Cty. Med., Inc v. Dept. of Dev. Disabilities

[Cite as Cty. Med., Inc v. Dept. of Dev. Disabilities, 2017-Ohio-5745.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 104921
COUNTY MED, INC.
PLAINTIFF-APPELLANT
vs.
OHIO DEPARTMENT OF
DEVELOPMENTAL DISABILITIES
DEFENDANT-APPELLEE
JUDGMENT:
AFFIRMED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-16-861453
BEFORE: E.T. Gallagher, J., Keough, A.J., and Blackmon, J.
RELEASED AND JOURNALIZED: July 6, 2017
ATTORNEY FOR APPELLANT
Sam A. Zingale
614 West Superior Avenue
700 Rockefeller Building
Cleveland, Ohio 44113
ATTORNEYS FOR APPELLEE
Mike DeWine
Ohio Attorney General
BY: Stephanie Deters
Assistant Attorney General
The Health and Human Services Section
30 East Broad Street, 26th Floor
Columbus, Ohio 43215
EILEEN T. GALLAGHER, J.:
{¶1} Appellant, County Med Inc. (“County Med”), appeals a judgment affirming an
adjudication order of the Ohio Department of Developmental Disabilities (“DODD”) that
revoked its operating certificate. County Med raises four assignments of error:
1. The trial court erred in not delineating the “additional evidence” it admitted
into the record, which oversight necessitates remanding this case to the trial court
for the purpose of precisely identifying the “additional evidence” to which the trial
court referred.
2. Assuming the trial court admitted all of the documents that plaintiff-appellant
County Med, Inc. presented during the course of the proceedings before the trial
court, the revocation of County Med, Inc.’s certificate was contrary to law, and the
trial court erred in affirming the final Agency Decision of defendant-appellee
Ohio Department of Developmental Disabilities (“Agency”) revoking County
Med Inc.’s certificate to operate because the evidence presented by County Med,
Inc. shows conclusively that County Med, Inc. was in full compliance with all of
the Agency’s rules and regulations.
3. Assuming that the trial court admitted all of the documents that
plaintiff-appellant County Med, Inc. presented during the course of the
proceedings before the trial court, the trial court erred in affirming the final
Agency decision revoking County Med, Inc.’s certificate to operate because that
final Agency decision was not founded on “reliable, probative, and substantial”
evidence.
4. In light of the evidence in the record of this case, including the “additional
evidence” accepted by the court, the trial court erred in not finding that the penalty
imposed by the Agency, i.e., revocation of County Med, Inc.’s certificate, was
unduly harsh and excessive, and should be vacated.
{¶2} We find no merit to the appeal and affirm.
I. Facts and Procedural History
{¶3} County Med was certified by the DODD in 2008 to provide non-medical
transportation services to individuals with developmental disabilities under the Individual
Options Waiver, Level One Options Waiver, and Self-Employed Life Funding Waiver Programs.
As an agency provider, County Med was subject to periodic compliance inspections by the
DODD. In June 2015, the DODD issued an order suspending County Med’s certifications. The
order also recommended revocation of the certificates due to a pattern of noncompliance with
certification standards.
{¶4} County Med made a timely request for a hearing regarding the suspension and
proposed revocation of its operating certificate, which took place in December 2015. Cathy
Kramer (“Kramer”), a review specialist in the agency’s Office of Standards and Review, testified
that she conducted a regular compliance review of County Med in July 2012 and issued 19
citations for violations of the administrative rules. County Med was cited for allowing
employees to work without first checking either the Sex Offender Registry or the DODD’s
Abuser Registry, which identifies employees who have previously committed abuse, neglect, and
misappropriation against developmentally disabled individuals. (Tr. 21-23.) It was also cited
for employing individuals without first completing employee background checks or drug tests
and for failure to provide evidence of a current insurance policy. (Tr. 21-24.) Kramer found
that some of County Med’s employees worked without providing proof of a valid driver’s license
in violation of the agency standards, and County Med failed to provide proof that many of its
employees received required training, among other things. (Tr. 23.)
{¶5} Following the review, County Med was given an opportunity to correct the citations.
Kramer testified that she provided County Med a compliance summary report and a letter
notifying it that compliance was required. County Med created a plan for compliance, and
Kramer advised County Med’s owner and CEO, Rania Karsheh (“Karsheh”), that not all the
items in the plan would be accepted. Kramer made notations on the plan to assist County Med
in complying with certification standards. (Tr. 25.) Kramer testified that all the cited items in
the 2012 review were eventually corrected and that all the drivers met the requirements of the
administrative rules. (Tr. 29.)
