Palos Community Hospital v. Illinois Health Facilities Planning Board

Case Date: 03/08/2002
Court: 1st District Appellate
Docket No: 1-01-2199 Rel

SIXTH DIVISION

March 8, 2002




No. 1-01-2199


PALOS COMMUNITY HOSPITAL, PALOS ) Appeal from the
HEIGHTS, ST. GEORGE CORPORATION,  ) Circuit Court of
and ST. GEORGE WELLNESS CENTER, ) Cook County.
)
                 Plaintiffs-Appellants, )
)
v. )
)
ILLINOIS HEALTH FACILITIES  ) Nos. 00 CH 15406
PLANNING BOARD, PAM A. TAYLOR, )          00 CH 17453
MARJORIE E. ALBRECHT, THOMAS )
BECK, FRED BENJAMIN, STUART )
LEVINE, LOUIS LIBERT, WILLIAM )
J. MARSHALL, ERIC L. MEYERS, )
RICHARD W. WRIGHT, ROBERT J. )
CLARKE, ERNEST JENKINS, BERNARD )
WEINER, WILLIAM MAROVITZ, )
and JOYCE WASHINGTON, ) Honorable
) Robert V. Boharic,
              Defendants-Appellees. ) Judge Presiding.
)


JUSTICE O'BRIEN delivered the opinion of the court:

We consider whether the Illinois Health Facilities Planning Act (Act) (20 ILCS 3960/1 et seq.(West 2001)) requires plaintiffs to obtain a permit from the Illinois Health Facilities Planning Board(Board) before constructing a free-standing health and fitness center (center). We believe not and reversethe circuit court.

Palos Community Hospital (Hospital) filed an application for a permit pursuant to the Act toconstruct a free-standing health and fitness center on a parcel of land separate from the Hospital. TheBoard issued an initial denial of the Hospital's application, and the Hospital timely requested anadministrative hearing. While its application was still pending before the Board, the Hospitalrestructured its corporate form and created a new parent corporation, the St. George Corporation, anda new wholly owned subsidiary of the parent corporation, the St. George Wellness Center. The St.George Wellness Center began construction of a center on the parcel of land without waiting for theBoard's final decision on the permit application.

The Board then began a formal investigation into whether the construction of the center violatedthe permit requirement in the Act. The Board issued a subpoena duces tecum to the Hospital, St.George Corporation, and the St. George Wellness Center (collectively referred to as plaintiffs) forinformation and documents relating to the construction and financing of the center.

Plaintiffs then filed a six-count complaint in the circuit court against the Board. Count I soughta declaratory judgment that the plaintiffs were not required to comply with the Act's permit requirement. Count II sought a declaratory judgment that the Board has no authority to regulate or investigate theSt. George Wellness Center or the St. George Corporation. Count III sought a declaratory judgmentthat the Board lacked the discretion to deny plaintiffs' application for a permit for the construction of thecenter. Count IV sought a declaratory judgment that the Board had violated the Hospital's rights to dueprocess and equal protection. Count V sought a declaration that the Board's function violates dueprocess. Count VI sought a declaration that the Board's denial of the permit application was arbitraryand capricious and against the manifest weight of the evidence.

The Board filed a complaint to temporarily restrain and enjoin plaintiffs from constructing thecenter until a valid permit was issued by the Board. The trial court consolidated the Board's complaintwith the plaintiffs' declaratory judgment action and denied the Board's motion for a temporaryrestraining order. The Board then voluntarily dismissed its complaint.

Plaintiffs moved for summary judgment on count I of their declaratory judgment action andsought to quash the subpoena duces tecum; the Board moved to dismiss plaintiffs' complaint pursuantto sections 2-615 and 2-619 of the Code of Civil Procedure. The trial court denied plaintiffs' summaryjudgment motion and their motion to quash the subpoena duces tecum, granted the Board's motion todismiss pursuant to section 2-619, and directed plaintiffs to comply with the subpoena. Plaintiffs filedthis timely appeal. The Illinois Hospital & Health Systems Association filed an amicus curiae brief insupport of plaintiffs' appeal.

On appeal, plaintiffs argue that the trial court erred in granting the Board's section 2-619 motionto dismiss and in denying plaintiffs' motion for partial summary judgment. Although the denial of amotion for summary judgment is not ordinarily appealable, such a denial is reviewable where, as here,the case is on appeal from a motion to dismiss which has been granted, there has been no evidentiaryhearing or trial, and the party seeking such review has not prevented or avoided hearing or trial. Rosev. Pucinski, 321 Ill. App. 3d 92, 96 (2001). In reviewing the circuit court's grant of the Board's section2-619 motion to dismiss and the denial of plaintiffs' motion for partial summary judgment, the relevantissues on appeal are the same: (1) whether a genuine issue of material fact exists; and (2) whether themovant was entitled to a judgment as a matter of law. Guzman v. C.R. Epperson Construction, Inc., 196Ill. 2d 391, 397 (2001). The standard of review is de novo. Guzman, 196 Ill. 2d at 397; 100 W. MonroePartnership v. Carlson, 319 Ill. App. 3d 761, 766 (2001).

