97-000162 Hayes Group Home, Inc. vs. Agency For Health Care Administration Status: Closed Recommended Order on Friday, July 18, 1997.

Summary: Petitioner entitled to licensure where statute relied on by agency did not establish automatic bar to licensure due to prior revocation.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

HAYES GROUP HOME, INC., )

)

Petitioner, )

)

vs. ) Case No. 97-0162

)

AGENCY FOR HEALTH CARE )

ADMINISTRATION, )

)

Respondent. )

__________________________________)

RECOMMENDED ORDER

This cause came before the undersigned for entry of a

Recommended Order based upon a stipulated statement of facts.

APPEARANCES

For Petitioner: Brian M. O'Connell, Esquire

Boose, Casey, Ciklin, Lubitz,

Martens, McBane & O'Connell

Post Office Box 4626

West Palm Beach, Florida 33401

For Respondent: Jennifer Stewart, Esquire

Agency for Health Care Administration

3810 Inverrary Boulevard

Lauderhill, Florida 33319

STATEMENT OF THE ISSUE

The issue presented is whether Petitioner's application for

licensure as an assisted living facility should be granted.

PRELIMINARY STATEMENT

By letter dated November 12, 1996, the Agency for Health

Care Administration advised Petitioner that its application for

licensure as an assisted living facility was denied, and

Petitioner timely requested an evidentiary hearing regarding that

determination. This cause was transferred to the Division of

Administrative Hearings on January 13, 1997, to conduct that

evidentiary proceeding.

This cause was scheduled for final hearing on April 17,

1997, in accordance with the parties' request. During a

telephonic hearing on April 14, the final hearing was cancelled

due to the parties' representation that all disputed issues of

material fact could be resolved by the parties.

A telephonic pre-hearing conference was conducted on April

25, 1997, and the parties advised that all disputed issues of

material fact had been resolved but that the parties stipulated

that the Division of Administrative Hearings should retain

jurisdiction over this matter for entry of a Recommended Order

based upon the parties' stipulated statement of facts, proposed

recommended orders and memoranda of law. By Order entered May 1,

1997, the schedule established by the parties for submitting

those documents was memorialized. Those documents have been

filed.

STIPULATED FACTS

1. Petitioner and the Agency entered into a Joint

Stipulation dated June 1994, whereby the parties agreed to end

pending litigation on the terms set forth therein.

2. Lois Shimmin, Area Supervisor for Area 9 of the Division

of Health Quality Assurance of the Agency, filed an

Administrative Complaint on or about April 8, 1996, seeking to

revoke Petitioner's license to operate an assisted living

facility (hereinafter "ALF") for failure to abide by the

conditions of the Joint Stipulation. Petitioner did not respond

to or request a hearing on the Administrative Complaint.

3. As outlined in the May 10, 1996, Final Order,

Petitioner's license to operate as an ALF was revoked by the

Agency because Petitioner failed to abide by the conditions of

the Joint Stipulation entered into with the Agency in June 1994

in that:

A. Petitioner failed to ensure that a registered

nurse visited the Hayes Group Home and

examined the residents three times per week in

the manner required in paragraph 3(a) of the

Joint Stipulation.

B. Petitione r failed to ensure that documentation

of the registered nurse's visits was furnished

to the Agency on a monthly basis as required by

paragraph 3(b) of the Joint Stipulation.

C. Petitioner failed to obtain the Agency's

approval of all registered nurses selected by

Petitioner to provide the service mandated by

the Joint Stipulation as required by paragraph

3(c) of the Joint Stipulation.

4. In its Final Order, the Agency entered a default

judgment against Petitioner, determining that Petitioner was

"without a license to operate as an ALF in compliance with

Chapter 400, Part III, Florida Statutes, and Chapter 58A-5,

Florida Administrative Code." The Final Order further provided

that Petitioner's license was revoked pursuant to Section

400.414(2), Florida Statutes. Petitioner did not appeal the

Final Order.

5. Petitioner owned 25 percent or more of, or operated, the

ALF whose license was revoked by the Final Order of May 10, 1996.

6. On or about September 11, 19 96, a new application for

licensure for Petitioner, signed by Ruby Hayes, was forwarded to

the Agency. In addition to the application, the following were

forwarded:

A. A check payable to the State of Florida in

the amount of $302 for the licensure fee.

B. Balance sheet and profit and loss statement.

C. Liability insurance verification.

D. HIV training confirmation affidavit.

E. Zoning approval letter.

F. Certificate of corporate status form.

G. Copy of facility' s floor plan.

H. Proof of satisfactory fire and safety

inspections.

