MILA ALF, LLC d/b/a Dixie Lodge Assisted Living Facility v. State of Florida, Agency For Health Care Administration

FIRST DISTRICT COURT OF APPEAL
STATE OF FLORIDA
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No. 1D18-3346
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MILA ALF, LLC d/b/a DIXIE
LODGE ASSISTED LIVING
FACILITY,
Appellant,
v.
STATE OF FLORIDA, AGENCY FOR
HEALTH CARE ADMINISTRATION,
Appellee.
_____________________________
On appeal from the Agency for Health Care Administration.
Justin M. Senior, Secretary.
May 30, 2019
OSTERHAUS, J.
MILA ALF, LLC appeals the decision of Florida’s Agency for
Health Care Administration to reject its change of ownership
application for a standard license to operate an assisted living
facility. Appellant makes two arguments on appeal. It argues, first,
that it is entitled to a license by default under § 120.60(1), Florida
Statutes (2015), because AHCA failed to timely decide its
application. It argues, second, that AHCA wrongfully overturned
a recommended order of the Division of Administrative Hearings
in violation of § 120.57(1)(l), Florida Statutes (2015). We affirm
AHCA’s final order.
I.
In July 2015, Appellant submitted to AHCA an application for
a change of ownership license related to the Dixie Lodge Assisted
Living Facility. Dixie Lodge had been licensed under previous
owners for about thirty years as a seventy-seven-bed assisted-
living facility with limited mental health specialty services. AHCA
granted Appellant a provisional license to operate the facility while
reviewing its application for a standard license. See § 408.808, Fla.
Stat. (2015).
Within a couple of months, AHCA issued a notice of intent to
deny Appellant’s application, citing its failure to meet minimum
licensure requirements. AHCA identified eighteen Class III
deficiencies and three Class II deficiencies from its change in
ownership inspection. AHCA later amended the notice to add legal
authority for its decision and results from a subsequently
discovered violation.
Appellant petitioned for a formal administrative hearing
pursuant to §§ 120.569 and 120.57(1), Florida Statutes. In 2018,
the Division of Administrative Hearings held a hearing to decide
whether Appellant’s application for change of ownership should be
approved. A recommended order issued in May 2018. The
Recommended Order found that clear and convincing evidence
supported many of the AHCA-identified deficiencies: failure to
prepare and file adverse incident report, failure to obtain/maintain
complete health assessments for residents, failure to provide
residents with a minimum weekly number of hours of leisure and
social activities, failure to ensure that residents’ rights were
addressed, failure to provide assistance with self-administration of
medications, failure to maintain accurate and up-to-date
medication observation records, failure to provide adequate
supervision over the facility, failure to timely obtain/maintain in
the personnel file of each direct health care provider verification
that the staff member was free from communicable disease, failure
to ensure that a staff member who had completed CPR courses was
in the facility at all times, failure to ensure that staff members
timely completed a required training course in DNRs, failure to
maintain a three-day supply of food in case of an emergency, and
failure to maintain facility records for admission and discharge.
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But the ALJ also found that closing Appellant’s facility would
have a potential negative impact on the residents. The order
concluded that AHCA did not demonstrate that the denial of
Appellant’s application was warranted under §§ 408.815(1)(b),
429.14(1)(a) or (e), or 408.815(1)(d), Florida Statutes; but that it
did have authority to deny Appellant’s application under §§
429.14(1)(h) and 408.815(1)(c), for failing to demonstrate that
operations at the facility met minimum licensure requirements.
The ALJ recommended, however, that AHCA not deny the
application.
On July 12, 2018, AHCA’s Final Order incorporated most of
the recommended order. But it ultimately denied the application,
citing §§ 429.14(1)(e) and 408.806(1)(g), Florida Statutes, because
of the twenty-four deficiencies uncovered by AHCA’s ownership
survey inspection and Appellant’s “failure to meet minimum
licensure requirements.” After AHCA denied Appellant’s
application, this appeal followed.
II.
A.
The first issue in this appeal involves the interpretation and
application of § 120.60(1), Florida Statutes. Appellant argues that
the statute requires AHCA to grant its application to operate the
assisted living facility by default because AHCA failed to timely
issue its final order. An issue involving statutory interpretation is
subject to de novo review. W. Fla. Reg’l Med. Ctr., Inc. v. See, 79
So. 3d 1, 8 (Fla. 2012). Courts must give full effect to all statutory
language and avoid readings that render a statute meaningless.
Bennett v. St. Vincent’s Med. Ctr., Inc., 71 So. 3d 828, 838 (Fla.
2011).
Florida law requires those that operate an assisted living
facility to have a license granted by AHCA. §§ 429.04(1), 429.07(1),
408.802(11), Fla. Stat. In this case, Appellant applied for such a
license, but AHCA denied it because Appellant failed to show that
it met licensure requirements in AHCA’s pre-licensure inspection.
Appellant argues, however, that it is entitled to a default license
anyway, because, under § 120.60(1), AHCA failed to make a final
decision on its application within 45 days after the ALJ’s
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recommended order. After the ALJ recommended that AHCA
grant Appellant’s license on May 10, 2018, AHCA didn’t issue its
final order denying Appellant’s license application until July 12,
2018, some 63 days later.
