In re Avon Skilled Nursing & Rehab. , 2019 Ohio 3790 ( 2019 )

[Cite as In re Avon Skilled Nursing & Rehab., 2019-Ohio-3790.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
In re: : No. 18AP-863
(O.D.H. File No. 9106-01-17A)
Avon Skilled Nursing and Rehabilitation. :
(REGULAR CALENDAR)
:
D E C I S I O N
Rendered on September 19, 2019
On brief: Dave Yost, Attorney General, and Henry G. Appel,
for appellee Ohio Department of Health. Argued: Henry G.
Appel.
On brief: Webster & Associates Co., LPA, and Geoffrey E.
Webster, for appellee/cross-appellant Avon Realty Holding,
LLC. Argued: Geoffrey E. Webster.
On brief: Rolf Goffman Martin Lang, LLP, Ira S. Goffman,
and Joseph F. Petros, for appellants/cross-appellees Main
Street Care Center Ltd., Avon Healthcare Center, Inc., and
R & J Investment Company, Inc. Argued: Ira S. Goffman.
APPEAL from the Ohio Department of Health
LUPER SCHUSTER, J.
{¶ 1} Appellants, Main Street Care Center, Ltd., Avon Healthcare Center, Inc., and
R & J Investment Company, Inc., appeal, and cross-appellant, Avon Realty Holding, LLC
("Avon Realty Holding"), cross-appeals from the October 19, 2018 adjudication order of
appellee Director of the Ohio Department of Health ("ODH") granting Avon Realty
Holding's certificate of need ("CON") application. For the following reasons, we affirm.
I. Factual and Procedural Background
{¶ 2} On October 30, 2015, Avon SNF Realty, LTD, filed a CON application with
ODH to construct and operate a new long-term care facility, to be known as Avon Skilled
Nursing and Rehabilitation, in Avon, Ohio, in Lorain County. The applicant proposed the
No. 18AP-863 2
relocation of 82 long-term care beds from Golden Acres Lorain County Home ("Golden
Acres"), a facility formerly operated in Lorain County by the Lorain County Board of
Commissioners (a "county nursing home" as defined in R.C. 5155.31)1, to a newly
constructed nursing facility in Lorain County on the Avon Health Campus. Golden Acres
last provided long-term care services to a resident in October 2015. The director denied
this CON application in May 2016, reasoning that he was without authority to approve the
application because it proposed the relocation of long-term care beds that were no longer
located in a county nursing home and therefore were no longer existing beds.
{¶ 3} On July 13, 2016, the 131st General Assembly enacted Amended Substitute
House Bill 483 ("Am.Sub.H.B. No. 483"), which became effective on October 12, 2016. The
application and constitutionality of this legislation is at issue in this case.
{¶ 4} On January 9, 2017, the County Commissioners Board of Lorain County and
Avon Realty Holding entered into an agreement for the transfer and sale of the right to
operate Golden Acres' 82 nursing home beds to Avon Realty Holding. The next day, Avon
Realty Holding2 filed a CON application with ODH to construct and operate the nursing
home facility to be known as Avon Skilled Nursing and Rehabilitation, in Avon, Ohio, in
Lorain County. Like Avon SNF Realty, LTD's October 30, 2015 CON application, Avon
Realty Holding sought ODH's approval for the relocation of 82 long-term care beds from
Golden Acres to a proposed new facility on the Avon Health Campus.
{¶ 5} After Avon Realty Holding submitted its CON application, ODH requested
additional information, which was provided. On July 20, 2017, ODH declared Avon Realty
Holding's CON application to be complete. On August 31, 2017, ODH staff submitted a
report to the director of ODH recommending approval of the relocation of long-term care
beds from Golden Acres to the proposed long-term care facility. On September 15, 2017,
the director of ODH informed Avon Realty Holding that its CON application, involving the
"[i]ntra-county relocation of 82 long-term care (LTC) beds from Golden Acres Lorain
1 R.C. 5155.31 uses the terms "county home" and "county nursing home" interchangeably, without any
distinction between the two terms. See R.C. 3721.01 (defining "home" to include a "nursing home"). Thus,
Golden Acres also may be considered a "county home."
2 Avon Health Realty, LLC, was initially identified as the applicant, but Avon Realty Holding was later
identified as the correct name of the applicant.
No. 18AP-863 3
County Home, to a newly constructed nursing facility," had been approved. (Joint Ex. at
407.)
{¶ 6} Pursuant to R.C. 3702.60(B), appellants, which operate long-term care
facilities in the service area where the long-term care services would be provided under
Avon Realty Holding's CON, filed an appeal of the director's decision and requested an
adjudication hearing.
{¶ 7} A hearing examiner held a four-day hearing on the matter in January and
February 2018. In August 2018, the hearing examiner issued a report and recommendation
recommending that the director grant Avon Realty Holding's CON application. Appellants
filed objections to the report and recommendation. In October 2018, the director issued an
adjudication order, adopting the hearing examiner's findings of fact, conclusions of law,
and recommendation. The director accordingly granted Avon Realty Holding's CON
application.
{¶ 8} Pursuant to R.C. 119.12, appellants appeal, and Avon Realty Holding cross-
appeals, from the director's adjudication order.
II. Assignments of Error
{¶ 9} Appellants assign the following errors for our review:
[1.] The director erred by refusing to apply and enforce
Administrative Code Section 3701-12-23.2(E).
[2.] The director's decision to approve the applicant's CON
application is in error because Section 737.10 of the Amended
Substitute House Bill No. 483, upon which the director's
decision relies, violates the one-subject rule under Article II,
Section 15(D) of the Ohio Constitution.
[3.] The director's decision to approve the applicant's CON
application is in error because Section 737.10 of the Amended
Substitute House Bill No. 483, upon which the director's
decision relies, violates the uniformity clause under Article II,
Section 26 of the Ohio Constitution.
