Article 4. Offenses of California Health And Safety Code >> Division 2. >> Chapter 3.2. >> Article 4.
(a) Any person who violates this chapter, or who willfully
or repeatedly violates any rule or regulation adopted under this
chapter, is guilty of a misdemeanor and upon conviction thereof shall
be punished by a fine not to exceed one thousand dollars ($1,000),
by imprisonment in the county jail for a period not to exceed one
year, or by both the fine and imprisonment.
(b) Operation of a residential care facility for the elderly
without a license shall be subject to a summons to appear in court.
Unlicensed operation, establishment, management, conducting, or
maintaining of a facility as prohibited by Section 1569.10 is a
separate and distinct offense of this section and is punishable as a
misdemeanor.
(c) A misdemeanor may be prosecuted regardless of any concurrent
enforcement of civil penalties or administrative remedies available
to the department.
(d) Notwithstanding any other provision of this chapter, any
person, firm, partnership, association, or corporation who owns,
operates, establishes, manages, conducts, or maintains a residential
care facility for the elderly, as defined in subdivisions (k) and (
l) of Section 1569.2 which is an unlicensed residential care
facility for the elderly as defined in subdivision (a) of Section
1569.44 is guilty of a misdemeanor and upon conviction thereof shall
be punished by a fine not exceeding two thousand five hundred dollars
($2,500), by imprisonment in the county jail for a period not to
exceed one year, or by both the fine and imprisonment.
Upon a finding by the licensing authority that a facility
is in operation without a license, a peace officer, as defined in
Chapter 4.5 (commencing with Section 830) of Title 3 of Part 2 of the
Penal Code, may enforce Section 1569.10 by utilizing the procedures
set forth in Chapter 5 (commencing with Section 853.5) of Title 3 of
Part 2 of the Penal Code. A facility violating Section 1569.10 is
guilty of an infraction punishable by a fine of two hundred dollars
($200) for each day of violation. Upon a determination that a
residential care facility for the elderly is in violation of Section
1569.10, and after a citation has been issued, the peace officer
shall immediately notify the licensing authority in the department.
Any person who, without lawful authorization from a duly
authorized officer, employee, or agent of the department, informs an
owner, operator, employee, agent, or resident of a residential care
facility for the elderly of an impending and unannounced site visit
to that facility by personnel of the department, except for a site
visit prior to licensing the facility, is guilty of a misdemeanor and
upon conviction thereof shall be punished by a fine not to exceed
one thousand dollars ($1,000), by imprisonment in the county jail for
a period not to exceed 180 days, or by both a fine and imprisonment.
The director may bring an action to enjoin the violation
or threatened violation of Section 1569.10 or 1569.44, or both, in
the superior court in and for the county in which the violation
occurred or is about to occur. Any proceeding under this section
shall conform to the requirements of Chapter 3 (commencing with
Section 525) of Title 7 of Part 2 of the Code of Civil Procedure,
except that the director shall not be required to allege facts
necessary to show or tending to show lack of adequate remedy at law
or irreparable damage or loss. Upon a finding by the director that
the violations threaten the health or safety of persons in, or served
by, a residential care facility for the elderly, the agency
contracted with pursuant to Section 1569.13 may bring an action to
enjoin the violation, threatened violation, or continued violation by
any residential care facility for the elderly which is located in an
area for which it is responsible pursuant to the terms of the
contract.
With respect to any and all actions brought pursuant to this
section alleging actual violation of Section 1569.10 or 1569.44, or
both, the court shall, if it finds the allegations to be true, issue
its order enjoining the residential care facility for the elderly
from continuance of the violation.
Any action brought by the director against a residential
care facility for the elderly shall not abate by reason of a sale or
other transfer of ownership of the residential care facility for the
elderly which is a party to the action except with express written
consent of the director.
Notwithstanding any other provisions of this chapter, the
district attorney of every county, and city attorneys in those cities
which have city attorneys which prosecute misdemeanors pursuant to
Section 72193 of the Government Code, shall, upon their own
initiative or upon application by the state department or its
authorized representative, institute and conduct the prosecution of
any action for violation of this chapter within his or her
jurisdiction.
(a) A facility shall be deemed to be an "unlicensed
residential care facility for the elderly" and "maintained and
operated to provide residential care" if it is unlicensed and not
exempt from licensure, and any one of the following conditions is
satisfied:
(1) The facility is providing care and supervision, as defined by
this chapter or the rules and regulations adopted pursuant to this
chapter.
(2) The facility is held out as, or represented as, providing care
and supervision, as defined by this chapter or the rules and
regulations adopted pursuant to this chapter.
(3) The facility accepts or retains residents who demonstrate the
need for care and supervision, as defined by this chapter or the
rules and regulations adopted pursuant to this chapter.
(4) The facility represents itself as a licensed residential
facility for the elderly.
(b) No unlicensed residential facility for the elderly, as defined
in subdivision (a), shall operate in this state.
(c) Upon discovery of an unlicensed residential care facility for
the elderly, the department shall refer residents to the appropriate
placement or adult protective services agency or the appropriate
local or state long-term care ombudsman, if either of the following
conditions exist:
(1) There is an immediate threat to the clients' health and
safety.
(2) The facility will not cooperate with the licensing agency to
apply for a license, meet licensing standards, and obtain a valid
license.
A facility shall be licensed as a residential care
facility for the elderly if it offers care and supervision, as
defined, to its residents. Every residential care facility for the
elderly in this state shall be licensed under this chapter.
Operation of an unlicensed facility shall be an act of
unfair competition and an unfair business practice within the meaning
of Chapter 5 (commencing with Section 17200) of the Business and
Professions Code.
(a) "Placement agency" means any county welfare
department, county social service department, county mental health
department, county public guardian, general acute care hospital
discharge planner or coordinator, state-funded program or private
agency providing placement or referral services, conservator pursuant
to Part 3 (commencing with Section 1800) of Division 4 of the
Probate Code, conservator pursuant to Chapter 3 (commencing with
Section 5350) of Part 1 of Division 5 of the Welfare and Institutions
Code, and regional center for persons with developmental
disabilities which is engaged in finding homes or other places for
the placement of elderly persons for temporary or permanent care.
