1569.481
. (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.