[4.] The director's decision to approve the applicant's CON
application is not supported by reliable, probative, and
substantial evidence and is not in accordance with Sections
3702.51 to 3702.62 of the Revised Code or the rules adopted
under those sections.
No. 18AP-863 4
{¶ 10} In its cross-appeal, Avon Realty Holding assigns the following errors for our
review:
[1.] Whether the hearing examiner erred by failing to issue the
findings of fact and conclusion of law that Lorain County's
Golden Acres Home was an open, operating facility and was an
existing health care facility as defined in R.C. 3702.51(J).
[2.] Whether the hearing examiner improperly granted
appellants' motion to quash Avon's subpoena request for
appellants' financial documentation.
[3.] Whether the hearing examiner improperly used the term
"special legislation" in reference to Am. Sub. H.B. 483 (131st
General Assembly) thereby creating the bases for a potential
appealable issue for appellants Main Street Care Center, Ltd.,
Atrium Retirement Centers, LLC, Avon Healthcare Center,
Inc., and R & J Investment Co., Inc.
III. Discussion
A. Appellants' First and Fourth Assignments of Error – Application
Approval
{¶ 11} We address together appellants' first and fourth assignments of error. In
appellants' first assignment of error, they contend the director erred in refusing to apply
Ohio Adm.Code 3701-12-23.2(E). They argue this regulation prohibited the director from
granting Avon Realty Holding's January 10, 2017 CON application. Appellants' fourth
assignment of error more generally asserts the director's adjudication order granting Avon
Realty Holding's January 10, 2017 CON application is not supported by reliable, probative,
and substantial evidence and is not in accordance with law, namely R.C. 3702.51 to 3702.62
and the administrative rules adopted thereunder. These assignments of error lack merit.
{¶ 12} Pursuant to R.C. 3702.60(B), "the [CON] applicant or another affected
person may appeal to the director in accordance with Chapter 119. of the Revised Code a
decision issued by the director to grant or deny a certificate of need application, and the
director shall provide an adjudication hearing in accordance with that chapter." At the
adjudication hearing, the appellant must prove by a preponderance of the evidence that the
director's decision is not in accordance with R.C. 3702.52 through 3702.62 and the rules
No. 18AP-863 5
adopted thereunder. In re LTC Tallmadge, LLC, 10th Dist. No. 18AP-282, 2019-Ohio-225,
¶ 17.
{¶ 13} The director's decision following the adjudication hearing may be appealed
to the Tenth District Court of Appeals under R.C. 3702.60(B). In considering an appeal of
a CON adjudication order, this court "shall affirm the director's order if it finds, upon
consideration of the entire record and any additional evidence admitted under division
(F)(2) of this section, that the order is supported by reliable, probative, and substantial
evidence and is in accordance with law. In the absence of such a finding, it shall reverse,
vacate, or modify the order." R.C. 3702.60(F)(3).
{¶ 14} Reliable evidence is "dependable; that is, it can be confidently trusted. In
order to be reliable, there must be a reasonable probability that the evidence is true." Our
Place, Inc. v. Ohio Liquor Control Comm., 63 Ohio St.3d 570, 571 (1992). Probative
evidence is "evidence that tends to prove the issue in question; it must be relevant in
determining the issue." Id. Substantial evidence is "evidence with some weight; it must
have importance and value." Id.{¶ 15} The "[a]nalysis of whether the evidence supports the director's decision is
essentially a question of the absence or presence of the requisite quantum of evidence." In
re Wedgewood Health Care Ctr., LLC, 176 Ohio App.3d 554, 2008-Ohio-2950, ¶ 7 (10th
Dist.). "Although this court may engage in a very limited weighing of the evidence upon an
appeal of this nature, we may not substitute our judgment for that of the [ODH] as to the
credibility of witnesses and the weight to be given the testimony." In re Knolls of Oxford,
10th Dist. No. 02AP-514, 2003-Ohio-270, ¶ 13. "A reviewing court must give due deference
to the administrative resolution of evidentiary conflicts." In re Progressive Macedonia
Real Estate, LLC, 10th Dist. No. 16AP-71, 2017-Ohio-8374, ¶ 10, citing In re Manor Care,
10th Dist. No. 05AP-398, 2005-Ohio-5703, ¶ 9. "With respect to factual findings, it is
incumbent upon appellant to demonstrate they are not supported by reliable, probative,
and substantial evidence." In re Certificate of Need Application for Parkside Villa, 10th
Dist. No. 04AP-1232, 2005-Ohio-5699, ¶ 14.
{¶ 16} " 'Courts must afford due deference to an agency's interpretation of the rules
it is required to administer, but only so long as the agency's interpretation is reasonable and
consistent with the plain language of the rules.' " In Re Certificate of Need Application of
No. 18AP-863 6
Countryside Health Care Ctr., 10th Dist. No. 14AP-411, 2014-Ohio-5861, ¶ 13, quoting In
re 4307 Care, L.L.C., Certificate of Need, 10th Dist. No. 05AP-672, 2006-Ohio-2071, ¶ 12.
" 'Deference to an agency's interpretation "may be disregarded or set aside when judicial
construction makes it imperative to do so." ' " Countryside Health Care Ctr. at ¶ 13, quoting
4307 Care at ¶ 12, quoting Glassco v. Ohio Dept. of Job & Family Servs., 10th Dist. No.
03AP-871, 2004-Ohio-2168, ¶ 11.
{¶ 17} At issue in this case is the application of the governing law pertaining to the
relocation of long-term care beds from a closed county nursing home to a proposed long-
term care facility. R.C. 3702.52 provides that the director "shall administer a state
certificate of need program in accordance with sections 3702.51 to 3702.62 of the Revised
Code and rules adopted under those sections." To facilitate the implementation of this
program, R.C. 3702.57(A) empowers the director to "adopt rules establishing procedures
and criteria for reviews of applications for certificates of need and issuance, denial, or
withdrawal of certificates." A "certificate of need" is a "written approval granted by the
director of health to an applicant to authorize conducting a reviewable activity." R.C.
