ÿWPCò /# ¢UN­ %û 0(b)w@14q…” 0Jœ 0Tæ 0^: 0h˜ 0r 0|r 0†î 0t 1u 0dyU>ÝB) AQD Æ• 0D[ 0@Ÿ 0Dß DC# D/f B• B² D3Ï AM U*O (y v~¡ vÓ˜HP LaserJet 4SiHPPCL5MS,ü,,,,,ü0nLhÎ(ÖÃ9 Z ‹6Times New Roman RegularX($¡¡- ù- €88‚8ƒ8„8…8E†8‡8ˆ8Ó€’8ê‚_#3|x•82 ÿÿ0Indent1Ô2ÔÔ3  Ô2" ÿÿ0Indent2à0 àÔ2ÔÔ3  Ô2, ÿÿ0Indent3à0 àà0 àÔ2ÔÔ3  Ô26 ÿÿ0Indent4à0 àà0 àà0 àÔ2ÔÔ3  Ô2@ ÿÿ0Indent5à0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2J ÿÿ0Indent6à0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2T ÿÿ0Indent7à0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2^ ÿÿ0Indent8à0 àà0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô ÿÿ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)P ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓ< Œ 9p`(&Times New Roman% Line 7 d!"#$&Cþÿ<< CÿÿƒLevel 1Level 2Level 3Level 4Level 5(3¯$¢¢Ý ƒ!ÝÝ  Ý("ÿÿ$££Ò  ÒÒ  Ò($$””ò òÚ  Ú1Ú  Úó ó7Border 1dd(('÷ÿ dxd düÿP Pd'''''ÿÿdxd!#%Cþÿ << Gÿÿ< Œ 9p`(Arial Ý ƒ!ÝÑ  ÑÑ#€d#ÑÔ€ÔÝ  ÝÝ ƒ""ÝÝ  ÝÔ€+ÔÔ€+ÔÓ  Óò òÔ YYY ÔFILEDÔ€+XÔÌÌMay€€29€,€1998ÌÌCecil€W.€CrowsonÌAppellate€Court€ClerkÔ  Ôó óPtPtHHØ(ÿáÿâùFG(üHHØ(d'`Styl{WP}01•ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃà Ãà Ãà Ãà Ãà ÃÃÃÃÃÃÃÃÃÃÃÐ ÐÐHHÐÐ  ÐÐ2ÐÐÿÿ¸æ$ÿÐÐHHÐÐÐÐÐÐÐÐ  ÐÐ ÐÐ ÐÑÑÑGenevaÑÑ ÑÑ € ÑÑ<Px–ÈÑÒÒÒ443!#4ÒÒ$ *$ÒÒ$*$ÒÒ ÿKK ÒÒ  Geneva ÒÒ  Geneva ÒÓ.,ÓÓÓÓ6ÓÓ ÓßßßßßßßßßßßßßßßßßßÑGenevaÑÑ ÑÒ  ellan Geneva ÒÒ  ellan Geneva ÒÝ ƒ!ÝÔ . ÔÔ€ÔÝ  ÝÒ  ÒÒ „ ÒÑ  ÑÑ\R AØ'\ÑÑ€ÑÑ7€¶LXXdìdÈ7ÑÑ  ÑÑ  Ñò ò›Þ ÞÌNATIONAL€HEALTHCARE,€L.P.,à à)Ìà àà àà àà àà àà à)à àDavidson€ChanceryÌà àPlaintiff/Appellant,à àà àà à)à àNo.€€97„469„IÌà àà àà àà àà àà à)à àÌVS.à àà àà àà àà àà à)ÌÙ€!ÙœßR€*,%A1-j|–€` X `€€@ÿRß›à àà àà àà àà àà à)à àÌSPARTA€MEDICAL€INVESTORSà à)à àAppeal€No.ÌLIMITED€PARTNERSHIP€and€the€à à)à à01A01„9712„CH„00718ÌTENNESSEE€HEALTH€FACILITIESà à)ÌCOMMISSION,à àà àà àà à)Ìà àà àà àà àà àà à)Ìà àDefendants/Appellees.à àà à)ÌÌà@ àIN€THE€COURT€OF€APPEALS€OF€TENNESSEEÌà@ àAT€NASHVILLEÌÌà@ àAPPEAL€FROM€THE€CHANCERY€COURT€OF€DAVIDSON€COUNTYÌà@ àAT€NASHVILLE,€TENNESSEEÌÌÓ  ÓHONORABLE€IRVIN€H.€KILCREASE,€JR.,€CHANCELLORÌÓ  Óó óÌÌÌRobert€B.€LittletonÌKathryn€LaddÌTRABUE,€STURDIVANT€&€DeWITTÌ2500€Nashville€City€CenterÌ511€Union€StreetÌNashville,€Tennessee€37219ÌATTORNEY€FOR€PLAINTIFF/APPELLANTÌÌJohn€Knox€WalkupÌAttorney€General€and€ReporterÌÌMichelle€Hohnke€JossÌAssistant€Attorney€GeneralÌSecond€Floor,€Cordell€Hull€BuildingÌ425€Fifth€Avenue,€NorthÌNashville,€Tennessee€37243ÌATTORNEYS€FOR€THE€TENNESSEE€HEALTH€FACILITIESÏCOMMISSION/DEFENDANT/APPELLEEÌÌJerry€W.€TaylorÌWYATT,€TARRANT€&€COMBSÌ511€Union€Street,€Suite€1500ÌNashville,€Tennessee€37219ÌATTORNEY€FOR€SPARTA€MEDICAL€INVESTORS€LIMITED€PARTNERSHIP€ÌÌÓ  Óò òAFFIRMED€AND€REMANDED.