15-007353 Agency For Health Care Administration vs. Talf, Inc., D/B/A The Inn At University Village Status: Closed Recommended Order on Wednesday, November 16, 2016.

Summary: TALF, Inc., d/b/a The Inn at University Village did not provide proof of financial ability as required by law or in a timely manner. Revocation recommended.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AGENCY FOR HEALTH CARE

ADMINISTRATION,

Petitioner,

vs. Case No. 15 - 7353

TALF, INC., d/b/a THE INN AT

UNIVERSITY VILLAGE,

Respondent.

_______________________________/

RECOMMENDED ORDER

Pursuant to notice, a final hearing was held in this cas e on

August 26, 2016, via video teleconference sites in Tampa and

Tallahassee, Florida, before Administrative Law Judge Lynne A.

Quimby - Pennock of the Division of Administrative Hearings

(Divi sion).

APPEARANCES

For Petitioner: Thomas J. Walsh, II, Esquire

Agency for Health Care Administration

Suite 330

525 Mirror Lake Drive North

St. Petersburg, Florida 33701

Andrew Beau - James Thornquest, Esquire

Agency for Health Care Administration

Mail Stop 3

2727 Mahan Drive

Tallahassee, Florida 32308

For Respondent: John F. Loar, Esquire

Broad and Cassel

Suite 400

215 South Monroe Street

Tallahassee, Florida 32301

M. Stephen Turner, Esquire

Broad and Cassel

Suite 400

215 South Monroe Street

Tallahassee, Florida 32301

STATEMENT OF THE ISSUE S

Did Respondent, TALF, Inc ., d/b/a The Inn at University

Village (University Inn), violate requirements to demonstrate the

financial ability to operate in accordan ce with statutes and

rules? If so, what penalty should be imposed?

PRELIMINARY STATEMENT

By a one - count Administrative Complaint (AC), dated

November 10, 2015, Petitioner, Agency for Health Care

Administration (AHCA), began proceedings to revoke Universi ty

InnÓs assisted living facility license. On December 2, 2015,

University Inn, via its president John Bartle, filed an Election

of Rights form which disputed the allegation in the AC. On

December 30, 2015, AHCA referred the matter to the Division to

con duct the requested hearing.

The hearing was originally scheduled for March 3, 2016. The

hearing was continued. On August 8, 2016, AHCA filed a Motion to

Relinquish Jurisdiction (Relinquish Motion) based of RespondentÓs

failure to provide the requested pr oof of financial ability to

operate. Respondent opposed the Relinquish Motion. On August 16,

2016, an Order d enying the Relinquish Motion w as entered.

On August 23, 2016, AHCA filed a Motion in Limine (Motion),

and RespondentÓs opposition to the Motion w as filed on August 25,

2016. At the beginning of the hearing on August 26, 2016, the

undersigned heard arguments from counsel. AHCAÓs Motion was

denied.

AHCA presented the testimony of Catherine Anne Avery, the

unit manager for AHCAÓs Assisted Living Lic ensure Unit ; John

Bartle, the president of the TALF Board ; and in rebuttal , Eric

West, a financial analyst with AHCAÓs F inancial A nalysis U nit.

AHCAÓs Exhibits A and C were admitted without objection. AHCAÓs

Exhibit B was admitted over objection. Univer sity Inn presented

testimony from John Bartle and via deposition, Lois Markham, one

of AHCAÓs licensure analysts for assisted living facilities.

University InnÓs Exhibits A , and C through Q were admitted without

objection. University InnÓs Exhibit B was admitted over

objection.

At the hearingÓs conclusion, AHCA requested and University

Inn did not object to additional time to file the proposed

recommended orders. The one - volume Tr anscript was filed on

September 12, 2016, and a Notice of Filing was issued the

following day. On October 7, 2016, RespondentÓs Unopposed Motion

for Enlargement of Time to File Proposed Recommended Order was

filed, and granted. On October 31, 2016, both parties timely

filed their proposed recommended orders, and each has been

c onsidered in the preparation of this Recommended Order.

On November 3, 2016, RespondentÓs Notice of Additional

Authority was filed. AHCA filed its Motion to Strike RespondentÓs

Notice of Additional Authority (Motion to Strike) later that same

day. On Nov ember 4, 2016, Respondent filed a Response in

Opposition to AHCAÓs Motion to Strike. 1 / AHCAÓs Motion to Strike

is granted.

All references to the Florida Statutes are to the 2016

version, unless otherwise noted.