{¶6} In February 2015, the DODD notified County Med of a regular compliance review
scheduled for May 2015. Julie Gregg (“Gregg”), the lead reviewer in the DODD’s Office of
Standards and Review, testified that she conducted the May 2015 compliance review of County
Med’s operation. (Tr. 34.) Gregg issued 24 citations. Gregg cited County Med for (1) failure to
document that drivers had valid driver’s licenses and had been subjected to criminal background
checks or mandatory database searches before delivering services to clients, (2) failure to
document required employee trainings intended to protect individuals’ health and safety, (3)
failure to document proper and timely recordkeeping, and (4) failure to document required
inspections of its vehicles, among other things. (Tr. 39, 48-59.) One vehicle had a cracked
windshield and others lacked usable fire extinguishers. Gregg also found that County Med
failed to provide evidence that it had investigated potential disqualifying offenses of two of its
employees. (Tr. 49-50.)
{¶7} Gregg testified that the employees with potential disqualifying offenses were
ultimately found to have not been convicted of those offenses. Gregg also stated that her
interviews with clients revealed no complaints or concerns, and that County Med replaced the
cracked windshield after the review.
{¶8} Theresa Ryan (“Ryan”), a manager in the DODD’s Office of Standards and Review,
testified that she manages suspensions and revocations and supervises special reviews. Ryan
testified that many of the citations issued in 2015 were repeat offenses for which County Med
had been cited in 2012. (Tr. 74.) Ryan referred the results of County Med’s 2012 and 2015
reviews to a regional manager and recommended that County Med’s certifications be summarily
revoked. When asked why she believed County Med’s certifications should be revoked, Ryan
stated:
In 2012, when they were reviewed, they were issued 19 citations. Those citations
were reviewed and compared to the citations from the 2015 review. * * * [I]t
was found that 12 of the original 19 citations were re-cited again in 2015. These
citations had to do with issues that were considered to be health and safety[.] I
met with my assistant deputy director and I presented her with both reports and
my recommendation, and it was approved. We believed that, based on the * * *
two reviews * * * this agency is not equipped to continue to provide services to
individuals with developmental disabilities.
(Tr. 74.) Ryan conceded that County Med did not employ individuals with disqualifying
offenses and that the clients’ needs were being met. She nevertheless concluded that County
Med’s certification should be revoked because it was not following agency rules and standards.
(Tr.79-80.) County Med was not offered an opportunity to submit a plan for correction
following the 2015 compliance review.
{¶9} Karsheh testified that the company has four employees other than herself, and that
she knew all of the employees before she hired them. She presented proof of insurance that
listed the covered employees and showed that County Med’s vehicles were covered under the
policy. Karsheh explained that turnover among drivers is low and that County Med serves 28
clients.
{¶10} Karsheh identified several documents she now uses to ensure compliance with
agency requirements. She also presented documents that she claimed proved that she corrected
the issues cited in the compliance reviews. (Tr. 93.) For example, she presented a daily
transportation log that she claimed contained information cited as missing by the reviewers. (Tr.
91.) She further testified that County Med had been using the transportation log since June 1,
2015, which was after the May 2015 review but several months before the December hearing.
{¶11} Karsheh presented proof that she faxed semiannual and annual reports for 2014 and
2015 to the agency that were missing from the 2015 review. (Tr. 91.) With respect to these
reports, Karsheh promised: “We’ll continue to do it within the timeline.” Karsheh presented a
document identifying changes she made to County Med’s recordkeeping, including changes to
County Med’s pre-employment checklist and trip sheets. She asserted that these changes
corrected all the deficiencies cited by Gregg. (Tr. 93.)
{¶12} According to Karsheh, neither County Med nor the DODD received complaints
from clients regarding County Med’s services. However, she conceded that her company
committed numerous violations and testified that “there could have been way worse issues” than
those identified in her review “that actually could have harmed people.” She explained:
[I]f somebody just up and quits, it’s hard for me to leave my consumers with no
ride. So if it’s an associate that I know, and I eventually get the paperwork done,
I feel like that’s okay. Which is wrong. It’s not proper documentation. So * *
* I’m going to find a friend or a relative that will be certified in this field, just in
case I am out a driver * * * so we do not leave consumers without transportation.
(Tr. 107-108.) On cross-examination, Karsheh admitted that she did not apprise herself of the
agency rules, but indicated that she has since educated herself and is now in a better position to
ensure compliance.