ó óÌÓ  Ớ̜à àà àà àà àà àà àHENRY€F.€TODDÌà àà àà àà àà àà àPRESIDING€JUDGE,€MIDDLE€SECTIONÌœCONCUR:›ÌBEN€H.€CANTRELL,€œJUDGEÌÌCONCURS€IN€SEPARATE€OPINION›ÌWILLIAM€C.€KOCH,€JR.,€JUDGEÌÌò òNATIONAL€HEALTHCARE,€L.P.,à à)Ìà àà àà àà àà àà à)à àDavidson€ChanceryÌà àPlaintiff/Appellant,à àà àà à)à àNo.€€97„469„IÌà àà àà àà àà àà à)à àÌVS.à àà àà àà àà àà à)Ìà àà àà àà àà àà à)à àÌSPARTA€MEDICAL€INVESTORSà à)à àAppeal€No.ÌLIMITED€PARTNERSHIP€AND€THE€à à)à à01A01„9712„CH„00718ÌTENNESSEE€HEALTH€FACILITIESà à)ÌCOMMISSION,à àà àà àà à)Ìà àà àà àà àà àà à)Ìà àDefendants/Appellees.à àà à)ÌÌó óÌà@ àòòò òÔ€„ÔO€P€I€N€I€O€NÔ€XÔó óóóÌÓ  ÓÓÓÌà àThis€appeal€involves€an€existing€health€care€facility€in€Sparta,€Tennessee€and€a€proposalÏto€build€a€second€health€care€facility€in€the€same€city.€€The€existing€facility€opposed€theÏconstruction€of€the€new€facility,€but€the€Tennessee€Health€Facilities€Commission€(hereafter,ÏCommission)€granted€a€certificate€of€need€(hereafter€CON)€authorizing€the€construction€of€theÏnew€facility.€€The€existing€facility€petitioned€for€judicial€review.€€The€Trial€Court€affirmed€theÏorder€of€the€Commission,€and€the€existing€facility€appealed€to€this€Court.Ìà àÌà àThe€identity€of€the€opposing€parties€and€their€position€in€the€litigation€requiresÏclarification.€€The€existing€facility€is€called€ð ðSparta€Life€Care€Centerðð€or€ð ðSLCC,ðð€but€it€isÏowned€by€National€Healthcare,€L.P.€which€appears€in€the€caption.€€The€application€for€a€CONÏto€build€the€new€facility€in€Sparta€was€filed€before€the€Commission€in€the€name€of€SpartaÍMedical€investors,€Limited€Partnership€(SMILP)€which€was€treated€as€the€applicant.€€TheÏexisting€facility,€SLCC,€petitioned€the€Commission€for€a€contested€hearing,€and€was€treated€asÏthe€petitioner.€€Likewise,€when€SLCC€initiated€this€judicial€review,€by€petition€for€review,€itÏbecame€the€petitioner€in€this€proceeding;€and€SMILP€became€a€respondent€along€with€theÏCommission.ÌÌà àFor€purposes€of€clarity,€this€opinion€will€refer€to€the€contesting€parties€as€the€existingÏfacility€and€the€proposed€facility.ÌÌà àThe€existing€facility€consists€of€seventy„nine€rooms€containing€one€hundred€fifty€beds.€ÏThe€proposed€facility€was€to€consist€of€one€hundred€twenty€beds€including€twenty€ð ðspecializedÏAlzheimer€Units.ðð€€The€Commission€approved€only€one€hundred€beds,€of€which€twenty€bedsÏwere€required€to€be€designated€for€treatment€of€Alzheimerðð€patients.€€The€Trial€Judge€affirmedÏand€the€existing€facility€appealed.ÌÌà àThe€existing€facility€was€acquired€by€the€appellant€National€HealthCare€in€1978.€€It€isÏthe€only€nursing€home€facility€in€White€County€where€Sparta€is€located.