08-006055 Agency For Health Care Administration vs. South Dade Elderly Care Corporation, D/B/A Home Sweet Home No. 2 Status: Closed Recommended Order on Monday, May 3, 2010.

Summary: Petitioner demonstrated that Respondent continued to conduct business after corporation dissolved; failed to notify of a CHOW 60 days prior to the CHOW; and failed to maintain continuous liability insurance coverage. Recommend revocation of license.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AGENCY FOR HEALTH CARE )

ADMINISTRATION, )

)

Petitioner, ) Case No. 08-6055

)

vs. )

)

SOUTH DADE ELDERLY CARE )

CORPORATION, d/b/a HOME SWEET )

HOME NO. 2, )

)

Respondent. )

________________________________)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case

on February 8, 2010, by video teleconference with connecting

sites in Miami and Tallahassee, Florida, before Errol H. Powell,

an Administrative Law Judge of the Division of Administrative

Hearings.

APPEARANCES

For Petitioner: Tria Lawton-Russell, Esquire

Agency for Health Care Administration

Spokane Building, Suite 103

8350 Northwest 52nd Terrace

Miami, Florida 33166

For Respondent: Lawrence E. Besser, Esquire

Samek and Besser

1200 Brickell Avenue, No. 1950

Miami, Florida 33131

STATEMENT OF THE ISSUE

The issue for determination is whether Respondent committed

the offenses set forth in the Amended Administrative Complaint

and, if so, what action should be taken.

PRELIMINARY STATEMENT

The Agency for Health Care Administration (AHCA) issued a

two-count Administrative Complaint on November 3, 2008, against

South Dade Elderly Care Corporation (South Dade), d/b/a Home

Sweet Home No. 2 (HSH No. 2): Count I—failing to maintain

liability insurance in violation of Sections 408.810(7),

429.275(3), and 624.605, Florida Statutes (2007), and Florida

Administrative Code Rule 58A-5.021(8); and Count II—failing to

notify AHCA that a change of ownership (CHOW) had taken place in

violation of Sections 408.803(5), 408.831 (1), 408.804(1),

408.806(2)(b), 408.807, and 429.12, Florida Statutes (2007), and

Florida Administrative Code Rule 58A-5.014(2). South Dade

disputed the allegations of fact and requested a hearing. This

matter was referred to the Division of Administrative Hearings on

December 8, 2008.

The final hearing was scheduled on a date agreed to by the

parties. Subsequently, the hearing was continued. Discovery

issues ensued. South Dade filed a motion to dismiss, which was

denied. AHCA also filed a motion to dismiss, which was denied.

On November 24, 2009, AHCA was granted leave to amend the

Administrative Complaint. By the Amended Administrative

Complaint, AHCA charged South Dade with four-counts: Count I—

failing to maintain liability insurance in violation of Sections

Florida Administrative Code Rule 58A-5.021(8); Count II— failing

to notify AHCA that a change of ownership (CHOW) had taken place

408.807, and 429.12, Florida Statutes (2008), and Florida

Administrative Code Rule 58A-5.014(2); Count III—South Dade was a

dissolved corporation, which may not carry-on any business, but

continued to engage in business, in violation of Sections

607.1405(1) and 607.1622(1), Florida Statutes (2008); and Count

IV—failing to pay all outstanding fine amounts that were assessed

by Final Order by AHCA, not subject to further appeal, in

violation of Section 408.831(1), Florida Statutes (2008).

Subsequently, AHCA filed an amended motion to compel, which

was granted. This matter was re-scheduled for final hearing. By

Order, sanctions were imposed upon South Dade for failure to

provide discovery pursuant to an order issued by the undersigned.

Also, AHCA requested that jurisdiction be relinquished, which was

denied.

At hearing, AHCA represented that it was not pursuing Count

IV of the Amended Administrative Complaint. Further, at hearing,

AHCA presented the testimony of one witness and entered 11

exhibits (Petitioner’s Exhibits numbered 1-11) into evidence,

with Exhibit No. 11 being deposition testimony. South Dade

presented the testimony of one witness and entered no exhibits

into evidence. Additionally, at hearing, South Dade moved to

dismiss Count I of the Amended Administrative Complaint, which

was denied.

