13-001206F Avalon&Apos;S Assisted Living, Llc, D/B/A Avalon&Apos;S Assisted Living And D/B/A Avalon&Apos;S Assisted Living At Avalon Park, And Avalon&Apos;S Assisted Living Ii, Llc, D/B/A Avalon&Apos;S Assisted Living At Southmeadow vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Tuesday, September 17, 2013.

Summary: AHCA was substantially justified initiating administrative action versus Petitioners; no award.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AVALON ' S ASSISTED LIVING, LLC,

d/b/a AVALON ' S ASSISTED LIVING

AND d/b/a AVALON ' S ASSISTED

LIVING AT AVALON PARK ; AND

AVALON ' S ASSISTED LIVING II,

LLC, d/b/a AVALON ' S ASSISTED

LIVING AT SOUTHMEADOW ,

Petitioners ,

vs. Case Nos. 13 - 1206F

13 - 1207F

AGENCY FOR HEALTH CARE 13 - 1208F

ADMINISTRATION ,

Respondent .

/

FINAL ORDER

On July 18, 2013, an administrative hearing was held in this

case, using video teleconferencing with sites in Orlando and

Tallahassee, before J. Lawrence Johnston, Administrative Law

Judge, Division of Administrative Hearings (DOAH).

APPEARANCES

For Petitioner s : John E. Terrel, Esquire

Law Office of John E. Terrel

Suite 11 - 116

1700 North Monroe Street

Tallahassee, Florida 32303

For Respondent: Richard Joseph Saliba, Esquire

Agency for Health Care Administration

Mail Stop 3

2727 Mahan Drive

Tallahassee, Florida 3 2303

Thomas J. Walsh, II, Esquire

Agency for Health Care Administration

Sebring Building, Suite 330G

525 Mirror Lake Drive, North

St. Petersburg, Florida 33701

STATEMENT OF THE ISSUE

The issue is whether the Respondent, Agency for Health Care

Administration (AHCA), should pay the Petitioners attorney ' s fees

and costs under section 57.111, Florida Statutes (2013), 1/ the

Florida Equal Access to Justice Act, for initiating DOAH

Case s 10 - 0528, 10 - 1672 and 10 - 1673.

PRELIMINAR Y STATEMENT

AHCA filed an administrative complaint against Avalon ' s

Assisted Living, LLC, d/b/a Avalon ' s Assisted Living and d/b/a

Avalon ' s Assisted Living at Avalon Park (Avalon) and gave notice

of intent to deny license renewals to Avalon and Avalon ' s

As sisted Living, II, LLC, d/b/a Avalon ' s Assisted Living at

Southmeadow (Avalon II) on various grounds. They requested

hearings, which resulted in DOAH Case s 10 - 0528, 10 - 1672

and 10 - 1673. A consolidated hearing was held, and A dministrative

Law Judge Willia m F. Quattlebaum recommended that the licenses be

revoked and not renewed. AHCA entered a f inal o rder adopting the

recommendation. Avalon and Avalon II appealed, and the final

order was reversed, essentially because the findings were based

on hearsay tha t would not be admissible over objection in a civil

action. See § 120.57(1)(c), Fla. Stat. Avalon and Avalon II

filed petitions for attorney ' s fees and costs under section

57.111 that initiated these proceedings.

Issues regarding entitlement to an award and the amount of

the award were bifurcated. At the hearing on entitlement on

July 18, 2013, the Petitioners called two witnesses and

had 14 exhibits admitted. AHCA called no witnesses , but had

14 exhibits admitted in evidence. The parties filed propos ed

orders, which have been considered.

FINDING S OF FACT

1. Avalon and Avalon II are licensed assisted living

facilities (ALFs) in Orange County. In 2009, they were owned and

operated by Robert Walker and Chiqquittia Carter - Walker. Each

had no more than 25 employees and a net worth of not more than

$2 million (making them small business parties under section

57.111).

2. On December 4, 2009, AHCA filed an administrative

complaint against Avalon (DOAH Case 10 - 0528). The administrative

complaint alleged that Avalon was guilty of three Class II

deficiencies, which are deficiencies that directly threaten the

physical or emotional health, safety, or security of a resident.

Count I alleged that Avalon falsified employee training

documentation (cited as Tag A 029) to deliberately misrepresent

the level of information and skill possessed by a staff member.

