Code R. § 100.01(3) (2011), available at httpj/msdh. ms.gov/msdhsite/static/resources/3346.pdf (last visited Nov. 30, 2011).

      . Kelly plans for his new facility to have sixty private rooms. And after the thirty-nine beds are relocated from Poplar Springs, Poplar Springs will have sixty-nine private rooms and eleven semi-private rooms.

      . We discuss these two considerations together because they are so closely intertwined.

      . "Economic Viability: The immediate and long-term financial feasability of the proposal, as well as the probable effect of the proposal on the costs and charges for providing health services by the institution or service." 15-991-8 Miss.Code R. § 100.01(4) (Weil 2011), available at http://msdh.ms.gov/msdhsite/_ staticlresourcesl3346.pdf (last visited Nov. 30, 2011).

      . Shane Hariel testified that both the Certificate of Need Review Manual and the staff analysis state that the cost of land is to be excluded when calculating the construction cost.

      . Dr. John Hyde, the contestants’ expert, testified that a debt-ratio of less than one means that "you're not making enough income to pay your debt.”

      . Section 41-7-173(h)(iv) defines "skilled nursing facility” as "an institution or a distinct part of an institution which is primarily engaged in providing to inpatients skilled nursing care and related services for patients who require medical or nursing care or rehabilitation services for the rehabilitation of injured, disabled or sick persons.”

      . The Legislature has since authorized many exceptions to the moratorium, but none is at issue in this case. See Miss.Code Ann. § 41— 7 — 191 (2)(a) — (t) (Rev.2009).

      . The DOH previously requested an opinion from the Attorney General, asking him to opine on its interpretation of the moratorium. The contestants urge this Court to grant no deference to that interpretation, because the DOH "punted the decision to the Attorney General’s Office.” First, we disagree that the DOH has "punted” the interpretation to the AG's Office, as the DOH states clearly in its brief that it had been interpreting the statute the same way that the AG ultimately interpreted it before it requested the opinion, and the contestants do not dispute that assertion. Second, and more importantly, this point is meritless in light of our discussion clarifying the consideration we give an agency's interpretation.

      . "(1) No person shall engage in any of the following activities without obtaining the required certificate of need:
      (a) The construction, development or other establishment of a new health care facility, which establishment shall include the reopening of a health care facility that has ceased to operate for a period of sixty (60) months or more [.]”
      Miss.Code Ann. § 41-7-191 (1 )(a) (Rev.2009).