{ "id": 8351892, "name": "GOOD HOPE HEALTH SYSTEM, L.L.C., Petitioner, and THE TOWN OF LILLINGTON, Petitioner-Intervenor v. N.C. DEPARTMENT OF HEALTH AND HUMAN SERVICES, DIVISION OF FACILITY SERVICES, CERTIFICATE OF NEED SECTION, Respondent, and BETSY JOHNSON REGIONAL HOSPITAL, INC., AND AMISUB OF NORTH CAROLINA, INC. D/B/A CENTRAL CAROLINA HOSPITAL, Respondent-Intervenors", "name_abbreviation": "Good Hope Health System, LLC v. N.C. Department of Health & Human Services", "decision_date": "2006-01-03", "docket_number": "No. COA05-123", "first_page": "296", "last_page": "308", "citations": [ { "type": "official", "cite": "175 N.C. App. 296" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "566 S.E.2d 701", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 2002, "pin_cites": [ { "page": "703", "parenthetical": "citations and internal quotation marks omitted" }, { "page": "703-04", "parenthetical": "citations omitted" } ], "opinion_index": 0 }, { "cite": "151 N.C. App. 651", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9081755 ], "year": 2002, "pin_cites": [ { "page": "654", "parenthetical": "citations and internal quotation marks omitted" } ], "opinion_index": 0, "case_paths": [ "/nc-app/151/0651-01" ] }, { "cite": "299 S.E.2d 763", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1983, "pin_cites": [ { "parenthetical": "Southern Bell II" }, { "page": "767" }, { "page": "767" } ], "opinion_index": 0 }, { "cite": "307 N.C. 541", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8564118 ], "year": 1983, "pin_cites": [ { "parenthetical": "Southern Bell II" } ], "opinion_index": 0, "case_paths": [ "/nc/307/0541-01" ] }, { "cite": "338 S.E.2d 139", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 5, "year": 1986, "pin_cites": [ { "page": "141" }, { "page": "142" }, { "page": "142" }, { "page": "143-44", "parenthetical": "finding Southern Bell II did not overrule Southern Bell I, but simply distinguished it" } ], "opinion_index": 0 }, { "cite": "78 N.C. App. 637", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8523388 ], "weight": 4, "year": 1986, "pin_cites": [ { "page": "640" }, { "page": "640" }, { "page": "641-42" }, { "page": "644" } ], "opinion_index": 0, "case_paths": [ "/nc-app/78/0637-01" ] }, { "cite": "221 S.E.2d 322", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1976, "pin_cites": [ { "page": "324", "parenthetical": "Southern Bell I" } ], "opinion_index": 0 }, { "cite": "289 N.C. 286", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8568034 ], "year": 1976, "pin_cites": [ { "page": "288", "parenthetical": "Southern Bell I" } ], "opinion_index": 0, "case_paths": [ "/nc/289/0286-01" ] }, { "cite": "510 S.E.2d 159", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1999, "pin_cites": [ { "page": "162-63" } ], "opinion_index": 0 }, { "cite": "350 N.C. 39", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 132016 ], "year": 1999, "pin_cites": [ { "page": "42-43" } ], "opinion_index": 0, "case_paths": [ "/nc/350/0039-01" ] }, { "cite": "402 S.E.2d 430", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1991, "opinion_index": 1 }, { "cite": "328 N.C. 98", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2539448, 2545427, 2542900 ], "year": 1991, "opinion_index": 1, "case_paths": [ "/nc/328/0098-03", "/nc/328/0098-01", "/nc/328/0098-02" ] }, { "cite": "397 S.E.2d 350", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1990, "pin_cites": [ { "page": "354" } ], "opinion_index": 1 }, { "cite": "100 N.C. App. 498", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8527049 ], "year": 1990, "pin_cites": [ { "page": "502" } ], "opinion_index": 1, "case_paths": [ "/nc-app/100/0498-01" ] }, { "cite": "466 S.E.2d 299", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1996, "pin_cites": [ { "page": "300", "parenthetical": "citing Walker v. N.C. Dept. of Human Resources, 100 N.C. App. 498, 502, 397 S.E.2d 350, 354 (1990), disc. review denied, 328 N.C. 98, 402 S.E.2d 430 (1991)" } ], "opinion_index": 1 }, { "cite": "121 N.C. App. 492", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11918185 ], "year": 1996, "pin_cites": [ { "page": "493", "parenthetical": "citing Walker v. N.C. Dept. of Human Resources, 100 N.C. App. 498, 502, 397 S.E.2d 350, 354 (1990), disc. review denied, 328 N.C. 98, 402 S.E.2d 430 (1991)" } ], "opinion_index": 1, "case_paths": [ "/nc-app/121/0492-01" ] }, { "cite": "531 S.E.2d 219", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2000, "pin_cites": [ { "page": "221" } ], "opinion_index": 1 }, { "cite": "138 N.C. App. 309", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11079584 ], "year": 2000, "pin_cites": [ { "page": "312" } ], "opinion_index": 1, "case_paths": [ "/nc-app/138/0309-01" ] }, { "cite": "599 S.E.2d 888", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2004, "pin_cites": [ { "page": "894", "parenthetical": "citation omitted" } ], "opinion_index": 1 }, { "cite": "358 N.C. 649", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2987357 ], "year": 2004, "pin_cites": [ { "page": "658", "parenthetical": "citation omitted" } ], "opinion_index": 1, "case_paths": [ "/nc/358/0649-01" ] }, { "cite": "588 S.E.2d 877", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2003, "pin_cites": [ { "page": "879", "parenthetical": "emphasis supplied" } ], "opinion_index": 1 }, { "cite": "357 N.C. 645", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 491605 ], "year": 2003, "pin_cites": [ { "page": "647", "parenthetical": "emphasis supplied" } ], "opinion_index": 1, "case_paths": [ "/nc/357/0645-01" ] }, { "cite": "61 L. Ed. 2d 297", "category": "reporters:federal", "reporter": "L. Ed. 2d", "year": 1979, "opinion_index": 1 }, { "cite": "442 U.S. 929", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 1531938, 1532133, 1531912, 1532170, 1532010, 1532202, 1532021, 1531990, 1532122, 1532092, 1531806 ], "year": 1979, "opinion_index": 1, "case_paths": [ "/us/442/0929-02", "/us/442/0929-01", "/us/442/0929-10", "/us/442/0929-08", "/us/442/0929-11", "/us/442/0929-03", "/us/442/0929-04", "/us/442/0929-09", "/us/442/0929-05", "/us/442/0929-06", "/us/442/0929-07" ] }, { "cite": "250 S.E.2d 890", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1978, "pin_cites": [ { "page": "912" } ], "opinion_index": 1 }, { "cite": "296 N.C. 109", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8565310 ], "year": 1978, "pin_cites": [ { "page": "147" } ], "opinion_index": 1, "case_paths": [ "/nc/296/0109-01" ] }, { "cite": "474 S.E.2d 783", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1996, "pin_cites": [ { "page": "787" } ], "opinion_index": 1 }, { "cite": "344 N.C. 394", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 867707 ], "year": 1996, "pin_cites": [ { "page": "398-99" } ], "opinion_index": 1, "case_paths": [ "/nc/344/0394-01" ] }, { "cite": "338 S.E.2d 139", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 7, "year": 1986, "pin_cites": [ { "page": "141" }, { "page": "141" }, { "page": "141" }, { "page": "142" }, { "page": "145" } ], "opinion_index": 1 }, { "cite": "78 N.C. App. 637", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8523388 ], "weight": 3, "year": 1986, "pin_cites": [ { "page": "640" }, { "page": "640" }, { "page": "640" } ], "opinion_index": 1, "case_paths": [ "/nc-app/78/0637-01" ] } ], "analysis": { "cardinality": 1036, "char_count": 28575, "ocr_confidence": 0.751, "pagerank": { "raw": 6.714240900960343e-07, "percentile": 0.9629605818717616 }, "sha256": "3e421f2aa65c3604f746a4ae195cdc411dff15a27dd5e72695acd0314459d9a3", "simhash": "1:b760dc426ebb2450", "word_count": 4629 }, "last_updated": "2023-07-14T22:29:36.119960+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judge GEER concurs.", "Judge TYSON dissents in a separate opinion." ], "parties": [ "GOOD HOPE HEALTH SYSTEM, L.L.C., Petitioner, and THE TOWN OF LILLINGTON, Petitioner-Intervenor v. N.C. DEPARTMENT OF HEALTH AND HUMAN SERVICES, DIVISION OF FACILITY SERVICES, CERTIFICATE OF NEED SECTION, Respondent, and BETSY JOHNSON REGIONAL HOSPITAL, INC., AND AMISUB OF NORTH CAROLINA, INC. D/B/A CENTRAL CAROLINA HOSPITAL, Respondent-Intervenors" ], "opinions": [ { "text": "STEELMAN, Judge.\nPetitioner, Good Hope Hospital (Good Hope), is licensed as an acute care hospital. It has been in operation since 1921 in Erwin, North Carolina. Betsy Johnson Regional Hospital, Inc. (Betsy Johnson), is located in Dunn, North Carolina. Both hospitals are located in Harnett County. Due in part to its age, Good Hope\u2019s existing hospital is nearing the end of its useful life and suffers from multiple deficiencies.\n2001 CON Application\nIn 2001, Good Hope applied for a Certificate of Need (CON) with the Department of Health and Human Services, Division of Facility Services, Certificate of Need Section (Agency) pursuant to Chapter 131E of the North Carolina General Statutes to partially replace its existing facility. The 2001 CON application proposed to reduce the number of acute care beds from forty-three to thirty-four, reduce the number of psychiatric beds from twenty-nine to twelve, for a total of forty-six beds, and proposed three operating rooms, at a cost of $16,159,950. The replacement hospital was to be built in Erwin. The Agency conditionally approved Good Hope\u2019s 2001 application, but only for two operating rooms. Good Hope filed a petition for contested case hearing in the Office of Administrative Hearings (OAH). Good Hope and the Agency settled the dispute in a written agreement. On 14 December 2001, the Agency issued a CON to Good Hope for a forty-six bed hospital with three operating rooms.