€€It€has€150€beds,€noneÏof€which€are€specially€designated€for€treatment€of€any€particular€ailment.€€ÌÌà àThe€administrative€record€does€not€contain€the€original€application€for€a€CON€for€theÏproposed€facility,€but€it€does€contain€a€copy€of€a€CON,€bearing€the€signature€of€the€ChairmanÏand€Secretary€of€the€Commission,€dated€August€2,€1993,€and€authorizing€Sparta€MedicalÏInvestors,€L.P.€to€construct€a€new€100„bed,€òònon„skilledóó€nursing€home€facility€with€20€of€thoseÏbeds€òòdesignated€for€treatment€of€Alzheimerððs€patientsóó.ÌÌà àThe€record€does€not€contain€a€copy€of€the€minutes€or€order€of€the€Commission€grantingÏthe€CON,€but€it€may€reasonably€be€inferred€that€such€action€preceded€July€23,€1993,€for€theÏadministrative€record€begins€with€a€ð ðPetition€for€Contested€Case€Hearingðð€filed€by€ð ðLife€CareÏCenter€of€Sparta,ðð€filed€on€July€23,€1993.ÌÌà àAfter€extensive€preliminary€proceedings€and€an€extended€hearing,€an€administrativeÏjudge€signed€(and€presumably€filed),€a€20„page€order€in€which€she€ð ðgrantedðð€to€SpartaÏHealthCare€Investors,€L.P.€ð ðthe€previously€issuedðð€CON€ð ðfor€the€establishment€of€a€100„bedÏnursing€home€facility.ðð€€The€administrative€judge€further€ordered€that€the€CON€ð ðis€herebyÏmodified€to€include€that€20€of€the€beds€be€dually€certified€for€participation€in€the€MedicareÏskilled€nursing€program.ðð€ÌÌà àOn€September€9,€1996,€the€existing€facility€filed€a€ð ðPetition€for€Appeal€from€InitialÏOrder.ððÌÌà àOn€December€3,€1996,€the€Commission€filed€its€ð ðFinal€Orderðð€containing€the€following:ÌÒ ¸ ÒÒ ` ÒÓÓà àAfter€consideration€of€the€record€in€this€matter,€andÏthe€briefs€and€arguments€of€counsel,€it€is€determined€that€theÏCON€application€submitted€on€behalf€of€Sparta€MedicalÏInvestors,€Limited€Partnership,€should€be€GRANTED€for€aÏ100„bed€nursing€home,€with€20€of€those€beds€skilled€beds,Ïand€including€a€specialized€Alzheimerððs€unit.€€This€decisionÏis€based€upon€the€following€Findings€of€Fact€andÏConclusions€of€Law:ÌÌÓ  Óò òòòFINDINGS€OF€FACTóóó óÌÓ  ÓÌ1„36.à àThe€Commission€adopts€and€incorporates€by€expressÏreference€Findings€of€Fact€Numbers€1€through€36€of€theÏInitial€Order.€€The€Commission€finds€and€concludes€thatÍthese€Findings€of€Fact€accurately€reflect€and€interpret€theÏproof€in€the€record.ÌÌÓ  Óòòò òCONCLUSIONS€OF€LAWó óóóÌÓ  ÓÌ1„25.à àThe€Commission€adopts€and€incorporates€by€expressÏreference€Conclusions€of€Law€Numbers€1€through€25€of€theÏinitial€Order.€€These€Conclusions€of€law€accurately€interpretÏand€apply€the€legal€authorities€reflected€therein.ÌÌ26.à àIn€addition,€the€Commission€makes€the€followingÏConclusion€of€Law,€which€was€not€included€in€the€InitialÏOrder.