Count II alleged that Avalon failed to provide appropriate

medication to a terminally ill resident (cited as Tag A427),

resulting in unnecessary pain suffere d by the resident. Count

III alleged that Avalon failed to provide one resident with a

prescribed nutritional supplement and two residents with

appropriate pain - relieving medications, including the resident

identified in Tag A427 (cited as Tag A700). Cou nt IV alleged

that the licenses of Avalon and Avalon II should be revoked under

section 408.812(5), Florida Statutes (2009), 2/ because they or

their owners and operators ( " controlling interests " under section

408.803(7)) operated a third, unlicensed ALF an d because of a

demonstrated pattern of deficient performance at Avalon.

3. The first three counts of the administrative complaint

were based on the results of an inspection (survey) of Avalon ' s

facility completed on July 23, 2009.

4. As to Count I, i t was discovered during the inspection

that training certificates for one Avalon staff member were not

accurate and falsely indicated that the employee received

required training, which the employee denied. Avalon disputed

the employee ' s statement, offere d explanations for some of the

anomalies in the training certificates, and pointed out that

Avalon still had time to provide some of the required training ,

but the employment was terminated before the time would have run

out. Avalon also pointed to variou s mistakes and confusion in

the survey report to attack its overall credibility.

Nonetheless, the information in the survey report was a

reasonable basis in fact to charge Avalon in Count I.

5. Section 429.19(2)(b) provided a reasonable basis in law

to file an administrative complaint seeking to fine Avalon for

the violation alleged in Count I.

6. As to Count II, the inspection revealed that a

terminally ill resident, who no longer met the criteria for

continued ALF residency, was allowed to remain i n the ALF subject

to the coordination of hospice care, the provision of additional

medical services, and the development and implementation of an

interdisciplinary care plan that adequately designated

responsibility for the various kinds of care required b y the

resident. The inspection revealed that the resident did not

receive medication for pain management, which had been authorized

by the resident ' s physician, and suffered pain unnecessarily

during the early morning hours of July 13, 2009. The inspecti on

concluded that Avalon was responsible.

7. Avalon disputed some of the findings in the survey

report regarding this resident. Specifically, Avalon disputed

statements in the survey report to the effect that there was no

interdisciplinary plan in plac e and being implemented at the

time. Avalon also contended that the allegations in Count II

were based on inadequate investigation by unqualified personnel

(i.e., not medical professionals), which resulted in a

misunderstanding by the inspectors regarding how a hospice

patient is treated in an ALF.

8. The crux of the findings in the survey report and of the

allegations in Count II was that Ms. Carter - Walker, who is a

nurse and was the only ALF staff member authorized to administer

medications to residen ts, as well as the administrator in charge

of the ALF, had the facility ' s medication cart locked and made

herself unavailable to authorize that it be opened during the

evening hours of July 12 and early morning hours of July 13,

2009, resulting in the inab ility of anyone to administer the

resident ' s pain medication for five hours when it was needed by

the resident, as ordered by the resident ' s physician. This was a

reasonable basis in fact to charge Avalon in Count II of the

administrative complaint (even if there may not have been a

reasonable basis for each and every allegation in Count II).

9. Section 429.19(2)(b) provided a reasonable basis in law

to file an administrative complaint seeking to fine Avalon for

the violation alleged in Count II.

10. Count III of the administrative complaint repeated the

allegation in Count II and added allegations regarding two other

residents.

11. One of the other two residents was alleged to have had

a history of weight loss and been prescribed a daily can of

" Ens ure " nutritional supplement, but did not receive the

supplement , as ordered , because the facility had not obtained or

provided it to the resident.

12. Avalon contended that there were no medical records,

facility records, or any other documentation submi tted to

substantiate the claim about the Ensure. It is true that the

survey report did not include such supporting documentation, and

no such supporting documentation was introduced in evidence in

this case. However, the survey report indicates that AHCA staff

reviewed Avalon ' s records on July 14, 2009, and that there was a

health care provider order dated June 16, 2009, on file for one

can of Ensure a day, and a Medication Observation Record showing

none was provided to the resident in June or July. The report

also indicates that Ms. Carter - Walker confirmed that no Ensure

had been provided to the resident and telephoned the pharmacy to

see if the pharmacy had received the order. This was a

reasonable basis in fact to charge Avalon regarding the Ensure i n

Count III of the administrative complaint .