\nGood Hope submitted a proposal to the North Carolina Medical Care Commission (MCC) to obtain funding to develop the new facility from the United States Department of Housing and Urban Development. MCC denied the request for funding and Good Hope was unable to procure other financing. Good Hope entered into discussions with Betsy Johnson concerning a possible merger, however, no merger resulted therefrom.\nGood Hope later entered into a joint venture with Triad Hospitals, Inc., which agreed to finance the project. The two formed Good Hope Hospital System, L.L.C. (GHHS). GHHS filed a motion for declaratory ruling requesting: (1) it be assigned Good Hope\u2019s 2001 CON, (2) permission to change the site of the new hospital to Lillington or Buies Creek, and (3) permission to increase the size of the hospital from 61,788 square feet to 67,874 square feet. The proposed cost of the new project was $18,523,942. The Agency denied the request for declaratory ruling. GHHS appealed the denial to the Department of Health and Human Services, Division of Facility Services (Department), but obtained a stay of that appeal. Good Hope has not relinquished its 2001 CON.\n2003 CON Application\nOn 14 April 2003, GHHS filed a new application (2003 application) for a CON to build a complete replacement hospital in Lillington, rather than Erwin. The proposed facility was 112,945 square feet, with a total of forty-six acute care beds, ten observation beds, and three operating rooms, at a cost of $33,488,750. Prior to filing the 2003 application, GHHS met with Ms. Hoffman, Chief of the Agency, who advised GHHS to file a new CON application, not just an amended 2001 application because of the difference in location, size, and scope of the proposed new hospital. After review, the Agency denied GHHS\u2019s 2003 application. GHHS appealed to OAH, challenging the Agency\u2019s decision. Betsy Johnson and Central Carolina Hospital (CCH) moved to intervene as respondents in support of the Agency\u2019s decision. The administrative law judge (ALJ) granted the motion to intervene. On 9 July 2004, the AU recommended the Agency\u2019s decision be reversed. Respondents appealed to the Department for final agency review. On 10 September .2004, the Department denied GHHS\u2019s application in a final agency decision. GHHS appealed.\n2005 CON Application\nWhile this appeal was pending before this Court, GHHS filed a new CON application (2005 application) on 15 August 2005 in response to a need determination issued by the Governor in the 2005 State Medical Facilities Plan (SMFP). The Governor has final authority to approve or amend the SMFP, which becomes the binding criteria for review of CON applications. Frye Reg\u2019l Med. Ctr., Inc. v. Hunt, 350 N.C. 39, 42-43, 510 S.E.2d 159, 162-63 (1999). In its 2005 application, GHHS resubmitted its 2003 CON application in its entirety, with some supplemental information.\nOn 26 August 2005, respondents filed a motion to dismiss plaintiffs\u2019 appeal in this case on the grounds the appeal has been rendered moot by GHHS\u2019s 2005 CON application.\nMootness\n\u201c \u2018When, pending an appeal to this Court, a development occurs, by reason of which the questions originally in controversy between the parties are no longer at issue, the appeal will be dismissed [as moot] for the reason that this Court will not entertain or proceed with a cause merely to determine abstract propositions of law . . . .\u201d State ex rel. Utilities Com. v. Southern Bell Telephone Co., 289 N.C. 286, 288, 221 S.E.2d 322, 324 (1976) (Southern Bell I) (citations omitted). The mootness doctrine applies in CON cases. See In re Denial of Request by Humana Hospital Corp., 78 N.C. App. 637, 640, 338 S.E.2d 139, 141 (1986).\nGHHS\u2019s 2003 application was denied, in part, because under the 2003 SMFP there was no need for a hospital with three operating rooms, as proposed by GHHS. The Department must follow the need requirements as promulgated in the SMFP and cannot grant a CON to a hospital which would allow more facilities than are needed. See N.C. Gen. Stat. \u00a7 131E-183(a)(l) (2005). The reason behind such a requirement is to prevent the proliferation of unnecessary health care facilities and equipment, which would result in costly duplication and underuse of facilities. N.C. Gen.. Stat. \u00a7 131E-175 (2005). In 2005, recognizing that Good Hope Hospital was nearing the end of its useful life, the Governor amended the 2005 SMFP to include a need for a new hospital in Harnett County with no more than fifty acute care beds and three operating rooms. GHHS filed a 2005 CON application for a new hospital containing forty-six acute care beds and three operating rooms. Respondents contend the case is now moot because the Agency is required to re-review GHHS\u2019s 2003 CON application, which it resubmitted as its 2005 CON application with supplemental information under the more favorable 2005 SMFP need requirements, thus providing GHHS with the relief sought. We agree.