Section 120.60(1) provides in pertinent part as follows:
Any application for a license which is not approved or
denied . . . within 45 days after a recommended order is
submitted to the agency and the parties, whichever
action and timeframe is latest and applicable, is
considered approved unless the recommended order
recommends that the agency deny the license. Subject
to the satisfactory completion of an examination if
required as a prerequisite to licensure, any license that
is considered approved shall be issued and may include
such reasonable conditions as are authorized by law.
Previous cases in other contexts have enforced this statute to grant
licenses when applications were undecided past the statutory
deadline. See, e.g., Premier Int’l Travel, Inc. v. Bronson, 843 So. 2d
294 (Fla. 1st DCA 2003) (“Section 120.60(1) provides that the
agency must approve any application for a license if the agency has
not approved or denied the application within the time periods
prescribed by that subsection.”); Krakow v. Dep’t of Prof’l
Regulation, Bd. of Chiropractic, 586 So. 2d 1271, 1273 (Fla. 1st
DCA 1991) (recognizing that “[o]nce the board failed to act in a
timely manner, it was precluded from considering the merits of the
appellants’ application and . . . the application must be deemed
approved”). Here, it is undisputed that AHCA failed to issue a final
order within 45 days after submission of the recommended order.
We conclude, however, that Appellant is not entitled to a
default license because it failed to meet minimum licensure
requirements in AHCA’s pre-licensure survey inspection.
Section 120.60(1) makes the issuance of a default license “[s]ubject
to the satisfactory completion of an examination if required as a
prerequisite to licensure.” In this case, AHCA’s pre-licensure
inspection to determine if an owner-applicant can ably operate an
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assisted living facility constitutes such an “examination”
prerequisite to licensure. *
To operate an assisted living facility, a new owner must apply
and pass a pre-licensure inspection to confirm upfront its ability to
lawfully operate the facility. §§ 408.806(1)(g) (requiring applicants
to satisfactorily pass an inspection to show that they can carry out
their statutory and regulatory responsibilities); 408.806(7)
(requiring applicants to pass an inspection); 408.808(1)
(conditioning issuance of a standard license on “compliance with
all statutory requirements and agency rules”); 408.811
(authorizing agency inspections), Fla. Stat.; see also Fla. Admin.
Code R. 59A-35.060(6)(c) (providing for the “[c]ompletion of a
satisfactory inspection” in which no regulatory violations exist, or
all prior violations have been corrected). Here, Appellant failed its
pre-licensure examination. AHCA concluded that Appellant didn’t
meet minimum licensure requirements because its survey-
inspection results showed more than twenty deficiencies. Under
these circumstances, where the applicant has failed the pre-
licensure examination, § 120.60(1) does not require a default
license to be issued. AHCA retained authority to deny Appellant’s
license application because Appellant failed its pre-licensure
inspection. See § 429.14(1)(h), Fla. Stat. (authorizing AHCA to
deny a license due to the applicant’s failure to meet minimum
requirements at the time of the license application).
B.
* The term “examination” in § 120.60(1) is not defined in the
statute, so we construe it according to its “plain and ordinary
sense.” State v. Brake, 796 So. 2d 522, 528 (Fla. 2001) (citing State
v. Mitro, 700 So. 2d 643, 645 (Fla. 1997)). See, e.g., Examination,
Merriam–Webster Online Dictionary, www.merriam-webster.
com/dictionary/examination (defining examination as “1 : the act
or process of examining : the state of being examined[;] 2 : an
exercise designed to examine progress or test qualification or
knowledge[; and] 3 : a formal interrogation”).
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Finally, we do not agree with Appellant’s argument that
AHCA wrongfully overturned the ALJ’s recommended order in
violation of § 120.57(1)(l).
Section 120.57(1)(l) requires that
When rejecting or modifying [a] conclusion of law . . . the
agency must state with particularity its reasons for
rejecting or modifying [it] and must make a finding that
its substituted conclusion of law or interpretation of
administrative rule is as or more reasonable than that
which was rejected or modified.
In this case, both the Recommended and Final Orders found that
the AHCA-identified deficiencies allowed the agency to deny
Appellant’s license application. Although the Recommended Order
did not ultimately recommend that AHCA deny the application, it
confirmed the legal basis for AHCA to do so. The Final Order
agreed, in turn, that AHCA could deny Appellant’s application
because of Appellant’s inspection-related shortcomings.
Accordingly, because the facts and legal conclusions in the
Recommended and Final Orders were in agreement regarding
AHCA’s authority to deny Appellant’s application, and AHCA
explained its reasons for doing so, the Final Order did not violate
§ 120.57(1)(l) of the Administrative Procedures Act.
III.
For these reasons, the Final Order denying Appellant’s
application is affirmed.
AFFIRMED.
ROWE and MAKAR, JJ., concur.
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Not final until disposition of any timely and
authorized motion under Fla. R. App. P. 9.330 or
9.331.
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John F. Gilroy, III, Tallahassee, for Appellant.
Nicholas A. Merlin, Agency for Health Care Administration,
Tallahassee, for Appellee.
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