3702.51(C). A CON application must be submitted on the forms and in the manner
prescribed by the director. R.C. 3702.52(B)(1). If the proposed project meets all the
applicable CON criteria under R.C. 3702.51 to 3702.62 and the rules adopted under those
sections, the director must grant the CON for all or part of the proposed project. R.C.
3702.52(C)(1). For the purpose of R.C. 3702.51 through 3702.62, a "county nursing home"
has the same meaning as in R.C. 5155.31, which defines the term to mean "a facility that is
owned and operated by the county * * * and that is used for the reception and care of
individuals who by reason of illness or physical or mental impairment require skilled
nursing care and of individuals who require personal assistance." R.C. 3702.51(Q).
{¶ 18} R.C. 3702.592(A) provides that the director "shall accept, for review under
section 3702.52 of the Revised Code, certificate of need applications for any of the following
purposes if the proposed increase in beds is attributable to a replacement or relocation of
existing beds from an existing long-term care facility within the same county." One of the
delineated purposes is the "[a]pproval of beds in a new long-term care facility or an increase
of beds in an existing long-term care facility if the beds are proposed to be licensed as
nursing home beds under Chapter 3721. of the Revised Code." R.C. 3702.592(A)(1).
No. 18AP-863 7
{¶ 19} Ohio Adm.Code 3701-12-23.2(A) provides: "In addition to review under
other applicable provisions of the Administrative Code, the director shall not approve an
application for a certificate of need to replace an existing long-term care facility or to
relocate existing long-term care beds from one site to another unless the application meets
all of the criteria prescribed by this rule." Among the criteria prescribed by this rule is the
requirement that the "facility being replaced or from which beds are being relocated is a
long term care facility, as defined in paragraph (P) of rule 3701-12-01 of the Administrative
Code, and an existing long-term care facility, as defined in paragraph (I) of rule 3701-12-01
of the Administrative Code." Ohio Adm.Code 3701-12-23.2(E).
{¶ 20} Ohio Adm.Code 3701-12-01(P) defines "long-term care facility" to mean any
of the following:
(1) A nursing home licensed under section 3721.02 of the
Revised Code or by a political subdivision certified under
section 3721.09 of the Revised Code;
(2) The portion of any facility, including a county home or a
county nursing home, that is certified as a skilled nursing
facility or a nursing facility under Title XVIII or XIX of the
Social Security Act; or
(3) The portion of any hospital that contains beds registered
under section 3701.07 of the Revised Code as skilled nursing
beds or long-term care beds.
See R.C. 3702.51(N) (same definition for "long-term care facility" for the purpose of R.C.
3702.51 to 3702.62).
{¶ 21} Ohio Adm.Code 3701-12-01(I) defines "existing long-term care facility" to
mean either of the following:
(1) A long-term care facility that is licensed or otherwise
authorized to operate in this state in accordance with
applicable law, including a county home or a county nursing
home that is certified under Title XVIII or Title XIX of the
Social Security Act, 49 Stat. 620 (1935), 42 U.S.C. 301, as
amended (1981), that is staffed and equipped to provide long-
term care services, and is actively providing long-term care
services; or
No. 18AP-863 8
(2) A long-term care facility that is licensed or otherwise
authorized to operate in this state in accordance with
applicable law, including a county home or a county nursing
home that is certified under Title XVIII or Title XIX of the
Social Security Act, 49 Stat. 620 (1935), 42 U.S.C. 301, as
amended (1981), or has beds registered under section 3701.07
of the Revised Code as skilled nursing beds or long-term care
beds and has provided long-term care services for at least three
hundred sixty-five consecutive days within the twenty-four
months immediately preceding the date a certificate of need
application is filed with the director of health.
See R.C. 3702.51(J) (same definition for "existing long-term care facility" for the purpose
of R.C. 3702.51 to 3702.62).
{¶ 22} In July 2016, the General Assembly enacted Am.Sub.H.B. No. 483, which
included a temporary provision pertinent to a CON applicant requesting the construction
of a new long-term care facility.3 Uncodified section 737.10 of Am.Sub.H.B. No. 483 states
as follows:
(A) As used in this section:
(1) "Existing long-term care facility" has the same meaning as
in section 3702.51 of the Revised Code.
(2) "Long-term care bed" has the same meaning as in section
3702.51 of the Revised Code, except that it also means a bed
that is located in a former county home or former county
nursing home and was part of the county home's or county
nursing home's authorized maximum certified capacity for
purposes of the Medicare and Medicaid programs before the
effective date of this section.
(B) The Director of Health shall accept for review under section
3702.52 of the Revised Code a certificate of need application to
which all of the following apply:
(1) The application is for the establishment, development, or
construction of a new long-term care facility.
3 The parties disagree as to the basis for the director's denial of the first CON application seeking to construct
the long-term care facility to be known as Avon Skilled Nursing and Rehabilitation. They analyze whether
Am.Sub.H.B. No. 483 remedied the basis for that denial. This analysis is unnecessary and inconsequential.
The issue here is whether the director erred in granting Avon Realty Holding's January 10, 2017 CON
application, not whether Am.Sub.H.B. No. 483 addressed any deficiency in Avon SNF Realty LTD's
October 30, 2015 CON application.
No. 18AP-863 9
(2) The new long-term care facility's long-term care beds are to
be long-term care beds that are relocated from a former county
home or former county nursing home to which both of the
following apply:
(a) The former county home or former county nursing home
was an existing long-term care facility on or before October 1,
2015.
(b) The operator of the former county home or former county
nursing home, in accordance with section 5155.38 of the
Revised Code, certified to the Director the number of long-term
care beds that were in operation in the home on July 1, 1993.
(3) The application is submitted to the Director during the
period beginning October 1, 2015, and ending ninety days after
the effective date of this section.
