BOARD OF TRUSTEES OF FLAVIUS WITHAM MEMORIAL HOSPITAL v. INDIANA DEPARTMENT OF HEALTH (2023)

MEMORANDUM DECISION

Case Summary

[1] The Indiana Department of Health (“IDOH”) imposed a $10,000.00 penalty upon the Board of Trustees of the Flavius J. Witham Memorial Hospital d/b/a Especially Kidz Health and Rehab (“Especially Kidz”). Especially Kidz requested an administrative review; it moved for summary judgment, and an Administrative Law Judge (“ALJ”) recommended denial; the Ultimate Authority of IDOH adopted the ALJ's recommendation. Especially Kidz then sought judicial review in the Shelby Superior Court, which dismissed the petition, remanded to IDOH for a hearing, and denied a motion to correct error. Especially Kidz now appeals, presenting a single issue which we restate as whether Especially Kidz was erroneously denied its right to judicial review under the Indiana Administrative Orders and Procedures Act (“AOPA”). We affirm.

Facts and Procedural History

[2] Especially Kidz is a long-term care facility, primarily providing services to children. On October 16, 2021, a three-year-old who suffered from numerous chronic health conditions died in the care of Especially Kidz. IDOH investigated and determined that Especially Kidz had failed to address the child's irregular pulse oximeter reading, resulting in unaddressed respiratory distress to the child, who became unresponsive and died. On January 22, 2022, IDOH issued a Notice of Citation to Especially Kidz and imposed a $10,000.00 penalty.

[3] Especially Kidz pursued an administrative review and, on September 30, 2022, filed a motion for summary judgment and request for a hearing. IDOH opposed the motion for summary judgment. The ALJ conducted a hearing on November 29 and, on February 3, 2023, issued a non-final order recommending denial of summary judgment. In pertinent part, the non-final order provided:

The record indicates that on October 16, 2021, IDOH was informed by one of E.K.’s employees, a Certified Nurse Aid (“CNA”), that the oximeter was silenced before Resident's death. The CNA further stated that when she informed the respiratory therapist, he acknowledged that he knew the alarm was silenced because the Resident was constantly causing the alarm to go off. Minutes later, Resident was discovered not breathing and his pulse oximeter did not alarm, which might have alerted facility staff that he was having respiratory or cardiac issues. This is a disputed question of fact that applies to the question of whether Petitioner failed to provide proper treatment for Respiratory Care.

The issue of whether the pulse oximeter was inappropriately silenced is a matter of disputed fact to be determined at a hearing. If the pulse oximeter was inappropriately silenced, the Department has the burden of showing that this silencing violates 410 IAC 16.2-3.1-47(a)(6). It is still an open question that cannot be decided in Summary Judgment.

(App. Vol. III, pg. 131.)

[4] Especially Kidz requested review from the Ultimate Authority of IDOH. On March 22, 2023, the Ultimate Authority issued a “final order affirm[ing] the non-final order issued by [ALJ] ․ denying the motion for summary judgment” and purportedly dismissing some requests for review. (Id. at 216.) The order additionally stated: “The determination of the facts, conclusions of law, and disposition of the claims will be adjudicated in a future hearing by a properly appointed [ALJ].” (Id.)

[5] On April 5, Especially Kidz filed a petition for judicial review pursuant to Indiana Code Section 4-21.5-5-2. IDOH filed a motion to dismiss, contending that Especially Kidz lacked standing to petition for judicial review, as defined by Indiana Code Section 4-21.5-5-3, due to the lack of a final agency action. On May 1, the trial court issued an order of dismissal, stating in relevant part: “for purposes of administrative review the agency has action to take and thus has not rendered a final judgment.” (App. Vol. II, pg. 5.) The trial court also entered an order of remand:

A hearing on the merits is now necessary. Having lost at summary judgment, the Petitioners may yet win on the merits. With a full-blown hearing still before them, the Court finds the Petitioners have not exhausted their administrative remedies. This non-exhaustion in turn deprives this court of jurisdiction to review the Department of Health's Order. The Petition for Administrative Review is dismissed without prejudice for lack of jurisdiction and the matter is remanded back to the Indiana Department of Health for a hearing on the merits.