{¶13} Based on the evidence presented at the hearing, the hearing examiner
recommended that the director of the DODD uphold the suspension of County Med’s provider
certifications and issue an adjudication order revoking County Med’s certifications. County
Med filed timely objections to the hearing officer’s report, but the DODD director overruled
them and issued a final decision revoking County Med’s provider certificates.
{¶14} County Med filed a timely appeal to the common pleas court. County Med also
sought and obtained a stay of enforcement of the DODD’s final decision. However, the
common pleas court ultimately affirmed the DODD’s adjudication order. County Med now
appeals the trial court’s judgment.
II. Law and Analysis
A. Scope of the Record
{¶15} In the first assignment of error, County Med urges us to remand the case to the trial
court for clarification of the trial court’s ruling. County Med asserts the record on appeal is
ambiguous because it is not clear whether the trial court considered exhibit Nos. 1 through 6
attached to its motion to stay enforcement of the DODD’s final decision. It contends the trial
court’s judgment affirming the DODD’s adjudication order indicates it may have considered this
supplemental evidence. The court’s judgment entry states, in relevant part:
Upon consideration of the entire record and such additional evidence as the court
has admitted, the court affirms the order of the Ohio Department of
Developmental Disabilities finding that the order is supported by reliable,
probative, and substantial evidence and is supported by law. (Emphasis added.)
Thus, the court’s judgment entry suggests it may have considered additional evidence.
{¶16} However, County Med filed a motion to supplement the record with the documents
“showing compliance with agency rules and regulations on and after December 4, 2015” that
were filed in conjunction with its motion to stay, but the trial court never ruled on it. “When a
trial court fails to rule on a motion, the motion is considered denied.” State v. Pate, 8th Dist.
Cuyahoga No. 95382, 2011-Ohio-1692, ¶ 33. Therefore, the evidence attached to the motion to
stay was never admitted into the record as supplemental materials.
{¶17} Furthermore, the documents “showing compliance with agency rules and
regulations on and after December 4, 2015” were not admissible in this administrative appeal.
R.C. 119.12(K) provides that common pleas courts hearing administrative appeals are “confined
to the record as certified to it by the agency.” R.C. 119.12(K) permits a common pleas court, in
its discretion, to admit additional evidence, but only if it first determines that (1) the additional
evidence is “newly discovered” and (2) a reasonably diligent search prior to the administrative
hearing would not have ascertained the evidence. Hetrick v. Ohio Dept. of Agriculture, 10th
Dist. Franklin No. 15AP-944, 2017-Ohio-303, ¶ 44.
{¶18} The administrative hearing was held on December 3, 2015. As previously stated,
County Med sought to supplement the record with documents “showing compliance with agency
rules and regulations on and after December 4, 2015.” (Motion of Appellant, County Med, Inc.
to Supplement Administrative Record.) “Newly discovered evidence” refers to evidence that
existed at the time of the administrative hearing but, despite a reasonably diligent search, could
not have been discovered before the hearing. Golden Christian Academy v. Zelman, 144 Ohio
App.3d 513, 517, 760 N.E.2d 889 (10th Dist.2001). In other words, “newly discovered
evidence” does not refer to “newly created evidence.” Id., citing Diversified Benefit Plans
Agency, Inc. v. Duryee, 101 Ohio App. 3d 495, 501-502, 655 N.E.2d 1353 (9th Dist.1995), citing
Steckler v. Ohio State Bd. of Psychology, 83 Ohio App. 3d 33, 38, 613 N.E.2d 1070 (8th
Dist.1992).
{¶19} R.C. 2506.03 also provides that common pleas courts hearing administrative
appeals are “confined to the transcript filed under section 2506.02 of the Revised Code.” R.C.
2506.03 allows a trial court to supplement the record under the following limited circumstances:
(1) The transcript does not contain a report of all evidence admitted or proffered
by the appellant.
(2) The appellant was not permitted to appear and be heard in person, or by the
appellant’s attorney, in opposition to the final order, adjudication, or decision, and
to do any of the following:
(a) Present the appellant’s position, arguments, and contentions;
(b) Offer and examine witnesses and present evidence in support;
(c) Cross-examine witnesses purporting to refute the appellant’s position,
arguments, and contentions;
(d) Offer evidence to refute evidence and testimony offered in opposition to the
appellant’s position, arguments, and contentions;
(e) Proffer any such evidence into the record, if the admission of it is denied by
the officer or body appealed from.
(3) The testimony adduced was not given under oath.
