STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

EXECUTIVE I & II, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 92-3891

)

AGENCY FOR HEALTH CARE )

ADMINISTRATION, )

)

Respondent. )

)

RECOMMENDED ORDER

On September 23, 1992, a formal administrative hearing was held in this case in St. Petersburg, Florida, before J. Lawrence Johnston, Hearing Officer, Division of Administrative Hearings.

APPEARANCES

For Petitioner: Thomas W. Caufman, Esquire

Agency for Health Care Administration Office of Licensure and Certification 7827 North Dale Mabry Highway

Tampa, Florida 33614

For Respondent: Paul W. Hitchens, Esquire

6464 First Avenue North

St. Petersburg, Florida 33710 STATEMENT OF THE ISSUE

The issue in this case is whether the Agency for Health Care Administration (AHCA) should grant the application of the Petitioner, Executive I & II, Inc., for licensure to operate as an adult congregate living facility (ACLF).

PRELIMINARY STATEMENT

The record in this case reflects that, on May 15, 1992, the Department of Health and Rehabilitative Services (HRS) 1/ sent a letter to the Petitioner, Executive I & II, Inc., denying its application for licensure to operate as an ACLF:

pursuant to the Department's Final Order No. 90-3356 and 90-3791 filed on February 25, 1991. You appealed this Final Order to the Second District Court of Appeals . . ..

The Second District Court of Appeals by Mandate dated on January 2, 1992 upheld the

Final Order. These circumstances constitute grounds for the Department to deny your application pursuant to Section 400.414(3). 2/

The applicant requested formal administrative proceedings under Section 120.57(1), Fla. Stat. (1991), and HRS referred the matter to the Division of Administrative Hearings on June 25, 1992. Subsequently, the AHCA was substituted for HRS as the Respondent in the case. 3/

Final hearing was scheduled for September 23, 1992, in St. Petersburg. At final hearing, the AHCA added Section 400.414(2)(b) as a ground for denial of the Petitioner's application. The owner of the applicant corporation testified in the Petitioner's case-in-chief, and Petitioner's Exhibits 1 through 5 were admitted in evidence. In addition, at the Petitioner's request, official recognition was taken of excerpts from the final hearing in DOAH Case Nos. 90- 3356 and 90-3791. The AHCA had official recognition taken of the Final Order and Recommended Order in DOAH Case Nos. 90-3356 and 90-3791 and portions of the record of the proceedings on the appeal of the Final Order to the District Court of Appeal, Second District of Florida, in Case No. 91-00751, including the per curiam affirmance and the court's mandate. Otherwise, the AHCA did not introduce any evidence. 4/

Neither party ordered the preparation of a transcript of the final hearing, and the parties were given ten days to file proposed recommended orders.

Explicit rulings on the proposed findings of fact contained in the parties' proposed recommended orders may be found in the attached Appendix to Recommended Order, Case No. 92-3891.

FINDINGS OF FACT

1. Some time before May 15, 1992, the Petitioner, Executive I & II, Inc., applied for licensure to operate as an adult congregate living facility (ACLF). (It had been, and is still, operating as a licensed boarding home.) The exact date of the application, or how long before May 15, 1992, the application was made, is not clear from the evidence.

   
   

2. The facility operated by the Petitioner is the same facility that was the subject of Division of Administrative Hearings (DOAH) Case Nos. 90-3356 and 90-3791. Before and during the pendency of those proceedings, the facility was owned and operated by Kriscour, Inc., d/b/a Executive I & II. Kriscour, Inc., is a separate legal entity from the Petitioner. The sole owner and operator of the Petitioner was the sole owner and operator of Kriscour, Inc., until October 10, 1989, when he became a 49% owner of Kriscour and ceased all involvement in the operation of the facility. Throughout, however, he owned the real property operated by Kriscour and by the Petitioner.

