In re Licensure of Shelly Ann Vandevord Day Care Home ( 2022 )

NOT DESIGNATED FOR PUBLICATION
No. 123,827
IN THE COURT OF APPEALS OF THE STATE OF KANSAS
In the Matter of the Licensure of
SHELLY ANN VANDEVORD DAY CARE HOME.
MEMORANDUM OPINION
Appeal from Johnson District Court; DAVID W. HAUBER, judge. Opinion filed May 27, 2022.
Appeal dismissed.
Amory K. Lovin, of Office of Legal Services, Kansas Department of Health and Environment, for
appellant Kansas Department of Health and Environment.
Sean P. Edwards, of Sanders Warren Russell & Scheer LLP, of Overland Park, for appellee
Shelly Ann Vandevord Day Care Home.
Before MALONE, P.J., SCHROEDER and HURST, JJ.
PER CURIAM: One of our first tasks in an appeal is to determine if we have
jurisdiction. Our jurisdiction is limited to final decisions of the district court. See K.S.A.
2020 Supp. 60-2102(a)(4). The Kansas Department of Health and Environment (KDHE)
now appeals the district court's order remanding to KDHE for further findings and
investigation regarding the revocation of Shelly Ann Vandevord's daycare license.
After KDHE submitted its brief, our motions panel issued a show-cause order
questioning whether the district court's remand order was a final appealable order. Based
on the parties' responses, we retained jurisdiction but ordered the parties to submit
supplemental briefing on the jurisdictional issue, which the parties did. Upon review, we
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find the district court's order of remand is not a final appealable order. Accordingly, we
dismiss KDHE's appeal for lack of jurisdiction.
FACTS
Vandevord operates a licensed home day care facility in Olathe. Based on various
violations observed during inspections of Vandevord's day care between March 2018 and
March 2019, KDHE sent Vandevord a notice of intent to suspend her license on March
20, 2019. In response, Vandevord requested an administrative hearing before an
administrative law judge (ALJ) in the Office of Administrative Hearings. KDHE
subsequently conducted two follow-up inspections in April 2019, observing some of the
earlier violations had not been corrected. In light of these violations, KDHE filed a
motion with the ALJ in May 2019, requesting it be allowed to modify its intended order
from suspension to revocation, which the ALJ allowed. KDHE admits no further
inspection of the day care occurred after April 2019.
The ALJ conducted an administrative hearing in January 2020 and issued an order
several months later affirming the revocation order. The ALJ made a number of findings
of fact and conclusions of law, the bulk of which the parties take no issue with on appeal.
Relevant to issues on judicial review, the ALJ found Vandevord's testimony that she had
corrected any remaining violations by May 13, 2019, was "something this tribunal may
not consider." The ALJ further found:
"Anything that has occurred since the last survey was conducted on April 30, 2019 is
irrelevant to these proceedings as that was not part of the consideration by the Agency
and is not subject to review. The Agency is simply required to prove by a preponderance
of the evidence available at the time of the action that the action was in compliance [with]
the statutes, regulations and policies in force and effect at the time."
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Vandevord filed a request for further administrative review with the Secretary of
KDHE, which the Secretary denied in July 2020. Vandevord then timely petitioned for
review in the district court pursuant to the Kansas Judicial Review Act (KJRA), K.S.A.
77-601 et seq. Specifically, Vandevord asserted KDHE "unreasonably, arbitrarily, and
capriciously revoked . . . her daycare license." The district court held a hearing in
December 2020. The district court found it was unreasonable as a matter of law for
KDHE not to perform a follow-up inspection after April 2019 on the licensee, given the
substantial delay in the proceedings while Vandevord's daycare remained open and
operating. The district court also expressed some concerns over the ALJ's failure to
consider whether Vandevord remedied the violations.