(C) In reviewing a certificate of need application authorized by
this section, the Director shall not deny the application on the
grounds that the former county home or former county nursing
home from which the long-term care beds are being relocated
has closed and ended its participation in the Medicare and
Medicaid programs.
{¶ 23} According to appellants, Avon Realty Holding's January 10, 2017 CON
application failed to meet all of the requirements of Ohio Adm.Code 3701-12-23.2(E), and,
therefore, pursuant to Ohio Adm.Code 3701-12-23.2(A), the director was not permitted to
approve the application. We are unpersuaded.
{¶ 24} As set forth above, Ohio Adm.Code 3701-12-23.2(E) requires that a facility
being replaced or from which beds are being relocated must be a "long-term care facility,"
as defined in Ohio Adm.Code 3701-12-01(P), and an "existing long-term care facility," as
defined in Ohio Adm.Code 3701-12-01(I). Appellants concede that Golden Acres was a
"long-term care facility" as defined in Ohio Adm.Code 3701-12-01(P). However, they
contend that, at the time Avon Realty Holding filed its CON application, Golden Acres was
not an "existing long-term care facility," as defined in Ohio Adm.Code 3701-12-01(I),
because it was not actively providing long-term care services and had not provided long-
term care services for 365 consecutive days over the 24 months immediately preceding the
filing of the application.
No. 18AP-863 10
{¶ 25} The director agreed with appellants' assertion that, at the time Avon Realty
Holding filed its CON application on January 10, 2017, Golden Acres was closed and had
not provided long-term care services for 365 consecutive days over the 24 months
immediately preceding the filing of the application. And the evidence supports this finding.
However, this does not end the analysis.
{¶ 26} As to section 737.10(B)'s applicability, the director found that Avon Realty
Holding's January 10, 2017 CON application proposes the establishment, development, or
construction of a new long-term care facility; the new long-term care facility's long-term
care beds are to be long-term care beds that are relocated from a former county home or
former county nursing home that was an existing long-term care facility on or before
October 1, 2015; and the operator of that home certified to the director, in accordance with
R.C. 5155.38, the number of long-term care beds that were in operation in the home on
July 1, 1993. Further, the director found that Avon Realty Holding's January 10, 2017 CON
application was submitted within the 90-day window set forth in section 737.10(B)(3) of
Am.Sub.H.B. No. 483. Therefore, the director found that all of the requirements of section
737.10(B) were established, and appellants do not challenge this finding.
{¶ 27} Appellants essentially argue that even though the criteria of section 737.10(B)
was met, this circumstance did not eliminate the requirement that Golden Acres constitute
an "existing long-term care facility," as set forth in Ohio Adm.Code 3701-12-23.2(E). We
disagree. Because Avon Realty Holding's CON application met all the elements of section
737.10(B), the director was required to accept the application for review, despite Golden
Acres not qualifying as an "existing long-term care facility" at the time of Avon Realty
Holding's CON application. Unlike Ohio Adm.Code 3701-12-23.2(E), section 737.10(B)
does not mandate any limitation on the length of time between the closure of a county home
or county nursing home and the proposed relocation of beds from the closed facility. And
to the extent there is any uncertainty as to this issue, section 737.10(C) expressly precludes
the director from denying such an application on the basis that a formerly open and
operating county home or county nursing home has closed. Thus, Ohio Adm.Code 3701-
12-23.2(E)'s limitation on when an applicant may seek to relocate long-term care beds from
a closed county home or county nursing home was effectively eliminated by section 737.10
for CON applications meeting the requirements of that law.
No. 18AP-863 11
{¶ 28} Appellants assert that this conclusion that section 737.10 altered the
circumstances under which a CON applicant may request the relocation of beds from a
closed county nursing home is inconsistent with section 737.10(A)(1), which states that
"[a]s used in this section[,] * * * '[e]xisting long-term care facility' has the same meaning as
in section 3702.51 of the Revised Code." We disagree. The only reference to an "existing
long-term care facility" in section 737.10, other than in section 737.10(A)(1), is the provision
referring to a county facility that "was an existing long-term care facility on or before
October 1, 2015." Thus, to qualify under section 737.10, the closed facility (which may or
may not be an "existing long-term care facility" at the time of filing the CON application,
depending on whether long-term care services had been provided for 365 consecutive days
over the 24 months immediately preceding the filing) must have been an existing long-term
care facility on or before October 1, 2015. Our analysis does not change the meaning of
"existing long-term care facility."
{¶ 29} Because appellants' first assignment of error lacks merit, we overrule it.
{¶ 30} In support of its fourth assignment of error, appellants argue that the director
should have denied Avon Realty Holding's CON application because of its flaws and
deficiencies. In particular, appellants contend Avon Realty Holding failed to demonstrate
control over one of the two parcels of land for the proposed facility, failed to document the
necessary working capital or financial feasibility in financial statements, and failed to
provide the required primary and secondary service area information by zip code.
Essentially, appellants argue that based on these flaws and deficiencies the adjudication
order was not supported by reliable, probative, and substantial evidence and is not in
accordance with law. We are unpersuaded.
{¶ 31} Ohio Adm.Code 3701-12-20(A) provides:
An applicant for a certificate of need shall provide sufficient
information to enable the director to perform a thorough
review of the application in relation to each relevant criterion
established by this chapter of the Administrative Code by
completely responding to each applicable portion of the
application form and attachments prescribed by the director
and by attaching the necessary supporting documentation.
No. 18AP-863 12
Pursuant to this rule, "the director of ODH is not required to disapprove a CON application
with omissions, mistakes, or inconsistencies where the director has sufficient information
to perform a thorough review of the application." Tallmadge, supra, at ¶ 24.