A transcript of the hearing was ordered. At the request of

the parties, the time for filing post-hearing submissions was set

for more than ten days following the filing of the transcript.

The Transcript, consisting of one volume, was filed on March 2,

2010. An extension of time was requested by the parties to file

their post-hearing submissions, which was granted. The parties

timely filed their post-hearing submissions, which have been

considered in the preparation of this Recommended Order.

FINDINGS OF FACT

1. HSH No. 2 is a six-bed assisted living facility. It

provides services to individuals with mental deficits and/or

psychiatric issues. HSH No. 2 is located at 20700 Southwest

122nd Avenue, Miami, Florida.

2. After a settlement agreement with AHCA, South Dade was

allowed to submit a CHOW to purchase HSH No. 2 from the prior

owner.

3. South Dade became the legal owner of HSH No. 2 on

December 28, 2005.

4. Prior to obtaining initial licensure from AHCA, South

Dade was required to provide AHCA with proof of liability

insurance.

5. Liability insurance coverage is for the protection of

residents at the assisted living facility in case of injury or

death. Without liability insurance, a resident injured at a

facility would have no recourse if he/she was harmed or injured

in any way.

6. AHCA, not the facility, is listed on each facility’s

certificate of insurance as the certificate holder.

Additionally, the address of AHCA’s licensure department is

listed on each facility’s certificate of insurance in order that

AHCA will be notified in the instance of a lapse of insurance

coverage.

7. South Dade provided proof of liability insurance to AHCA

on October 17, 2005, for the period of September 23, 2005,

through September 23, 2006. South Dade obtained the liability

coverage from an insurance company in Miami, Florida.

8. Having obtained liability insurance and having provided

proof of liability insurance, South Dade obtained licensure from

AHCA.

9. South Dade was eventually issued a standard biennial

license by AHCA for the period of December 28, 2007, through

December 27, 2009. South Dade was the licensee.

10. On September 4, 2007, South Dade, as a corporation, was

administratively dissolved due to its failure to file its annual

report as required by law. At the time, South Dade was 100

percent owned by Larazo Martinez. South Dade does not dispute

that Mr. Martinez allowed the dissolution of South Dade in order

for Natalie Egea, who had recently become HSH No. 2’s

administrator, to gain ownership of HSH No. 2. 1

11. South Dade continued to carry-on business, as HSH No.2,

even though it (South Dade) was administratively dissolved.

12. South Dade’s corporate status was reinstated on May 11,

2009, over two years after its dissolution. Mr. Martinez was

listed as the only officer, i.e., president.

13. Instead of applying for a CHOW to begin the process of

new ownership of HSH No. 2, an application for renewal of the

license was submitted to AHCA.

14. An application for licensure renewal was filed on

November 13, 2007, with AHCA. Only South Dade, as the licensee,

could apply for renewal of the license.

15. Ms. Egea completed the application for the licensure

renewal. She listed Mr. Martinez, the individual, as the owner

of HSH No. 2, not South Dade, the corporation. Furthermore, she

indicated that the applicant was an individual, not a

corporation.

16. Ms. Egea was aware that there was a difference between

South Dade, the corporation, and Mr. Martinez, the individual,

owning HSH No. 2. 2

17. After receiving the renewal application, AHCA sent a

letter dated December 6, 2007, by certified mail, return receipt,

to Ms. Egea, as the administrator of HSH No. 2, advising her,

among other things, that the application omitted several

documents and was, therefore, incomplete; that the liability

insurance for HSH No. 2 had expired; and that proof of current

liability insurance coverage needed to be provided. Further, the

letter advised Ms. Egea that, in several items on one of the

forms, she listed herself as the owner of the facility, but, on

another document, she listed Mr. Martinez as the owner of the

facility and listed herself as the administrator.

18. By letter dated December 20, 2007, Ms. Egea responded

to AHCA’s letter dated December 6, 2007, and, among other things,

provided the omitted documents and corrected the documents

referring to the owner of HSH No. 2 to reflect Mr. Martinez as

the owner. Furthermore, Ms. Egea advised AHCA that the facility

was having difficulty in obtaining liability insurance coverage.