There are no genuine issues of material fact here. The issue is one of law: whether the Actrequires plaintiffs to obtain a permit from the Board prior to constructing the center.

The resolution of this issue requires us to construe the Act. Because the construction of a statuteis a question of law, the Board's construction of the Act is not binding and we may independentlyconstrue the Act. Metro Utility Co. v. Illinois Commerce Commission, 262 Ill. App. 3d 266, 273 (1994).

The primary rule of statutory construction is to ascertain and give effect to the true intent of thelegislature. Augustus v. Estate of Somers, 278 Ill. App. 3d 90, 97 (1996). In determining legislativeintent, a court should consider the statutory language first. Augustus, 278 Ill. App. 3d at 97. Where thelanguage of the statute is clear, it will be given effect without resort to other aids for construction. Augustus, 278 Ill. App. 3d at 97. If the words used in a statute are ambiguous or if the meaning isunclear, the court may consider the legislative history as an aid to construction. Armstrong v. HedlundCorp., 316 Ill. App. 3d 1097, 1106(2000).

First, when is a permit necessary?

Section 5 of the Act plainly and unambiguously provides that a permit is necessary only forconstruction of a "health care facility":

"After effective dates set by the State Board, no person shall construct, modify or establisha health care facility *** without first obtaining a permit or exemption from the State Board."(Emphasis added.) 20 ILCS 3960/5 (West 2001).

* * *

"A permit or exemption shall be obtained prior to the acquisition of major medicalequipment or to the construction or modification of a health care facility which:

(a) requires a total capital expenditure in excess of the capital expenditure minimum; or

(b) substantially changes the scope or changes the functional operation of the facility; or

(c) changes the bed capacity of a health care facility ***." (Emphasis added.) 20 ILCS3960/5 (West 2001).

Next, what is a "health care facility"?

Although the Board admits in its brief and at oral argument that the center is not a "health carefacility," the Act itself is dispositive.

Section 3 of the Act defines "[h]ealth care facilities" as:

"1. An ambulatory surgical treatment center required to be licensed pursuant to theAmbulatory Surgical Treatment Center Act;

2. An institution, place, building or agency required to be licensed pursuant to theHospital Licensing Act;

3. Skilled and intermediate long term care facilities licensed under the Nursing HomeCare Act;

***

4. Hospitals, nursing homes, ambulatory surgical treatment centers, or kidney diseasetreatment centers maintained by the State or any department or agency thereof;

5. Kidney disease treatment centers, including a free-standing hemodialysis unit; and

6. An institution, place, building, or room used for the performance of outpatientsurgical procedures that is leased, owned, or operated by or on behalf of an out-of-state facility."20 ILCS 3960/3 (West 2001).

Plaintiffs' center is not within the definition of a "health care facilit[y]" in section 3 of the Act (20ILCS 3960/3 (West 2001)) and therefore no permit was necessary prior to its construction.

This does not end the conversation for the Board. The Board argues that a permit is necessarywhen construction or modification is made "by or on behalf of" a health care facility and that theplaintiffs may be constructing the center "by or on behalf of" a health care facility. The Board citessection 3 of the Act which defines "construction or modification", in relevant part, as:

"any capital expenditure made by or on behalf of a health care facility which exceeds the capitalexpenditure minimum ***." (Emphasis added.) 20 ILCS 3960/3 (West 2001).

The Board also cites section 3's definition of "capital expenditure":

"an expenditure *** made by or on behalf of a health care facility." (Emphasis added.) 20 ILCS3960/3 (West 2001).

The Board argues that it should be allowed to continue its investigation to determine whetherthe center is being constructed "by or on behalf of" a health care facility.

We disagree. A statute must be interpreted as a whole, with each provision construed inconnection with every other section. Bonaguro v. County Officers Electoral Board, 158 Ill. 2d 391, 397(1994). Here, section 3 must be read in conjunction with section 5, which provides that a permit is onlyrequired prior to the construction or modification "of a health care facility." 20 ILCS 3960/5 (West 2001). Read together, section 3 and section 5 provide that a permit is required when two conditions are met:(1) construction or modification is made by or on behalf of a health care facility; and (2) the constructionor modification is of a health care facility. Since the construction here was not of a health care facility,no permit was required.

The Board next argues that a permit was required pursuant to the following language in section5:

"A permit or exemption shall be obtained prior to *** the construction or modificationof a health care facility which:

* * *

(b)substantially changes the scope or changes the functional operation of the facility." 20 ILCS3960/5 (West 2001).

The Board argues that the phrase "substantially changes the scope or changes the functionaloperation of the facility" (20 ILCS 3960/5 (West 2001)) is a term of art which the Board has defined inits rules as follows:

"the acquisition, construction, or leasing of space, buildings, or structures for the purposeof providing outpatient surgical services on a site or location that is not within thelicensed premises of the health care facility. Outpatient surgical services are thosesurgical procedures that are routinely performed in such settings as a hospital orambulatory surgical treatment center, or in any room or area that is designed, equipped,and used for surgery, such as, but not limited to, a surgical suite or special proceduresroom. Outpatient surgical services do not include those procedures performed as partof a physician's private practice in examination or non-surgical treatment rooms." 77 Ill.Adm. Code