(b) A placement agency shall not place individuals in licensed
residential care facilities for the elderly when the individual,
because of his or her health condition, cannot be cared for within
the limits of the license or requires inpatient care in a health
facility. Violation of this subdivision is a misdemeanor.
(c) A placement agency or employee of a placement agency shall not
place, refer, or recommend placement of a person in a facility
providing care and supervision, or protective supervision, unless the
facility is licensed as a residential care facility for the elderly
or is exempt from licensing under Section 1569.145. Violation of this
subdivision is a misdemeanor.
(d) Any employee of a placement agency who knows, or reasonably
suspects, that a facility which is not exempt from licensing is
operating without a license shall report the name and address of the
facility to the department. Failure to report as required by this
subdivision is a misdemeanor.
(e) The department shall investigate any report filed under
subdivision (d). If the department has probable cause to believe that
the facility which is the subject of the report is operating without
a license, the department shall investigate the facility within 10
days after receipt of the report.
(f) A placement agency shall notify the appropriate licensing
agency of any known or suspected incidents which would jeopardize the
health or safety of residents in a residential care facility for the
elderly. Reportable incidents include, but are not limited to, all
of the following:
(1) Incidents of physical abuse.
(2) Any violation of personal rights.
(3) Any situation in which a facility is unclean, unsafe,
unsanitary, or in poor condition.
(4) Any situation in which a facility has insufficient personnel
or incompetent personnel on duty.
(5) Any situation in which residents experience mental or verbal
abuse.
An emergency resident contingency account may be
established within the Technical Assistance Fund established under
Section 1523.2 to which not more than 50 percent of each penalty
assessed pursuant to Section 1569.49 is deposited for use by the
Community Care Licensing Division of the department, at the
discretion of the director, for the relocation and care of residents
when a facility's license is revoked or temporarily suspended. The
money in the account shall cover costs, including, but not limited
to, transportation expenses, expenses incurred in notifying family
members, and any other costs directly associated with providing
continuous care and supervision to the residents. The department
shall seek the input of stakeholders and local agencies in developing
policies for emergency resident care and supervision.
(a) (1) It is the intent of the Legislature in enacting
this section to authorize the department to take quick, effective
action to protect the health and safety of residents of residential
care facilities for the elderly and to minimize the effects of
transfer trauma that accompany the abrupt transfer of residents by
appointing a temporary manager to assume the operation of a facility
that is found to be in a condition in which continued operation by
the licensee or his or her representative presents a substantial
probability of imminent danger of serious physical harm or death to
the residents.
(2) A temporary manager appointed pursuant to this section shall
assume the operation of the facility in order to bring it into
compliance with the law, facilitate a transfer of ownership to a new
licensee, or ensure the orderly transfer of residents should the
facility be required to close. Upon a final decision and order of
revocation of the license, issuance of a temporary suspension, or a
forfeiture by operation of law, the department shall immediately
issue a provisional license to the appointed temporary manager.
Notwithstanding the applicable sections of this code governing the
revocation of a provisional license, the provisional license issued
to a temporary manager shall automatically expire upon the
termination of the temporary manager. The temporary manager shall
possess the provisional license solely for purposes of carrying out
the responsibilities authorized by this section and the duties set
forth in the written agreement between the department and the
temporary manager. The temporary manager does not have the right to
appeal the expiration of the provisional license.
(b) For purposes of this section, "temporary manager" means the
person, corporation, or other entity appointed temporarily by the
department as a substitute facility licensee or administrator with
authority to hire, terminate, reassign staff, obligate facility
funds, alter facility procedures, and manage the facility to correct
deficiencies identified in the facility's operation. The temporary
manager has the final authority to direct the care and supervision
activities of any person associated with the facility, including
superseding the authority of the licensee and the administrator.
(c) The director, in order to protect the residents of the
facility from physical or mental abuse, abandonment, or any other
substantial threat to health or safety, may appoint a temporary
manager when any of the following circumstances exist:
(1) The director determines that it is necessary to temporarily
suspend the license of a residential care facility for the elderly
pursuant to Section 1569.50 and the immediate relocation of the
residents is not feasible based on transfer trauma, lack of available
alternative placements, or other emergency considerations for the
health and safety of the residents.
(2) The licensee is unwilling or unable to comply with the
requirements of Section 1569.525 or the requirements of Section
1569.682 regarding the safe and orderly relocation of residents when
ordered to do so by the department or when otherwise required by law.
(3) The licensee has opted to secure a temporary manager pursuant
to Section 1569.525.
(d) (1) Upon appointment, the temporary manager shall complete its
application for a license to operate a residential care facility for
the elderly and take all necessary steps and make best efforts to
eliminate any substantial threat to the health and safety to
residents or complete the transfer of residents to alternative
placements pursuant to Section 1569.525 or 1569.682. For purposes of
a provisional license issued to a temporary manager, the licensee's
existing fire safety clearance shall serve as the fire safety
clearance for the temporary manager's provisional license.
(2) A person shall not impede the operation of a temporary
manager. The temporary manager's access to, or possession of, the
property shall not be interfered with during the term of the
temporary manager's appointment. There shall be an automatic stay for
a 60-day period subsequent to the appointment of a temporary manager
of any action that would interfere with the functioning of the
facility, including, but not limited to, termination of utility
services, attachments, or setoffs of resident trust funds, and
repossession of equipment in the facility.
(e) (1) The appointment of a temporary manager shall be
immediately effective and shall continue for a period not to exceed
60 days unless otherwise extended in accordance with paragraph (2) of
subdivision (h) at the discretion of the department or as permitted
by paragraph (2) of subdivision (d) of Section 1569.525, or unless
otherwise terminated earlier by any of the following events:
(A) The temporary manager notifies the department, and the
department verifies, that the facility meets state and, if
applicable, federal standards for operation, and will be able to
continue to maintain compliance with those standards after the
termination of the appointment of the temporary manager.
(B) The department approves a new temporary manager.
(C) A new operator is licensed.
(D) The department closes the facility.
(E) A hearing or court order ends the temporary manager
appointment, including the appointment of a receiver under Section
1569.482.
(F) The appointment is terminated by the department or the
temporary manager.