FINDING S OF FACT

1. AHCA is the State regul atory authority responsible for

licensure of assisted living facilities and enforcement of

applicable state regulations, state statutes, and rules governing

assisted living facilities pursuant to chapters 429, p art I , and

408, p art II, Florida Statutes, an d Florida Administrative Code

C hapters 58A - 5 and 59A - 35 .

2. At all times material to this proceeding, University Inn

was a licensed assisted living facility providing services for a

continuing care retirement community in Tampa, Florida, under the

licensi ng authority of AHCA. University Inn was required to

comply with AHCAÓs applicable rules and statutes.

3. University Inn conducts business at University Village,

which is affiliated with Westport Holdings Tampa, LP (Westport).

Westport holds a certifica te from the Office of Insurance

Regulation (OIR) to operate University Inn as part of a continuing

care retirement community. As such, University Inn is also

regulated by the OIR. 2 /

4. A continuing care retirement community allows its

residents to transi tion from an independent living setting to care

in an assisted living facility to care in a skilled nursing

facility.

5. University Inn is physically located on the second and

third floors of a building which also houses a licensed nursing

facility known as TR & SNF, doing business as The Nursing Center

at University Village (Center). Westport is also affiliated with

the Center. University Inn and the Center share common vendors,

utilities, services and personnel.

6. Sometime after February 13, 2015, AH CA became aware of an

ÐInitial Order of SuspensionÑ issued by the OIR to the Westport

Holdings Tampa, LP , d / b / a University Village (University Village).

University Village is part of the continuing care retirement

community associated with University Inn and Center, located in

Tampa, Florida. 3 /

7. In late February or early March, AHCA conducted a survey

of the Center and found that certain vendors had not been paid

appropriately. The Center and University Inn are intertwined and

the financial health of o ne affects the other. If any of the

services provided to the residents are disrupted, residentsÓ

health, safety and welfare could be adversely affected.

8. Based on concerns for the University InnÓs residentsÓ

well - being, Ms. Avery authorized utiliz ation of section

408.810(8), Florida Statutes, which authorize d AHCA to demand

University Inn to provide proof of its financial ability to

operate.

9. On April 22, 2015, AHCA issued a certified letter to

University Inn asking it to provide proof of financial a bility

(PFA) to operate. The letter sought the PFA information within

ten days of receipt of the request. The initial paragraphs set

the tone of the request as follows:

The Agency has received information concerning

the financial status of your assisted living

facility. It has come to our attention that

the assisted living facility is in arrears in

paying vendors for services and goods [ sic ]

rendered.

This is an indication that your ALF is

experiencing financial instability and may be

jeopardizing patie nt care. The agency is

authorized by Florida Statutes and the Florida

Administrative Code to require you to submit

evidence of financial ability to continue

operating.

10. AHCAÓs demand letter provided the following statute and

rule provisions for Unive rsity Inn to review: section 408.810(8)

and 408.810(9), Florida Statutes (2014); and Florida

Administrative Code Rule 59A - 35.062(3) and (7) . University Inn

was directed to obtain the Assisted Living Facility Proof of

Financial Ability to Operate AHCA For m 3100 - 0009 July 2009, from

AHCAÓs website, and in addition to that form, to provide Ðcopies

of your current operating account balance (30 - day banking

statement); any other lines of credit and any other evidence of

available funds for your agencyÓs use; nu mbers of staff by

professional discipline currently employed including contractors;

proof of payment to staff and CONTRACTORS (current payroll

records); and copies of invoices for all vendors providing goods

and s ervices in the last 12 months.Ñ

11. Mr. Ba rtle was aware of AHCAÓs request for the PFA at or

near the time the request w as made. Mr. Bartle contacted Sue

Benovich, a certified public accountant , and asked her to start

preparing the PFA for University Inn. Mr. Bartle turned the PFA

request over t o Anna Sma ll, an attorney representing TALF and TR &

SNF. Mr. Bartle testified that he Ðreviewed notes along the way,

e - mails and back and forth . . . between the partiesÑ as the PFA

was being prepared and was satisfied that the forms were being

prepared.

12. At some point after receipt of the letter, Ms. Small, on

behalf of University Inn , asked AHCA for additional time in which

to provide the information. AHCA set May 25, 2015, as the

deadline for receipt of the PFA. University Inn did not submit

the requested PFA by the revised (May) deadline.