€€Pursuant€to€T.C.A.€ðð€68„11„109,€the€CommissionÏmust€assess€the€costs€of€this€proceeding€against€either€of€theÏparties,€based€upon€the€consideration€of€who€prevailed€onÏthe€merits,€and€the€partiesðð€abilities€to€pay.ÌÌà àIn€this€case,€the€Petitioner,€Sparta€HC,€filed€theÏpetition€for€contested€case€hearing.€€As€set€forth€in€the€aboveÏFindings€of€Fact€and€Conclusions€of€Law,€the€evidenceÏclearly€establishes€that€the€CON€was€properly€granted,€andÏSparta€Medical€Investors,€Limited€Partnership€is€theÏprevailing€party.€€There€was€no€proof€submitted€indicatingÏthat€Sparta€HC€or€its€owner,€National€HealthCare,€L.P.,Ïdoes€not€have€the€ability€to€pay€these€costs.€€Therefore,€theÏCommission€concludes€and€ORDERS€that€the€costs€of€thisÏproceeding€be€assessed€to€the€Petitioner,€Sparta€HC,Ïpursuant€to€T.C.A.€ðð€68„11„109.ÌÓ  Ó„€„€„€„ÌÓ  Óà àIn€addition€to€the€policy€reasons€reflected€in€theÏFindings€of€Fact€and€Conclusions€of€Law,€the€CommissionÏfinds€that€it€is€sound€public€policy€to€apply€the€CON€statutesÏand€Commission€Rules€in€a€fair€and€equitable€manner,€and€toÏgrant€a€certificate€of€need€when€the€applicable€criteria€areÏmet.€€Since,€as€set€forth€in€the€Findings€of€Fact€andÏConclusions€of€Law,€those€criteria€are€met€by€the€Life€CareÏCenter€of€Sparta€CON€application,€it€is€in€the€public€interest,Ïand€it€is€sound€public€policy,€to€grant€the€CON€to€SpartaÏMedical€Investors,€Limited€Partnership.ÌÌÌÒ  ÒÒ „ ÒÓÓà àIf€an€amended€CON€was€issued€pursuant€to€this€order,€it€does€not€appear€in€the€record.€ÏIt€must€be€assumed€that€the€original€August€2,€1993,€CON,€as€amended€by€the€September€9,Ï1996,€order€of€the€Commission,€remains€in€effect.ÌÌà àAs€previously€stated,€the€existing€facility€filed€a€petition€for€judicial€review,€the€TrialÏJudge€affirmed,€and€the€existing€facility€appealed.ÌÌà àThe€appellant€presents€the€following€issues€for€review:ÌÒ  ÒÒ ` ÒÓÓI.à àWhether€the€Health€Facilities€Commission€erred€inÏmodifying€the€original€certificate€of€need€granted€to€SpartaÏMedical€Investors€to€includes€20€dually€certified€beds.ÌÌII.à àWhether€the€Health€Facilities€Commissionððs€findsÏand€conclusions€that€the€proposed€facility€is€needed€areÏsupported€by€evidence€which€is€both€substantial€andÏmaterial.ÌÌIII.à àWhether€the€Health€Facilities€CommissionððsÏfindings€and€conclusions€that€the€proposed€facility€isÏeconomically€feasible€are€supported€by€evidence€which€isÏboth€substantial€and€material.ÌÒ  ÒÒ „ ÒÓÓÌà àThe€œproposed›€facility€presents€the€issues€in€the€following€form:ÌÒ ¸ ÒÒ ` ÒÓÓI.à àWhether€the€Health€Facilities€Commission€erred€inÏmodifying€the€original€certificate€of€need€granted€to€SpartaÏMedical€Investors€to€include€20€dually€certified€beds.