(2) The appointment of a temporary manager shall authorize the
temporary manager to act pursuant to this section. The appointment
shall be made pursuant to a written agreement between the temporary
manager and the department that outlines the circumstances under
which the temporary manager may expend funds. The department shall
provide the licensee and administrator with a copy of the accusation
to appoint a temporary manager at the time of appointment. The
accusation shall notify the licensee of the licensee's right to
petition the Office of Administrative Hearings for a hearing to
contest the appointment of the temporary manager as described in
subdivision (f) and shall provide the licensee with a form and
appropriate information for the licensee's use in requesting a
hearing.
(3) The director may rescind the appointment of a temporary
manager and appoint a new temporary manager at any time that the
director determines the temporary manager is not adhering to the
conditions of the appointment.
(f) (1) The licensee of a residential care facility for the
elderly may contest the appointment of the temporary manager by
filing a petition for an order to terminate the appointment of the
temporary manager with the Office of Administrative Hearings within
15 days from the date of mailing of the accusation to appoint a
temporary manager under subdivision (e). On the same day the petition
is filed with the Office of Administrative Hearings, the licensee
shall serve a copy of the petition to the office of the director.
(2) Upon receipt of a petition under paragraph (1), the Office of
Administrative Hearings shall set a hearing date and time within 10
business days of the receipt of the petition. The office shall
promptly notify the licensee and the department of the date, time,
and place of the hearing. The office shall assign the case to an
administrative law judge. At the hearing, relevant evidence may be
presented pursuant to Section 11513 of the Government Code. The
administrative law judge shall issue a written decision on the
petition within 10 business days of the conclusion of the hearing.
The 10-day time period for holding the hearing and for rendering a
decision may be extended by the written agreement of the parties.
(3) The administrative law judge shall uphold the appointment of
the temporary manager if the department proves, by a preponderance of
the evidence, that the circumstances specified in subdivision (c)
applied to the facility at the time of the appointment. The
administrative law judge shall order the termination of the temporary
manager if the burden of proof is not satisfied.
(4) The decision of the administrative law judge is subject to
judicial review as provided in Section 1094.5 of the Code of Civil
Procedure by the superior court of the county where the facility is
located. This review may be requested by the licensee of the facility
or the department by filing a petition seeking relief from the
order. The petition may also request the issuance of temporary
injunctive relief pending the decision on the petition. The superior
court shall hold a hearing within 10 business days of the filing of
the petition and shall issue a decision on the petition within 10
days of the hearing. The department may be represented by legal
counsel within the department for purposes of court proceedings
authorized under this section.
(g) If the licensee does not protest the appointment or does not
prevail at either the administrative hearing under paragraph (2) of
subdivision (f) or the superior court hearing under paragraph (4) of
subdivision (f), the temporary manager shall continue in accordance
with subdivision (e).
(h) (1) If the licensee petitions the Office of Administrative
Hearings pursuant to subdivision (f), the appointment of the
temporary manager by the director pursuant to this section shall
continue until it is terminated by the administrative law judge or by
the superior court, or it shall continue until the conditions of
subdivision (e) are satisfied, whichever is earlier.
(2) At any time during the appointment of the temporary manager,
the director may request an extension of the appointment by filing a
petition for hearing with the Office of Administrative Hearings and
serving a copy of the petition on the licensee. The office shall
proceed as specified in paragraph (2) of subdivision (f). The
administrative law judge may extend the appointment of the temporary
manager an additional 60 days upon a showing by the department that
the conditions specified in subdivision (c) continue to exist.
(3) The licensee or the department may request review of the
administrative law judge's decision on the extension as provided in
paragraph (4) of subdivision (f).
(i) The temporary manager appointed pursuant to this section shall
meet the following qualifications:
(1) Be qualified to oversee correction of deficiencies in a
residential care facility for the elderly on the basis of experience
and education.
(2) Not be the subject of any pending actions by the department or
any other state agency nor have ever been excluded from a
department-licensed facility or had a license or certification
suspended or revoked by an administrative action by the department or
any other state agency.
(3) Not have a financial ownership interest in the facility and
not have a member of his or her immediate family who has a financial
ownership interest in the facility.
(4) Not currently serve, or within the past two years have served,
as a member of the staff of the facility.
(j) Payment of the costs of the temporary manager shall comply
with the following requirements:
(1) Upon agreement with the licensee, the costs of the temporary
manager and any other expenses in connection with the temporary
management shall be paid directly by the facility while the temporary
manager is assigned to that facility. Failure of the licensee to
agree to the payment of those costs may result in the payment of the
costs by the department and subsequent required reimbursement of the
department by the licensee pursuant to this section.
(2) Direct costs of the temporary manager shall be equivalent to
the sum of the following:
(A) The prevailing fee paid by licensees for positions of the same
type in the facility's geographic area.
(B) Additional costs that reasonably would have been incurred by
the licensee if the licensee and the temporary manager had been in an
employment relationship.
(C) Other reasonable costs incurred by the temporary manager in
furnishing services pursuant to this section.
(3) Direct costs may exceed the amount specified in paragraph (2)
if the department is otherwise unable to find a qualified temporary
manager.
(k) (1) The responsibilities of the temporary manager may include,
but are not limited to, the following:
(A) Paying wages to staff. The temporary manager shall have the
full power to hire, direct, manage, and discharge employees of the
facility, subject to any contractual rights they may have. The
temporary manager shall pay employees at the same rate of
compensation, including benefits, that the employees would have
received from the licensee or wages necessary to provide adequate
staff for the protection of clients and compliance with the law.
(B) Preserving resident funds. The temporary manager shall be
entitled to, and shall take possession of, all property or assets of
residents that are in the possession of the licensee or administrator
of the facility. The temporary manager shall preserve all property,
assets, and records of residents of which the temporary manager takes
possession.
(C) Contracting for outside services as may be needed for the
operation of the facility. A contract for outside services in excess
of five thousand dollars ($5,000) shall be approved by the director.
(D) Paying commercial creditors of the facility to the extent
required to operate the facility. The temporary manager shall honor
all leases, mortgages, and secured transactions affecting the
building in which the facility is located and all goods and fixtures
in the building, but only to the extent of payments that, in the case
of a rental agreement, are for the use of the property during the
period of the temporary management, or that, in the case of a
purchase agreement, come due during the period of the temporary
management.
