Hospital Corp. of North Carolina, Inc. v. Iredell County , 120 N.C. App. 445 ( 1995 )

GREENE, Judge.

Iredell County (defendant) appeals from the trial court’s order entering summary judgment in favor of Hospital Corporation of North Carolina, Inc. d/b/a Davis Community Hospital (plaintiff) which restrained defendant from transferring the management of its home health agency until defendant complied with certain notice requirements.

The evidence shows that defendant owns and operates the Iredell County Home Health Agency (Home Health), which provides “home health care for persons needing medical assistance in their homes and hospitals.” Defendant’s organizational chart places Home Health under the Board of Health within the Iredell County Health Department. It is undisputed that Home Health operates pursuant to a license issued by the North Carolina Department of Human Resources, and that Home Health is not required to have a Certificate of Need, pursuant to Article 9 of Chapter 131E of the North Carolina General Statutes.

On 7 June 1994, the “Iredell County Board of Commissioners voted to transfer the management of the Iredell Home Health Agency to Iredell Memorial Hospital, Inc.,” (Iredell) which is a non-profit hospital where a “majority of the voting members of the Board of Directors . .. are not appointed by” defendant. Thereafter, on 10 June 1994, plaintiffs, a for-profit hospital in competition with Iredell, sued defendants, seeking a temporary restraining order and a permanent restraining order, until defendants comply with notice requirements set forth in N.C. Gen. Stat. § 131E-13(d), the Municipal Hospital Act (the Act). The trial court entered a temporary restraining order on 10 June 1994, which the parties agreed by consent order should remain in effect until the matter could be heard. On 19 July 1994, the Board of Commissioners “adopted a resolution approving the transfer of the management of [Home Health] and lease of space and equipment to Iredell Memorial Hospital, Inc., subject to dissolution of the Restraining Order pending in this matter.” The agreement which the Board of Commissioners approved provides that Iredell, as consideration for the contract, will eliminate a county subsidy to Home Health, pay $200,000, and lease the office space, within which Home Health currently operates, as well as all of the personal property of Home Health, from defendant in exchange “for the Transfer of operating rights and responsibilities.” This transfer includes Home Health’s license and provider number. Upon Iredell’s breach of any terms of the contract, including requirements that Iredell provide indiscriminate care to all members of the County and provide indigent care, defendant may resume operation of the management of Home Health.

On 22 August 1994, the trial court entered summary judgment in favor of plaintiffs, and ordered that the transfer of the management of Home Health should be permanently restrained until defendant complies with the notice provisions in N.C. Gen. Stat. § 131E-13(d).

The issues are whether (I) a home health agency is a “hospital facility” as defined by N.C. Gen. Stat. § 131E-6(4) and if so, whether (II) the transfer of Home Health’s management in this case was a lease, sale or conveyance, requiring defendant’s compliance with the notice requirements of N.C. Gen. Stat. § 131E-13(d), prior to the transfer.

I

Prior to “leasing, selling, or conveying a hospital facility” to either a “for profit corporation” or a “nonprofit corporation” meeting the requiremerits of section 131E-14, a county which owns the facility must first comply with the requirements of section 131E-13(d). N.C.G.S. § 131E-13(d) (1994). In this case it is not disputed that Iredell is a section 131E-14 “nonprofit corporation.” The defendant argues that Home Health is not a “hospital facility” within the meaning of the statute. We disagree.

A “hospital facility” is defined as

any type of hospital; facility operated in connection with a hospital such as a clinic, including mental health clinics; nursing, convalescent, or rehabilitative facility; public health center; or any facility of a local health department. The term “hospital facility” also includes related facilities such as laboratories, outpatient departments, housing and training facilities for nurses and other health care professionals, central service facilities operated in connection with hospitals, and all equipment necessary for its operation.

N.C.G.S. § 131E-6(4) (1994) (emphasis added). In this case, it is not disputed and, in fact, the record reveals that Home Health is a part of defendant’s local health department. The question, therefore, is whether Home Health is “a facility” of defendant’s local health department.

A facility is defined to include not only stmctures designed “to facilitate some particular end” but anything that “promotes the ease of any action, operation, transaction, or course of conduct.” Webster’s Third New International Dictionary 812 (1968); Black’s Law Dictionary 591 (6th ed. 1990). In this case, the defendant agreed to transfer Home Health’s license to Iredell as well as the office space and equipment. The transfer of the license vested Iredell with the “operating rights and responsibilities” and thus promoted or made it possible for it to provide the home health service to the people of Iredell County. It follows therefore that Home Health, consisting of a license, equipment and office space, is a hospital facility within the meaning of section 131E-13(d).

Furthermore, the entire “Health Care Facilities and Services Act,” codified as Chapter 13 IE, treats home health agencies as facilities. Article 6, which is the “Facility Licensure Act” includes home health care agencies as facilities requiring licensure. N.C.G.S. § 131E-135 (1994). Article 9, which sets forth certificate of need requirements, also specifically lists home health agencies as a “health service facility.” N.C.G.S. § 131E-176(9b) (1994).

Finally, the legislature obviously intended to foster competition with its adoption of section 131E-13(d) and we are not prepared to exclude home health agencies from its provisions in the absence of clear legislative language.

II

In the alternative, the defendant argues that its contract with Iredell to transfer “management” of Home Health is not a “lease, sale or conveyance” requiring compliance with the notice provisions of N.C. Gen. Stat. § 131E-13(d) because the transfer only relates to the “management” of Home Health. We disagree.

A conveyance is “one by which the right ... in a thing is transferred.” Black’s Law Dictionary 333 (6th ed. 1990). In this case the defendant transferred the right to operate Home Health to Iredell and in so doing made a conveyance within the meaning of the statute. The fact that the contract contained provisions relating to the operation of Home Health and permitted the defendant to terminate the contract upon noncompliance is not material to the issue presented. The controls retained by defendant are required by law, N.C.G.S. §§ 131E-8(a), -13(a). In any event, in this case the lease of the office space, which was an integral part of the contract, qualifies the transfer as a lease within the meaning of section 131E-13(d).

Accordingly, summary judgment in favor of plaintiffs was appropriate.

Affirmed.

Judge McGEE concurs. Judge WYNN concurs with separate opinion.