(4) The appellant was unable to present evidence by reason of a lack of the
power of subpoena by the officer or body appealed from, or the refusal, after
request, of that officer or body to afford the appellant opportunity to use the power
of subpoena when possessed by the officer or body.
(5) The officer or body failed to file with the transcript conclusions of fact
supporting the final order, adjudication, or decision.
{¶20} The exhibits attached to County Med’s motion to stay enforcement of agency
decision, which County Med sought to have admitted into the agency record, consisted of an
affidavit executed by Karsheh on April 13, 2016, in which she authenticates several positive
client surveys from November 2015 and recommendation letters from clients from June 2015.
None of the evidence sought to be admitted as supplemental material fell within any of the
categories described in R.C. 2506.03.
{¶21} Karsheh’s affidavit was not admissible under either R.C. 119.12(K) or 2506.03
because she testified under oath at the administrative hearing, and her affidavit testimony related
to events that occurred after the hearing. Evidence created after the hearing does not fall within
the definition of “newly discovered evidence” because it did not exist at the time of the hearing.
Golden Christian Academy, 144 Ohio App. 3d at 517, 760 N.E.2d 889. Moreover, County Med
failed to demonstrate that, despite a reasonably diligent search, it was unable to produce the
client surveys and recommendation letters before the December hearing. Therefore, the
documents County Med sought to have admitted into the trial court record were inadmissible and
were never made part of the record.
{¶22} The first assignment of error is overruled.
B. Revocation of Provider Certificate
{¶23} In the second assignment of error, County Med argues the trial court erred in
affirming the DODD’s decision to revoke its provider certificate because “the evidence presented
by County Med, Inc. shows conclusively that County Med, Inc. was in full compliance with all of
the Agency’s rules and regulations.” (Appellant’s Brief p. 1.) In the third assignment of error,
County Med argues the trial court erred in affirming the DODD’s decision to revoke County
Med’s provider certificate because the “final Agency Decision was not founded on ‘reliable,
probative, and substantial’ evidence.” (Appellant’s Brief p. 1.) We discuss these assigned
errors together because they are interrelated.
1. Standard of Review
{¶24} In an administrative appeal, the common pleas court considers the “whole record,”
including any new or supplemental evidence admitted pursuant to R.C. 2506.03, and determines
whether the administrative order is unconstitutional, illegal, arbitrary, capricious, unreasonable,
or unsupported by the preponderance of substantial, reliable, and probative evidence. Henley v.
Youngstown Bd. of Zoning Appeals, 90 Ohio St. 3d 142, 147, 735 N.E.2d 433 (2000). A
common pleas court must “not substitute its judgment for that of an administrative board * * *
unless the court finds that there is not a preponderance of reliable, probative and substantial
evidence to support the board’s decision.” Kisil v. Sandusky, 12 Ohio St. 3d 30, 34, 465 N.E.2d
848 (1984).
{¶25} In Henley, the Ohio Supreme Court clarified that “[t]he standard of review to be
applied by the court of appeals in an R.C. 2506.04 appeal is ‘more limited in scope’” than the
standard of review applied by the trial court. (Emphasis deleted.) Id. at 147, quoting Kisil at 34.
The court explained that R.C. 2506.04
“grants a more limited power to the court of appeals to review the judgment of the
common pleas court only on ‘questions of law,’ which does not include the same
extensive power to weigh ‘the preponderance of substantial, reliable and probative
evidence,’ as is granted to the common pleas court.” [Kisil] at fn. 4. “It is
incumbent on the trial court to examine the evidence. Such is not the charge of
the appellate court. * * * The fact that the court of appeals, or this court, might
have arrived at a different conclusion than the administrative agency is
immaterial. Appellate courts must not substitute their judgment for those of an
administrative agency or a trial court absent the approved criteria for doing so.”
Lorain City School Dist. Bd. of Edn. v. State Emp. Relations Bd., 40 Ohio St. 3d
257, 261, 533 N.E.2d 264 (1988).
Henley at 147.
{¶26} Ultimately, the standard of review that we apply in an administrative appeal
“permits reversal only when the court of common pleas errs in its application or interpretation of
the law or its decision is unsupported by a preponderance of the evidence as a matter of law.”
Cleveland Clinic Found. v. Cleveland Bd. of Zoning Appeals, 141 Ohio St. 3d 318,
2014-Ohio-4809, 23 N.E.3d 1161, ¶ 30.