{¶ 32} Here, the director adopted the hearing examiner's finding of fact that Avon
Realty Holding's January 10, 2017 CON application "contained omissions, errors, and
inconsistencies, but the information provided by the applicant through its certificate of
need application nonetheless provided the Ohio Department of Health and the Ohio
Director of Health with sufficient information to provide a thorough, reliable, and required
review of the certificate of need application under the laws and rules of Ohio's certificate of
need program." (Hearing Examiner Report & Recommendation at 98.) Thus, the director
did not view those omissions, errors, and inconsistencies as significant enough to preclude
its thorough review of the CON application.
{¶ 33} We separately address the deficiencies appellants contend required the
denial of Avon Realty Holding's CON application. Appellants first argue Avon Realty
Holding did not demonstrate control over one of the two parcels of land where the project
is proposed to be developed.
{¶ 34} Ohio Adm.Code 3701-12-08(D) states that "[e]ach applicant shall submit an
original of the application form and necessary attachments in a manner prescribed by the
director and shall include, but not be limited to, the following: * * * (4) Identification of a
specific site for the project designated by a street address or, if there is no street address, a
plot or parcel number."
{¶ 35} In its CON application, Avon Realty Holding indicated that the proposed 82-
bed facility would be located "on a parcel of land that is a portion of the new Avon Health
Campus in Avon, Ohio, on Health Campus Boulevard (or an artery thereof), which is near
Nagle Road by I-90. No address is yet assigned to this site which is the portion of
permanent parcel numbers 04-00-028-101-114 [parcel 114] and 04-00-028-101-117 [parcel
117], as identified on the attachment to page one of the application form pages." (Joint Ex.
at 24.) The application continues, "It is possible the precise location may be adjusted based
upon soil tests, and other topography requirements (such as water retention pond) and
those tests will not be done unless and until this Application is granted; however the site
No. 18AP-863 13
identified is as close as possible to the desired location agreed to by the Seller and Applicant
and will not materially change." (Joint Ex. at 24-25.)
{¶ 36} Before the ODH hearing examiner, Avon Realty Holding's owner, Michael
Francus, testified that his company is in contract to purchase parcels 114 and 117, but the
precise location of the facility on those properties is subject to a "wetlands problem" and
thus had not been finalized. (Tr. Vol. V at 626.) Avon Realty Holding submitted copies of
two purchase and sale agreements in connection with its CON application. One agreement
pertains to parcel 114, and the other purportedly pertains to parcel 117. As to the latter
agreement, appellants argue this agreement does not support a finding that Avon Realty
Holding has demonstrated control over parcel 117, in part because it does not include any
address, plot, or parcel number identifying the property to which the agreement relates.
This agreement states that the seller agreed to sell to Avon Realty Holding approximately
5.28 acres of a "certain parcel of land located in Lorain County, Ohio, containing 38.377
acres * * * located near the intersection of Interstate 90 and Nagel Road in the Avon
Place/Avon Health Campus development." (Joint Ex. at 388.) The submitted tax map for
the Interstate 90 and Nagel Road area contained no 38.377 acre parcel. Thus, the
agreement did not identify the precise location of the property ultimately to be transferred,
and there was inconsistency between the acreage identified in the agreement and that
reflected on the tax map. However, while there was some uncertainty as to the precise
location of the proposed facility, ODH employee Greg Glass testified that such uncertainty
is not uncommon because the location of a newly constructed facility may not be finalized
until after the application is approved considering construction realities. Further, Francus'
testimony clarified that, while no 38-acre parcel is shown on the tax map, the 38-acre
property discussed in the agreement, purported to relate to parcel 117, is now only 33 acres.
The tax map shows a 33-acre parcel adjacent to what is indisputably parcel 114.
{¶ 37} Based on our review of the record, we find that, even though the exact
location of the proposed facility was uncertain, the director was provided with sufficient
information from which to reasonably identify the location of the proposed facility and to
reasonably conclude that the applicant had control over the land on which the facility would
be constructed. Therefore, we find appellants' argument as to this issue to be unpersuasive.
No. 18AP-863 14
{¶ 38} Appellants next contend the director could not adequately consider the
financial feasibility of the proposed project because of problems in Avon Realty Holding's
financial statements. Appellants also argue that the documents Avon Realty Holding
submitted do not demonstrate the existence of sufficient working capital for the project.
We reject these arguments.
{¶ 39} Ohio Adm.Code 3701-12-20(I) requires the director to "consider the short-
term and long-term financial feasibility and the cost effectiveness of the project and its
financial impact upon the applicant, other providers, health care consumers and the
medicaid program established under Chapter 5162. of the Revised Code." In considering
these issues, the director must evaluate:
(1) The availability of financing for the project, including all
pertinent terms of any borrowing, if applicable;
(2) The operating costs specific to the project and the effect of
these costs on the operating costs of the facility as a whole
based upon review of balance sheets, cash flow statements and
available audited financial statements;
(3) The effect of the project on charges and payment rates for
the facility as a whole and specific to the project;
(4) The costs and charges associated with the project compared
to the costs and charges associated with similar services
furnished or proposed to be furnished by other providers; and
(5) The historical performance of the applicant and related or
affiliated parties in providing cost-effective long-term care
services.
Ohio Adm.Code 3701-12-20(I).
{¶ 40} Avon Realty Holding's CON application indicated the project cost was
determined to be $17,921,250. Documentation submitted also indicated that Avon Realty
Holding would finance the project with a loan in the amount of $15,571,250 and a cash
contribution by the owner in the amount of $2,350,000. Avon Realty Holding also
provided a projected balance sheet and cash flow statement for the three years following
project completion. At the hearing before the hearing examiner, Avon Realty Holding's
CPA, Russell Corwin, acknowledged there are discrepancies on the balance sheet and cash
No. 18AP-863 15
flow statement. However, he asserted that these must have been transcription errors.
