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03/25/94 COJEUNAZE NURSING CENTER v. JOHN R.

March 25, 1994

COJEUNAZE NURSING CENTER, AN ILLINOIS PARTNERSHIP AND ILLINOIS LICENSED NURSING HOME, PLAINTIFF-APPELLANT,
v.
JOHN R. LUMPKIN, M.D., DIRECTOR OF THE ILLINOIS DEPARTMENT OF PUBLIC HEALTH, AND THE ILLINOIS DEPARTMENT OF PUBLIC HEALTH, DEFENDANTS-APPELLEES.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE THOMAS J. O'BRIEN, JUDGE PRESIDING.

Released for Publication May 5, 1994.

Murray, Gordon, Cousins, Jr.

The opinion of the court was delivered by: Murray

PRESIDING JUSTICE MURRAY delivered the opinion of the court:

Plaintiff, Cojeunaze Nursing Center (Cojeunaze), appeals from an order of the trial court affirming the final decision and order of John R. Lumpkin (Lumpkin), Director of the Illinois Department of Public Health (IDPH), revoking Cojeunaze's nursing home license.

The relevant facts are as follows.

Cojeunaze is a 200-bed skilled nursing and intermediate care/long-term care facility, licensed by the IDPH. In May 1990 Dr. Yvon Nazon was convicted of 17 counts of medicaid fraud in connectionwith his submission of false claims seeking payment for services not performed in the State of Indiana. See United States v. Nazon (7th Cir. 1991), 940 F.2d 255.

On February 19, 1991, the IDPH sent a letter to Dr. Nazon, requesting that he divest himself of his 70% ownership interest in Cojeunaze by April 19, 1991, due to his fraud conviction. The notice informed Dr. Nazon that the transferee could not be an affiliate as defined in section 1-106 of the Nursing Home Care Act (NHCA). (See 210 ILCS 45/1--106 (West 1992).) Dr. Nazon was given 90 days to effectuate the transfer and was notified that his failure to comply with the IDPH's request would result in the issuance of license revocation. In March 1991 the IDPH notified Dr. Nazon's attorney that, although the IDPH was authorized to proceed with the revocation of Dr. Nazon's license, it was willing to allow Dr. Nazon time to find a buyer or transferee who was not his affiliate, but that the IDPH would proceed with the license revocation action if the change was not effectuated by April 19, 1991.

On or about April 15, 1991, the IDPH received documents which indicated the transfer of Dr. Nazon's 70% ownership interest from Yvon Nazon to Faye H. Nazon, Cojeunaze administrator and the spouse of Dr. Nazon. *fn1

On May 13, 1991, the IDPH revoked Cojeunaze's nursing home license on the basis of Dr. Nazon's conviction. Said revocation was to take effect on June 1, 1991. Pursuant to section 3-119(3)(c) of the NHCA, Cojeunaze requested a hearing to contest the revocation. 210 ILCS 45/3--119(3)(c) (West 1992).

At the administrative hearing, the IDPH presented a motion for summary judgment arguing that Faye Nazon could not be the transferee of Dr. Nazon's ownership interest since the NHCA's definition of affiliate includes a person in the first degree of kinship and that a spouse was included in the definition. The hearing officer issued a report and recommendation finding that the IDPH's motion for summary judgment should be granted, since, as a matter of law, the spouse of an individual person is an affiliate of that individual as defined by the NHCA. The hearing officer stated that "to find otherwise would go against the intent of the Act and the legislature and would lead to absurd and ridiculous results." On October 15, 1991, Lumpkin issued a final decision and order adopting the reportand recommendation of the hearing officer and revoking Cojeunaze's nursing home license.

Pursuant to the Administrative Review Act, Cojeunaze filed its complaint objecting to the revocation of its license. (735 ILCS 45/3--104 (West 1992); see also 210 ILCS 45/3--318 (West 1992).) The complaint alleged, inter alia, error on the part of Lumpkin and the IDPH in finding that Faye H. Nazon was an "affiliate" of Yvon Nazon as defined by section 1-106 of the NHCA. See 210 ILCS 45/1--106 (West 1992).

After hearing oral argument by respective counsel, the trial court issued a written memorandum of opinion, stating that "the dispositive issue before this Court is whether the legislature, by narrowly defining an 'affiliate' as a person related in the first degree of kinship, intended to exclude a person's spouse from the reach of the license revocation provision * * *." The trial court affirmed the final decision and order of the IDPH, reasoning that:

"To hold that a spouse is not an 'affiliate' would contravene the obvious legislative intent of preventing unqualified individuals from operating nursing homes. Familial affiliation with a prior licensee who has been convicted of numerous criminal offenses and who is no longer permitted to hold an operating license ...


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