ÌÌII.à àWhether€the€Health€Facilities€Commissionððs€findingsÏand€conclusions€that€the€proposed€facility€is€needed€areÏsupported€by€evidence€that€is€both€substantial€and€material.ÌÌIII.à àWhether€the€Health€Facilities€Commissionððs€findingsÏand€conclusions€that€the€proposed€facility€is€economicallyÏfeasible€are€supported€by€evidence€that€is€both€substantialÏand€material.ÌÒ  ÒÒ „ ÒÓÓÌà àThe€Commission€presents€the€following€issues:ÌÒ ¸ ÒÒ ` ÒÓÓI.à àWhether€the€Administrative€Law€Judge€compliedÏwith€statutory€procedures€and€properly€granted€a€certificateÏof€need€to€Sparta€Medical€Investors€for€a€100„bed€nursingÏfacility,€including€20€dually€certified€beds.ÌÌII.à àWhether€there€is€substantial€and€material€evidence€inÏthe€record€to€support€the€Commissionððs€final€order.ÌÒ  ÒÒ „ ÒÓÓÌà àThe€Uniform€Administrative€Procedure€Act,€T.C.A.€ðð€4„5„322(h)€provides:ÌÒ ¸ ÒÒ ` ÒÓÓà àò òJudicial€reviewó ó.€„€(a)(1)€A€person€who€isÏaggrieved€by€a€final€decision€in€a€contested€case€is€entitled€toÏjudicial€review€under€this€chapter€which€shall€be€the€onlyÏavailable€method€of€judicial€review.ÌÓ  Ó„€„€„€„ÌÓ  Óà à(b)(1)€Proceedings€for€review€are€instituted€by€filingÏa€petition€for€review€in€the€chancery€court€of€DavidsonÏCounty,€unless€another€court€is€specified€by€statute.€€SuchÏpetition€shall€be€filed€within€sixty€(60)€days€after€the€entry€ofÏthe€agencyððs€final€order€thereon.ÌÓ  Ó„€„€„€„ÌÓ  Óà à(h)€the€court€may€affirm€the€decision€of€the€agency€orÏremand€the€case€for€further€proceedings.€€The€court€mayÏreverse€or€modify€the€decision€if€the€rights€of€the€petitionerÏhave€been€prejudiced€because€the€administrative€findings,Ïinferences,€conclusions€or€decisions€are:ÌÌà à(1)€In€violation€of€constitutional€or€statutoryÏprovisions;ÌÌà à(2)€€€In€excess€of€the€statutory€authority€of€theÏagency;ÌÌà à(3)€€Made€upon€unlawful€procedure;ÌÌà à(4)€€Arbitrary€or€capricious€or€characterized€by€abuseÏof€discretion€or€clearly€unwarranted€exercise€of€discretion;€orÌÌà à(5)€Unsupported€by€evidence€which€is€bothÏsubstantial€and€material€in€the€light€of€the€entire€record.€€ÌÌIn€determing€the€substantiality€of€evidence,€the€court€shallÏtake€into€account€whatever€in€the€record€fairly€detracts€fromÏits€weight,€but€the€court€shall€not€substitute€its€judgment€forÏthat€of€the€agency€as€to€the€weight€of€the€evidence€onÏquestion€of€fact.ÌÒ  ÒÒ „ ÒÓÓ€Ìà àJudicial€review€of€factual€findings€of€an€administrative€agency€is€not€òòde€novoóó,€but€theÏinquiry€is€whether€the€administrative€decision€is€supported€œby›€substantial€and€materialÏevidence.€€òòSanifill€of€Tennessee,€Inc.€v.