|
|
3-1900-17862-2 |
STATE OF
OFFICE OF ADMINISTRATIVE HEARINGS
FOR THE COMMISSIONER OF LABOR AND INDUSTRY
|
In
the Matter of Steve Sviggum, Commissioner, Department of Labor and Industry, Complainant, v. John
Richardson, QRC #656, Respondent. |
ORDER DENYING MOTION FOR SUMMARY
DISPOSITION |
This matter is pending before Administrative Law Judge Kathleen D. Sheehy pursuant to a Notice of and Order for Pre-Hearing Conference dated February 15, 2007. The Respondent filed a motion for summary disposition on November 26, 2007. The Complainant filed a response on December 7, 2007, and the OAH record on the motion closed on that date.
Tricia L. Matzek and
Rory A. Foley, Assistant Attorneys General,
Based upon all of the files, records and proceedings herein, and for the reasons set forth in the accompanying Memorandum,
IT IS HEREBY ORDERED:
1. That the Respondent’s motion for Summary Disposition is DENIED.
2. That this matter will proceed to hearing as scheduled on January 8, 2008.
Dated: December 14, 2007
|
s/Kathleen
D. Sheehy |
|
KATHLEEN D. SHEEHY |
|
Administrative Law Judge |
In this contested case proceeding, the Department
of Labor and Industry (Complainant or Department) alleges the Respondent
violated a number of rules applicable to Qualified Rehabilitation Consultants
(QRCs), as set out more specifically in the 28 counts alleged in the Complaint
and Amended Complaint. The Respondent has
moved for summary disposition, arguing there are no material issues of fact in
dispute and he is entitled to disposition of this case in his favor as a matter
of law. He seeks dismissal of “all
claims that were in existence prior to the date Respondent demanded a hearing” in
December 2004 on the grounds of laches; he seeks dismissal of “all the new
claims” asserted in the Amended Complaint concerning his billing practices,
contending the Administrative Law Judge lacks jurisdiction to address those
claims because the Department failed to follow its own internal procedures in
investigating the allegations against him and failed to exhaust existing
remedies. He contends that any potential
issues concerning his billing practices should be deferred until such time as
the Department follows the procedures for investigating complaints that are
outlined in the Department’s Standard Operating Procedures for the
Investigation of Rehabilitation Provider Conduct and Accountability.
Procedural Standard
The facts, viewed in the light most favorable to the Department (the nonmoving party) are as follows. The Respondent has been a licensed QRC for 18 years. He is the owner and operator of Professional Associates of Rehabilitation, Inc. (PAR). The Department received a number of complaints about the Respondent that were resolved by stipulated settlement agreement in 2001. Beginning in February 2003, the Department received more complaints about the conduct of Respondent and/or PAR. In December 2004, the Department met with the Respondent and his attorney concerning ten different complaints. The Department made a global settlement proposal that involved a combination of fines on some complaints and dismissal of others.[9] By letter dated December 16, 2004, the Respondent declined to pay the proposed fines, demanded a contested case hearing regarding certain complaints, and attempted to accept dismissal of the other complaints.[10]
Department representatives met with the Respondent and his attorney in July and November 2006 to discuss further the outstanding complaints against him. These attempts to resolve the complaints were unsuccessful.[11] On February 15, 2007, the Department initiated a contested case proceeding by filing and serving the Notice and Order for Hearing and Complaint dated February 15, 2007. The original ten counts in the Complaint generally allege, among other violations, that the Respondent failed to make timely filings of reports and rehabilitation plans or failed to timely meet with and provide services with regard to several clients in the 2002-2006 timeframe, in violation of Minn. R. 5220.1801, 5220.1802, 5220.0130, and 5220.0410.[12]
After the filing and service of the Complaint, the Department’s investigator found evidence of additional rule violations. He opened an investigation file and proceeded to investigate these additional alleged violations.[13] An Amended Complaint containing 18 additional counts focusing mainly on the Respondent’s billing practices was filed and served on June 22, 2007.[14]
Analysis
Laches
The Respondent first argues that the ten counts of the original Complaint should be dismissed on the basis of laches because the Respondent demanded a hearing in December 2004, the Department waited until February 2007 to initiate a contested case proceeding, and the hearing will not take place until January 2008. The Respondent characterizes these counts as isolated claims relating primarily to procedural issues like timing of contacts and reports, which will require an analysis of specific things said and done by people more than three years ago. He argues the delay in bringing these claims has caused prejudice to him because it will be inherently more difficult for individuals to remember details regarding dates they were contacted and things of that nature.