The district court summarized its overarching concern, stating: "My concern, very
frankly, is we go from May of 2019 to [here] it is December of 2020 without a whisper of
anybody checking on her." Accordingly, the district court found: "[T]he course of
conduct to this point appears retroactively to be unreasonable. I'm not suggesting the
revocation won't occur, but I don't think—the fact they've done nothing for quite some
time tells me there's a serious problem with follow-up." The district court explained: "I'm
simply remanding it to the agency. . . . I think the agency needs to do more fact-finding at
this point in light of the considerable delay that's occurred." The district court also found
there was "an insignificant record for the purposes of the time of the motion to revoke in
the present day which has involved zero agency follow-up, period." In its written order,
the district court remanded the matter to KDHE "for follow up and further inspection of
[Vandevord's day care]," finding it was "unreasonable as a matter of law to not follow up
on a licensee after the Notice of Intent to Revoke was issued in May of 2019 through [the
December 7, 2020] hearing."
In response to our show-cause order, the parties promptly submitted supplemental
briefing on the jurisdictional issue—whether the district court's order of remand is a final
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appealable order under K.S.A. 2020 Supp. 60-2102(a)(4) and K.S.A. 77-623. Additional
facts are set forth as necessary.
ANALYSIS
Standard of Review
Under K.S.A. 77-623, "[d]ecisions on petitions for judicial review of agency
action are reviewable by the appellate courts as in other civil cases." We exercise the
same statutorily limited review of an agency's action as does the district court, "'as though
the appeal had been made directly to this court."' Kansas Dept. of Revenue v. Powell, 290
Kan. 564, 567, 232 P.3d 856 (2010). District courts have limited power of review under
the KJRA and may only grant relief based on the enumerated circumstances in K.S.A.
77-621(c). Sheldon v. KPERS, 40 Kan. App. 2d 75, 79, 189 P.3d 554 (2008) (citing Jones
v. Kansas State University, 279 Kan. 128, 139, 106 P.3d 10 [2005]). However, we need
not delve extensively into the analytical framework of the KJRA. Here, the threshold
question—whether we have jurisdiction over KDHE's appeal—is ultimately dispositive
to our decision.
We do not have jurisdiction over KDHE's appeal.
Under K.S.A. 2020 Supp. 60-2102(a)(4), a party may appeal a "final decision" in
any action as a matter of right. The jurisdictional question before us is whether the district
court's order of remand is a final appealable decision. "If not, the appeal is interlocutory
and must be dismissed." Nickels v. Board of Education of U.S.D. No. 453, 38 Kan. App.
2d 929, 931, 173 P.3d 1176 (2008). Whether jurisdiction exists is a question of law over
which our scope of review is unlimited. See Via Christi Hospital Wichita v. Kan-Pak,
310 Kan. 883, 889, 451 P.3d 459 (2019). We have a duty to consider whether we have
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jurisdiction. Wiechman v. Huddleston, 304 Kan. 80, 84, 370 P.3d 1194 (2016). We start
by looking at the district court's order for remand.
To begin with, the district court's order for remand lacks clarity. The written order
stated it was remanding the matter to KDHE "for follow up and further inspection of
[Vandevord's day care]." This seemingly contemplates a scope of remand potentially
related to matters before and after the final agency action, which is further complicated
by the somewhat imprecise statutory definitions of "final agency action" and "nonfinal
agency action" under the KJRA. See K.S.A. 77-607(b)(1) ("'Final agency action' means
the whole or a part of any agency action other than nonfinal agency action."); K.S.A. 77-
607(b)(2) ("'Nonfinal agency action' means the whole or a part of an agency
determination, investigation, proceeding, hearing, conference or other process that the
agency intends or is reasonably believed to intend to be preliminary, preparatory,
procedural or intermediate with regard to subsequent agency action of that agency or
another agency."). And Kansas appellate courts often have been unable to provide a
clearer distinction between final agency orders and final agency actions. See Blomgren v.
Kansas Dept. of Revenue, 40 Kan. App. 2d 208, 213, 191 P.3d 320 (2008) ("A final
agency action should not be confused with a final order.").