13. Mr. Bartle was aware that Ms. Small left her law

practice at Allen Dell Ðright after the 4th of July [ 2015 ] Ñ

because Ms. Small sought Mr. BartleÓs permission to transfer Ðthe

case toÑ another law firm. Mr. Bartle confirmed that he reviewed

a draft in July and Ðassumed it would have been sent to the Agency

at some point by Ms. Small.Ñ Mr. Bartle did not know the PFA was

not submitted until Ðthe provi der was served the compl a i nt.Ñ

14. On December 2, 2015, A HCA received University InnÓs

completed Election of Rights (request for hearing) form with an

Attachment A. Attachment A contained approximately 18 pages

following a page titled:

TALF, INC.

D/B/A THE INN AT UNIVERSITY VILLAGE

PROJ ECTED FI N ANCIAL STATEMEN TS

FOR THE YEARS ENDING JULY 31, 2016 AND 2017

15. Mr. West reviewed the PFA (Attachment A) submitted by

University Inn. Mr. West was unable to provide a professional

opinion on the financial stability of TALF because he was not

given a complete pictur e of t he financial position of TALF.

16. In April 2015 , AHCA performed several survey visits to

University Inn. The surveys were conducted to ensure the health,

safety, and well - being of University InnÓs residents, and did not

cite any deficie n cies .

17. University Inn failed to comply with an authorized

request to submit financial information to support its continu ed

ability to o perat e .

CONCLUSIONS OF LAW

18. DOAH has jurisdiction over the parties to and the

subject matter of this proceeding. §§ 120.56 9 and 120.57(1), Fla.

Stat . (2015).

19. AHCA bears the burden of proving the allegations of its

Administrative Complaint. See Dep't of Banking & Fin. v. Osborne

Stern & Co. , 670 So. 2d 932, 935 (Fla. 1996; Fla. Dep't of Transp.

v. J.W.C. Co. 396 So. 2d 7 78, 788 (Fla. 1st DCA 1981). Since AHCA

seeks to impose fines and revoke a license, AHCA must prove its

allegations by clear and convincing evidence. Nair v. DepÓt of

Bus. & ProfÓl Reg., Bd. of Med. , 654 So. 2d 205 (Fla. 1st DCA

1995.

20. The clear and convincing standard was described in

Slomowitz v. Walker , 429 So. 2d 797, 800 (Fla. 4th DCA 1983) , as

follows:

[T] he evidence must be found to be credible;

the facts to which the witnesses testify must

be distinctly remembered; the testimony must

be precis e and explicit and the witnesses must

be lacking in confusion as to the facts in

issue. The evidence must be of such weight

that it produces in the mind of the trier of

fact a firm belief or conviction, without

hesitancy, as to the truth of the allegation s

sought to be established.

21. Section 408.810 provides the following in pertinent

part:

(8) Upon application for initial licensure or

change of ownership licensure, the applicant

shall furnish satisfactory proof of the

applicantÓs financial ability to operate in

accordance with the requirements of this part,

authorizing statutes, and applicable rules.

The agency shall establish standards for this

purpose, including information concerning the

applicantÓs controlling interests. The agency

shall also es tablish documentation

requirements, to be completed by each

applicant, that show anticipated provider

revenues and expenditures, the basis for

financing the anticipated cash - flow

requirements of the provider, and an

applicantÓs access to contingency financ ing.

A current certificate of authority, pursuant

to chapter 651, may be provided as proof of

financial ability to operate. The agency may

require a licensee to provide proof of

financial ability to operate at any time if

there is evidence of financial i nstability,

including, but not limited to, unpaid expenses

necessary for the basic operations of the

provider .

(9) A controlling interest may not withhold

from the agency any evidence of financial

instability, including, but not limited to,

checks return ed due to insufficient funds,

delinquent accounts, nonpayment of withholding

taxes, unpaid utility expenses, nonpayment for

essential services, or adverse court action

concerning the financial viability of the

provider or any other provider licensed under

this part that is under the control of the

controlling interest. A controlling interest

shall notify the agency within 10 days after a

court action to initiate bankruptcy,

foreclosure, or eviction proceedings

concerning the provider in which the

controlli ng interest is a petitioner or

defendant. Any person who violates this

subsection commits a misdemeanor of the second

degree, punishable as provided in s. 775.082

or s. 775.083. Each day of continuing

violation is a separate offense.

(Emphasis added).