(E) Performing all acts that are necessary and proper to maintain
and operate the facility in accordance with sound fiscal policies.
The temporary manager shall take action as is reasonably necessary to
protect or conserve the assets or property of which the temporary
manager takes possession and may use those assets or property only in
the performance of the powers and duties set forth in this section.
(2) Expenditures by the temporary manager in excess of five
thousand dollars ($5,000) shall be approved by the director. Total
encumbrances and expenditures by the temporary manager for the
duration of the temporary management shall not exceed the sum of
forty-nine thousand nine hundred ninety-nine dollars ($49,999) unless
approved by the director in writing.
(3) The temporary manager shall not make capital improvements to
the facility in excess of five thousand dollars ($5,000) without the
approval of the director.
(l) (1) To the extent department funds are advanced for the costs
of the temporary manager or for other expenses in connection with the
temporary management, the department shall be reimbursed from the
revenues accruing to the facility or to the licensee or an entity
related to the licensee. Any reimbursement received by the department
shall be redeposited in the account from which the department funds
were advanced. If the revenues are insufficient to reimburse the
department, the unreimbursed amount shall constitute grounds for a
monetary judgment in civil court and a subsequent lien upon the
assets of the facility or the proceeds from the sale thereof.
Pursuant to Chapter 2 (commencing with Section 697.010) of Division 2
of Title 9 of Part 2 of the Code of Civil Procedure, a lien against
the personal assets of the facility or an entity related to the
licensee based on the monetary judgment obtained shall be filed with
the Secretary of State on the forms required for a notice of judgment
lien. A lien against the real property of the facility or an entity
related to the licensee based on the monetary judgment obtained shall
be recorded with the county recorder of the county where the
facility of the licensee is located or where the real property of the
entity related to the licensee is located. The lien shall not attach
to the interests of a lessor, unless the lessor is operating the
facility. The authority to place a lien against the personal and real
property of the licensee for the reimbursement of any state funds
expended pursuant to this section shall be given judgment creditor
priority.
(2) For purposes of this section, "entity related to the licensee"
means an entity, other than a natural person, of which the licensee
is a subsidiary or an entity in which a person who was obligated to
disclose information under Section 1569.15 possesses an interest that
would also require disclosure pursuant to Section 1569.15.
(m) Appointment of a temporary manager under this section does not
relieve the licensee of any responsibility for the care and
supervision of residents under this chapter. The licensee, even if
the license is deemed surrendered or the facility abandoned, shall be
required to reimburse the department for all costs associated with
operation of the facility during the period the temporary manager is
in place that are not accounted for by using facility revenues or for
the relocation of residents handled by the department if the
licensee fails to comply with the relocation requirements of Section
1569.525 or 1569.682 when required by the department to do so. If the
licensee fails to reimburse the department under this section, then
the department, along with using its own remedies available under
this chapter, may request that the Attorney General's office, the
city attorney's office, or the local district attorney's office seek
any available criminal, civil, or administrative remedy, including,
but not limited to, injunctive relief, restitution, and damages in
the same manner as provided for in Chapter 5 (commencing with Section
17200) of Part 2 of Division 7 of the Business and Professions Code.
(n) The department may use funds from the emergency resident
contingency account pursuant to Section 1569.48 when needed to
supplement the operation of the facility or the transfer of residents
under the control of the temporary manager appointed under this
section if facility revenues are unavailable or exhausted when
needed. Pursuant to subdivision (l), the licensee shall be required
to reimburse the department for any funds used from the emergency
resident contingency account during the period of control of the
temporary manager and any incurred costs of collection.
(o) This section does not apply to a residential care facility for
the elderly that serves six or fewer persons and is also the
principal residence of the licensee.
(p) Notwithstanding any other provision of law, the temporary
manager shall be liable only for damages resulting from gross
negligence in the operation of the facility or intentional tortious
acts.
(q) All governmental immunities otherwise applicable to the state
shall also apply to the state in the use of a temporary manager in
the operation of a facility pursuant to this section.
(r) A licensee is not liable for any occurrences during the
temporary management under this section except to the extent that the
occurrences are the result of the licensee's conduct.
(s) The department may adopt regulations for the administration of
this section.
(a) It is the intent of the Legislature in enacting this
section to authorize the department to take quick, effective action
to protect the health and safety of residents of residential care
facilities for the elderly and to minimize the effects of transfer
trauma that accompany the abrupt transfer of residents through a
system whereby the department may apply for a court order appointing
a receiver to temporarily operate a residential care facility for the
elderly. The receivership is not intended to punish a licensee or to
replace attempts to secure cooperative action to protect the
residents' health and safety. The receivership is intended to protect
the residents in the absence of other reasonably available
alternatives. The receiver shall assume the operation of the facility
in order to bring it into compliance with law, facilitate a transfer
of ownership to a new licensee, or ensure the orderly transfer of
residents should the facility be required to close.
(b) (1) Whenever circumstances exist indicating that continued
management of a residential care facility by the current licensee
would present a substantial probability or imminent danger of serious
physical harm or death to the residents, or the facility is closing
or intends to terminate operation as a residential care facility for
the elderly and adequate arrangements for the relocation of residents
have not been made at least 30 days prior to the closing or
termination, the director may petition the superior court for the
county in which the facility is located for an order appointing a
receiver to temporarily operate the facility in accordance with this
section.
(2) The petition shall allege the facts upon which the action is
based and shall be supported by an affidavit of the director. A copy
of the petition and affidavit together with an order to appear and
show cause why temporary authority to operate the residential care
facility for the elderly should not be vested in a receiver pursuant
to this section, shall be delivered to the licensee, administrator,
or a responsible person at the facility to the attention of the
licensee and administrator. The order shall specify a hearing date,
which shall be not less than 10, nor more than 15, days following
delivery of the petition and order upon the licensee, except that the
court may shorten or lengthen the time upon a showing of just cause.
