STATE OF FLORIDA

AGENCY FOR HEALTH CARE ADMINISTRATION

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION,

Petitioner,

V.

RISE AND SHINE ASSISTED LIVING FACILITY, LLC d/b/a RISE AND SHINE ASSISTED LIVING FACILITY,

DOAH CASE NO. 16-7558 AHCA NOS. 2016000434

2016003395

2016008245

RENDI1ION NO.: AHCA· { 3"000 Cf-FOF-OLC

Respondent.

                                                                      I RISE AND SHINE ASSISTED LIVING FACILITY, LLC d/b/a RISE AND SHINE ASSISTED LIVING FACILITY,

Petitioner,

V.

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION,

DOAH CASE NO. 17-2087 AHCA NO. 2017002198

FILE NO. 11968739

LICENSE NO. 12637 FACILITY TYPE: ASSISTED LIVING FACILITY

Respondent,

                                                                         I

FINAL ORDER

This cause was referred to the Division of Administrative Hearings where the assigned Administrative Law Judge (ALJ), Elizabeth W. McArthur, conducted a formal administrative hearing. The issues in these cases are whether the Agency for Health Care Administration ("AHCA" or "Agency") should discipline Rise and Shine Assisted Living Facility, LLC d/b/a Rise and Shine Assisted Living Facility ("Rise and Shine") for the statutory and rule violations alleged in the September 26, 2016 Administrative Complaint, and whether the Agency should renew the assisted living facility license held by Rise and Shine. The Recommended Order

Filed January 26, 2018 3:49 PM Division of Administrative Hearings

dated November 9, 2017, is attached to this Final Order and incorporated herein by reference,

except where noted infra.

RULING ON EXCEPTIONS

The both parties filed exceptions to the Recommended Order, and the Agency filed a response to Rise and Shine's exceptions.

In determining how to rule upon the parties' exceptions and whether to adopt the ALJ's Recommended Order in whole or in part, the Agency must follow section 120.57(1)(1), Florida Statutes, which provides:

The agency may adopt the recommended order as the final order of the agency. The agency in its final order may reject or modify the conclusions of law over which it has substantive jurisdiction and interpretation of administrative rules over which it has substantive jurisdiction. When rejecting or modifying such conclusion of law or interpretation of administrative rule, the agency must state with particularity its reasons for rejecting or modifying such conclusion of law or interpretation of administrative rule and must make a finding that its substituted conclusion of law or interpretation of administrative rule is as or more reasonable than that which was rejected or modified. Rejection or modification of conclusions of law may not form the basis for rejection or modification of findings of fact. The agency may not reject or modify the findings of fact unless the agency first determines from a review of the entire record, and states with particularity in the order, that the findings of fact were not based upon competent substantial evidence or that the proceedings on which the findings were based did not comply with essential requirements of law. The agency may accept the recommended penalty in a recommended order, but may not reduce or increase it without a review of the complete record and without stating with particularity its reasons therefor in the order, by citing to the record in justifying the action.

§ 120.57(1)(1), Fla. Stat. Additionally, "[t]he final order shall include an explicit ruling on each exception, but an agency need not rule on an exception that does not clearly identify the disputed portion of the recommended order by page number or paragraph, that does not identify the legal basis for the exception, or that does not include appropriate and specific citations to the record."

§ 120.57(1)(k), Fla. Stat. In accordance with these legal standards, the Agency makes the following rulings on the parties' exceptions:

Rise and Shine's Exceptions

In Exception No. 1, Rise and Shine takes exception to Paragraph 321 of the Recommended Order, arguing that it is an erroneous conclusion of law. Paragraph 32 of the Recommended Order contains a mixture of findings of fact and conclusions of law. To the extent it contains findings of fact, the findings of fact in Paragraph 32 of the Recommended

