STATE OF NORTH CAROLINA IN THE OFFICE OF

ADMINISTRATIVE HEARINGS

COUNTY OF DURHAM 07 DHR 1399

______

CORNELL JONES )

Petitioner, )

)

v. )

) DECISION

NORTH CAROLINA DEPARTMENT OF )

HEALTH AND HUMAN SERVICES, )

DIVISION OF HEALTH SERVICES )

REGULATION )

Respondent. )

______

This contested case was heard before Shannon R. Joseph, Administrative Law Judge, on 13 February 2008 in Raleigh, North Carolina. The Record was held open until 3 April 2008 to allow the parties to submit proposed decisions. Petitioner Cornell Jones (“Petitioner”) challenges the imposition of a Type A administrative penalty against him as the sole proprietor of TCHS Day Activity Program (“TCHS”) for an employee’s abuse of a TCHS client.

APPEARANCES

For Petitioner: Cornell Jones

3809 Pickett Road

Durham, North Carolina 27705

For Respondent: Amy L. Funderburk

Assistant Attorney General

North Carolina Department of Justice

9001 Mail Service Center

Raleigh, North Carolina 27699-9001

ISSUE

Whether Respondent acted erroneously, misapplied laws or rules, or acted arbitrarily or capriciously when it assessed a Type A administrative penalty to Petitioner for the abusive conduct of an employee of Petitioner.

APPLICABLE STATUTES AND RULES

N.C. Gen. Stat. § 122C-24

N.C. Gen. Stat. § 122C-24.1

10A NCAC 27C .0101

10A NCAC 27D .0304

EXHIBITS ADMITTED INTO EVIDENCE

For Petitioner: Exhibits 1 and 2

For Respondent: Exhibits 1, 2, and 3

BASED UPON careful consideration of the sworn testimony of the witnesses presented at the hearing, along with documents and exhibits received and admitted in evidence and the entire record in this proceeding, the Undersigned makes the following Findings of Fact. In making the Findings of Fact, the Undersigned has weighed all the evidence and has assessed the credibility of the witnesses by taking into account the appropriate factors for judging credibility, including but not limited to the demeanor of the witnesses, any interests, bias, or prejudice the witness may have, the opportunity of the witness to see, hear, know, or remember the facts or occurrences about which the witness testified, whether the testimony of the witness is reasonable, and whether the testimony is consistent with all other believable evidence in the case.

FINDINGS OF FACT

1. Until approximately July 2007, Petitioner was the sole proprietor of TCHS Day Activity Program (“TCHS”), a facility for developmentally disabled individuals. Petitioner held a license from the State of North Carolina to provide care at TCHS.

2. On 17 May 2007, TCHS client “J.M.” was injured at TCHS in an incident involving a TCHS employee, David Williams.

3. At the time of the incident, Mr. Williams was a Qualified Professional and co-manager of a group home operated by Petitioner.

4. At the time of the incident, Mr. Williams had received the applicable training necessary to be employed at TCHS.

5. On 17 May 2007, at the time of the incident, Mr. Williams was acting in the scope of his employment. Mr. Williams was working at TCHS and providing services to Client J.M. at the time the incident occurred. Mr. Williams continued to provide services to Client J.M. following the incident, including transporting Client J.M. to the hospital for medical treatment. Mr. Williams also completed the required incident report regarding Client J.M.’s injuries from the incident.

6. Petitioner was not present in the facility at the time of the incident.

7. After an investigation of the incident, Respondent substantiated the allegation that a TCHS employee had abused a client on 17 May 2007. Respondent also found Petitioner to be deficient as to 10A NCAC 27G .0204, “Competencies and Supervision of Paraprofessionals,” and to have violated 10A NCAC 27D .0304 Client Rights, Protection from Harm, Abuse, Neglect or Exploitation.

8. By letter dated 1 August 2007, Respondent notified Petitioner of the assessment of a Type A administrative penalty against TCHS in the amount of $500, and provided Petitioner with a Summary Statement of Deficiencies. The Summary Statement of Deficiencies concluded that an employee of TCHS subjected one of TCHS’s clients to abuse, constituting a violation of 10A NCAC 27D .0304.

9. Although Respondent found Petitioner’s deficient as to compliance with 10A NCAC 27G. 0204, “Competencies and Supervision of Paraprofessionals,” Petitioner was not cited with a Type A Administrative Penalty for this deficiency, and this deficiency does not form the basis of the penalty at issue. Indeed, 10A NCAC 27G .0204 by its terms applies to “Paraprofessionals,” not Qualified Professionals, such as Mr. Williams.

10. Stephanie Alexander, Chief of the Mental Health Licensure and Certification Section of Respondent, is responsible for overseeing the Section's responsibilities and mission, including regulation of mental health, developmental disability, and substance abuse facilities and services. Testifying on behalf of Respondent, Ms. Alexander explained Respondent’s practice in holding a facility responsible for the abusive conduct of an employee: “[Respondent’s] expectation is that the facility will develop governing body policies and procedures regarding supervision, training, procedures to follow, how to implement strategies regarding a treatment plan, et cetera, that would result in safe and effective treatment of the individuals served. Therefore, when an employee is acting as an employee but doesn’t do what they’re supposed to do and it results in harm or injury or neglect to an individual in that facility, then we would cite [the facility] for noncompliance with that rule, the 27D .0304.”

11. TCHS is no longer in operation. Petitioner closed the facility for economic reasons unrelated to the incident that forms the basis of the penalty at issue in this action.

BASED UPON the foregoing Findings of Fact, the Undersigned makes the following Conclusions of Law.