(c) (1) If the director files a petition pursuant to subdivision
(b) for appointment of a receiver to operate a residential care
facility for the elderly, in accordance with Section 564 of the Code
of Civil Procedure, the director may also petition the court, in
accordance with Section 527 of the Code of Civil Procedure, for an
order appointing a temporary receiver. A temporary receiver appointed
by the court pursuant to this subdivision shall serve until the
court has made a final determination on the petition for appointment
of a receiver filed pursuant to subdivision (b). A receiver appointed
pursuant to this subdivision shall have the same powers and duties
as a receiver would have if appointed pursuant to subdivision (b).
Upon the director filing a petition for a receiver, the receiver
shall complete its application for a provisional license to operate a
residential care facility for the elderly. For purposes of a
provisional license issued to a receiver, the licensee's existing
fire safety clearance shall serve as the fire safety clearance for
the receiver's provisional license.
(2) At the time of the hearing, the department shall advise the
licensee of the name of the proposed receiver. The receiver shall be
a certified residential care facility for the elderly administrator
or other responsible person or entity, as determined by the court,
from a list of qualified receivers established by the department,
and, if need be, with input from providers of residential care and
consumer representatives. Persons appearing on the list shall have
experience in the delivery of care services to clients of community
care facilities, and, if feasible, shall have experience with the
operation of a residential care facility for the elderly, shall not
be the subject of any pending actions by the department or any other
state agency, and shall not have ever been excluded from a department
licensed facility nor have had a license or certification suspended
or revoked by an administrative action by the department or any other
state agency. The receivers shall have sufficient background and
experience in management and finances to ensure compliance with
orders issued by the court. The owner, licensee, or administrator
shall not be appointed as the receiver unless authorized by the
court.
(3) If at the conclusion of the hearing, which may include oral
testimony and cross-examination at the option of any party, the court
determines that adequate grounds exist for the appointment of a
receiver and that there is no other reasonably available remedy to
protect the residents, the court may issue an order appointing a
receiver to temporarily operate the residential care facility for the
elderly and enjoining the licensee from interfering with the
receiver in the conduct of his or her duties. In these proceedings,
the court shall make written findings of fact and conclusions of law
and shall require an appropriate bond to be filed by the receiver and
paid for by the licensee. The bond shall be in an amount necessary
to protect the licensee in the event of any failure on the part of
the receiver to act in a reasonable manner. The bond requirement may
be waived by the licensee.
(4) The court may permit the licensee to participate in the
continued operation of the facility during the pendency of any
receivership ordered pursuant to this section and shall issue an
order detailing the nature and scope of participation.
(5) Failure of the licensee to appear at the hearing on the
petition shall constitute an admission of all factual allegations
contained in the petition for purposes of these proceedings only.
(6) The licensee shall receive notice and a copy of the
application each time the receiver applies to the court or the
department for instructions regarding his or her duties under this
section, when an accounting pursuant to subdivision (i) is submitted,
and when any other report otherwise required under this section is
submitted. The licensee shall have an opportunity to present
objections or otherwise participate in those proceedings.
(d) A person shall not impede the operation of a receivership
created under this section. The receiver's access to, or possession
of, the property shall not be interfered with during the term of the
receivership. There shall be an automatic stay for a 60-day period
subsequent to the appointment of a receiver of any action that would
interfere with the functioning of the facility, including, but not
limited to, cancellation of insurance policies executed by the
licensees, termination of utility services, attachments, or setoffs
of resident trust funds and working capital accounts and repossession
of equipment in the facility.
(e) When a receiver is appointed, the licensee may, at the
discretion of the court, be divested of possession and control of the
facility in favor of the receiver. If the court divests the licensee
of possession and control of the facility in favor of the receiver,
the department shall immediately issue a provisional license to the
receiver. Notwithstanding the applicable sections of this code
governing the revocation of a provisional license, the provisional
license issued to a receiver shall automatically expire upon the
termination of the receivership. The receiver shall possess the
provisional license solely for purposes of carrying out the
responsibilities authorized by this section and the duties ordered by
the court. The receiver shall have no right to appeal the expiration
of the provisional license.
(f) A receiver appointed pursuant to this section:
(1) May exercise those powers and shall perform those duties
ordered by the court, in addition to other duties provided by
statute.
(2) Shall operate the facility in a manner that ensures the safety
and adequate care for the residents.
(3) Shall have the same rights to possession of the building in
which the facility is located, and of all goods and fixtures in the
building at the time the petition for receivership is filed, as the
licensee and administrator would have had if the receiver had not
been appointed.
(4) May use the funds, building, fixtures, furnishings, and any
accompanying consumable goods in the provision of care and services
to residents and to any other persons receiving services from the
facility at the time the petition for receivership was filed.
(5) Shall take title to all revenue coming to the facility in the
name of the receiver who shall use it for the following purposes in
descending order of priority:
(A) To pay wages to staff. The receiver shall have full power to
hire, direct, manage, and discharge employees of the facility,
subject to any contractual rights they may have. The receiver shall
pay employees at the same rate of compensation, including benefits,
that the employees would have received from the licensee or wages
necessary to provide adequate staff for the protection of the clients
and compliance with the law.
(B) To preserve resident funds. The receiver shall be entitled to,
and shall take, possession of all property or assets of residents
that are in the possession of the licensee or operator of the
facility. The receiver shall preserve all property, assets, and
records of residents of which the receiver takes possession.
(C) To contract for outside services as may be needed for the
operation of the residential care facility for the elderly. A
contract for outside services in excess of five thousand dollars
($5,000) shall be approved by the court.
(D) To pay commercial creditors of the facility to the extent
required to operate the facility. Except as provided in subdivision
(h), the receiver shall honor all leases, mortgages, and secured
transactions affecting the building in which the facility is located
and all goods and fixtures in the building of which the receiver has
taken possession, but only to the extent of payments which, in the
case of a rental agreement, are for the use of the property during
the period of receivership, or which, in the case of a purchase
agreement, come due during the period of receivership.
(E) To receive a salary, as approved by the court.
(F) To do all things necessary and proper to maintain and operate
the facility in accordance with sound fiscal policies. The receiver
shall take action as is reasonably necessary to protect or conserve
the assets or property of which the receiver takes possession and may
use those assets or property only in the performance of the powers
and duties set out in this section and by order of the court.
(G) To ask the court for direction in the treatment of debts
incurred prior to the appointment, if the licensee's debts appear
extraordinary, of questionable validity, or unrelated to the normal
and expected maintenance and operation of the facility, or if payment
of the debts will interfere with the purposes of receivership.