\nOur holding in Humana, 78 N.C. App. 637, 640, 338 S.E.2d 139, 141 is determinative of this question. In Humana, the hospital filed a 1981 CON application to build a new 160-bed hospital in Wake County. The Agency denied their 1981 application on the grounds that the then current SMFP did not contain a need for additional acute care beds in the area. Humana requested a reconsideration hearing, which the Agency denied. While seeking judicial review of the denial of its 1981 CON application, Humana filed another CON application in 1982. The SMFP in effect for 1982 contained a need for 174 beds in Wake County. The Agency denied Humana\u2019s 1982 CON application.\nThis Court dismissed Humana\u2019s appeal on grounds of mootness. Because Humana\u2019s 1982 CON application was virtually identical to its 1981 application, with additional, supplemental information, and the 1982 application was reviewed under the more favorable 1982 SMFP requirements, we held this afforded Humana an adequate remedy to have its application reviewed under the more favorable 1982 SMFP need requirements. 78 N.C. App. at 641-42, 338 S.E.2d at 142. This Court found it significant that Humana\u2019s 1981 and 1982 applications were almost identical, with the only difference being that the 1982 application contained supplemental information which was not considered as part of the 1981 application. Id. at 641, 338 S.E.2d at 142.\nAlthough this Court stated in Humana that its decision was based on the unique facts in that case, the facts in the instant case are virtually identical to those in Humana. Therefore, the reasoning in Humana is controlling. GHHS\u2019s 2003 application is virtually identical to its 2005 application, with the addition of supplemental information. The review of its 2005 application, under the more favorable 2005 SMFP need requirements, affords GHHS an adequate remedy of any alleged errors in the 2003 review process, thereby making this appeal moot.\nGHHS contends the 2003 CON application and the 2005 application are legally and factually different, in that its 2003 application was for a replacement hospital, which is judged against different criteria than its 2005 application, which is for a new hospital. It asserts that the Agency improperly applied the criteria for a new hospital to its 2003 application for a replacement hospital. Therefore, petitioner alleges the Agency\u2019s review of its 2005 application would not afford it the remedy sought, that is, to have the criteria for awarding a CON for a replacement hospital applied to its 2003 CON application.\nWe do not find this argument persuasive. GHHS\u2019s 2001 application was for a replacement hospital, which was to be located in Erwin, where Good Hope is currently located. The 2003 application, however, proposed to change the location of the hospital to Lillington and doubled both the proposed square footage and cost of the hospital from the 2001 application. In GHHS\u2019s 2005 CON application, it proposed the same location, size, and scope for its new hospital as contained in its 2003 application. While GHHS did denote its 2003 application as being for a \u201creplacement hospital,\u201d it describes the exact same hospital in the 2005 CON application as a \u201cnew hospital.\u201d Regardless of how GHHS characterizes its hospital, both plans are for the exact same hospital. Therefore, the Agency\u2019s review of the resubmitted 2003 CON application during its 2005 review process provides GHHS with an adequate remedy. In addition, if GHHS were awarded a CON based on its 2005 application, it would be required to yield any other CON it may have. The Governor explained in his Clarification Memorandum to 2005 State Medical Facilities Plan, that:\n[T]o avoid the proliferation of unnecessary health service facilities as referenced in N.C. Gen. Stat. \u00a7 131E-175(4), I have concluded that any successful applicant for a CON to develop the New Hospital shall be required as a condition of its approval to relinquish any other CON which it holds to develop or replace acute care beds or operating rooms in Harnett County and to withdraw any other pending application or litigation concerning the development or replacement of such beds or rooms.