€Tennessee€Solid€Waste€Disposal€Control€Boardóó,ÍTenn.€1995,€907€S.W.2d€807.€€òòSouthern€Ry.€Co.€v.€€State€Board€of€Equalization,óó€Tenn.Ï1984,€682€S.W.2d€196.€€€òòEstate€of€Street€v.€State€Board€of€Equalizationóó,€Tenn.€App.€1990,Ï812€S.W.2d€583.ÌÌà àThe€Administrative€Record€œcontains›€579€pages€of€testimony€and€40€voluminousÏexhibits€which€furnish€adequate€substantial€and€material€evidence€to€support€the€findings€andÏconclusion€of€the€Commission€that€the€proposed€facility€is€needed.€€There€is€competent€andÏmaterial€evidence€of€the€following€facts:ÌÌà àThe€existing€facility€has€œonly›€œ20€skilled›€nursing€œbeds,›€and€80%€of€patients€beingÏdischarged€from€the€local€general€hospital€need€skilled€nursing.ÌÌà àMedicare€does€not€pay€for€post„hospitalization€care€unless€it€is€ð ðskilled€care.ðð€ÌÌà àThe€proposed€facility€would€provide€œ20€ð ðdually›€certified€skilled€œcareðð€beds›Ïcompensable€by€Medicare.ÌÌà àThe€existing€facility€has€been€unable€to€accept€all€applications€from€White€CountyÏresidents€for€admission€due€to€lack€of€beds€and/or€services,€and€such€applicants€have€beenÏobliged€to€seek€admission€to€facilities€outside€the€county.ÌÌà àThe€counties€surrounding€White€County€are€inadequately€equipped€to€furnish€skilledÏnursing€care,€and€the€area€is€in€need€œof›œ€an€additional€skilled€nursing€facility.›ÌÌà àThe€projected€needs€of€the€area€support€the€approval€of€the€proposed€facility.ÌÌà àThe€appellantððs€first€issue€complains€to€this€Court€that€the€Commission€modified€itsÏoriginal€certificate€of€need€to€require€20€dually€certified€beds.€€Appellantððs€argument€does€notÏdiscuss€the€issue,€but€discusses€the€approval€of€100€beds€instead€of€120€as€originallyÏrequested.ÌÌThis€ruling€was€not€prejudicial€to€appellant.ÌÌà àIn€response€to€appellantððs€two€remaining€issues,€this€Court€finds€that€the€final€action€ofÏthe€Commission€is€supported€by€competent€and€substantial€evidence€and€is€neither€arbitrearyÏnor€capricious€nor€unlawful.€The€issue€presented€by€appellees€involve€the€same€questions€asÏthose€presented€by€appellant,€and€therefore€requires€no€further€discussion.€ÌÌà àThe€judgment€of€the€Trial€Court€and€the€action€of€the€Commission€are€affirmed.€€CostsÏof€this€appeal€are€taxed€to€the€appellant€and€its€surety.€€The€cause€is€remanded€to€the€Trial€CourtÏfor€necessary€further€procedure.ÌÓ  Óò òÌAFFIRMED€AND€REMANDED.ó óÌÓ  ÓÓÓà àà àà àà àÌà àà àà àà àà àà àà à_________________________________Ìà àà àà àà àà àà àà àHENRY€F.€TODDà àÌà àà àà àà àà àà àà àPRESIDING€JUDGE,€MIDDLEÏSECTIONÌÓ  ÓÌÌÌÌCONCUR:ÌÌÌÌ_____________________________ÌBEN€H.€CANTRELL,€JUDGEÌÌÌÌœCONCURS€IN€SEPARATE€OPINION:›ÌWILLIAM€C.€KOCH,€JR.,€JUDGEÌ