Further, ODH's initial reviewer of Avon Realty Holding's CON application, Taylor
Gustavson, testified that, while there were discrepancies, "based on the information in this
application as a whole the financial feasibility of the project doesn't seem to be a question
to me." (Tr. Vol. II at 327.) Concerning the working capital issue, Francus explained how
the short-term obligations of the project would be met, including through the use of
noncash contributions from associated businesses, the minimization of initial expenses,
and the deferral of expense payments. Corwin also noted that the financial statements
submitted with the CON application indicated significant projected revenue that would be
received from residents. In sum, appellants have failed to demonstrate that Avon Realty
Holding submitted insufficient information to enable ODH to analyze whether there was
adequate financing for the proposed project, or that the submitted information did not
reasonably show the financial feasibility of that project.
{¶ 41} Lastly, appellants argue that Avon Realty Holding's failure to provide certain
zip code information precluded the director from making the necessary considerations in
reviewing the CON application. In support, appellants cite Ohio Adm.Code 3701-12-20(D),
which requires the director to "consider the need that the population served or proposed to
be served has for the services to be provided upon implementation of the project." This
includes examining the "[c]urrent and projected patient origin data, by zip code." Ohio
Adm.Code 3701-12-20(D)(3).
{¶ 42} Avon Realty Holding's CON application contained zip code data regarding
the projected service area for the proposed facility and the service area for the source
facility. However, in providing this data, Avon Realty Holding duplicated three of the zip
codes in the projected service areas for the proposed facility. That is, three zip codes are
listed as both projected primary and secondary service areas for the proposed facility.
Gustavson testified that, in reviewing Avon Realty Holding's application, he noted the
duplication of certain zip codes in the listed primary and secondary service areas. However,
he did not view this duplication as an impediment to ODH's review of the current and
projected patient origin data because he realized it was a mistake and determined that
further information was unnecessary on this issue. Because appellants fail to show ODH
was unable to examine current and projected patient origin data by zip code pursuant to
No. 18AP-863 16
Ohio Adm.Code 3701-12-20(D)(3), we reject appellants' argument regarding the zip code
information.
{¶ 43} Accordingly, appellants' fourth assignment of error lacks merit, and is
overruled.
B. Appellants' Second and Third Assignments of Error – Constitutional
Challenge
{¶ 44} Appellants' second and third assignments of error challenge the
constitutionality of section 737.10 of Am.Sub.H.B. No. 483. Their second assignment of
error asserts the director erred in granting Avon Realty Holding's January 10, 2017 CON
application because section 737.10 of Am.Sub.H.B. No. 483 violates the one-subject rule
under Article II, Section 15(D) of the Ohio Constitution. They contend the inclusion of
section 737.10 in Am.Sub.H.B. No. 483 is an example of impermissible "log-rolling." And
their third assignment of error asserts the director erred in granting Avon Realty Holding's
January 10, 2017 CON application because section 737.10 of Am.Sub.H.B. No. 483 violates
the Uniformity Clause in Article II, Section 26 of the Ohio Constitution. Appellants argue
section 737.10 was impermissibly tailored to benefit only one particular nursing home
provider. We are unpersuaded.
{¶ 45} Legislative enactments are entitled to a strong presumption of
constitutionality. Arbino v. Johnson & Johnson, 116 Ohio St.3d 468, 2007-Ohio-6948,
¶ 25; Reading v. Pub. Util. Comm., 109 Ohio St.3d 193, 2006-Ohio-2181, ¶ 25. A party only
rebuts that presumption by establishing beyond a reasonable doubt that the enactment is
unconstitutional. Dayton v. State, 151 Ohio St.3d 168, 2017-Ohio-6909, ¶ 12; State v. Mole,
149 Ohio St.3d 215, 2016-Ohio-5124, ¶ 11. Thus, any doubt as to the constitutionality of an
enactment will be resolved in favor of its validity. State v. Mason, 153 Ohio St.3d 476, 2018-
Ohio-1462, ¶ 5. The constitutionality of an enactment is a question of law, which appellate
courts review de novo. Crutchfield Corp. v. Testa, 151 Ohio St.3d 278, 2016-Ohio-7760,
¶ 16; Fowler v. Ohio Dept. of Pub. Safety, 10th Dist. No. 16AP-867, 2017-Ohio-7038, ¶ 7.
{¶ 46} The one-subject rule of the Ohio Constitution provides that "[n]o bill shall
contain more than one subject, which shall be clearly expressed in its title." Article II,
Section 15(D) of the Ohio Constitution. The purpose of this provision is to prevent "log-
rolling," "the practice by which several matters are consolidated in a single bill for the
No. 18AP-863 17
purpose of obtaining passage for proposals which would never achieve a majority if voted
on separately." Hoover v. Bd. of Cty. Commrs., 19 Ohio St.3d 1, 6 (1985).
{¶ 47} The one-subject rule is mandatory and may result in the invalidation of
legislation. In re Nowak, 104 Ohio St.3d 466, 2004-Ohio-6777, ¶ 54. Where a court
determines that legislation contains more than one subject, it may determine which subject
is primary and which is an unrelated addition. The court may then sever the unrelated
provisions and preserve the portions of the bill relating to a single subject. State ex rel.
Ohio Academy of Trial Lawyers v. Sheward, 86 Ohio St.3d 451, 500 (1999); State ex rel.
Hinkle v. Franklin Cty. Bd. of Elections, 62 Ohio St.3d 145, 149 (1991). Because there is a
strong presumption supporting the constitutionality of a legislative enactment, however,
only "a manifestly gross and fraudulent violation" of the one-subject rule will cause this
court to invalidate a legislative enactment. State ex rel. Dix v. Celeste, 11 Ohio St.3d 141,
142, 145 (1984).