19. The evidence demonstrates that, when Ms. Egea filed the

renewal application, the intent in the application process was to

change the ownership of HSH No. 2 to Mr. Martinez, and,

eventually, to herself. Further, the evidence demonstrates that

Ms. Egea considered Mr. Martinez as owning HSH No. 2, even though

AHCA’s licensure documents showed South Dade as owning HSH No. 2

and as the licensee.

20. AHCA issued South Dade a conditional license for the

period December 28, 2007, through February 27, 2008, pending

proof of liability insurance coverage.

21. Through the issuance of a license to an assisted living

facility, AHCA is guaranteeing to the public that that facility

is in compliance with all the requirements set by AHCA. But

through the issuance of a conditional license, AHCA is putting

the public on notice that there are outstanding conditions of

licensure that the facility has not met.

22. Even though AHCA renewed the license in the name of

South Dade, the application should have been considered a CHOW.

AHCA mistakenly treated the application as a renewal, instead of

a CHOW. The renewal application was in actuality an application

for licensure by an individual, not previously licensed by AHCA.

As a result, the application was a CHOW, not a renewal

application for licensure.

23. When a facility’s liability insurance coverage expires,

the facility is required to provide AHCA with proof of a renewal

policy or proof of a new policy.

24. At the expiration of its liability insurance on

September 23, 2006, South Dade was unable to immediately renew

its liability insurance or obtain new liability insurance from

companies in Miami. South Dade blamed the recent hurricanes in

the South Florida area as causing insurance companies to become

reluctant to issue new liability insurance policies. However,

AHCA was the agency licensing and renewing the licensure of

assisted living facilities in the entire State of Florida; but

AHCA was not aware of any other assisted living facilities in the

South Florida area having such difficulty. The undersigned does

not find the reason put forth by South Dade for the difficulty in

obtaining liability insurance coverage as a plausible reason.

25. AHCA sent a notice of violation (NOV) dated December 4,

2007, by certified mail, return receipt, to Ms. Egea, as the

administrator, for the lapse of liability insurance coverage.

The NOV, among other things, requested proof of current liability

insurance within ten days and indicated, among other things, that

the failure to comply could result in an administrative

proceeding to revoke the license or deny licensure.

26. AHCA’s interpretation of the ten-day period is the

maximum amount of time that a facility has to provide evidence to

AHCA that it has current liability insurance and that there has

not been a lapse and, therefore, no violation. AHCA’s

interpretation is found to be reasonable.

27. South Dade failed to provide proof of insurance within

the ten-day period or during the month of December 2007.

28. A second NOV dated January 2, 2008, was sent by

certified mail, return receipt, to Ms. Egea, as the

administrator, for the failure to have liability insurance

coverage. The second NOV also requested proof of current

liability insurance within ten days and indicated, among other

things, that the failure to comply could result in an

administrative proceeding to revoke the license or deny

licensure.

29. South Dade was finally able to obtain liability

insurance coverage, effective January 2, 2008, through January 2,

2009. AHCA was provided proof of the coverage.

30. However, approximately three months later, the

liability insurance coverage was canceled, effective March 24,

2008, for non-payment of premium.

31. Notification of the canceled liability insurance

coverage was faxed to AHCA on July 17, 2008.

32. AHCA sent a NOV dated July 18, 2008, the next day by

certified mail, return receipt, to Ms. Egea, as the

administrator, for the failure to have liability insurance

coverage. The NOV also requested proof of current liability

insurance within 21 days and indicated, among other things, that

the failure to comply could result in an administrative

proceeding to revoke the license or deny licensure.

33. AHCA states that the purpose of the NOV dated July 18,

2008, was to make certain that there was no lapse in the policy

providing liability insurance coverage, not to provide South Dade

a time frame in which to purchase the required liability

insurance coverage. The purpose stated by AHCA is found to be

reasonable.

34. South Dade received the NOV dated July 18, 2008, on

July 23, 2008.

35. South Dade obtained liability insurance coverage on

August 12, 2008, effective August 12, 2008, through August 12,

2009.