22. Rule 59A - 35.062 provides the following in pertinent

part:

(7) An applicant for renewal of a license

shall not be required to provide proof of

financial ability to operate, unless the

licensee or applicant has demonstrated

financial instability. If an applicant or

licensee has shown signs of financial

instability, as provided in Section

408.810(9), F.S., at any time, the Agency may

require the applicant or licensee to provide

proof of financial ability to operate by

submission of:

(a) AHCA Form 310 0 - 0009, July 2009, Proof of

Financial Ability Form, that includes a

balance sheet and income and expense statement

for the next 2 years of operation which

provide evidence of having sufficient assets,

credit, and projected revenues to cover

liabilities and expenses; and

(b) Documentation of correction of the

financial instability, including but not

limited to, evidence of the payment of any bad

checks, delinquent bills or liens. If

complete payment cannot be made, evidence must

be submitted of partial pa yment along with a

plan for payment of any liens or delinquent

bills. If the lien is with a government

agency or repayment is ordered by a federal or

state court, an accepted plan of repayment

must be provided.

23. The AC alleges that Univers ity Inn vio lated provisions

of c hapters 408, p art II , a nd 429, p art I. Those provisions

re quire an assisted living facility to furnish satisfactory proof

of financial ability to operate . The statute says that AHCA shall

establish standards for this purpose , includi ng information about

applicantÓs controlling interests, which it did through rule 59A -

35.062(7).

24. Clear and convincing evidence, in the form of the order

suspending the certificate for the continuing care community,

showed that AHCA had sufficient evid ence of financial instability

to require proof of financial ability.

25. Rule 59A - 35.062(7) authorizes AHCA to require a provider

to submit proof of financial ability by completing and submitting

a Proof of Financial Ability Form, a balance sheet, and an income

and expense statement. Providing some of that information (which

did not comply with the request) approximately seven months after

it was requested does not allow AHCA to adequately protect the

residents, staff and/or vendors as required. AHCA has proven by

clear and convincing evidence that it had reasonable cause to

request the financial information and that Unive rsity Inn failed

to provide it.

26. Section 408.815 provides the following in pertinent

part:

(1) In addition to the grounds provided in

authorizing statutes, grounds that may be used

by the agency for denying and revoking a

license or change of ownership application

include any of the following actions by a

controlling interest:

* * *

(c) A violation of this part, authorizin g

statutes, or applicable rules.

27. Section 429.14 provides the following in pertinent part:

(1) In addition to the requirements of part

II of chapter 408, the agency may deny,

revoke, and suspend any license issued under

this part and impose an admini strative fine in

the manner provided in chapter 120 against a

licensee for a violation of any provision of

this part, part II of chapter 408, or

applicable rules, or for any of the following

actions by a licensee, any person subject to

level 2 background s creening under s. 408.809,

or any facility staff:

* * *

(b) A determination by the agency that the

owner lacks the financial ability to provide

continuing adequate care to residents.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of

Law, it is recommended that A gency for H ealth C are A dministration

enter a final order revoking the license of TALF, Inc. , d/b/a

The Inn at University Village.

DONE AND ENTERED this 16th day of November , 2016 , in

Tallahassee, Leon County, F lorida.

S

LYNNE A. QUIMBY - PENNOCK

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

Filed with the Clerk of the

Division of Administrative Hearings

this 16th day of November, 2016 .

ENDNOTE S

1 / See Fla. Admin. Code R. 28 - 106.204.

2/ All continuing care retirement communities are regulated by

OIR.

3/ The suspension was later removed.

COPIES FURNISHED:

John F. Loar, Esquire

Broad and Cassel

Suite 400

215 South Monroe Street

Tallahassee, Florida 32301

(eServed)

Thomas J. Walsh, II, Esquire

Agency for Health Care Administration

Suite 330

525 Mirror Lake Drive North

St. Petersburg, Florida 33701

(eServed)

Andrew Beau - James Thornquest, Esquire

Agency for Health Care Administration

Mail Stop 3

2727 Mahan Drive

Tallahassee, Florida 32308

(eServed)

M. Stephen Turner, Esquire

Broad and Cassel

Suite 400

215 South Monroe Str eet

Tallahassee, Florida 32301

(eServed)

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Stuart Williams, General Counsel

Agency for Health Care Administration

272 7 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Justin Senior, Interim Secretary

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 1

Tallahassee, Florida 32308

(eServed)

Shena Grantham , Esquire

Agency for Health Care Adm inistration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Thomas Hoeler, Chief Facilities Counsel

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

NOTICE OF RIGHT TO SUBM IT 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.