{¶ 48} Ohio courts must accord "the General Assembly 'great latitude in enacting
comprehensive legislation by not construing the one-subject provision so as to
unnecessarily restrict the scope and operation of laws, or to multiply their number
excessively, or to prevent legislation from embracing in one act all matters properly
connected with one general subject.' " State ex rel. Ohio Civ. Serv. Emps. Assn. v. State
Emp. Relations Bd., 104 Ohio St.3d 122, 2004-Ohio-6363, ¶ 27, quoting Dix at 145. Given
the wide latitude owed to the General Assembly, courts liberally construe the term "subject"
for purposes of the rule. Ohio Civ. Serv. Emps. Assn. at ¶ 27. Thus, "[t]he mere fact that a
bill embraces more than one topic is not fatal, as long as a common purpose or relationship
exists between the topics." Id. at ¶ 28; accord Dix at 146 (holding that "the one-subject
provision is not directed at plurality but at disunity in subject matter"). There is no violation
of the one-subject rule if there exists any "practical, rational or legitimate reason for
combining provisions in one Act." Ohio Civ. Serv. Emps. Assn. at ¶ 28.
{¶ 49} Appellants argue that section 737.10 of Am.Sub.H.B. No. 483 has no
discernable rational relationship to the rest of the legislation. We disagree.
{¶ 50} Am.Sub.H.B. No. 483 contains multiple provisions concerning residential
care facilities. For example, this legislation directs the Ohio Department of Developmental
Disabilities ("DODD") to prepare a report evaluating the progress of efforts to relocate the
No. 18AP-863 18
residents of closing developmental centers (section 751.20), and it permits intermediate
care facilities for individuals with intellectual disabilities ("ICF/IID"), in addition to nursing
home and residential care facilities, to use one or more medical aides to administer
prescription medications to its residents, subject to certain conditions (section 101.01
amending R.C. 4723.64). Further, this legislation contains other provisions directly
affecting ODH. For example, it decreased funding for ODH by approximately $11 million
(section 289.10); transferred the "part C early intervention services program" from ODH to
the DODD (section 101.01 amending R.C. 3701.61 and R.C. 5123.02, and section 751.10);
and amended a statute requiring the director to adopt administrative rules defining and
classifying hospitals and dispensaries and providing for the reporting of information by
hospitals and dispensaries (section 101.01 amending R.C. 3701.07). Thus, multiple
provisions in Am.Sub.H.B. No. 483 address residential care facility issues, and multiple
provisions in the legislation alter the authority of ODH as to particular healthcare issues.
The challenged provision, section 737.10, aligns with a common purpose of Am.Sub.H.B.
No. 483—to make legislative changes concerning facilities that provide institutional care.
{¶ 51} Because appellants cannot show beyond a reasonable doubt that the General
Assembly's inclusion of section 737.10 in Am.Sub.H.B. No. 483 violated the single-subject
rule, we overrule their second assignment of error.
{¶ 52} We also reject appellants' claim that section 737.10 violates the Uniformity
Clause of the Ohio Constitution, which provides that "[a]ll laws, of a general nature, shall
have a uniform operation throughout the state." Article II, Section 26 of the Ohio
Constitution. The purpose of the Uniformity Clause is "to prohibit the enactment of special
or local legislation." (Emphasis sic.) Austintown Twp. Bd. of Trustees v. Tracy, 76 Ohio
St.3d 353, 356 (1996).
{¶ 53} Courts apply a two-part test in determining whether legislation violates the
Uniformity Clause. First, the court must determine whether the statute is a law of a general
or a special nature. Desenco, Inc. v. Akron, 84 Ohio St.3d 535, 541 (1999). This part of the
Uniformity Clause test concerns the subject matter of the legislative enactment, not its
geographical application. Id. at 542. "A law is general if the subject does or may exist in,
and affect the people of, every county in the state." Cuyahoga Cty. Veterans Servs. Comm.
No. 18AP-863 19
v. State, 159 Ohio App.3d 276, 2004-Ohio-6124, ¶ 17 (10th Dist.), citing Simmons-Harris
v. Goff, 86 Ohio St.3d 1, 12 (1999).
{¶ 54} Second, the court must determine whether the statute operates uniformly
throughout the state. Desenco, Inc. at 541. This means " 'universal operation as to
territory; it takes in the whole state. And, as to persons and things, it means universal
operation as to all persons and things in the same condition or category. When a law is
available in every part of the state as to all persons and things in the same condition or
category, it is of uniform operation throughout the state.' " Austintown Twp. Bd. of
Trustees at 356, quoting State ex rel. Wirsch v. Spellmire, 67 Ohio St. 77, 86 (1902). A law
does not operate uniformly throughout the state when "it seeks to create artificial
distinctions where no real distinction exists" and is narrowly tailored in its application.
State ex rel. Stanton v. Powell, 109 Ohio St. 383, 385 (1924); Cuyahoga Cty. Veterans
Servs. Comm. at ¶ 21. A law is " 'equally valid if it contains provisions which permit it to
operate upon every locality where certain specified conditions prevail.' " Descenco at 542,
quoting Stanton at 385.
{¶ 55} Section 737.10 pertains to the relocation of long-term care beds. A law
pertaining to this subject matter is considered a law of a general nature as it affects the
people of every county in the state. Gallipolis Care, L.L.C. v. Ohio Dept. of Health (In re
Holzer Consol. Health Sys.), 10th Dist. No. 03AP-1020, 2004-Ohio-5533, ¶ 24. Thus, the
law meets the first part of the Uniformity Clause test.
{¶ 56} Section 737.10 also satisfies the second part of the Uniformity Clause test.
Appellants argue this case is indistinguishable from Holzer wherein this court found a
legislative enactment, section 26 of Am.Sub.S.B. No. 261, to violate the Uniformity Clause.
We disagree. In Holzer, the legislation at issue provided that "[n]otwithstanding section
3702.68 of the Revised Code [which provided for a statewide moratorium on relocating
nursing home beds across county lines], the Director of Health may accept for review under
section 3702.52 of the Revised Code an application for a certificate of need approving the
relocation of up to twenty-four existing nursing home beds in Jackson County to Gallia
County." Section 26 of Am.Sub.S.B. No. 261. This court resolved that " 'an application' in
[section 26 of Am.Sub.S.B. No. 261] is synonymous with one application, the specific
application made by Holzer seeking to relocate home beds from Jackson to Gallia County."