36. The usual procedure of the insurance agent from whom

South Dade obtained the liability insurance coverage was to mail

the Certificate of Liability Insurance to both the insured and

AHCA when the insurance carrier approves and binds coverage. A

finding of fact is made that the insurance agent followed the

same procedure in the instant case.

37. On November 3, 2008, AHCA issued its Administrative

Complaint charging South Dade, among other things, with failure

to maintain liability insurance coverage.

38. After receiving the Administrative Complaint, Ms. Egea

contacted the insurance agent regarding the Certificate of

Liability Insurance. The insurance agent reiterated to Ms. Egea

that the Certificate of Liability Insurance was mailed to AHCA in

August 2008.

39. On November 5, 2008, AHCA received the Certificate of

Liability Insurance, as proof of insurance, when it was faxed to

AHCA by the insurance agent.

40. Also, the liability insurance policy, effective

August 12, 2008, had a different policy number than the last

liability insurance policy. The different policy number

indicated that the liability insurance coverage effective on

August 12, 2008, was a new, not a renewal, policy. 3

41. South Dade was without liability insurance coverage

from March 24, 2008, until August 12, 2008, when liability

insurance coverage was obtained. South Dade failed to maintain

continuous liability insurance coverage from March 24, 2008, to

August 11, 2008. South Dade had a lapse in liability insurance

coverage from March 24, 2008, to August 11, 2008.

42. No evidence was presented to show that any resident was

harmed in any form or manner at HSH No. 2.

CONCLUSIONS OF LAW

43. The Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and the

parties thereto pursuant to Sections 120.569 and 120.57(1),

Florida Statutes (2009).

44. The ultimate burden of proof is on AHCA to establish by

clear and convincing evidence that South Dade committed the

offenses as set forth in the Amended Administrative Complaint,

except for Count IV which AHCA decided not to pursue. Department

of Banking and Finance, Division of Securities and Investor

Protection v. Osborne Stern and Company , 670 So. 2d 932 (Fla.

1996); § 120.57(1)(j), Fla. Stat.

45. “If the meaning of the statute is clear then [this

Administrative Law Judge’s] task goes no further than applying

the plain language of the statute. However, when a statutory

term is subject to varying interpretations and that statute has

been interpreted by the executive agency charged with enforcing

the statute [this Administrative Law Judge] follows a deferential

principle of statutory construction: An agency’s interpretation

of the statute that it is charged with enforcing is entitled to

great deference. See BellSouth Telecommunications, Inc. v.

Johnson , 708 So. 2d 594, 596 (Fla. 1998). [This Administrative

Law Judge] will not depart from the contemporaneous construction

of a statute by a state agency charged with its enforcement

unless the construction is ‘clearly unauthorized or erroneous.’

(citation omitted).” GTC, Inc. v. Edgar , 967 So. 2d 781, 785

(Fla. 2007).

46. As to the administrative dissolution of South Dade, the

Amended Administrative Complaint charged South Dade with

violating Sections 607.1405(1) and 607.1622(1), Florida Statutes

(2008).

47. Section 607.1405, Florida Statutes (2008), provides in

pertinent part:

(1) A dissolved corporation continues its

corporate existence but may not carry on any

business except that appropriate to wind up

and liquidate its business and affairs,

including:

(a) Collecting its assets;

(b) Disposing of its properties that will

not be distributed in kind to its

shareholders;

(c) Discharging or making provision for

discharging its liabilities;

(d) Distributing its remaining property

among its shareholders according to their

interests; and

(e) Doing every other act necessary to wind

up and liquidate its business and affairs.

48. Section 607.1622, Florida Statutes (2008), provides in

pertinent part:

(1) Each domestic corporation and each

foreign corporation authorized to transact

business in this state shall deliver to the

Department of State for filing a sworn annual

report on such forms as the Department of

State prescribes that sets forth:

(a) The name of the corporation and the

state or country under the law of which it is

incorporated;

(b) The date of incorporation or, if a

foreign corporation, the date on which it was

admitted to do business in this state;

(c) The address of its principal office and

the mailing address of the corporation;

(d) The corporation's federal employer

identification number, if any, or, if none,

whether one has been applied for;

(e) The names and business street addresses

of its directors and principal officers;

(f) The street address of its registered

office and the name of its registered agent

at that office in this state;

(g) Language permitting a voluntary

contribution of $ 5 per taxpayer, which

contribution shall be transferred into the

Election Campaign Financing Trust Fund. A

statement providing an explanation of the

purpose of the trust fund shall also be

included; and

(h) Such additional information as may be

necessary or appropriate to enable the

Department of State to carry out the

provisions of this act.