The equitable
doctrine of laches is available to prevent one who has not been diligent in
asserting a known right from recovering at the expense of one who has been
prejudiced by the delay.[15] The basic question when applying the doctrine
of laches is “whether there has been such an unreasonable delay in asserting a
known right, resulting in prejudice to others, as would make it inequitable to
grant the relief prayed for.”[16] The
following four elements form the test as to whether the defense is appropriate:
(1) availability of the defense as determined by the nature of the action; (2) the reasons for the delay; (3) prejudice;
and (4) policy considerations.[17]
Traditionally, the doctrine of laches has been available against the state when acting in its proprietary capacity, but not when acting in its sovereign capacity. In Leisure Hills v. Minnesota Department of Human Services, the Court of Appeals held that the doctrine of laches is not available as a defense against the state when the state is acting in a sovereign capacity.[18] A state acts in a sovereign capacity when it is engaged in a governmental function, as opposed to a “proprietary” function in which the state asserts its rights much like a private person.[19] In this case the Department is performing its duty to investigate complaints made against a QRC pursuant to Minn. Stat. § 176.102, subd. 3a (2006). It is acting in its sovereign capacity, and the defense of laches is not available.[20]
Even if the doctrine of laches were available, however, the Respondent’s motion would be denied. The Department has been investigating the first set of complaints since 2003, and the Respondent has been on notice since December 2004 that the Department proposed disciplinary action in response to a number of them. Most recently, the parties held settlement discussions in November 2006 concerning these issues. The Department maintains that two days later, the Respondent filed an action in district court against the Department and its investigator. The Department served its Complaint three months later.
The delay in initiating the contested case proceeding was not unreasonable and resulted at least partly from the Department’s continuing efforts to negotiate a global resolution of all pending complaints concerning the Respondent. The Administrative Law Judge concludes that neither the 19-month gap between negotiation sessions (December 2004 to July 2006) nor the three-month gap between the last negotiation meeting and the initiation of the contested case proceeding (November 2006 to February 2007) constitutes a cumulative delay so great as to make the pursuit of these complaints inequitable as a matter of law. Moreover, the Respondent has not established as a matter of law that the delay has caused him prejudice. One count dates back to November 2002, but the others appear to allege violations occurring between late 2003 and 2006. Many of the claims asserted in the original Complaint are based on the Respondent’s alleged failure to timely file documents with the Department, not on the conflicting statements of witnesses. Assuming the defense of laches were otherwise available, the Respondent has failed to show that it should bar the complaints asserted against him in the original Complaint.
Failure to Follow Internal Procedures
Second, the Respondent contends that the 18 counts of the Amended Complaint should be dismissed because the Department failed to follow its normal procedures for investigation and attempted resolution before filing a contested case proceeding. He argues the issues raised in the Amended Complaint were never subject to an independent review and there has been no discussion or negotiation regarding the merits or a possible resolution. The Respondent has not identified any specific statute, rule or policy provision that the Department has arguably violated.