(g) (1) A person who is served with notice of an order of the
court appointing a receiver and of the receiver's name and address
shall be liable to pay the receiver, rather than the licensee, for
any goods or services provided by the residential care facility for
the elderly after the date of the order. The receiver shall give a
receipt for each payment and shall keep a copy of each receipt on
file. The receiver shall deposit amounts received in a special
account and shall use this account for all disbursements. Payment to
the receiver pursuant to this subdivision shall discharge the
obligation to the extent of the payment and shall not thereafter be
the basis of a claim by the licensee or any other person. A resident
shall not be evicted nor may any contract or rights be forfeited or
impaired, nor may any forfeiture be effected or liability increased,
by reason of an omission to pay the licensee, operator, or other
person a sum paid to the receiver pursuant to this subdivision.
(2) This section shall not be construed to suspend, during the
temporary management by the receiver, any obligation of the licensee
for payment of local, state, or federal taxes. A licensee shall not
be held liable for acts or omissions of the receiver during the term
of the temporary management.
(3) Upon petition of the receiver, the court may order immediate
payment to the receiver for past services that have been rendered and
billed, and the court may also order a sum not to exceed one month's
advance payment to the receiver of any sums that may become payable
under the Medi-Cal program.
(h) (1) A receiver shall not be required to honor a lease,
mortgage, or secured transaction entered into by the licensee of the
facility and another party if the court finds that the agreement
between the parties was entered into for a collusive, fraudulent
purpose or that the agreement is unrelated to the operation of the
facility.
(2) A lease, mortgage, or secured transaction or an agreement
unrelated to the operation of the facility that the receiver is
permitted to dishonor pursuant to this subdivision shall only be
subject to nonpayment by the receiver for the duration of the
receivership, and the dishonoring of the lease, mortgage, security
interest, or other agreement, to this extent, by the receiver shall
not relieve the owner or operator of the facility from any liability
for the full amount due under the lease, mortgage, security interest,
or other agreement.
(3) If the receiver is in possession of real estate or goods
subject to a lease, mortgage, or security interest that the receiver
is permitted to dishonor pursuant to paragraph (1), and if the real
estate or goods are necessary for the continued operation of the
facility, the receiver may apply to the court to set a reasonable
rent, price, or rate of interest to be paid by the receiver during
the duration of the receivership. The court shall hold a hearing on
this application within 15 days. The receiver shall send notice of
the application to any known owner of the property involved at least
10 days prior to the hearing.
(4) Payment by the receiver of the amount determined by the court
to be reasonable is a defense to any action against the receiver for
payment or possession of the goods or real estate, subject to the
lease or mortgage, which is brought by any person who received the
notice required by this subdivision. However, payment by the receiver
of the amount determined by the court to be reasonable does not
relieve the owner or operator of the facility from any liability for
the difference between the amount paid by the receiver and the amount
due under the original lease, mortgage, or security interest.
(i) A monthly accounting shall be made by the receiver to the
department of all moneys received and expended by the receiver on or
before the 15th day of the following month or as ordered by the
court, and the remainder of income over expenses for that month shall
be returned to the licensee. A copy of the accounting shall be
provided to the licensee. The licensee or owner of the residential
care facility for the elderly may petition the court for a
determination as to the reasonableness of any expenditure made
pursuant to paragraph (5) of subdivision (f).
(j) (1) The receiver shall be appointed for an initial period of
not more than three months. The initial three-month period may be
extended for additional periods not exceeding three months, as
determined by the court pursuant to this section. At the end of one
month, the receiver shall report to the court on its assessment of
the probability that the residential care facility for the elderly
will meet state standards for operation by the end of the initial
three-month period and will continue to maintain compliance with
those standards after termination of the receiver's management. If it
appears that the facility cannot be brought into compliance with
state standards within the initial three-month period, the court
shall take appropriate action as follows:
(A) Extend the receiver's management for an additional three
months if there is a substantial likelihood that the facility will
meet state standards within that period and will maintain compliance
with the standards after termination of the receiver's management.
The receiver shall report to the court in writing upon the facility's
progress at the end of six weeks of any extension ordered pursuant
to this paragraph.
(B) Order the director to revoke or temporarily suspend, or both,
the license pursuant to Section 1569.50 and extend the receiver's
management for the period necessary to transfer clients in accordance
with the transfer plan, but for not more than three months from the
date of initial appointment of a receiver, or 14 days, whichever is
greater. An extension of an additional three months may be granted if
deemed necessary by the court.
(2) If it appears at the end of six weeks of an extension ordered
pursuant to subparagraph (A) of paragraph (1) that the facility
cannot be brought into compliance with state standards for operation
or that it will not maintain compliance with those standards after
the receiver's management is terminated, the court shall take
appropriate action as specified in subparagraph (B) of paragraph (1).
(3) In evaluating the probability that a residential care facility
for the elderly will maintain compliance with state standards of
operation after the termination of receiver management ordered by the
court, the court shall consider at least the following factors:
(A) The duration, frequency, and severity of past violations in
the facility.
(B) History of compliance in other care facilities operated by the
proposed licensee.
(C) Efforts by the licensee to prevent and correct past
violations.
(D) The financial ability of the licensee to operate in compliance
with state standards.
(E) The recommendations and reports of the receiver.
(4) Management of a residential care facility for the elderly
operated by a receiver pursuant to this section shall not be returned
to the licensee, to any person related to the licensee, or to any
person who served as a member of the facility's staff or who was
employed by the licensee prior to the appointment of the receiver
unless both of the following conditions are met:
(A) The department believes that it would be in the best interests
of the residents of the facility, requests that the court return the
operation of the facility to the former licensee, and provides clear
and convincing evidence to the court that it is in the best
interests of the facility's residents to take that action.
(B) The court finds that the licensee has fully cooperated with
the department in the appointment and ongoing activities of a
receiver appointed pursuant to this section, and, if applicable, any
temporary manager appointed pursuant to Section 1569.481.
(5) The owner of the facility may at any time sell, lease, or
close the facility, subject to the following provisions:
(A) If the owner closes the facility, or the sale or lease results
in the closure of the facility, the court shall determine if a
transfer plan is necessary. If the court so determines, the court
shall adopt and implement a transfer plan consistent with the
provisions of Section 1569.682.