49. The evidence demonstrates that Mr. Martinez

intentionally allowed South Dade to be administratively dissolved

in order for Ms. Egea to take ownership of HSH No. 2. South Dade

was administratively dissolved on September 14, 2007.

50. Additionally, the evidence demonstrates that South Dade

was not reinstated as a corporate entity until May 11, 2009.

Further, the evidence demonstrates that HSH No. 2 was owned by

South Dade; that AHCA issued the license to South Dade for the

operation of HSH No. 2; and that HSH No. 2 continued to operate

and conduct business after South Dade was dissolved.

51. Hence, AHCA demonstrated that South Dade violated

Sections 607.1405(1) and 607.1622(1), Florida Statutes (2008).

52. As to the CHOW, the Amended Administrative Complaint

charges South Dade with violating Sections 408.803(5),

408.804(1), 408.806(2)(b), 408.807, and 429.12, Florida Statutes

(2008), and Florida Administrative Code Rule 58A-5.014(2).

53. CHOW is defined in Section 408.803, Florida Statutes

(2008), which provides in pertinent part:

As used in this part, the term:

* * *

(5) “Change of ownership” means an event in

which the licensee changes to a different

legal entity or in which 45 percent or more

of the ownership, voting shares, or

controlling interest in a corporation whose

shares are not publicly traded on a

recognized stock exchange is transferred or

assigned, including the final transfer or

assignment of multiple transfers or

assignments over a 2-year period that

cumulatively total 45 percent or greater. A

change solely in the management company or

board of directors is not a change of

ownership.

54. Section 408.804, Florida Statutes (2008), provides in

pertinent part:

(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.

55. Section 408.806, Florida Statutes (2008), provides in

pertinent part:

(2) (a) The applicant for a renewal license

must submit an application that must be

received by the agency at least 60 days prior

to the expiration of the current license. If

the renewal application and fee are received

prior to the license expiration date, the

license shall not be deemed to have expired

if the license expiration date occurs during

the agency's review of the renewal

application.

(b) The applicant for initial licensure due

to a change of ownership must submit an

application that must be received by the

agency at least 60 days prior to the date of

change of ownership.

56. Section 408.807, Florida Statutes (2008), provides in

pertinent part:

Whenever a change of ownership occurs:

(1) The transferor shall notify the agency

in writing at least 60 days before the

anticipated date of the change of ownership.

(2) The transferee shall make application to

the agency for a license within the

timeframes required in s. 408.806.

(3) The transferor shall be responsible and

liable for:

(a) The lawful operation of the provider and

the welfare of the clients served until the

date the transferee is licensed by the

agency.

(b) Any and all penalties imposed against

the transferor for violations occurring

before the date of change of ownership.

(4) Any restriction on licensure, including

a conditional license existing at the time of

a change of ownership, shall remain in effect

until the agency determines that the grounds

for the restriction are corrected.

(5) The transferee shall maintain records of

the transferor as required in this part,

authorizing statutes, and applicable rules,

including:

(a) All client records.

(b) Inspection reports.

(c) All records required to be maintained

pursuant to s. 409.913, if applicable.

57. Section 429.12, Florida Statutes (2008), provides in

pertinent part:

It is the intent of the Legislature to

protect the rights of the residents of an

assisted living facility when the facility is

sold or the ownership thereof is transferred.

Therefore, in addition to the requirements of

part II of chapter 408, whenever a facility

is sold or the ownership thereof is

transferred, including leasing:

(1) The transferee shall notify the

residents, in writing, of the change of

ownership within 7 days after receipt of the

new license.