\nFurthermore, the same reasons Humana was found to be distinguishable from State ex rel. Utilities Comn v. Southern Bell, 307 N.C. 541, 299 S.E.2d 763 (1983) (Southern Bell II), apply here. In Southern Bell II, our Supreme Court held that the grant of a second application for a rate increase did not moot the appeal of the denial of the first application because the second rate increase was not applied retroactively. Id. at 547-48, 299 S.E.2d at 767. By not applying the second rate increase retroactively, the petitioner would not receive the relief sought; therefore, the issue of the first rate application was not moot. Id. at 48, 299 S.E.2d at 767. This case is more akin to Southern Bell I where the two requests were the same. See Humana, 78 N.C. App. at 644, 338 S.E.2d at 143-44 (finding Southern Bell II did not overrule Southern Bell I, but simply distinguished it).\nNor do the facts of this case fit within the exception to the mootness doctrine, that the issues are \u201ccapable of repetition yet evading review.\u201d Boney Publishers, Inc. v. Burlington City Council, 151 N.C. App. 651, 654, 566 S.E.2d 701, 703 (2002) (citations and internal quotation marks omitted). To apply this exception GHHS must show the challenged action is \u201c \u2018in its duration too short to be fully litigated prior to its cessation or expiration\u201d and there is a reasonable expectation that the same issue would arise again. Id. at 654, 566 S.E.2d at 703-04 (citations omitted). Regardless of the Agency\u2019s decision concerning GHHS\u2019s 2005 application, its decision will not escape review.\nGHHS has been afforded an adequate remedy in having its 2003 application reconsidered under the more favorable 2005 SMFP need requirements. Any allegations regarding errors in the 2003 review process are now moot.\nAPPEAL DISMISSED.\nJudge GEER concurs.\nJudge TYSON dissents in a separate opinion.", "type": "majority", "author": "STEELMAN, Judge." }, { "text": "TYSON, Judge\ndissenting.\nI. Mootness\nThe majority\u2019s opinion cites In re Denial of Request by Humana Hospital Corp. and applies the mootness doctrine to GHHS\u2019s appeal. 78 N.C. App. 637, 640, 338 S.E.2d 139, 141 (1986). In Humana, this Court stated, \u201c[t]he doctrine of mootness is applicable to an appellate proceeding where the original question in controversy is no longer at issue.\u201d 78 N.C. App. at 640, 338 S.E.2d at 141.\nA case is considered moot when \u201ca determination is sought on a matter which, when rendered, cannot have any practical effect on the existing controversy.\u201d Roberts v. Madison Cty. Realtors Ass\u2019n, 344 N.C. 394, 398-99, 474 S.E.2d 783, 787 (1996). Courts will not entertain such cases because it is not the responsibility of courts to decide \u201cabstract propositions of law.\u201d In re Peoples, 296 N.C. 109, 147, 250 S.E.2d 890, 912 (1978), cert. denied, 442 U.S. 929, 61 L. Ed. 2d 297 (1979). Conversely, when a court\u2019s determination can have a practical effect on a controversy, the court may not dismiss the case as moot.\nLange v. Lange, 357 N.C. 645, 647, 588 S.E.2d 877, 879 (2003) (emphasis supplied).\nGHHS persuasively argues reasons to show this case is not moot. GHHS contends, the \u201cagency has deprived Good Hope Hospital of the substantive legal right to use and maintain its existing, previously approved hospital by erroneously misapplying the CON act to evaluate GHHS\u2019s 2003 proposal as for a new hospital and new services rather than as for replacement of an existing hospital.\u201d\nThe 2003 application is to be reviewed and evaluated under Policy AC-5 in the 2003 SMFP and criterion (3a) concerning reduction and relocation of existing health services. N.C. Gen. Stat. \u00a7 131E-183(a)(3a) (2003). Proposals for new services are judged against criteria 1, 3, and 6. N.C. Gen. Stat. \u00a7\u00a7 131E-183(a)(l), (3), and (6). GHHS\u2019s 2005 CON is an application for \u201cnew services\u201d and does not moot the 2003 CON for \u201crelocation of existing services.\u201d I respectfully dissent.\nII. Standard of Review\nN.C. Gen. Stat. \u00a7 150B-23(a) (2003) provides:\nA contested case shall be commenced by filing a petition with the Office of Administrative Hearings and, except as provided in Article 3A of this Chapter, shall be conducted by that Office ... A petition shall be signed by a party or a representative of the party and, if filed by a party other than an agency, shall state facts tending to establish that the agency named as the respondent has deprived the petitioner of property, has ordered the petitioner to pay a fine or civil penalty, or has otherwise substantially prejudiced the petitioner\u2019s rights and that the agency:\n(1) Exceeded its authority or jurisdiction;\n(2) Acted erroneously;\n(3) Failed to use proper procedure;\n(4) Acted arbitrarily or capriciously; or\n(5) Failed to act as required by law or rule.\nThe parties in a contested case shall be given an opportunity for a hearing without undue delay. Any person aggrieved may commence a contested case hereunder.