Order are based on competent, substantial record evidence. See Transcript, Volume I, Pages 81- 83; Transcript, Volume II, Page 235; Agency's Exhibit 2. Thus, the Agency cannot reject or

modify them. See§ 120.57(1)(/), Fla. Stat.; Heifetz v. Department of Business Regulation, 475 So. 2d 1277, 1281 (Fla. 1st DCA 1985) (holding that an agency "may not reject the hearing officer's finding [of fact] unless there is no competent, substantial evidence from which the finding could reasonably be inferred"). To the extent it contains conclusions of law, the Agency finds that, while it has substantive jurisdiction over the conclusions of law in Paragraph 32 of the Recommended Order because it is the state agency in charge of enforcing the rules and regulations governing assisted living facilities in Florida, it cannot substitute conclusions of law that are as or more reasonable than those of the ALJ. Therefore, the Agency denies Exception No. 1.

In Exception No. 2, Rise and Shine takes exception to Paragraph 127 of the

Recommended Order, argumg that the ALJ's interpretation of rule 58A-5.0l 9, Florida Administrative Code, is erroneous. The Agency finds that, while it has substantive jurisdiction

1 In Exception No. 1, Rise and Shine initially states that it is taking exception to Paragraph 17 of the Recommended Order. However, it then states that it is taking exception to Paragraph 32 of the Recommended Order, on Page 17. Since the substance of its argument is directed to Paragraph 32 of the Recommended Order, the Agency will address and rule on it as an exception to that paragraph, not Paragraph 17 of the Recommended Order.

over the conclusions of law in Paragraph 127 of the Recommended Order because it is the state agency in charge of enforcing the rules and regulations governing assisted living facilities in Florida, it cannot substitute conclusions of law that are as or more reasonable than those of the ALJ. Therefore, the Agency denies Exception No. 2.

In Exception No. 3, Rise and Shine takes exception to Paragraph 130 of the Recommended Order, arguing that the ALJ erred in concluding that Rania Azouki's written statement meant that Kathy Azouki acted as an administrator for more than 21 days. Paragraph 130 of the Recommended Order is a mixture of findings of fact and conclusions of law. To the extent it contains findings of fact, the findings of fact in Paragraph 130 of the Recommended Order are based on competent, substantial record evidence. See Transcript, Volume II, Pages 234-235; Agency Exhibit 11. Thus, the Agency is prohibited from rejecting or modifying them.

See§ 120.57(1)(/), Fla. Stat.; Heifetz. To the extent it contains conclusions of law, the Agency finds that, while it has substantive jurisdiction over the conclusions of law in Paragraph 130 of the Recommended Order because it is the state agency in charge of enforcing the rules and regulations governing assisted living facilities in Florida, it cannot substitute conclusions of law that are as or more reasonable than those of the ALJ. Therefore, the Agency denies Exception No. 3.

Agency's Exceptions

In its sole exception to the Recommended Order, The Agency takes exception to Paragraph 120 (and, by extension, to Paragraphs 114 and 151 and Endnote 7) of the Recommended Order, arguing that the ALJ improperly implied that the wrong burden of proof applied to the licensure renewal case, and thus did not comply with the essential requirements of law. Section 120.57(1 )(l), Florida Statutes, requires an agency to "first determine from a review

of the entire record, and state with particularity in the [final] order ... that the proceedings on which the findings [of fact] were based did not comply with essential requirements of law." Even though the phrase "did not comply with the essential requirements of law" is contained in the sentence regarding the rejection or modification of findings of fact, the Agency asserts failure to comply with the essential requirements of law is also a valid reason for the Agency to reject or modify the ALJ's incorrect determination of the burden of proof in a licensure case, which is a procedural issue that affects the findings of fact and proceedings as a whole, and is closely tied to the Agency's discretion to determine the fitness of licensure applications, pursuant to the Florida

Supreme Court's reasoning in Department of Children and Families v. Davis Family Day Care

Home, 160 So. 3d 854, 856-57 (Fla. 2015) and Department of Banking and Finance v. Osborne

Stem & Co., 670 So. 2d 932 (Fla. 1996).