7. On September 27, 1996, Petitioner received a letter from

Wendy G. Beard, Healthcare Facilities Consultant for the Agency's

ALF Unit, notifying Petitioner that its application was

incomplete and requesting additional information so the Agency

could continue the licensing process. Among other things, the

letter requested the following:

A. An additional $9 for licensure fees, advising that

the standard fee for an ALF license was $247.

B. A Certificate of Status from the Florida Secretary

of State.

C. Proof of satisfactory fire safety inspection

conducted by the local authority within the

past year.

D. A copy of the County Public Health Unit inspection

report.

E. A completed HRS-AA Form 1801, Assets and Liability

Statement.

F. A completed HRS-AA Form 1802, Statement of

Operations.

G. A copy of a warranty deed, lease, or rental

agreement in the name of Hayes Group Home, Inc.

H. A copy of the facility's floor plan.

8. On or about October 18, 1996, Ms. Beard granted

Petitioner an extension until October 28 to submit the various

documents requested in the September 27 letter. On or about

October 29, 1996, the following documentation was provided to Ms.

Beard:

A. A copy of an October 21, 1996, letter from

the Fire Marshal of the City of Riviera Beach

verifying compliance with the fire safety codes.

B. A copy of the ALF Assets and Liability Statement

as of September 30, 1996.

C. A copy of the ALF Statement of Operations for

the period of January 1 through September 30, 1996.

9. As of October 29, 1996, the only item which had not been

furnished pursuant to Ms. Beard's September 27 letter was the

County Public Health Unit Inspection Report from the Palm Beach

County Public Health Unit. Ms. Beard was notified that the

proper authorities had been contacted regarding the sanitation

inspection and that the report would be forwarded to her as soon

as it was received by Petitioner.

10. At all times material hereto, the Agency had notice

that Petitioner's ALF license had previously been revoked.

11. On or about October 30, 1996, Lois Shimmin notified Ms.

Beard by telephone that Petitioner's ALF license had previously

been revoked. Immediately thereafter, the Agency halted the

application process for Petitioner's application.

12. By letter dated November 12, 1996, the Agency denied

Petitioner's application for an ALF license despite the fact that

all requested documentation needed for application approval was

not received by the Agency. The stated basis for the denial was

that "[t]he applicant, Ruby Hayes [sic], license was revoked for

Hayes Group Home on April 8, 1996. Pursuant to section

400.414(5)[,] F.S., application for a new license will not be

approved when it is within five years of the date of a previous

license revocation."

13. Thereafter, Petitioner requested the Agency to allow

Petitioner to complete the application process before summarily

denying Petitioner's application but to no avail.

14. Petitioner timely requested this proceeding.

CONCLUSIONS OF LAW

15. The Division of Administrative Hearings has

jurisdiction over the parties hereto and the subject matter

hereof. Sections 120.569 and 120.57(1), Florida Statutes.

16. In its proposed recommended order, Petitioner raises

several issues, both procedural and substantive. The procedural

issues relate to Petitioner's argument that the Agency violated

Petitioner's due process rights and the mandates of Section

120.60, Florida Statutes, by summarily denying Petitioner's

application while Petitioner was completing the application

process.

17. Petitioner's procedural arguments are without merit and

are not dispositive. Although the stipulated facts reveal that

the Agency conducted no investigation or analysis of all portions

of the application and supporting documents, thereby not

complying strictly with the requirements of Section 120.60, any

deficiencies have been cured. Petitioner's timely request for

this proceeding transformed the Agency's denial of Petitioner's

licensure application into only preliminary, or intended, Agency

action, and the de novo nature of this Chapter 120 proceeding

permits Petitioner to show that its application should be

granted.

18. On the other hand, Petitioner's substantive arguments

are dispositive of this proceeding. Section 400.414, Florida

Statutes, authorizes the Agency to deny, revoke, or suspend a

license to operate an ALF for certain specified conduct.

Subsection (5), relied upon by the Agency as its sole basis for

denying Petitioner's application for licensure, provides as

follows:

(5) The agency may deny a license to an applicant

who owns 25 percent or more of, or operates, a

facility which, during the 5 years prior to the

application for a license, has had a license

denied, suspended, or revoked pursuant to

subsection (2), or, during the 2 years prior to

the application for a license, has had a

moratorium impose d on admissions, has had an

injunctive proceeding initiated against it, has

had a receiver appointed, was closed due to

financial inability to operate, or has an

outstanding fine assessed under this part.

19. Contrary to the Agency's arguments, Section 400.414(5),

Florida Statutes, does not provide an automatic bar to

Petitioner's licensure. That Section provides only that the

Agency "may" deny an application of an applicant, like

Petitioner, who has had an ALF license revoked within the past

five years. Had the Legislature intended that a prior revocation

be an automatic bar, it would have said so. The statute is not

ambiguous; it provides that the Agency may deny such an applicant

or it may not.