The Department argues that there is nothing in statute, rule, or its internal policy manual that requires an investigator to meet with the Respondent or attempt to negotiate a resolution before initiating a contested case proceeding. The Department’s rules permit, but do not require, the Commissioner to confer with parties for clarification or settlement of issues.[21] The Department’s Standard Operating Procedures for the Investigation of Rehabilitation Provider Conduct and Accountability (Manual)[22] require that complaints regarding compliance be made in writing to the commissioner. Any person who becomes aware of a violation, including employees of the Department, may submit a complaint. The provider may be advised of the complaint through informal means (a letter, phone call, or personal meeting) or through a formal notice.[23] A meeting between the provider and the complaint investigator “may then be scheduled” for the purpose of exchanging information to clarify facts, clear up misunderstandings, identify the statutory basis for discipline, and settle the matter.[24] The procedures manual expressly provides that compliance services staff may perform file audits periodically or in situations where a provider’s service or billing practices are called into question through inquiries or complaints filed.[25] Department staff and counsel make the decision, based on the results of the investigation, about the disposition of a case.[26]
At the time the Department began investigating the billing claims in the Amended Complaint, this contested case proceeding was pending.[27] The rules of the Office of Administrative Hearings, not the internal policies of the agency, control the amendment of issues for hearing. The OAH rules provide that an agency may file and serve an amended Notice of and Order for Hearing at any time prior to the start of the evidentiary hearing, provided that, should the amended notice and order raise new issues or allegations, the parties shall have a reasonable time to prepare to meet the new issues or allegations if requested.[28] That is what happened here after service of the Amended Complaint—the Respondent requested a revision to the procedural schedule, to which the Department did not object, and the parties are now preparing for hearing.[29] Nothing would preclude the parties from meeting, conferring, and attempting to resolve all of these claims before the hearing.
The Administrative Law Judge concludes there is no legal or factual basis for dismissal of the Amended Complaint for failure to follow the Department’s internal practices.
Propriety of Billing Practices
Third, the Respondent contends he is entitled to summary disposition on the claims concerning his billing practices because those practices should be deemed to be acceptable as a matter of law unless and until the Department adopts a rule setting out specifically how QRCs are to pro-rate bills among multiple clients. The Respondent submitted an affidavit stating that, in the absence of more specific direction on how to apportion travel costs, he established a general guideline whereby each employee is billed for 60% of the travel costs and are not billed for waiting time or travel time between appointments.[30] In addition, his policy was to bill 2.5 hours per week for job development services, and in general all services for job development were billed on the same day of the week, even though this was an ongoing service occurring in smaller increments on a daily basis.[31]
A rehabilitation provider shall advise the referral source and payer of its fees and reporting procedures in advance of rendering any services and shall also furnish, upon request, detailed and accurate time records regarding any bills in question.
Rehabilitation providers shall fully disclose to a payer the basis for computing and prorating a fee so that the payer may determine the reasonableness of the fee charged. When more than one employee is served during the time period, the rehabilitation provider shall prorate the fee.
The Department asserts that the Respondent’s affidavit fails to account for his practice of simultaneously prorating expenses between paying files and also billing 100% of the travel and mileage to files that he suspected would be non-paying files. Several of the counts allege that Respondent billed 60% of the travel time and mileage for a single trip to St. Cloud to two different clients, and 100% of those same expenses to a third client. By this method, the Respondent billed three clients a total of 298 miles and 5.2 hours for a 150-mile round-trip that normally takes no more than two hours. The Department maintains that the Respondent failed to appropriately prorate fees and expense, failed to disclose to payers the basis for prorating these fees and expenses, and failed to furnish detailed or accurate time records to support these bills.
As the Respondent points out, Minn. R. 5220.1805 E does not require a particular method of computing or prorating a fee; it does, however, require that the provider disclose to payers, in advance of rendering any services, the basis upon which it will be done. It also requires the provider to furnish, upon request, detailed and accurate time records. The Administrative Law Judge concludes that there are genuine issues of material fact concerning the Respondent’s compliance with billing rules, which preclude summary disposition and require a hearing in this matter. The Respondent’s motion for summary disposition is denied, and the hearing in this matter will commence as scheduled on January 8, 2008.
K.D.S.