13. The other resident mentioned in Count III was alleged

to have had a history of hypertension and hypothyroid issues and

to have been prescribed a daily Ibuprofen (400mg) for pain, but

Avalon ' s medication rec ords allegedly indicated that the

medication had been provided to the resident twice on some days

and not at all on other days. Avalon points out the vagueness of

some of the evidence AHCA had to support this charge (namely, the

statement of a former empl oyee about an unknown date in June 2009

when the resident did not receive any pain medication), the

confused and inconsistent testimony of AHCA ' s inspector and her

supervisor as to the basis in fact for this allegation, and the

absence of the medical recor ds for this resident from the

evidence introduced in this case. Nonetheless, the statements in

the survey report reflecting that Avalon ' s records were reviewed

by the AHCA inspectors were a reasonable basis in fact to include

these allegations in Count II I of the administrative complaint .

14. Avalon complains that Count III repeated the

allegations in Count II in order to combine with and elevate the

other two deficiencies in Count III from Class III deficiencies

to Class II deficiencies. While there ma y be no specific

statutory or rule authority for doing so, Avalon does not point

to any rule or statute prohibiting doing so, and AHCA had a

reasonable basis in fact to take the position that the three

alleged deficiencies, combined, were Class II.

15. S ection 429.19(2)(b) provided a reasonable basis in law

to file an administrative complaint seeking to fine Avalon for

the violations alleged in Count III.

16. The allegation in Count IV of the administrative

complaint that at an unlicensed facility was b eing operated by

the owners and operators of Avalon and Avalon II on August 5,

2009, was supported by the report of an inspection (survey) of

the facility on that day.

17. As stated in the survey report, Mrs. Carter - Walker

arrived and identified herself to the AHCA inspectors as the

administrator of the facility. She was known to them as the

administrator of Avalon and Avalon II, as well. It also was

reported that she identified herself as the administrator of the

facility to other care providers, inclu ding a clinical social

worker, a registered nurse providing contract health care

services to facility residents, and administrators at other

local ALFs. In addition, according to the statements of an

employee at the facility, there had been residents at t he

facility since at least June 16, 2009, which was when the staff

member began to work at the facility. The employee worked

providing resident services five days a week. According to the

employee, there were always at least three residents in the

facili ty, and the same residents were present on a day - to - day

basis. There was no indication that those residents were

transported out of the facility during the evening for some

reason or that they did not otherwise remain in the facility

overnight.

18. A li censed practical nurse present at the facility on

August 5, 2009, was the person who permitted the Agency ' s

inspector to enter the facility. The nurse was there to provide

personal care assistance to a terminally ill resident receiving

care through an agr eement between Mrs. Carter - Walker, as the

facility ' s administrator, and hospice. After Mrs. Carter - Walker

arrived at the facility, she appeared to the inspector to be

unhappy that the nurse had permitted the inspector to enter the

facility and directed th e nurse to leave the facility.

19. During the inspection on August 5, 2009, a " Notice of

Unlicensed Activity/Order to Cease and Desist " was issued to

Mrs. Carter - Walker and to Robert Walker, who arrived during the

inspection and identified himself as an owner of the facility.

20. At no time during the inspection on August 5, 2009, did

Mr. Walker, Mrs. Carter - Walker, or anyone else say that the

residents in the facility did not spend the night at the

facility, that the residents had a familial relation t o the

owners, or that the facility was exempt from or otherwise not

required to comply with relevant ALF licensing requirements. To

the contrary, on August 14, 2009, Mr. Walker and Mrs. Carter -

Walker applied for an ALF license for the facility to cure the

violation.

21. Avalon and Avalon II contend that there was no

reasonable basis in fact and law for Count IV of the

administrative complaint because Mr. Walker and Ms. Carter - Walker

ceased and desisted as ordered by AHCA and applied for licensure.

They cite to section 408.812(3) and (5), which they say subjected

them to penalties only if they failed to cease and desist. AHCA

contends that section 408.812(5) did authorize revocation and

other disciplinary actions. AHCA also contends that section

429.14( 1)(k) authorized revocation or suspension and fines.

AHCA ' s arguments are reasonable.