Fortunately, for purposes of this appeal, KDHE concedes "[t]he final agency
action was when the Secretary of KDHE denied Ms. Vandevord's Petition for
Administrative Review." This seems to be a correct interpretation, generally, because the
Secretary could have granted relief through further hearing or investigation. See K.S.A.
77-527(d)-(f). Here, the final agency action did not occur until the Secretary denied
Vandevord's petition for further administrative review on July 22, 2020. The ALJ stated
he could not consider anything Vandevord did to correct the violations and come into
compliance after April 2019. At the administrative hearing, Vandevord testified she
resolved all the violations by May 13, 2019, which she also asserted in her response to
KDHE's motion to amend, filed on May 17, 2019. KDHE moved to amend its prior
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notice of intent to suspend to revocation on May 6, 2019, but the ALJ did not grant the
motion until May 31, 2019, following a prehearing conference on May 23, 2019. In other
words, there was potentially a legitimate factual question or dispute regarding arguably
relevant evidence bearing on the ALJ's order granting the motion to amend. And KDHE
had notice of Vandevord's assertion the violations were remedied prior to the May 23,
2019 prehearing conference addressing the merits of its motion to amend.
Clarification of KDHE's reasons, if any, for not conducting additional follow-up
while its motion to amend was pending appears generally relevant to the district court's
consideration of whether KDHE's revocation action was "supported to the appropriate
standard of proof by evidence that is substantial when viewed in light of the record as a
whole." K.S.A. 77-621(c)(7). Because the ALJ expressly declined to consider whether
Vandevord subsequently remedied any violations, there has been no factual finding on
the credibility of her assertions. Therefore, the agency action appears improper—
revoking instead of suspending—to the extent it may have been premised on "an
unreasonable and arbitrary disregard of relevant evidence." Hudson v. Kansas Public
Employees Retirement Bd., 53 Kan. App. 2d 309, 321, 388 P.3d 597 (2016).
KDHE's final action was predicated on (1) the ALJ allowing KDHE to amend its
notice of intent to pursue revocation and (2) the ALJ upholding the initial revocation
order. Thus, KDHE could not have proceeded to the final agency action without the ALJ
granting the motion to amend. In other words, if KDHE's failure to investigate relevant
evidence between May 6, 2019, and May 23, 2019, did or could have undermined this
threshold decision, it seemingly taints the validity of any subsequent agency action in
reliance thereon. And any additional agency investigation prior to the Secretary's denial
of further review may have been relevant to the Secretary's exercise of his discretion.
In the broader context of the district court's on-record explanation for its decision,
it expressed concerns with the lack of follow-up inspection during the pendency of the
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agency action and the administrative proceedings from May 2019 to July 2020. To the
extent the district court intended to remand "to [KDHE] for follow up" regarding the lack
of information explaining its actions or inaction prior to July 22, 2020, this action appears
proper under K.S.A. 77-619(a)(2) and (b).
We acknowledge the district court indicated some concerns that seem to
intermingle the lack of follow-up during both administrative and judicial proceedings.
However, we are unpersuaded this makes the order for remand a final appealable order.
We also note the parties largely failed to get clarification of the exact nature of the district
court's ruling. The district court told Vandevord's counsel:
"[Y]ou're not off the hook. I'm just telling you I'm remanding it to the agency because I
strongly believe that the course of conduct to this point appears retroactively to be
unreasonable. I'm not suggesting the revocation won't occur, but I don't think—the fact
that they've done nothing for quite some time tells me that there's a serious problem with
follow-up."
KDHE's attorney then asked, "[W]ould this be a final order from you?" The
district court responded, "I'm simply remanding it to the agency." The district court
further explained, "I think the agency needs to do more fact-finding at this point in light
of the considerable delay that's occurred." These statements seem to generally indicate
the district court wanted more agency fact-finding before ruling on the merits. Contrary
to KDHE's arguments, the district court's order is not clear enough to conclude it was
only remanding for inspection of the current conditions of the daycare, as opposed to
"further follow up" also including an explanation of KDHE's rationale and decision-
making while the administrative action was pending.