\nIn Humana, cited by the majority\u2019s opinion, the hospital submitted two applications as a new provider for a new facility and new beds. 78 N.C. App. at 640, 338 S.E.2d at 141. Humana\u2019s request for a reconsideration hearing regarding the denial of its 1981 application was also denied. Id. This Court held that because Humana\u2019s 1982 application was reviewed, and the 1981 and 1982 applications were virtually identical, \u201cthe 1982 review process afforded Humana an adequate remedy to have its application reviewed under a plan projecting a bed need, regardless of any alleged error in the 1981 review process. Therefore, the assignments of error as to the review process of Humana\u2019s 1981 application are moot.\u201d Id. at 641, 338 S.E.2d at 142. This Court in Humana also limited the applicability of its holding and stated, \u201c[t]his opinion should not be construed as holding that the opportunity to reapply for a certificate of need automatically moots all procedural claims in all cases.\u201d Id. at 646, 338 S.E.2d at 145.\nHere, GHHS\u2019s 2005 application did not moot the claims involved in the 2003 application. The original issue on appeal regarding GHHS\u2019s 2003 application remains unanswered. The legal issue of how the CON Act can constitutionally and statutorily be applied to replacement projects remains unanswered. GHHS\u2019s 2003 CON and the 2005 CON applications are factually and legally different.\nUnlike Humana, GHHS requested a reduction in beds and relocation of the existing facility in its 2003 application, not a CON for a new facility. The 2005 application sought a \u201cnew facility.\u201d This application resulted from and was based upon the Governor\u2019s amendment to the 2005 SMFP, which determined that a \u201cNew Hospital\u201d is needed in central Harnett County. The Governor specifically stated, \u201cI have concluded that the Certificate of Need (\u201cCON\u201d) application process to build the New Hospital should be open to any applicant and nothing herein is to be construed as favoritism toward, or bias against, any potential applicant.\u201d Substantially different review criteria applies if an applicant seeks to replace existing health services rather than apply for a CON for new health services. Compare N.C. Gen. Stat. \u00a7 131E-183(a)(3a) with \u00a7 131E-183(a)(l), (3), and (6). The 2005 CON request for a New Hospital is a new and different application that solely arose due to the Governor\u2019s amendment to the 2005 SMFP and is subject to review under different statutory regulations. Id.\nThe requirements for a relocation or reduction in services are provided in N.C. Gen. Stat. \u00a7 131E-183(a)(3a), which provides:\nIn the case of a reduction or elimination of a service, including the relocation of a facility or a service, the applicant shall demonstrate that the needs of the population presently served will be met adequately by the proposed relocation or by alternative arrangements, and the effect of the reduction, elimination or relocation of the service on the ability of low income persons, racial and ethnic minorities, women, handicapped persons, and other underserved groups and the elderly to obtain needed health care.\nThe Agency found that GHHS met the requirements of N.C. Gen. Stat. \u00a7 131E-183(a)(3a). GHHS\u2019s 2003 application did not request new beds, as did the 2005 application. In its final decision, the Agency concluded that GHHS\u2019s 2003 application failed to satisfy the requirements for new services; criteria that is wholly inapplicable to the 2003 application.\nThe 2005 application must satisfy the standards under N.C. Gen. Stat. \u00a7 131E-183(a)(l), (3), and (6). Under these Sections of the statute, GHHS must explain why \u201cnew\u201d services are needed and demonstrate that the \u201cnew projects\u201d will not result in an \u201cunnecessary duplication\u201d of existing health services.\nThe Agency denied GHHS\u2019s 2003 application. The Agency found that GHHS failed to meet the statutory requirements of N.C. Gen. Stat. \u00a7 131E-183(a)(l), (3), (4), (5), (6), (12), (18a) and 131E-183(b). GHHS argues the Agency incorrectly applied N.C. Gen. Stat. \u00a7 131E-183(a)(l), (3), and (6) standards to the 2003 application. I agree. In 2003, GHHS applied for a modification to the existing facility only. The Agency erred when it reviewed and evaluated the 2003 application under the standard set forth for new facilities in N.C. Gen. Stat. \u00a7 131E-183(a). GHHS is entitled to a decision on the merits of this issue. The majority\u2019s opinion fails to correctly apply the mootness doctrine. Since I find the appeal is not moot, I address the merits of the appeal.