22. Avalon and Avalon II point to section 408.832, which

provides that chapter 408 prevails over chapter 429 in the case

of a conflict. However, it is reasonable for AHCA to argue that

there is no irreconcilable conflict between section 408.812(3)

and (5) and section 429.14(1)(k). AHCA ' s legal arguments

persuaded Judge Quattlebaum, whose c onclusions of l aw in that

regard were not addressed by the appellate court in re versing the

f inal o rder that adopted them. For these reasons, the survey

report for the inspection on August 5, 2009, provided a

reasonable basis in fact and law for this allegation in Count IV.

23. Count IV also alleged a demonstrated pattern of

defici ent performance by Avalon between 2007 and 2009, as

reflected in the attached survey reports. These survey reports

indicated that Avalon had numerous lesser deficiencies during

that time period. As pointed out by Avalon, not everything

listed in these su rveys indicated an actual deficiency, and all

the earlier deficiencies presumably were corrected. Nonetheless,

the survey reports were a reasonable basis in fact to charge

Avalon with a continuing pattern of inadequate performance and a

failure to meet re levant standards.

24. In addition, section 429.14(1)(e)2. authorized fines

and revocation, suspension, or denial of a license for three or

more Class II deficiencies and was a reasonable basis in law to

charge Avalon in Count IV.

25. AHCA gave notice o f intent to deny the license renewals

for Avalon and Avalon II because of the unlicensed operation of

an ALF and because their licenses were " under revocation. " The

first ground has been addressed. As to the latter, Avalon and

Avalon II contend that ther e was no reasonable basis in fact and

law because no final action revoking their licenses had been

taken. However, the pending administrative complaint to revoke

their licenses was a reasonable basis in fact and law to give

notice of intent not to renew t hem.

CONCLUSIONS OF LAW

26. Section 57.111 , the Florida Equal Access to Justice

Act, authorizes the award of attorney ' s fees and costs to a small

business party that prevails in an administrative proceeding

seeking review of or defending against unreason able government

action by a state agency, i.e., when the state agency ' s actions

are not substantially justified and no special circumstances

exist that would make the award unjust. Section 57.111(3)(e)

defines substantial justification as a reasonable bas is in fact

and law.

27. The agency has the burden to prove substantial

justification. AHCA v. MVP Health, Inc. , 74 So. 3d 1141, 1143

(Fla. 1st DCA 2011); Helmy v. Dep ' t of Bus. and Prof ' l Reg. ,

707 So. 2d 366, 368 (Fla. 1st DCA 1998).

28. It was held in AHCA v. MVP Health, Inc. , supra , at

1143 - 44:

[A] n agency cannot satisfy the " substantial

justification " standard simply by showing an

action was " not frivolous. " This is because

" while governmental action may not be so

unfounded as to be frivolous, it may

nonetheless be based on such an unsteady

foundation factually and legally as not to

be substantially justified. " Dep ' t of

Health & Rehab. Servs. v. S.G. , 613 So. 2d

1380, 1386 (Fla. 1st DCA 1993). On the

other hand, the standard is not so strict a s

to require the agency to demonstrate that

its action was correct. Id. , quoting

McDonald v. Schweiker , 726 F.2d 311, 316

(7th Cir. 1983) (stating the government need

not have a " necessarily correct basis [] for

the position that it took " ). The

" substant ial justification " standard lies

between these two extremes. The closest

approximation is that if a state agency can

present an argument for its action "' that

could satisfy a reasonable person[,] '" then

that action should be considered

" substantially just ified. " Helmy , 707 So.

2d at 368, quoting Pierce v. Underwood , 487

U.S. 552, 565, 108 S. Ct. 2541, 101 L. Ed.

2d 490 (1998).

An additional consideration when evaluating

an agency ' s action under section 57.111 is

that the inquiry is limited only to whet her

the agency had a " reasonable basis in law

and fact at the time " it took the action.

§ 57.111(3)(e), Fla. Stat. (2010) (emphasis

added). The reviewing body -- whether DOAH or

a court -- may not consider any new evidence

which arose at a fees hearing, but m ust

focus exclusively upon the information

available to the agency at the time that it

acted. See Dep ' t of Health, Bd. of Physical

Therapy Practice v. Cralle , 852 So. 2d 930,

932 (Fla. 1st DCA 2003) (criticizing an ALJ

for being " influenced by considerati on of

evidence which was presented at [a fees]

hearing rather than being focused solely on

whether the [agency ' s underlying] decision

had a reasonable basis in law and fact " ).