No. 18AP-863 20
Holzer at ¶ 27. Thus, this court found that the statute at issue "did not operate in a uniform
manner throughout the state because it did not have the potential to apply to any county in
the state or any other nursing home operators other than the nursing home that was
applying for the relocation of beds." Cuyahoga Cty. Veterans Servs. Comm. at ¶ 20, citing
Holzer.
{¶ 57} The law at issue here is not the type of "narrowly tailored" and geographically
limited legislation that was invalidated in Holzer. By its terms, section 737.10 applies to
any county home or county nursing home that had certified beds under R.C. 5155.38 and
had operated on or before October 1, 2015. While section 737.10 refers to the director
accepting "a certificate of need application" (emphasis added) that meets all delineated
requirements, this does not reflect an intent for the section only to apply to one particular
circumstance as was found in Holzer. According to appellants, no county home or county
nursing home in Ohio other than Golden Acres could have satisfied section 737.10's
requirements. They make this assertion based on the testimony of Glass, an in-house
attorney for ODH, who testified that he was not aware of any other county home that had
closed after May 2016. But Glass's testimony did not establish that no other county home
or county nursing home in Ohio could have satisfied section 737.10's requirements. His
statement did not address the existence of county homes or county nursing homes in Ohio
that closed before May 2016 and had certified beds under R.C. 5155.38. Thus, Glass's
testimony did not demonstrate that Golden Acres was the only former county home or
county nursing home from which an applicant could have sought to relocate long-term care
beds during the specified application period. And the language of section 737.10 is not
limited to permitting the relocation of beds within Lorain County.
{¶ 58} For these reasons, we reject appellants' argument that section 737.10 of
Am.Sub.H.B. No. 483 violates the Uniformity Clause of the Ohio Constitution. Accordingly,
we overrule appellants' third assignment of error.
C. Avon Realty Holding's Cross-Assignments of Error
{¶ 59} In Avon Realty Holding's first cross-assignment of error, it argues the hearing
examiner's findings of fact and conclusions of law, which were adopted by the director, fail
to recognize that Golden Acres was open and operating when it filed its January 10, 2017
CON application. Avon Realty Holding reasons that because Golden Acres was open and
No. 18AP-863 21
operating at that time it met the requirements of Ohio Adm.Code 3701-12-23.2(E) and R.C.
3702.51(J) to demonstrate it was an "existing long-term care facility" at the time of the
application.
{¶ 60} According to Avon Realty Holding, the enactment of Am.Sub.H.B. No. 483
was inconsequential to its January 10, 2017 CON application meeting the applicable
requirements. In support of this contention, Avon Realty Holding cites a Lorain County
prosecutor's testimony that Golden Acres "reopened on June 14, 2016." (Tr. Vol. IV at 434.)
However, even though there was testimony that Golden Acres "reopened on June 14th,
2016," the prosecutor also testified that Golden Acres did not provide nursing home
services to anyone after October 30, 2015. It is uncontroverted that Golden Acres was not
actively providing long-term care services at the time of Avon Realty Holding's CON
application and had not provided long-term care services for at least three hundred sixty-
five consecutive days within the twenty-four months immediately preceding Avon Realty's
filing of the CON application on January 10, 2017. Thus, at that time, Golden Acres was
not an "existing long-term care facility."
{¶ 61} Accordingly, we overrule Avon Realty Holding's first cross-assignment of
error.
{¶ 62} Avon Realty Holding's second cross-assignment of error alleges the ODH
hearing examiner erroneously granted appellants' motion to quash its subpoena request for
appellants' financial documents. Avon Realty Holding asserts that obtaining this
information was essential for it to refute appellants' contention that the proposed project
will adversely financially impact them. Avon Realty Holding further asserts that, if this
court modifies or remands this matter to the director, appellants should be ordered to
comply with Avon Realty Holding's subpoenas regarding appellants' financial documents.
This cross-assignment of error is moot because we have determined the director did not err
in granting Avon Realty Holding's January 10, 2017 CON application and therefore will
affirm the director's adjudication order.
{¶ 63} Avon Realty Holding's third cross-assignment of error alleges the ODH
hearing examiner improperly used the term "special legislation" in reference to
Am.Sub.H.B. No. 483. Avon Realty Holding contends that the hearing examiner's use of
No. 18AP-863 22
this term implied that it was enacted solely to enable the relocation of long-term care beds
from Golden Acres to the proposed Avon Skilled Nursing and Rehabilitation facility.
{¶ 64} In granting Avon Realty Holding's January 10, 2017 CON application, the
director adopted the hearing examiner's findings of fact, conclusions of law, and
recommendation that the director grant Avon Realty Holding's CON application. The
hearing examiner's findings of fact, conclusions of law, and recommendation contain no
reference to Am.Sub.H.B. No. 483 constituting "special legislation." Furthermore, we
reject Avon Realty Holding's assertion that the hearing examiner's use of the term "special
legislation" reflected a finding as to the legislation's constitutionality. The hearing
examiner correctly, expressly, and repeatedly, noted it was not within the executive
branch's authority to consider and rule on the constitutionality of the legislation. And even
if the hearing examiner had expressed a position as to the legislation's constitutionality, we
would give it no deference in our review of that issue. Because the hearing examiner's use
of the term "special legislation" is inconsequential, we overrule Avon Realty Holding's third
cross-assignment of error.
IV. Disposition
{¶ 65} Appellants' four assignments of error are overruled. Cross-appellant's first
and third assignments of error are overruled, and its second assignment of error is moot.
We affirm the adjudication order of the Director of the Ohio Department of Health.
Order affirmed.
BROWN and BRUNNER, JJ., concur.