\nTTT. Issues\nGHHS argues the Agency: (1) exceeded its authority by ignoring its own statutes, plan, prior decisions, and settlement agreement with Good Hope; (2) exceeded its authority by demanding space information not required under N.C. Gen. Stat. \u00a7 131E-182(b) and ignoring space information required by the application; (3) violated N.C. Gen. Stat. \u00a7 13IE-185 by failing to consider information from the public hearing concerning how GHHS\u2019s application conformed to the applicable law; and (4) unconstitutionally applied the CON criteria to deny GHHS\u2019s application and deprive the hospital of its right to use its existing facility.\nIV. Standard of Review\nN.C. Gen. Stat. \u00a7 131E-188(b) (2003) provides:\nAny affected person who was a party in a contested case hearing shall be entitled to judicial review of all or any portion of any final decision of the Department in the following manner. The appeal shall be to the Court of Appeals as provided in G.S. 7A-29(a).\n\u201cOn judicial review of an administrative agency\u2019s final decision, the substantive nature of each assignment of error dictates the standard of review.\u201d North Carolina Dep\u2019t of Env\u2019t and Natural Res. v. Carroll, 358 N.C. 649, 658, 599 S.E.2d 888, 894 (2004) (citation omitted). \u201cIf the party asserts the agency\u2019s decision was affected by a legal error, de novo review is required; if the party seeking review contends the agency decision was not supported by the evidence, or was arbitrary or capricious, the whole record test is applied.\u201d Christenbury Surgery Ctr. v. N.C. Dep\u2019t of Health and Human Servs., 138 N.C. App. 309, 312, 531 S.E.2d 219, 221 (2000). \u201c[T]his Court reviews the agency\u2019s findings and conclusions de novo wh\u00e9n considering alleged errors of law.\u201d Cape Fear Mem. Hosp. v. N.C. Dept. of Human Resources, 121 N.C. App. 492, 493, 466 S.E.2d 299, 300 (1996) (citing Walker v. N.C. Dept. of Human Resources, 100 N.C. App. 498, 502, 397 S.E.2d 350, 354 (1990), disc. review denied, 328 N.C. 98, 402 S.E.2d 430 (1991)).\nV. Agency Authority\nGHHS argues the Agency exceeded its authority by ignoring its own statutes, plan, prior decisions, and settlement agreement with Good Hope. I agree.\nGood Hope applied for a CON in 2001. The application proposed to: (1) replace part of its existing hospital with a new facility on Highway 421 near Erwin; (2) utilize buildings on the old campus for outpatient physical therapy, business offices, plant operations, information services, and other support functions; (3) reduce the number of beds from seventy-two to forty-six; (4) develop three operating rooms; (5) encompass 61,788 square feet; and (6) spend a capital expenditure of $16,159,950.00.\nThe Agency approved the application, but conditioned its approval on the development of two operating rooms. Good Hope and the Agency entered into a settlement agreement, and the Agency agreed that Good Hope could develop three operating rooms. A CON was issued to Good Hope on 14 December 2001.\nGood Hope secured financing through a joint venture with Triad Hospitals, Inc. known as Good Hope Health Systems, L.L.C., and referred to in the majority\u2019s opinion as \u201cGHHS.\u201d In 2003, GHHS filed an application to develop a replacement facility in central Harnett County. The 2003 application proposed the same number of beds and operating rooms as was provided in the 2001 application but increased the size of the facility to 112,945 square feet. The 2003 application proposed more meeting space, more private rooms, and to relocate all facilities rather than utilize any portion of the existing facility. During the review process, GHHS sent a letter to the Agency stating it was entitled to an exemption from CON review under N.C. Gen. Stat. \u00a7 131E-184(a). The Agency denied the application.\nN.C. Gen. Stat. \u00a7 131E-176(16)(e) (2003) provides:\n\u201cNew institutional health services\u201d means any of the following:\n(e) A change in a project that was subject to certificate of need review and for which a certificate of need was issued, if the change is proposed during the development of the project or within one year after the project was completed. For purposes of this subdivision, a change in a project is a change of more than fifteen percent (15%) of the approved capital expenditure amount or the addition of a health service that is to be located in the facility, or portion thereof, that was constructed or developed in the project.\nGHHS\u2019s 2003 application proposed additional capital expenditures exceeding 15% over the 2001 project for which a CON was issued. The 2003 application was \u201cproposed during the development of the project\u201d granted in the 2001 application and stated that it was proposing changes to the approved 2001 project.\nThe Agency incorrectly reviewed the 2003 application as a new project, rather than a modification to an existing project. The Agency failed to set forth any finding to support its determination that the 2003 application should be reviewed and evaluated as a new project instead of an existing project.