(Id. at 5-6.) Especially Kidz filed a motion to correct error, which was summarily denied. Especially Kidz now appeals.

Discussion and Decision

[6] AOPA governs administrative proceedings and judicial review of decisions of executive branch agencies such as IDOH. See Ind. Code §§ 4-21.5-1-1 to 6. After a matter is assigned to an ALJ, a party may move for summary judgment “in the party's favor as to all or any part of the issues in a proceeding. I.C. § 4-21.5-3-23(a). Pursuant to subsection (b), the ALJ “shall consider a motion filed under subsection (a) as would a court that is considering a motion for summary judgment filed under Trial Rule 56 of the Indiana Rules of Trial Procedure.” Here, the Ultimate Authority considered and denied the motion for summary judgment filed by Especially Kidz. The denial of summary judgment is not a final judgment, but rather it is an interlocutory order. T.R. Bulger, Inc. v. Indiana Ins. Co., 901 N.E.2d 1110, 1114, n.5 (Ind. Ct. App. 2009).

[7] However, Especially Kidz asserts that its right to judicial review is not grounded in the common law but in the express language of AOPA. Indiana Code Section 4-21.5-5-2 addresses eligibility for judicial review of an agency decision. Under subsection (b), the qualified person must have standing; must have exhausted administrative remedies;¹ and must timely file the petition and record. Indiana Code Section 4-21.5-5-3(a) provides that among those with standing are: “A person to whom the final agency action was directed” and “A person who was a party to the proceedings of the ultimate authority that led to the final agency action, including the agency whose order was under review in the proceeding.”

[8] For purposes of AOPA, a “final agency action” means:

(1) the entry of an order designated as a final order under this article; or

(2) any other agency action that disposes of all issues in a proceeding for all parties after the exhaustion of all available administrative remedies concerning the action.

I.C. § 4-21.5-1-6.

[9] Here, the order of the Ultimate Authority bears a designation that it is a final order entered for the purpose of affirming, modifying, or dissolving the recommended order. This order sets forth the relief requested by Especially Kidz as:

(1) Granting the summary judgment motion (and thereby modifying ALJ Wallace's Non-Final Order);

(2) Determination that the alleged statutory deficiency does not exist;

(3) Determination that the alleged immediate jeopardy never existed;

(4) Elimination of the fine;

(5) Elimination of the NATCEP Prohibition; and

(6) Final judgment in favor of the Petitioners and against the Respondent.

(App. Vol. III, pg. 214.)

[10] The Ultimate Authority's order did not grant any of the requested relief. But it did not preclude future relief to Especially Kidz, purporting to “dismiss [the] request for the Ultimate Authority's review of the additional relief.” (Id. at pg. 216.) The order unequivocally contemplates additional action before resolution of the claims: “The determination of the facts, conclusions of law, and disposition of the claims will be adjudicated in a future hearing by a properly appointed [ALJ].” Id. Although the order at first blush would appear to qualify as “an order designated as a final order,” I.C. § 4-21.5-1-6, there was no disposition of the claims on the merits and the practical effect of the order was simply a remand.

Conclusion

[11] Because a final order was not entered in administrative proceedings, Especially Kidz lacks standing as statutorily defined to present its petition for judicial review. Accordingly, Especially Kidz was not erroneously denied a statutory right to review of the denial of its motion for summary judgment.

[12] Affirmed.

FOOTNOTES

1.   Indiana Code Section 4-21.5-5-4(a) provides: “A person may file a petition for judicial review under this chapter only after exhausting all administrative remedies available within the agency whose action is being challenged and within any other agency authorized to exercise administrative review.”

Bailey, Judge.

Tavitas, J., and Kenworthy, J., concur.