As a licensee, Rise and Shine ultimately bears the burden in proving that it meets all the requirements for re-licensure, and any conclusion of law to the contrary is clear legal error. Any conclusion of law to the contrary also goes against the Florida Supreme Court's opinions in

Davis and Osborne Stem. In Davis, which re-affirmed the Osborne Stem case, the Court stated

that "[i]n Osborne Stem, this Court clarified that it is the nature of the agency's action and the

underlying rights implicated by the action that govern the applicable evidentiary standard." Id at 857. Thus, the Court found that "the Second District correctly recognized that '[t]he holding of

Osborne [Stem] was that the preponderance of the evidence burden of proof, not the clear and

convincing burden, is applicable to license application proceedings."' Id. The Florida Supreme

Court's reasoning in Davis and Osborne Stem applies with equal persuasiveness to both initial and renewal licensure denials. Indeed, as the First District Court of Appeal observed in Terrell

Oil Co. v. Department of Transportation, 541 So. 2d 713 (Fla. 1st DCA 1989), license renewal

proceedings are not penal because they do not have the effect of suspending or revoking a license. Id. at 715. There is "a qualitative difference between the type of order ... that denies renewal of a license that has expired or is about to expire and one which suspends or revokes an

active license." Id.

This same reasoning is also found in the case of Lauderhill Family Care Retirement

Residence, Inc. d/b/a Lauderhill Family Care Retirement v. Agency for Health Care

Administration, DOAH Case No. 14-0435 (AHCA 2014). In that case, the ALJ upheld the Agency's denial of an assisted living facility's licensure renewal application based on the fact that the facility failed to have a satisfactory biennial licensure survey, and the fact that the controlling interest of the facility was the controlling interest of a facility that had an unpaid fine and its license revoked. The facility argued that the Agency should have to prove the allegations that formed the basis of its denial by clear and convincing evidence, but the ALJ rejected this argument stating "[t]his is not a disciplinary proceeding to revoke the license of Petitioner. Rather, this proceeding is to determine whether Petitioner demonstrated by a preponderance of the evidence that it met the criteria applicable for re-licensure." See Endnote 5 of the Recommended Order. The ALJ concluded that "[a]s an applicant for a license, Petitioner bears the burden of proof in this proceeding to demonstrate by a preponderance of the evidence that it satisfied all the requirements for licensure and was entitled to receive the license." See Paragraph 45 of the Recommended Order.

In Endnote 7, the ALJ argues the Agency did not consider the reasoning in Coke v.

Department of Children and Family Services, 704 So. 2d 726 (Fla. 5th DCA 1998); and Dubin v.

Department of Business Regulation; 262 So. 2d 273 (Fla. 1st DCA 1972), when it changed the

conclusions of law in the Avalon case. However, the ALJ fails to acknowledge the Agency's

position in regard to these cases. As the Agency has stated previously, the Coke case has no

bearing on this matter because, in Coke, DCF "agree[d] that in this proceeding it had the burden of proving [Coke's] lack of entitlement to a renewal of her license and that the evidence needed to be clear and convincing." Here, the Agency did not call its January 17, 2017 Notice of Intent to Deny for the Assisted Living Facility Renewal Application an "administrative complaint," nor did the Agency agree that it bore the burden of proving the violations alleged in the January 17, 2017 Notice of Intent to Deny for Assisted Living Facility Renewal Application by clear and convincing evidence. Finally, the Dubin case is distinguishable from the case at hand because it concerned an agency's denial of a renewal application without first providing the applicant a

hearing, and because it relied on the case of Wilson v. Pest Control Commission, 199 So. 2d 777

(Fla. 5th DCA 1967), which is not in harmony with the Osborne Stem case or applicable law.

