Waterman Convalescent Hospital, Inc. v. State Department of Health Services

Opinion

Plaintiff Waterman Convalescent Hospital, Inc. (Waterman) appeals from a judgment of dismissal entered against it after defendant State Department of Health Services’ (DHS) demurrer to the first amended complaint was sustained without leave to amend. The trial court found that Waterman’s action was barred by the statute of limitations set forth in Health

The operative first amended complaint was filed on December 14, 2000. Waterman alleged that the citation was both procedurally and substantively defective, and therefore must be dismissed. It also alleged that it was excused from pursuing its optional administrative remedy (the CRC) on the grounds that it would be fiitile and would cause irreparable injury, and because DHS unreasonably delayed in conducting the hearing. DHS again demurred on the basis of the statute of limitations. Waterman’s request to file additional briefing was granted and the demurrer was set for hearing on March 15, 2001. On March 20, 2001, the decision was issued sustaining the demurrer without leave to amend based upon the expiration of the statute of limitations. The case was dismissed, pursuant to DHS’s motion, on April 23, 2001. This appeal followed.

Discussion

The question that we must consider is whether Waterman’s action is barred by the statute of limitations in section 1428, subdivisions (a) and (b). To do so, we must interpret the statute, an action that we undertake de novo. (Catalina Investments, Inc. v. Jones (2002) 98 Cal.App.4th 1 , 6 [ 119 Cal.Rptr.2d 256 ].) Section 1428, subdivision (a) provides, “If the licensee desires to contest a citation or the proposed assessment of a civil penalty therefor, the licensee shall use the processes described in subdivisions (b) and (c) for classes ‘AA,’ ‘A,’ or ‘B’ citations. . . .” Subdivision (b) then states, “[i]f a licensee notifies the director that he or she intends to contest a class ‘AA’ or a class ‘A’ citation, the licensee may first, within 15 business days after service of the citation, notify the director in writing of his or her request for a citation review conference. The licensee shall inform the director in writing, within 15 business days of the service of the citation or the receipt of the decision of the director’s designee after the citation review conference, of the licensee’s intent to adjudicate the validity of the citation in the municipal or superior court in the county in which the long-term

This statute is not a model of clarity. Thus, we resort to long-held rules of statutory construction. “ ‘The fundamental purpose of statutory construction is to ascertain the intent of the lawmakers so as to effectuate the purpose of the law. [Citations.] In order to determine this intent, we begin by examining the language of the statute. [Citations.] . . . [However,] “language of a statute should not be given a literal meaning if doing so would result in absurd consequences which the Legislature did not intend.” [Citations.] Thus, “[t]he intent prevails over the letter, and the letter will, if possible, be so read as to conform to the spirit of the act.” [Citation.] . . . [Nor do we] construe statutes in isolation, but rather read every statute “with reference to the entire scheme of law of which it is part so that the whole may be harmonized and retain effectiveness.” [Citation.]’ [Citation.] We must also consider ‘the object to be achieved and the evil to be prevented by the legislation. [Citations.]’ [Citation.]” (Horwich v. Superior Court (1999) 21 Cal.4th 272 , 276 [ 87 Cal.Rptr.2d 222 , 980 P.2d 927 ].)

In its distilled form, section 1428 provides a facility charged with a class “A” violation with a choice. The facility must inform the director of its intent to contest the citation. It may first, within 15 business days of service of the citation, request a CRC. It can also, within 15 business days of service of the citation, inform the director of its intent to adjudicate the validity of the citation in the trial court. If it chooses the second option, the action shall be filed within 90 calendar days after the director was notified of the intent to contest. If, however, it chooses the first option, it may still file a court action. Subdivisions (a) and (b) both provide that if, after receipt of the CRC decision, a facility desires to contest the action in court, it must so notify the director. This notice must be within 15 business days after receipt of the CRC decision. The action must then be filed within 90 days after receipt of the CRC decision.

The statute does not deal expressly with the problem that we encounter here; to wit: What is the time limit for filing an action when a CRC has been

When a statute is silent on a point, the courts resort to statutory interpretation, the rules concerning which have already been set out. (See, e.g., Lakin v. Watkins Associated Industries (1993) 6 Cal.4th 644 , 663 [ 25 Cal.Rptr.2d 109 , 863 P.2d 179 ].) Our mandate is to determine legislative intent consistent with enforcing the purpose of the law. One of the express purposes of the Act is the prompt issuance of civil sanctions against facilities that violate health and safety regulations. (§ 1417.1.) Since sanctions may be avoided until a citation contest is terminated in favor of the state agency (§ 1428, subd. (e)), it follows that an express goal of the Act is the prompt resolution of citation contests.

The relatively short time periods for the completion of all actions related to enforcement of the Act also speak to the Legislature’s intent to ensure quick action. For example, from the time he or she learns that an alleged violation has occurred, the director has only 24 hours to issue to a facility a notice of correction and intent to issue a citation. (§ 1423, subd. (a).) Any citation must be served upon the facility within three days of the inspection, unless the facility authorizes an extension of time in writing. (Ibid.) The facility must notify the director of the intent to contest a citation within 15 business days of its initial issuance or affirmation after a CRC. (§ 1428, subds. (a)-(c).) Suit must be filed within 90 days of notice to the director and served within 90 days of filing. (Ibid.) These are comparatively very short time periods. (See, e.g., generally, Code Civ. Proc., §§ 315-349¾, 583.210, subd. (a).) If no at-issue memorandum is filed within six months of the DBS’s answer, a court action is subject to dismissal. (Health & Saf. Code, § 1428, subd. (b).) Actions under section 1428 are to “be set for trial at the earliest possible date and shall take precedence on the court calendar over all other cases .... Times for responsive pleading and for hearing the proceeding shall be set. . . with the object of securing a decision as to subject matters at the earliest possible time.” (§ 1428, subd. (j).)

These time limits demonstrate the legislative purpose of collecting penalties and correcting violations quickly. Prompt resolution of alleged violations is critical to the DHS when the facility is in violation, and critical to the facility when it is not. In the first instance, prompt adjudication promotes

Further, interpreting the statute as we do is entirely consistent with the doctrine of equitable tolling. The purpose of that doctrine is to soften the harsh impact of a technical application of a statute of limitations that might otherwise prevent a good faith litigant from obtaining a trial on the merits. (Addison v. State of California (1978) 21 Cal.3d 313 , 316 [ 146 Cal.Rptr. 224 , 578 P.2d 941 ].) The application of the doctrine “requires timely notice, and lack of prejudice, to the defendant, and reasonable and good faith conduct on the part of the plaintiff.” (Id. at p. 319.) These elements are present here, as has been demonstrated in analogous cases. For example, in Myers v. County of Orange (1970) 6 Cal.App.3d 626 [ 86 Cal.Rptr. 198 ], the plaintiff had the same two options as did Waterman. She could sue immediately in court, or she could pursue an administrative remedy. It was assumed there, as here, that the administrative remedy was not a prerequisite to filing the action in court. (Id. at p. 634.) In spite of the defendant’s argument to the contrary, the appellate court held that the limitations period on the judicial action was tolled while the plaintiff was pursuing the administrative remedy. (Id. at pp. 634-637.) In the instant action, the statute of limitations on the judicial remedy would have been tolled so long as Waterman was, in good faith, pursuing its administrative remedy, a CRC. The doctrine of equitable tolling therefore supports our interpretation of section 1428.

Disposition

The judgment is reversed. Plaintiff to recover its costs on appeal.

Hollenhorst, J., and Richli J., concurred.