20. While the Agency correctly argues that it can interpret

a statute which it is charged with administering, such as the one

relied on by the Agency in this proceeding, such an

interpretation, to be a valid one, carries its own requirements.

For example, the law is well settled that an agency cannot

interpret a statute to be contrary to the statutory language. In

the case at bar, the Agency asserts that the statutory

requirement is mandatory, not permissive. A plain reading of the

statute belies that assertion.

21. To the extent that the Agency has not simply misread

the statute but rather is relying on some agency policy that the

statute will be applied so that an application by an individual

or entity who has been previously revoked is automatically denied

rather than determined on a case-by-case basis consistent with

the statutory language which allows some such applications to be

granted, the Agency has offered no evidence that such a policy

exists. Agency policies can be found in rules and in orders

issued by the agency. The Agency has offered no rule or order

which sets forth the interpretation of the statute it relies on

in this proceeding.

22. Agency policy can also be developed through

adjudication so long as there is a record foundation supporting

that policy. See , for example, McDonald v. Dept. of Banking &

Finance , 346 So. 2d 569 (Fla. 1st Dist. 1977), and its progeny.

The Agency offered no evidence in this cause which would

establish the existence of such a policy, and the record is

devoid of the explication of the Agency's non-rule policy

required by the well-settled law in Florida. See , Section

120.57(1)(e), Florida Statutes.

23. The stipulated facts reveal that Ms. Shimmin telephoned

Ms. Beard and stated that Petitioner's license had been revoked,

and Ms. Beard halted the application process. Despite

Petitioner's request that Petitioner be allowed to complete its

application, the Agency wrote to Petitioner advising that its

application was denied automatically pursuant to Section

400.414(5), Florida Statutes. That basis for denial is contrary

to the plain wording of the statute. No other basis for denial

being asserted by the Agency, Petitioner's application must be

granted subject to Petitioner submitting the final document from

the Palm Beach County Public Health Unit.

24. Petitioner's final argument, that Section 400.414(5)

does not apply because its license was not revoked for a

violation of Section 400.414(2), is without merit. The Final

Order revoking Petitioner's license recites that violation of the

Joint Stipulation constitutes grounds to revoke Petitioner's

license pursuant to Section 400.414(2). Whether that statement

is factually and legally correct cannot be adjudicated in this

proceeding. Petitioner did not appeal that Final Order, and its

contents have become the law of this case.

25. The Agency's argument that the standard of review in

this proceeding is clearly erroneous and its denial, therefore,

cannot be overturned is without merit. That is an appellate

standard of review; it is inapplicable to this proceeding which

is de novo and which only requires Petitioner to show entitlement

to licensure by a preponderance of the evidence. Section

120.57(1)(h)and ( i), Florida Statutes.

26. Petitioner's request for attorney's fees and costs,

raised for the first time in its Proposed Final [sic] Order,

cannot be granted. There are a number of provisions under which

a prevailing party in an administrative proceeding may recover

attorney's fees and costs. Some of them require evidence during

the proceeding, and some of them require the filing of a petition

for attorney's fees and costs with the Division of Administrative

Hearings after a final order has been entered. Petitioner has

not identified the provision under which it alleges its

entitlement to attorney's fees and costs. Further, Petitioner's

request that jurisdiction be retained in this proceeding to

determine attorney's fees and costs is not permissible where only

a recommended order is entered by the Division of Administrative

Hearings because jurisdiction is transferred from the Division to

the referring agency upon entry of the recommended order.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED THAT a Final Order be entered granting

Petitioner's application for a license to operate an ALF, subject

only to Petitioner providing the required inspection report from

the Palm Beach County Public Health Unit.

DONE AND ENTERED this 18th day of July, 1997, at

Tallahassee, Leon County, Florida.

___________________________________

LINDA M. RIGOT

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fa x Filing [phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 18th day of July, 1997.

COPIES FURNISHED:

Brian M. O'Connell, Esquire

Boose, Casey, Ciklin, Lubitz,

Martens, McBane & O'Connell

Post Office Box 4626

West Palm Beach, Florida 33401

Jennifer Stewart, Esquire

Agency for Health Care Administration

3810 Inverrary Boulevard

Lauderhill, Florida 33319

Jerome W. Hoffman, General Counsel

Agency for Health Care Administration

2727 Mahan Drive

Tallahassee, Florida 32309

Sam Power, Agency Clerk

Agency for Health Care Administration

Fort Knox Building III, Suite 3431

2727 Mahan Drive

Tallahassee, Florida 32309

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.