\nGHHS argues N.C. Gen. Stat. \u00a7 131E-183(a)(3a) controls the 2003 application. The application proposes to \u201creduce and relocate facilities\u201d rather than establish a new hospital. The Agency found that GHHS\u2019s proposed replacement facility would appropriately meet the needs of all patient groups, but GHHS failed to adequately demonstrate \u201cthat the population projected to be served needs the scope of services proposed by the application,\u201d a requirement of N.C. Gen. Stat. \u00a7 131E-183(a)(3). The Agency also found GHHS\u2019s application complied with N.C. Gen. Stat. \u00a7 131E-183(a)(3a). The Agency also analyzed the application under N.C. Gen. Stat. \u00a7 131E-183(a)(6) and found the requirement of demonstrating \u201cthat the proposed project will not result in unnecessary duplication of existing or approved health service capabilities or facilities\u201d was not satisfied. The Agency erred when it applied criterion for new hospitals in N.C. Gen. Stat. \u00a7 131E-183(a) to GHHS\u2019s 2003 modification. In light of this error, it is unnecessary to consider the remaining assignments of error.\nVI. Conclusion\nThe majority\u2019s opinion improperly applies the mootness doctrine to dismiss GHHS\u2019s appeal. GHHS is entitled to a decision on the merits of its appeal.\nThe Agency erred when it reviewed GHHS\u2019s 2003 application based on criterion for a new facility. In light of this error, it is unnecessary to consider the remaining assignments of error. I vote to reverse and remand this case for evaluation of GHHS\u2019s 2003 CON application under the statutes and regulations applicable to relocation of an existing facility. I respectfully dissent.", "type": "dissent", "author": "TYSON, Judge" } ], "attorneys": [ "Smith Moore, LLP, by Maureen Demurest Murray, Susan Frandenburg, and William Stewart, Jr., for petitioner-appellant, Good Hope Health System, LLC.", "Morgan, Reeves and Gilchrist, by C. Winston Gilchrist, for petitioner-intervenor appellant, Town of Lillington.", "Attorney General Roy Cooper, by Special Deputy Attorney General Melissa L. Trippe, for respondent-appellee N.C. Department of Health and Human Services.", "Wyrick Robbins Yates & Ponton, LLP, by K. Edward Greene and Kathleen A. Naggs, and Nelson Mullins Riley & Scarborough, LLP, by Noah H. Huffstetler, III and Denise M. Gunter, for respondent-intervenor appellee Betsy Johnson Regional Hospital, Inc.", "Bode Call & Stroupe, L.L.P., by Robert V. Bode and S. Todd Hemphill, for respondent-intervenor appellee Amisub of North Carolina, Inc. dfb/a Central Carolina Hospital." ], "corrections": "", "head_matter": "GOOD HOPE HEALTH SYSTEM, L.L.C., Petitioner, and THE TOWN OF LILLINGTON, Petitioner-Intervenor v. N.C. DEPARTMENT OF HEALTH AND HUMAN SERVICES, DIVISION OF FACILITY SERVICES, CERTIFICATE OF NEED SECTION, Respondent, and BETSY JOHNSON REGIONAL HOSPITAL, INC., AND AMISUB OF NORTH CAROLINA, INC. D/B/A CENTRAL CAROLINA HOSPITAL, Respondent-Intervenors\nNo. COA05-123\n(Filed 3 January 2006)\nHospitals\u2014 certificate of need \u2014 subsequent application\u2014 appeal of first moot\nAn appeal from the denial of a certificate of need for a hospital was dismissed as moot where there was a subsequent application. Although petitioner contends that the two applications are legally and factually different, both applications are for exactly the same hospital, regardless of how it is characterized, and the agency review of the resubmitted original application during the review process for the subsequent application provides an adequate remedy.\nJudge Tyson dissenting.\nAppeal by petitioner and petitioner-intervenor from a Final Agency Decision issued 10 September 2004 by the North Carolina Department of Health and Human Services. Heard in the Court of Appeals 14 September 2005.\nSmith Moore, LLP, by Maureen Demurest Murray, Susan Frandenburg, and William Stewart, Jr., for petitioner-appellant, Good Hope Health System, LLC.\nMorgan, Reeves and Gilchrist, by C. Winston Gilchrist, for petitioner-intervenor appellant, Town of Lillington.\nAttorney General Roy Cooper, by Special Deputy Attorney General Melissa L. Trippe, for respondent-appellee N.C. Department of Health and Human Services.\nWyrick Robbins Yates & Ponton, LLP, by K. Edward Greene and Kathleen A. Naggs, and Nelson Mullins Riley & Scarborough, LLP, by Noah H. Huffstetler, III and Denise M. Gunter, for respondent-intervenor appellee Betsy Johnson Regional Hospital, Inc.\nBode Call & Stroupe, L.L.P., by Robert V. Bode and S. Todd Hemphill, for respondent-intervenor appellee Amisub of North Carolina, Inc. dfb/a Central Carolina Hospital." }, "file_name": "0296-01", "first_page_order": 330, "last_page_order": 342 }