(2) The transferor of a facility the license

of which is denied pending an administrative

hearing shall, as a part of the written

change-of-ownership contract, advise the

transferee that a plan of correction must be

submitted by the transferee and approved by

the agency at least 7 days before the change

of ownership and that failure to correct the

condition which resulted in the moratorium

pursuant to part II of chapter 408 or denial

of licensure is grounds for denial of the

transferee's license.

58. Florida Administrative Code Rule 58A-5.014 provides in

pertinent part:

(2) CHANGE OF OWNERSHIP (CHOW).

(a) Pursuant to Section 429.12, F.S., the

transferor shall notify the agency in

writing, at least 60 days prior to the date

of transfer of ownership.

(b) Completed applications shall be filed

with the Agency by the transferee at least 60

days before the date of transfer of ownership

as required by Section 429.12, F.S., and must

include the information and fees required

under subsection (1) of this rule. An

application package for a change of ownership

of a currently licensed facility is available

from the Agency Central Office.

(c) At the time of transfer of ownership,

all resident funds on deposit, advance

payments of resident rents, resident security

deposits and resident trust funds held by the

current licensee shall be transferred to the

applicant. Proof of such transfer shall be

provided to the agency at the time of the

agency survey and prior to the issuance of a

standard license. This provision does not

apply to entrance fees paid to a continuing

care facility subject to the acquisition

provisions in Section 651.024, F.S.

1. The transferor shall provide to each

resident a statement detailing the amount and

type of funds credited to the resident for

whom funds are held by the facility.

2. The transferee shall notify each resident

in writing of the manner in which the

transferee is holding the resident's funds

and state the name and address of the

depository where the funds are being held,

the amount held, and type of funds credited.

(d) The current resident contract on file

with the facility shall be considered valid

until such time as the transferee is licensed

and negotiates a new contract with the

resident.

(e) Failure to apply for a change of

ownership of a licensed facility as required

by Section 429.12, F.S., shall result in a

fine levied by the Agency pursuant to Section

429.19, F.S.

(f) During a change of ownership, the owner

of record is responsible for ensuring that

the needs of all residents are met at all

times in accordance with Part III of Chapter

400, F.S., and this rule chapter.

(g) If applicable, the transferor shall

comply with Section 408.831(2), F.S., prior

to Agency approval of the change of ownership

application.

59. The evidence demonstrates that South Dade was the

licensee and that South Dade was the owner of HSH No. 2. The

evidence further demonstrates that South Dade failed to continue

to be a corporate entity when it was administratively dissolved

on September 14, 2007, and was not reinstated as a corporate

entity at the time that the renewal application was filed; that

the renewal application was completed by Ms. Egea; that South

Dade was not listed as the owner of HSH No. 2; that Mr. Martinez,

not South Dade, was listed as having 100 percent ownership

interest in HSH No. 2; that Mr. Martinez, as an individual, was

listed as the applicant, not South Dade. Consequently, a CHOW

had occurred.

60. Furthermore, the evidence demonstrates that AHCA was

not notified 60 days prior to the CHOW.

61. Hence, AHCA demonstrated that South Dade violated

Sections 408.803(5), 408.804(1), 408.806(2)(b), 408.807, and

429.12, Florida Statutes (2008), and Florida Administrative Code

Rule 58A-5.014(2).

62. As to the failure to maintain liability insurance, the

Amended Administrative Complaint charged South Dade with

violating Sections 408.810(7), 429.275(3), and 624.605, Florida

Statutes (2008), and Florida Administrative Code Rule 58A-

5.021(8).

63. Section 408.810, Florida Statutes (2008), provides in

pertinent part:

In addition to the licensure requirements

specified in this part, authorizing statutes,

and applicable rules, each applicant and

licensee must comply with the requirements of

this section in order to obtain and maintain

a license.

* * *

(7) If proof of insurance is required by the

authorizing statute, that insurance must be

in compliance with chapter 624, chapter 626,

chapter 627, or chapter 628 and with agency

rules.

64. Section 429.275, Florida Statutes (2008), provides in

pertinent part:

The assisted living facility shall be

administered on a sound financial basis that

is consistent with good business practices.