(B) If the licensee proposes to sell or lease the facility and the
facility will continue to operate as a residential care facility for
the elderly, the court and the department shall reevaluate any
proposed transfer plan. If the court and the department determine
that the sale or lease of the facility will result in compliance with
licensing standards, the transfer plan and the receivership shall,
subject to those conditions that the court may impose and enforce, be
terminated upon the effective date of the sale or lease.
(k) (1) The salary of the receiver shall be set by the court
commensurate with community care facility industry standards, giving
due consideration to the difficulty of the duties undertaken, and
shall be paid from the revenue coming to the facility. If the revenue
is insufficient to pay the salary in addition to other expenses of
operating the facility, the receiver's salary shall be paid from the
emergency resident contingency account as provided in Section
1569.48. State advances of funds in excess of five thousand dollars
($5,000) shall be approved by the director. Total advances for
encumbrances and expenditures shall not exceed the sum of forty-nine
thousand nine hundred ninety-nine dollars ($49,999) unless approved
by the director in writing.
(2) To the extent state funds are advanced for the salary of the
receiver or for other expenses in connection with the receivership,
as limited by subdivision (g), the state shall be reimbursed from the
revenues accruing to the facility or to the licensee or an entity
related to the licensee. Reimbursement received by the state shall be
redeposited in the account from which the state funds were advanced.
If the revenues are insufficient to reimburse the state, the
unreimbursed amount shall constitute grounds for a monetary judgment
in civil court and a subsequent lien upon the assets of the facility
or the proceeds from the sale thereof. Pursuant to Chapter 2
(commencing with Section 697.010) of Division 2 of Title 9 of Part 2
of the Code of Civil Procedure, a lien against the personal assets of
the facility or an entity related to the licensee based on the
monetary judgment obtained shall be filed with the Secretary of State
on the forms required for a notice of judgment lien. A lien against
the real property of the facility or an entity related to the
licensee based on the monetary judgment obtained shall be recorded
with the county recorder of the county where the facility of the
licensee is located or where the real property of the entity related
to the licensee is located. The lien shall not attach to the
interests of a lessor, unless the lessor is operating the facility.
The authority to place a lien against the personal and real property
of the licensee for the reimbursement of any state funds expended
pursuant to this section shall be given judgment creditor priority.
(3) For purposes of this subdivision, "entity related to the
licensee" means an entity, other than a natural person, of which the
licensee is a subsidiary or an entity in which any person who was
obligated to disclose information under Section 1569.15 possesses an
interest that would also require disclosure pursuant to Section
1569.15.
(l) (1) This section does not impair the right of the owner of a
residential care facility for the elderly to dispose of his or her
property interests in the facility, but any facility operated by a
receiver pursuant to this section shall remain subject to that
administration until terminated by the court. The termination shall
be promptly effectuated, provided that the interests of the residents
have been safeguarded as determined by the court.
(2) This section does not limit the power of the court to appoint
a receiver under any other applicable provision of law or to order
any other remedy available under law.
(m) (1) Notwithstanding any other provision of law, the receiver
shall be liable only for damages resulting from gross negligence in
the operation of the facility or intentional tortious acts.
(2) All governmental immunities otherwise applicable to the State
of California shall also apply in the use of a receiver in the
operation of a facility pursuant to this section.
(3) The licensee is not liable for any occurrences during the
receivership except to the extent that the occurrences are the result
of the licensee's conduct.
(n) The department may adopt regulations for the administration of
this section. This section does not impair the authority of the
department to temporarily suspend licenses under Section 1569.50 or
to reach a voluntary agreement with the licensee for alternate
management of a community care facility including the use of a
temporary manager under Section 1569.481. This section does not
authorize the department to interfere in a labor dispute.
(o) This section does not apply to a residential care facility for
the elderly that serves six or fewer persons and is also the
principal residence of the licensee.
(p) This section does not apply to a licensee that has obtained a
certificate of authority to offer continuing care contracts, as
defined in paragraph (8) of subdivision (c) of Section 1771.
(a) Notwithstanding any other provision of this chapter,
any person who violates Section 1569.10 or 1569.44, or both, shall be
assessed by the department an immediate civil penalty in the amount
of one hundred dollars ($100) per resident for each day of the
violation, unless other remedies available to the department,
including criminal prosecution, are deemed more effective by the
department.
(b) The civil penalty authorized in subdivision (a) shall be
doubled if an unlicensed facility is operated and the operator
refuses to seek licensure or the operator seeks licensure and the
licensure application is denied and the operator continues to operate
the unlicensed facility, unless other remedies available to the
department, including criminal prosecution, are deemed more effective
by the department.
(c) An operator may appeal the assessment to the director. The
department shall adopt regulations setting forth the appeal
procedure.
(a) In addition to the suspension, temporary suspension,
or revocation of a license issued under this chapter, the department
may levy a civil penalty.
(b) The amount of the civil penalty shall not be less than
twenty-five dollars ($25) or more than fifty dollars ($50) per day
for each violation of this chapter except where the nature or
seriousness of the violation or the frequency of the violation
warrants a higher penalty or an immediate civil penalty assessment,
or both, as determined by the department. Except as otherwise
provided in this chapter, a civil penalty assessment shall not exceed
one hundred fifty dollars ($150) per day per violation.
(c) Notwithstanding Section 1569.33, the department shall assess
an immediate civil penalty of one hundred fifty dollars ($150) per
day per violation for any of the following serious violations:
(1) (A) Fire clearance violations, including, but not limited to,
overcapacity, ambulatory status, inoperable smoke alarms, and
inoperable fire alarm systems. The civil penalty shall not be
assessed if the licensee has done either of the following:
(i) Requested the appropriate fire clearance based on ambulatory,
nonambulatory, or bedridden status, and the decision is pending.
(ii) Initiated eviction proceedings.
(B) A licensee denied a clearance for bedridden residents may
appeal to the fire authority, and, if that appeal is denied, may
subsequently appeal to the Office of the State Fire Marshal, and
shall not be assessed an immediate civil penalty until the final
appeal is decided, or after 60 days has passed from the date of the
citation, whichever is earlier.