Using this legal standard, there was substantial justification

for AHCA ' s act ions in this case.

29. In the underlying cases, the appellate court held that

AHCA failed to meet its burd e n of proof because its allegations

were supported only by hearsay evidence that was not admissible

over objection in a civil action. See § 120.57( 1)(c). That rule

of evidence does not apply to the initiation of an action by a

state agency since hearsay is, by definition, " a statement, other

than one made by the declarant while testifying at the trial or

hearing . . . . " § 90.801(1)(c). The unavoi dable hearsay

character of the results of the inspections on August 5 and 23,

2009, did not undermine their ability to serve as a reasonable

basis in fact to file the administrative complaint against Avalon

in DOAH C ase 10 - 0528 and the notices of intent to deny the

license renewal applications of Avalon and Avalon II in DOAH

C ase s 10 - 1672 and 10 - 1673.

30. There may not have been a reasonable basis for each and

every factual allegation in Count II. However, that does not

mean attorney ' s fees and costs sho uld be awarded for that claim.

While there appears to be no Florida law on the point, it is

appropriate to look to the federal case law for guidance.

Gentele v. Dep ' t of Prof ' l Reg. , 513 So. 2d 672, 673 (Fla. 1st

DCA 1987) ( " The [Florida Equal Access to Justice Act] is

generally modeled after its federal counterpart, 5 U.S.C.

S ection 504 (the Federal Act). It is instructive to look to the

decisions of federal courts, which have construed the meaning of

the language of the Federal Act. " ) . The federal law is that a

claim - by - claim analysis is not appropriate for claims that are

factually closely entwined. See Baeder v. Heckler , 826 F.2d

1345, 1347 (3d Cir. 1987); Haitian Refugee Ctr . v. Meese ,

791 F.2d 1489, 1500 (11th Cir. 1986 ), vacated in part on other

grounds , 804 F.2d 1573 (11th Cir. 1986). A fortiori , an

allegation - by - allegation analysis within Count IV would not be

appropriate where the arguably unsubstantiated allegations are

closely entwined with the crux of the overarching substantive

allegation of Count II.

DISPOSITION

Based on the foregoing Findings of Fact and Conclusions of

Law, the petitions for attorney ' s fees and costs in these cases

are denied.

DONE AND ORDERED this 17th day of September , 2013 , in

Tallahassee, Leon County, Florida.

S

J. LAWRENCE JOHNSTON

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Fi led with the Clerk of the

Division of Administrative Hearings

this 17th day of September , 2013 .

ENDNOTE S

1/ Unless otherwise indicated, references to section 57.111 are

to the 2013 codification of the Florida Statutes, as are the

references to chapters 120 and 90. The other statutory

references are to the 2009 codification.

2/ See footnote 1.

COPIES FURNISHED:

Elizabeth Dudek, Secretary

Agency for Health Care Administration

Mail Stop 1

2727 Mahan Drive

Tallahassee, Florida 32308

Stuart Williams, General Counsel

Agency for Health Care Administration

Mail Stop 3

2727 Mahan Drive

Tallahassee, Florida 32308

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration

Mail Stop 3

2727 Mahan Drive

Tallahassee, Florida 32308

John E. Terrel, E squire

Law Office of John E. Terrel

Suite 11 - 116

1700 North Monroe Street

Tallahassee, Florida 32303

Richard Joseph Saliba, Esquire

Agency for Health Care Administration

Mail Stop 3

2727 Mahan Drive

Tallahassee, Florida 3230 8

Thomas J. Walsh, II, Esqui re

Agency for Health Care Administration

Sebring Building, Suite 330G

525 Mirror Lake Drive, North

St. Petersburg, Florida 33701

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is entitled

to judicial review pur suant to section 120.68, Florida Statutes.

Review proceedings are governed by the Florida Rules of Appellate

Procedure. Such proceedings are commenced by filing the original

notice of administrative appeal with the agency clerk of the

Division of Adminis trative Hearings within 30 days of rendition

of the order to be reviewed, and a copy of the notice,

accompanied by any filing fees prescribed by law, with the clerk

of the District Court of Appeal in the appellate district where

the agency maintains its he adquarters or where a party resides or

as otherwise provided by law.