Had the ALJ followed Davis and Osborne Stem, the burden of proof would have remained with Rise and Shine to prove it met all requirements to have its license renewed by a preponderance of the evidence. § 120.57(1)(j), Fla. Stat. Though the outcome recommended by the ALJ will not change as a result, the Agency feels compelled to correct the ALJ's error in this regard in order to avoid confusion in future cases. Thus, upon review of the entire record and the

Davis and Osborne Stem cases, the Agency finds that the ALJ did not comply with the essential requirements of law when she used the incorrect burden of proof as reasoned in Paragraphs 114 and 120 of the Recommended Order, and as explicitly stated in Paragraph 151 of the Recommended Order. The Agency further finds that it has substantive jurisdiction over the conclusions of law in this paragraph because it is the single state agency responsible for the licensure and regulation of assisted living facilities in Florida, and that it can substitute conclusions of law that are as or more reasonable than those of the ALJ. Therefore, the Agency

grants its exception, rejects Paragraphs 114 and 120 and Endnote 7 of the Recommended Order in their entirety, and modifies Paragraph 151 of the Recommended Order as follows:

151. A.HCA met its burden of proof by clear and convincing evidence of Rise and Shine's past violations of the ALF licensure statutes and rules, including those charged in the Administrative Complaint, plus the additional deficiencies in surveys from June 2015 through April 2016 for ·.vhich fines ·.vere not soughtRise and Shine failed to prove by a preponderance of the evidence that it meets the requirements for re-licensure. Rise and Shine has shown a flagrant failure to adhere to ALF regulatory requirements. Being unaware of those requirements is an excuse that has worn thin; indeed, that is why the core training program and core competency test are in place. Denial of a renewal license is warranted under section 408.815(1)(c), Florida Statutes (AHCA may revoke or deny ALF licensure for violations of applicable statutes and rules).

FINDINGS OF FACT

The Agency adopts the findings of fact set forth in the Recommended Order.

CONCLUSIONS OF LAW

The Agency adopts the conclusions of law set forth in the Recommended Order, except

where noted supra.

ORDER

1. A $17,500 fine and $771.40 survey fee is hereby imposed on Rise and Shine; Rise and Shine's license is hereby revoked; and Rise and Shine's licensure renewal application is hereby denied.

2. In order to ensure the health, safety, and welfare of Rise and Shine's clients, the license expiration date is extended for 30 days for the sole purpose of allowing the safe and orderly discharge of clients. § 408.815(6), Fla. Stat. As a condition of this extension, Rise and Shine is prohibited from accepting any new admissions during this period and must immediately notify the clients that they will soon be discharged. Rise and Shine is subject to monitoring by

   the Agency and possibly third parties. The Agency may tenninate the 30-day extension or modify the conditions at any time. Rise and Shine must comply with all other applicable federal and state laws. At the conclusion of 30 days, or upon the discontinuance of operations, whichever is first in time, Rise and Shine shall promptly return the license certificate which is the subject of this agency action to the appropriate licensure unit in Tallahassee, Florida. Fla. Admin. Code R. 59A-35.040(5).

3. In accordance with Florida law, Rise and Shine is responsible for retaining and appropriately distributing all client records within the timeframes prescribed in the authorizing statutes and applicable administrative code provisions. Rise and Shine is advised of Section 408.810, Florida Statutes.

4. In accordance with Florida law, Rise and Shine is responsible for any refunds that may have to be made to the clients.

5. Rise and Shine is given notice of Florida law regarding unlicensed activity. It is advised of Section 408.804 and Section 408.812, Florida Statutes. Rise and Shine should also consult the applicable authorizing statutes and administrative code provisions. Rise and Shine is notified that the revocation of its registration may have ramifications potentially affecting accrediting, third party billing including but not limited to the Florida Medicaid program, and private contracts.