(2) Absence of supervision as required by statute or regulation.
(3) Accessible bodies of water, when prohibited in this chapter or
regulations adopted pursuant to this chapter.
(4) Accessible firearms, ammunition, or both.
(5) Refused entry to a facility or any part of a facility in
violation of Section 1569.32, 1569.33, or 1569.35.
(6) The presence of an excluded person on the premises.
(d) For a violation that the department determines resulted in the
death of a resident, the civil penalty shall be fifteen thousand
dollars ($15,000).
(e) For a violation that the department determines constitutes
physical abuse, as defined in Section 15610.63 of the Welfare and
Institutions Code, or resulted in serious bodily injury, as defined
in Section 15610.67 of the Welfare and Institutions Code, to a
resident, the civil penalty shall be ten thousand dollars ($10,000).
(f) Prior to the issuance of a citation imposing a civil penalty
pursuant to subdivision (d) or (e), the decision shall be approved by
the program administrator of the Community Care Licensing Division.
(g) Notwithstanding Section 1569.33, any residential care facility
for the elderly that is cited for repeating the same violation of
this chapter within 12 months of the first violation is subject to an
immediate civil penalty of one hundred fifty dollars ($150) and
fifty dollars ($50) for each day the violation continues until the
deficiency is corrected.
(h) Any residential care facility for the elderly that is assessed
a civil penalty pursuant to subdivision (g) that repeats the same
violation of this chapter within 12 months of the violation subject
to subdivision (g) shall be assessed an immediate civil penalty of
one thousand dollars ($1,000) and one hundred dollars ($100) for each
day the violation continues until the deficiency is corrected.
(i) (1) The department shall adopt regulations setting forth the
appeal procedures for deficiencies.
(2) A notification of a deficiency written by a representative of
the department shall include a factual description of the nature of
the deficiency fully stating the manner in which the licensee failed
to comply with the specified statute or regulation, and, if
applicable, the particular place or area of the facility in which the
deficiency occurred.
(j) (1) A licensee shall have the right to submit to the
department a written request for a formal review of a civil penalty
assessed pursuant to subdivisions (d) and (e) within 15 business days
of receipt of the notice of a civil penalty assessment and shall
provide all available supporting documentation at that time. The
review shall be conducted by the deputy director of the Community
Care Licensing Division. The licensee may submit additional
supporting documentation that was unavailable at the time of
submitting the request for review within the first 30 business days
after submitting the request for review. If the department requires
additional information from the licensee, that information shall be
requested within the first 30 business days after receiving the
request for review. The licensee shall provide this additional
information within 30 business days of receiving the request from the
department. If the deputy director determines that the civil penalty
was not assessed, or the finding of the deficiency that resulted in
the assessment of the civil penalty was not made, in accordance with
applicable statutes or regulations of the department, he or she may
amend or dismiss the civil penalty or finding of deficiency. The
licensee shall be notified in writing of the deputy director's
decision within 60 business days of the date when all necessary
information has been provided to the department by the licensee.
(2) Upon exhausting the review described in paragraph (1), a
licensee may further appeal that decision to an administrative law
judge. Proceedings shall be conducted in accordance with Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title 2 of
the Government Code, and the department shall have all the powers
granted by those provisions. In all proceedings conducted in
accordance with this section, the standard of proof shall be by a
preponderance of the evidence.
(3) If, in addition to an assessment of civil penalties, the
department elects to file an administrative action to suspend or
revoke the facility license that includes violations relating to the
assessment of the civil penalties, the department review of the
pending appeal shall cease and the assessment of the civil penalties
shall be heard as part of the administrative action process.
(k) (1) A licensee shall have the right to submit to the
department a written request for a formal review of any other civil
penalty or deficiency not described in subdivision (j) within 15
business days of receipt of the notice of a civil penalty assessment
or a finding of a deficiency, and shall provide all available
supporting documentation at that time. The review shall be conducted
by a regional manager of the Community Care Licensing Division. The
licensee may submit additional supporting documentation that was
unavailable at the time of submitting the request for review within
the first 30 business days after submitting the request for review.
If the department requires additional information from the licensee,
that information shall be requested within the first 30 business days
after receiving the request for review. The licensee shall provide
this additional information within 30 business days of receiving the
request from the department. If the regional manager determines that
the civil penalty was not assessed, or the finding of the deficiency
was not made, in accordance with applicable statutes or regulations
of the department, he or she may amend or dismiss the civil penalty
or finding of deficiency. The licensee shall be notified in writing
of the regional manager's decision within 60 business days of the
date when all necessary information has been provided to the
department by the licensee.
(2) Upon exhausting the review described in paragraph (1), the
licensee may further appeal that decision to the program
administrator of the Community Care Licensing Division within 15
business days of receipt of notice of the regional manager's
decision. The licensee may submit additional supporting documentation
that was unavailable at the time of appeal to the program
administrator within the first 30 business days after requesting that
appeal. If the department requires additional information from the
licensee, that information shall be requested within the first 30
business days after receiving the request for the appeal. The
licensee shall provide this additional information within 30 business
days of receiving the request from the department. If the program
administrator determines that the civil penalty was not assessed, or
the finding of the deficiency was not made, in accordance with
applicable statutes or regulations of the department, he or she may
amend or dismiss the civil penalty or finding of deficiency. The
licensee shall be notified in writing of the program administrator's
decision within 60 business days of the date when all necessary
information has been provided to the department by the licensee. The
program administrator's decision is considered final and concludes
the licensee's administrative appeal rights regarding the appeal
conducted pursuant to this paragraph.
(l) The department shall adopt regulations implementing this
section.
(m) The department shall, by January 1, 2016, amend its
regulations to reflect the changes to this section made by Section 6
of Chapter 813 of the Statutes of 2014.
(n) Notwithstanding the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code), the department may implement and administer
the changes made by the act that added this subdivision through
all-county letters or similar written instructions until regulations
are adopted pursuant to the Administrative Procedure Act.
(o) This section shall become operative on July 1, 2015.
The civil, criminal, and administrative remedies
available to the department pursuant to this article are not
exclusive, and may be sought and employed in any combination deemed
advisable by the state department to enforce this chapter.