   
   

3. In DOAH Case No. 90-3356, HRS sought to revoke Kriscour's conditional ACLF license. While it was pending, Kriscour applied for renewal of the license, and HRS denied renewal. Kriscour initiated formal administrative proceedings, which became DOAH Case No. 90-3791. The two cases were consolidated at DOAH. Ultimately, they resulted in an HRS Final Order denying the renewal application and "cancelling" the conditional license.

   
   

4. Kriscour appealed the Final Order to the District Court of Appeal, Second District of Florida, where it was given Case No. 91-00751. Kriscour obtained a stay of the Final Order and continued to operate the facility as an ACLF during the appellate proceedings.

5. Meanwhile, on or about November 26, 1991, the Petitioner, Executive I & II, Inc., was formed and became licensed to operate the facility as a boarding home. The Petitioner made extensive renovations and improvements to the physical plant. At the same time, Kriscour continued to operate the facility as an ACLF.

   
   

6. Ultimately, the appellate court upheld the Final Order. The court's Mandate, which operated to dissolve the stay, was entered on January 2, 1992. On or about that date, Kriscour ceased to operate the facility as an ACLF and began operating the facility as a boarding home. To date, the Petitioner has operated the facility exclusively as a boarding home.

   
   

   CONCLUSIONS OF LAW

   
   

7. Section 400.414, Fla. Stat. (1991), relating to ACLFs, states in pertinent part:

   
   

   1. The [AHCA] 5/ may deny . . . a license

      . . . in the manner provided in chapter 120. At the chapter 120 hearing, the [AHCA] shall prove by a preponderance of the evidence that its actions are warranted.

      
      

   2. Any of the following actions by a facility or its employee shall be grounds for action by the [AHCA] against a licensee:

      * * *

      (b) The determination by the [AHCA] that the facility owner or administrator is not of suitable character and competency, or that the owner lacks the financial ability, to

      provide continuing adequate care to residents, pursuant to the information obtained through s. 400.411, s. 400.417, or s. 400.434.

      * * *

   3. In addition to the reasons in subsection (2), the [AHCA] may deny a license to an applicant who owns or operates a facility which, during the 12 months prior to the application for a license, has had a license revoked pursuant to subsection (2), had a moratorium imposed on admissions, had injunction proceedings initiated against it, or had a receiver appointed.

      
      

8. The evidence in this case is clear that DOAH Case No. 90-3356 was a license revocation case and that DOAH Case No. 90-3791 was a subsequent license renewal denial case, in which the denial was based on the same facts on which HRS was seeking to revoke the license held by Kriscour, Inc., in Case No. 90- 3356. The two cases were consolidated and resulted in a Final Order under which Kriscour, Inc.'s conditional ACLF license was "cancelled," and its application to renew the license was denied, resulting in delicensure of the facility. It is concluded that, under these circumstances, the Kriscour license was "revoked," as that term is used in Section 400.414(3), Fla. Stat. (1991). See Black's Law Dictionary (5th Ed. 1979)("revoke" means, among other things, "to cancel.") See also Vocelle v. Riddell, 119 So. 2d 809 (Fla. 2d DCA 1960)(when a

   regulatory agency denies renewal of a license renewable as of right upon payment of applicable fees and completion of other ministerial requirements, the agency has the burden of proving the grounds for denial, just as if the agency were prosecuting a license revocation).

   
   

9. The evidence in this case is clear that, as a result of the appeal taken in DOAH Case Nos. 90-3356 and 90-3791, the Final Order revoking Kriscour's license was stayed pending appellate proceedings. It is concluded that, for purposes of Section 400.414(3), Fla. Stat. (1991), the revocation did not take effect until January 2, 1992, that date of the Mandate by the appellate court.