Thus, we cannot intelligently separate the district court's concerns about a lack of
follow-up during administrative proceedings from the lack of follow-up during judicial
proceedings. We also find any ambiguity in the district court's order should be charged to
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KDHE because (1) KDHE did not object to a lack of findings or sufficiently request
additional findings or clarification from the district court and (2) KDHE's attorney
drafted the order being appealed. See Friedman v. Kansas State Bd. of Healing Arts, 296
Kan. 636, 644, 294 P.3d 287 (2013) (burden is on party making claim "'to designate a
record sufficient to present its points to the appellate court and to establish its claims'");
O'Brien v. Leegin Creative Leather Products, Inc., 294 Kan. 318, 361, 277 P.3d 1062(2012) (when no objection is made to district court's findings of fact or conclusions of
law on basis of inadequacy, appellate court will presume district court found all facts
necessary to support its judgment); Lyndon State Bank v. Price, 33 Kan. App. 2d 629,
631-32, 106 P.3d 511 (2005) (when district court assigns responsibility of drafting an
order or journal entry to party, order must conform to district court's ruling; if nondrafting
party does not object, the drafting party submits proposed order to district court for
signature and filing).
Here, the district court assigned the task of drafting the order for remand to
Vandevord's counsel. However, for reasons that are unclear from the record, KDHE's
counsel ultimately prepared the order for remand. KDHE was the party aggrieved by the
district court's order; thus, it could not have reasonably expected Vandevord to object to
the proposed order. As the aggrieved party, KDHE needed to designate a sufficient
record to establish its claims of error on appeal. See Friedman, 296 Kan. at 644. "[A]
district court's journal entry of judgment in a civil case controls over its prior oral
statements from the bench." Uhlmann v. Richardson, 48 Kan. App. 2d 1, 10, 287 P.3d
287 (2012). To the extent the district court's on-record explanation was unclear, KDHE
should have objected or requested additional findings before drafting the proposed order
so a clearer ruling could be memorialized in the written order, which KDHE is now
appealing. See Friedman, 296 Kan. at 644; O'Brien, 294 Kan. at 361; Lyndon State Bank,
33 Kan. App. 2d at 631-32.
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It is well-established "absent exceptional circumstances, a district court order
remanding a proceeding to [an agency] for further findings is not a final decision
appealable as of right under K.S.A. 60-2102(a)(4)." Holton Transport, Inc. v. Kansas
Corporation Comm'n, 10 Kan. App. 2d 12, 13, 690 P.2d 399 (1984). In NEA-Topeka v.
U.S.D. No. 501, 260 Kan. 838, 843, 925 P.2d 835 (1996), our Supreme Court applied
Holton Transport, Inc., finding: "[I]f the trial court grants a motion to compel arbitration,
then the parties must submit to arbitration and then challenge the arbitrator's decision
before there is a final order which is appealable to an appellate court." Likewise, our
Supreme Court noted an order granting a new trial is generally not a final or appealable
order. NEA-Topeka, 260 Kan. at 843. These principles equally apply in the administrative
context. See Nickels, 38 Kan. App. 2d at 932 ("We conclude that because the due process
hearing ordered by the district court has not yet been conducted, the Board's appeal to
this court is not a final, appealable order and the appeal must be dismissed as
interlocutory.").
An order for new trial generally contemplates a significantly more burdensome
procedure than conducting the type of follow-up and fact-finding directed by the district
court in this case. Rather, the district court's remand order here seemingly poses no
more—and perhaps much less—of a burden than an order compelling arbitration. We
find the present remand order akin to the "order of remand for further findings of fact" in
Holton Transport, Inc., 10 Kan. App. 2d at 12, which was not a final appealable order.
KDHE unpersuasively argues there were exceptional circumstances, asserting the
district court's order here was an appealable collateral order based on the analysis in
Skahan v. Powell, 8 Kan. App. 2d 204, 205-07, 653 P.2d 1192 (1982). We find Skahan
factually and procedurally distinguishable. There, the order being appealed was the
disqualification of an out-of-state attorney for purposes of proceedings in the district
court. The Skahan panel correctly recognized there was no available remedy after the
fact, as it would "be effectively unreviewable on appeal from a final judgment," and
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"[t]he order of disqualification . . . conclusively determines . . . whether plaintiff is to
have counsel of his choice or be forced to retain another." 8 Kan. App. 2d at 206.