[1]
[2]
Sauter v. Sauter, 70 N.W.2d 351, 353
(
[3]
Illinois Farmers Insurance Co. v. Tapemark
Co., 273 N.W.2d 630, 634 (
[4] Theile
v. Stich, 425 N.W.2d 580, 582 (
[5]
Highland Chateau, 356 N.W.2d at 808; Hunt
v. IBM Mid
[6]
[7] Carlisle, 437 N.W.2d at 715 (citing Celotex Corp. v. Catrett, 477
[8]
See Celotex, 477
[9] Affidavit of John O’Loughlin ¶ 7.
[10] Affidavit of Donald G. Clapp, Ex. 2.
[11] O’Loughlin Aff. ¶ 10.
[12] Because multiple violations are alleged in each count, the following summary is necessarily incomplete: Count 1 (failure to timely file various reports with regard to client V.L.M, November 2002); Count 2 (failure to timely meet with and provide services with regard to client R.W.H., October 2002); Count 3 (failure to timely meet with client M.B., August and October 2003, and failure to remain objective as a QRC); Count 4 (failure to timely file various reports and secure a waiver for release of information with regard to client S.S., September 2003); Count 5 (failure to report discipline by the Commission on Rehabilitation Counselor Certification (CRCC), in violation of Minn. R. 5220.1801, subp. 9 D); Count 6 (failure to report hiring and departure of various employees, in violation of Minn. R. 5220.1600, subp. 1 or Minn. R. 5220.1801, subp. 9 A); Count 7 (failure to properly designate and monitor work performed by an intern with regard to client J.W.R., November 2004); Count 8 (failure to base a determination that an employee was qualified for services on the recommendation of a treating physician with regard to clients R.E.H. and M.D., November 2005, in violation of Minn. R. 5221.0430, Minn. R. 5220.0100, subp. 22); Count 9 (failure to timely file various documents with regard to client T.W.); and Count 10 (acting as a QRC when someone else was assigned and disparaging the qualifications of another QRC with regard to client J.H., October 2006).
[13] O’Loughlin Aff. ¶ 9.
[14] The counts in the Amended Complaint are summarized as follows: Counts 11-13 allege failure to pro-rate fees, travel time, and mileage with regard to client L.M. in March and April 2004; Counts 14-16 contain similar allegations with regard to client T.G. in March and April 2004; Counts 17-19, same allegations with regard to P.L. in March and April 2004; Count 20 alleges an employee billed 30 hours of time to eight different files on March 22, 2004; Count 21 alleges improper billing by the same employee on March 22, 2004; Count 22 alleges the same employee billed 24 hours or more on a number of different days in March and May 2004; Counts 23-25 allege improper billing with regard to client G.G. on April 26, 2004, as well as billing in excess of 20 hours per day to this client on two days between March and May 2004; Count 26 alleges failure to comply with a variety of filing and contact requirements with regard to client A.E.; and Counts 27 and 28 allege improper billings for specialists and job placement services in March through May 2004.
[15] Winters v. Kiffmeyer, 650 N.W.2d 167,
169 (
[16]
[17] M.A.D. v. P.R., 277 N.W.2d 27, 29 (
[18]
480 N.W.2d 149, 151 (
[19] See id.
[20] The Respondent cites Whitfield v. Anheuser-Busch, Inc., 820 F.2d 243, 244-45 (8th Cir. 1987) for the proposition that the defense of laches may be asserted against government agencies. In Whitfield, the court held that a laches defense may be asserted against an individual plaintiff when the individual’s delay in filing suit was due in part to a ten-year delay by an administrative agency in issuing a right-to-sue letter.
[21]
[22] Clapp Aff. Ex. 3.
[23] Manual Part V; see also Minn. R. 5220.1806, subp. 5.
[24]
[25] Manual Part IX.
[26] Manual Part V.
[27] It appears the investigation began May 23, 2007 (Clapp. Aff. Ex. 15).
[28]
[29] Second Prehearing Order (July 9, 2007).
[30] Affidavit of John Richardson ¶ 6.
[31]