   
   

10. It is true that, under the facts of this case, the prior licensee was a separate legal entity from the applicant in this case. But, nonetheless, it is concluded that, "during the 12 months prior to the application for a license," "the facility" which the Petitioner "owns or operates" "has had a license revoked pursuant to subsection (2)" of Section 400.414, Fla. Stat. (1991). (Emphasis added.) Although improvements were made to the facility's physical plant, the facility being operated by the Petitioner remains the same facility that had its license revoked, effective January 2, 1992. It is concluded that, under Section 400.414(3), these circumstances constitute a ground for, and "warrant," denial of the Petitioner's application for licensure in this case.

    
    

11. In light of the foregoing Conclusions of Law, it is not necessary to find or conclude whether the Petitioner's application should be denied under Section 400.414(2)(b), Fla. Stat. (1991).

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Agency for Health Care Administration enter a final order denying the application of the Petitioner, Executive I & II, Inc., for licensure to operate as an ACLF.

RECOMMENDED this 21st day of October, 1992, in Tallahassee, Florida.

J. LAWRENCE JOHNSTON Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 21st day of October, 1992.

ENDNOTES

1/ By Chapter 92-33, Laws of Florida (1992), the AHCA was created, and by Chapter 92-58, Laws of Florida (1992), parts of HRS' functions, including

responsibility for licensure of ACLFs, were transferred to the AHCA. These changes generally were effective July 1, 1992.

2/ At final hearing, the AHCA added Section 400.414(2)(b) as a ground for denial. See below in Preliminary Statement.

3/ See footnote 1, above.

4/ The parties were advised that official recognition only would be taken of documents, or portions of them, filed at the Division of Administrative Hearings after the hearing. In accordance with this procedure, both parties filed specific documents for official recognition.

5/ Section 400.414, Fla. Stat. (1991), actually refers to "the department," meaning the Department of Health and Rehabilitative Services (HRS), but these functions have been transferred to the AHCA under Chapters 92-33 and 92-58, Laws of Florida (1992). See footnote 1, above.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-3891

To comply with the requirements of Section 120.59(2), Fla. Stat. (1991), the following rulings are made on the parties' proposed findings of fact:

Petitioner's Proposed Findings of Fact.

1.-6. Accepted and incorporated to the extent not subordinate or unnecessary.

1. Rejected as a mixed question of fact and law, and as contrary to facts found.

2. Accepted but unnecessary.

Respondent's Proposed Findings of Fact.

1. The precise date is rejected as not supported by any evidence in the record. Otherwise, accepted and incorporated.

2.-11. Accepted and incorporated to the extent not subordinate or unnecessary.

12. Rejected in part in that he testified to being a shareholder, not that he "owned" the company, which implies 100 percent ownership. Otherwise, accepted but subordinate to facts found.

13.-20. Accepted and incorporated to the extent not subordinate or unnecessary.

1. Rejected as contrary to the evidence.

2. Accepted but subordinate and unnecessary.

3. Rejected as contrary to the evidence.

COPIES FURNISHED:

Paul W. Hitchens, Esquire 6464 First Avenue North

St. Petersburg, Florida 33710

Thomas W. Caufman, Esquire

Agency for Health Care Administration Office of Licensure and Certification 7827 North Dale Mabry Highway

Tampa, Florida 33614

R. S. Power, Esquire Acting Agency Clerk

Agency for Health Care Administration 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

ALL PARTIES HAVE THE RIGHT TO SUBMIT TO THE AGENCY FOR HEALTH CARE ADMINISTRATION WRITTEN EXCEPTIONS TO THIS RECOMMENDED ORDER. ALL AGENCIES ALLOW EACH PARTY AT LEAST TEN DAYS IN WHICH TO SUBMIT WRITTEN EXCEPTIONS. SOME AGENCIES ALLOW A LARGER PERIOD WITHIN WHICH TO SUBMIT WRITTEN EXCEPTIONS. YOU SHOULD CONSULT WITH THE AGENCY FOR HEALTH CARE ADMINISTRATION CONCERNING ITS RULES ON THE DEADLINE FOR FILING EXCEPTIONS TO THIS RECOMMENDED ORDER.

Docket for Case No: 92-003891

Orders for Case No: 92-003891