Here, unlike Skahan, even assuming the district court might improperly consider
any evidence as a result of follow-up inspection, it can be remedied in a subsequent
appeal. At this point, it is largely speculative whether, or to what extent, the district court
might consider matters after the final agency action in reviewing the supplemented
agency record pursuant to its order of remand. And depending on KDHE's follow-up
findings and clarification of the agency record, including any evidence related to
Vandevord's claims she remedied all violations prior to the ALJ allowing KDHE to
amend to a notice of intent to revoke, the district court might still resolve the matter in
KDHE's favor. Accordingly, we find it is premature for KDHE to seek relief on appeal
for a nonfinal order.
Contrary to KDHE's arguments, the district court's order of remand was not a final
decision because it was not "'one which finally decides and disposes of the entire merits
of the controversy, and reserves no further questions or directions for the future or further
action of the court.'" Gulf Ins. Co. v. Bovee, 217 Kan. 586, 587, 538 P.2d 724 (1975).
Rather the district court left open the ultimate question of whether Vandevord's license
would be revoked, stating, "I'm remanding it to the agency because I strongly believe that
the course of conduct to this point appears retroactively to be unreasonable. I'm not
suggesting that revocation won't occur." And to that end, we are unpersuaded by KDHE's
argument the district court erroneously remanded for further agency proceedings. The
district court clearly stated it was remanding the matter to the agency "to do more fact-
finding at this point." This was the appropriate remedy for the district court's concerns
because: (1) The district court sent the matter back to the agency—the body from which
the decision appealed originated; and (2) the order for remand was for agency follow-up
and fact-finding, not additional proceedings before the ALJ. See Travelers Casualty
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Insurance v. Karns, 61 Kan. App. 2d 43, 57-58, 499 P.3d 491 (2021). Accordingly, we
reject KDHE's argument it was entitled to appeal based on exceptional circumstances.
We are further unpersuaded by KDHE's argument the district court had to
explicitly consider whether substantial competent evidence supported the agency decision
before it could remand. This seems to defy the purpose of remand—developing a
sufficient record to meaningfully review the proceedings before the agency. In other
words, an order for remand is appropriate when gaps or ambiguities in the record or
proceedings before the agency prevent the district court from determining if substantial
competent evidence supports the agency's decision. See K.S.A. 77-619(b)(1) ("The court
may remand a matter to the agency . . . with directions that the agency conduct fact-
finding and other proceedings the court considers necessary . . . if: . . . [t]he agency was
required to base its action exclusively on a record of a type reasonably suitable for
judicial review, but the agency failed to prepare or preserve an adequate record.");
Travelers, 61 Kan. App. 2d at 57 ("'[R]emand' is defined as '[t]he act or an instance of
sending something [such as a case, claim, or person] back for further action.' Black's Law
Dictionary 1547 [11th ed. 2019].").
Here, the district court implicitly found there was not substantial competent
evidence when it held there was "an insignificant record" and "the agency needs to do
more fact-finding at this point." But this is not the same as reversing on the merits
because "the agency action [was] based on a determination of fact, made or implied by
the agency, that is not supported . . . by evidence that is substantial when viewed in light
of the record as a whole." See K.S.A. 77-621(c)(7). Rather, the district court's ruling
suggests it found the record from the proceedings below as a whole too poorly developed
to conclusively decide the point.
We find the order for remand by the district court is not a final appealable order
deciding whether Vandevord's day care license should be revoked. KDHE has not
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demonstrated exceptional circumstances to permit an interlocutory appeal of a nonfinal
order. We dismiss the appeal for lack of jurisdiction. The parties must comply with the
district court's order for remand.
Appeal dismissed.
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