6. Unless payment has already been made, payment in the amount of $18,271.40 is now due from Rise and Shine. Such payment shall be made in full within 30 days of the filing of this Final Order unless other payment arrangements have been made. The payment shall be made by check payable to Agency for Health Care Administration, and shall be mailed to the Agency for Health Care Administration, Attn. Central Intake Unit, 2727 Mahan Drive, Mail Stop

61, Tallahassee, Florida 32308.

DONE AND ORDERED m Tallahassee, Florida, on this day of

- Jo. ·n_,

11ar_·_v    

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9'r

JUSTIN . SENI" , Secretary

AGENCY FOR HEALTH CARE ADMINISTRATION

NOTICE OF RIGHT TO JUDICIAL REVIEW

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW, WHICH SHALL BE INSTITUTED BY FILING THE ORIGINAL NOTICE OF APPEAL WITH THE AGENCY CLERK OF AHCA, AND A COPY, ALONG WITH THE FILING FEE PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF THE RENDITION OF THE ORDER TO BE REVIEWED.

CERTIFICATE OF SERVICE

I CERTIFY that a true and correct copy of this Final Order was served on the below-

named

persons by the method designated on this

Faay of

AGENCY FOR HEALTH CARE ADMINISTRATION

2727 Mahan Drive, MS #3

Tallahassee, Florida 32308

Telephone: (850) 412-3630

Copies furnished to:

NOTICE OF FLORIDA LAW

408.804 License required; display.--

1. It is unlawful to provide services that require licensure, or operate or maintain a provider that offers or provides services that require licensure, without first obtaining from the agency a license authorizing the provision of such services or the operation or maintenance of such provider.

   
   

2. A license must be displayed in a conspicuous place readily visible to clients who enter at the address that appears on the license and is valid only in the hands of the licensee to whom it is issued and may not be sold, assigned, or otherwise transferred, voluntarily or involuntarily. The license is valid only for the licensee, provider, and location for which the license is issued.

408.812 Unlicensed activity. --

1. ) A person or entity may not offer or advertise services that require licensure as defined by this part, authorizing statutes, or applicable rules to the public without obtaining a valid license from the agency. A licenseholder may not advertise or hold out to the public that he or she holds a license for other than that for which he or she actually holds the license.

   
   

2. The operation or maintenance of an unlicensed provider or the performance of any services that require licensure without proper licensure is a violation of this part and authorizing statutes. Unlicensed activity constitutes harm that materially affects the health, safety, and welfare of clients. The agency or any state attorney may, in addition to other remedies provided in this part, bring an action for an injunction to restrain such violation, or to enjoin the future operation or maintenance of the unlicensed provider or the performance of any services in violation of this

   part and authorizing statutes, until compliance with this part, authorizing statutes, and agency rules has been demonstrated to the satisfaction of the agency.

   
   

3. It is unlawful for any person or entity to own, operate, or maintain an unlicensed provider. If after receiving notification from the agency, such person or entity fails to cease operation and apply for a license under this part and authorizing statutes, the person or entity shall be subject to penalties as prescribed by authorizing statutes and applicable rules. Each day of continued operation is a separate offense.

   
   

4. Any person or entity that fails to cease operation after agency notification may be fined

   
   

   $1,000 for each day of noncompliance.

   
   

5. When a controlling interest or licensee has an interest in more than one provider and fails to license a provider rendering services that require licensure, the agency may revoke all licenses and impose actions under s. 408.814 and a fine of $1,000 per day, unless otherwise specified by authorizing statutes, against each licensee until such time as the appropriate license is obtained for the unlicensed operation.

   
   

6. In addition to granting injunctive relief pursuant to subsection (2), if the agency determines that a person or entity is operating or maintaining a provider without obtaining a license and determines that a condition exists that poses a threat to the health, safety, or welfare of a client of the provider, the person or entity is subject to the same actions and fines imposed against a licensee as specified in this part, authorizing statutes, and agency rules.

   
   

7. Any person aware of the operation of an unlicensed provider must report that provider to the agency.

Docket for Case No: 17-002087

Orders for Case No: 17-002087