* * *

(3) The administrator or owner of a facility

shall maintain liability insurance coverage

that is in force at all times.

65. Section 624.605, Florida Statutes (2008), provides in

pertinent part:

(1) “Casualty insurance” includes:

* * *

(b) Liability Insurance --Insurance against

legal liability for the death, injury, or

disability of any human being, or for damage

to property, with provision for medical,

hospital, and surgical benefits to the

injured persons, irrespective of the legal

liability of the insured, when issued as a

part of a liability insurance contract.

66. Florida Administrative Code Rule 58A-5.021 provides in

pertinent part:

(8) LIABILITY INSURANCE. Pursuant to

Section 429.275, F.S., facilities shall

maintain liability insurance coverage, as

defined in Section 624.605, F.S., in force at

all times. On the renewal date of the

facility's policy or whenever a facility

changes policies, the facility shall file

documentation of continued coverage with the

AHCA central office. Such documentation

shall be issued by the insurance company and

shall include the name of the facility, the

street address of the facility, that it is an

assisted living facility, its licensed

capacity, and the dates of coverage.

67. The evidence demonstrates that South Dade failed to

have liability insurance coverage in force at all times. South

Dade was without liability insurance coverage for the period

March 24, 2008, to August 11, 2008, and obtained liability

insurance coverage effective on August 12, 2008. Therefore,

South Dade failed to maintain continuous, and had a lapse in,

liability insurance coverage from March 24, 2008, through

August 11, 2008.

68. AHCA’s interpretation that to maintain and have in

force at all times liability insurance coverage was to maintain

continuous coverage and not have a lapse in coverage is a

reasonable interpretation and will not be disturbed.

69. Further, the purpose presented by AHCA as to the time

frame provided to South Dade in the NOV of July 18, 2008, was not

a time frame in which to obtain liability insurance coverage, but

was a time frame in which to show that it (South Dade) had

continuous, non-lapsed liability insurance coverage is

reasonable. The evidence demonstrates that South Dade was unable

to make such a showing.

70. Hence, AHCA demonstrated that South Dade violated

Sections 408.810(7), 429.275(3), and 624.605, Florida Statutes

(2008), and Florida Administrative Code Rule 58A-5.021(8).

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:

1. Finding that South Dade Elderly Care Corporation, d/b/a

Home Sweet Home No. 2, committed the offenses set forth in Counts

I, II, and III in the Amended Administrative Complaint.

2. Revoking the license of South Dade Elderly Care

Corporation, d/b/a Home Sweet Home No. 2.

DONE AND ENTERED this 3rd day of May, 2010, in Tallahassee,

Leon County, Florida.

___________________________________

ERROL H. POWELL

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 3rd day of May, 2010.

ENDNOTES

1/ Mr. Martinez did not testify at hearing. Ms. Egea testified

on behalf of South Dade and provided the testimony. Her

testimony regarding the dissolution of South Dade is found to be

credible.

2/ Ms. Egea testified that South Dade had been dissolved and that

she saw no difference between Mr. Martinez, who owned 100 percent

of South Dade, and South Dade; to her they were one-in-the-same.

Ms. Egea’s testimony that she saw no difference between South

Dade and Mr. Martinez is not found to be credible. She knew that

South Dade had been dissolved and that Mr. Martinez owned HSH

No. 2. Furthermore, she indicated on the renewal application

that the applicant was an individual, not a corporation.

3/ AHCA provided testimony that HSH No. 2 may have purchased

retroactive insurance. The evidence fails to support a finding

that HSH No. 2 purchased retroactive insurance.

COPIES FURNISHED:

Tria Lawton-Russell, Esquire

Agency for Health Care Administration

Spokane Building, Suite 103

8350 Northwest 52nd Terrace

Miami, Florida 33166

Lawrence E. Besser, Esquire

Samek and Besser

1200 Brickell Avenue, No. 1950

Miami, Florida 33131

Richard J. Shoop, Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

Justin Senior, General Counsel

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

Thomas W. Arnold, Secretary

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15

days from the date of this recommended order. Any exceptions to

this recommended order should be filed with the agency that will

issue the final order in this case.