2. Revocation
{¶27} R.C. 5123.166 governs the DODD’s authority to revoke operating certificates
issued to agency providers such as County Med. R.C. 5123.166(A) authorizes the DODD to
revoke a provider certificate “if good cause exists as specified in R.C. 5123.166(B).” As
relevant here, R.C. 5123.166(B) provides that “good cause” may be demonstrated either by “[t]he
person[‘s] * * * failure to meet or continue to meet the applicable certification standards
established in rules adopted under section 5123.1611 of the Revised Code,” or “nonfeasance.”
R.C. 5123.166(B)(1) and (6). Nonfeasance is “‘the failure to act when a duty existed.’”
Teagardin v. Metal Foils, L.L.C., 11th Dist. Lake No. 2001-L-235, 2003-Ohio-1975, ¶ 11,
quoting Black’s Law Dictionary 861 (7th Ed.2000). Thus, a provider’s conduct may at once
constitute both nonfeasance and the failure to meet applicable certification standards.
{¶28} It is undisputed that County Med failed to comply with several certification
standards. Kramer testified that although County Med provided nonmedical transportation
services, it lacked documentation verifying that its drivers had valid driver’s licenses, failed to
provide proof of insurance for its employees and vehicles, and failed to provide proof that its
employees received required training. Kramer also cited County Med for allowing employees to
work without first conducting criminal background checks and drug tests, or searching
mandatory registries, such as the Sex Offender Registry and the DODD’s Abuser Registry,
among other things. (Tr. 23.)
{¶29} Following the 2012 compliance review, Kramer worked with County Med from
July 2012 through March 2013 helping County Med bring its operation into compliance. (Tr.
79.) Gregg testified that Kramer spent an inordinate amount of time with County Med and that
reviewers are expected to complete the compliance process within 90 days. (Tr. 80.)
{¶30} Gregg also testified that in May 2015, she cited County Med for (1) failure to
document that drivers had valid driver’s licenses and had been subjected to criminal background
checks or mandatory database searches before delivering services to clients, (2) failure to
document required employee trainings, such as first-aid and CPR, intended to protect
individuals’ health and safety, (3) failure to document proper and timely recordkeeping, and (4)
failure to document required inspections of its vehicles, among other things. (Tr. 39, 48-59.)
Ryan reviewed both County Med’s 2012 and 2015 compliance reviews and concluded that a
pattern of noncompliance created a substantial risk to the health and safety of the clients who
depend on County Med’s services. (Tr. 75.)
{¶31} County Med corrected many of the violations it received from the May 2015
compliance review. However, despite receiving 90 days notice of the May 2015 compliance
review, County Med was cited for 19 violations. County Med had previously been cited for 12
of the 19 violations, even though it received in-depth assistance in bringing the operation into
compliance. (Tr. 68.) Ryan explained that these repeat offenses, which concerned clients’
health and safety, indicated that County Med “was not equipped to continue to provide services
to individuals with developmental disabilities.” (Tr. 75.) She also testified that the DODD
views repeat violators who continue to be out of compliance as posing “a significant jeopardy to
individuals.” (Tr. 75.)
{¶32} County Med was given a second chance to comply with agency standards but
continued to violate them, even after receiving comprehensive compliance support from Kramer
and 90 days notice of the 2015 compliance review. Thus, a preponderance of the evidence
supports the DODD’s finding and the trial court’s finding that County Med committed
nonfeasance by failing to comply with the DODD’s certification standards.
{¶33} Accordingly, the second and third assignments of error are overruled.
C. Harsh and Excessive Consequence
{¶34} In the fourth assignment of error, County Med argues the trial court erred in not
finding that revocation of County Med’s operating certificate was unduly harsh and excessive,
and should be vacated.
{¶35} We are cognizant of the effects caused by the loss of County Med’s operating
certificate. However, as previously stated, a common pleas court may “not substitute its
judgment for that of an administrative board * * * unless the court finds that there is not a
preponderance of reliable, probative and substantial evidence to support the board’s decision.”
Kisil, 12 Ohio St. 3d 30 at 34, 465 N.E.2d 848. And our review is even more limited than that of
the trial court. The board’s decision to revoke County Med’s certification is supported by a
preponderance of reliable, probative, and substantial evidence. We are therefore obliged to
affirm the trial court’s judgment.
{¶36} Therefore, the fourth assignment of error is overruled.
{¶37} Judgment affirmed.
It is ordered that appellee recover from appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to the common pleas court to carry this
judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the
Rules of Appellate Procedure.
EILEEN T. GALLAGHER, JUDGE
KATHLEEN ANN KEOUGH, A.J., and
PATRICIA ANN BLACKMON, J., CONCUR