CONCLUSIONS OF LAW

1. The Office of Administrative Hearings has personal and subject matter jurisdiction of this contested case. The parties received proper notice of the hearing in the matter. All parties have been correctly designated, and there is no question as to misjoinder or nonjoinder of parties. To the extent that the Findings of Fact contain Conclusions of Law, or that the Conclusions of Law are Findings of Fact, they should be so considered without regard to the given labels.

2. Pursuant to N.C. Gen. Stat. § 122C-24.1(a)(1), a Type A violation occurs when a facility violates “the regulations, standards and requirements set forth in Article 2 or 3 of this Chapter or applicable State or federal laws and regulations governing the licensure or certification of a facility which results in death or serious physical harm, or results in substantial risk that death or serious physical harm will occur.”

3. For each Type A violation, Respondent is required by N.C. Gen. Stat. § 122C-24.1 to “impose a civil penalty in an amount not less than five hundred dollars ($500.00) nor more than ten thousand dollars ($10,000).”

4. Here, the Type A violation is based on 10A NCAC 27D .0304, which provides, in part: “(a) Employees shall protect clients from harm, abuse, neglect and exploitation . . .; (b) Employees shall not subject a client to any sort of abuse or neglect as defined in 10A NCAC 27C .0102 of this Chapter.”

5. Respondent’s arguments regarding the basis for assessing a penalty against a facility for abusive conduct by an employee were not consistent. Respondent, through counsel, first asserted that a facility could be held strictly liable for abusive conduct by an employee (T p. 26), then asserted that “the facility did not take adequate measures to ensure that this employee was acting appropriately” (T p. 112), a standard that is inconsistent with strict liability. Indeed, Respondent agreed that it is “not always a violation when abuse happens.” (T p. 113) Later, however, Respondent again asserted that “[u]ltimately the licensee is on the hook for what their employees do.” (T p. 115)

6. Notwithstanding Respondent’s varying articulations of the proper construction of the applicable statutes and regulations, Petitioner bears the burden to prove his claim in this action. Specifically, Petitioner must prove that Respondent acted erroneously, misapplied laws or rules, or acted arbitrarily or capriciously when it held Petitioner vicariously liable for the conduct of his employee when Respondent assessed a Type A administrative penalty to Petitioner in connection with the abuse of Client J.M. At the hearing of this matter, Petitioner stressed that the sole basis for his challenge to Respondent’s action is that, as the sole proprietor of the facility, he cannot be held vicariously liable for acts of employees that violate the facility’s policies, instructions, and training. Therefore, this decision focuses on the vicarious liability standard.

7. Petitioner’s position is contrary to the obligations assumed by Petitioner as the licensee to operate the facility, as well as to established principles of common law.

8. The common law principles of vicarious liability on which Petitioner relies support Respondent’s application of N.C. Gen. Stat. § 122C-24.1 and 10A NCAC 27D .0304 to impose a penalty in this case. In Wegner v. Delicatessen, 270 N.C. 62, 153 S.E.2d 804 (1967), the North Carolina Supreme Court stated that:

If the servant was engaged in performing the duties of his employment at the time he did the wrongful act which caused the injury, the employer is not absolved from liability by reason of the fact that the employee was also motivated by malice or ill will toward the person injured, or even by the fact that the employer had expressly forbidden him to commit such act.

Id. at 66, 153 S.E.2d at 807-08 (emphasis added).

9. In accord with Wegner, Petitioner’s contention that the facility had forbidden Mr. Williams from abusing clients and had appropriately trained Mr. Williams is unavailing. Moreover, Petitioner did not present evidence that Mr. Williams was otherwise not engaged in performing the duties of his employment and, in fact, acknowledged that he “had no other reason but [to] believe that [Mr. Williams] was acting with in the scope of his employment.”

10. Further, apart from viewing the regulation through the lens of vicarious liability principles, the statutory and regulatory scheme imposes a direct duty of compliance with 10A NCAC 27D .0304 on the facility.

11. Petitioner, as a licensee, was subject to all of the requirements contained in 10A NCAC 27D pursuant to the terms of 10A NCAC 27C.0101, “Scope,” which states in part:

(a) These Rules, 10A NCAC 27C, 27D, 27E and 27F, set forth procedures governing the protection of client rights in each public or private facility that provides mental health, developmental disabilities and substance abuse services, with the exception of a state-operated facility. In addition to these Rules, the governing body shall comply with the provisions of G.S. 122C, Article 3, regarding client rights.

12. Thus, Petitioner’s facility was a private facility which provided the services detailed in 10A NCAC 27C .0101. Pursuant to the terms of 10A NCAC 27C .0101, the provisions of 10A NCAC 27D with which Petitioner’s facility was required to comply included 10A NCAC 27D .0304, which prohibits client abuse by employees.

13. As discussed above, Respondent proffered evidence of its practice of applying this provision to assess a Type A penalty against a facility when its employee abuses a client. Under these circumstances, the agency’s interpretation should be accorded some deference. Rainey v. North Carolina Dept. of Public Instruction, 361 N.C. 679, 681-82, 652 S.E.2d 251, 252-53 (2007) (“If the agency can show that the agency has consistently applied that interpretation of the law, if the agency's interpretation of the law is not simply a ‘because I said so’ response to the contested case, then the agency's interpretation should be accorded the same deference to which the agency's construction of the law was entitled under prior law.”) (quoting Brad Miller, What Were We Thinking?: Legislative Intent and the 2000 Amendments to the North Carolina APA, 79 N.C. L. Rev. 1657, 1665-66 (2001)).

14. Here, although the regulations may have some ambiguities, Respondent’s application of the regulations in this case is not inconsistent with the language of the regulations.

15. Respondent did not err, misapply laws or rules, or act arbitrarily or capriciously by imposing a Type A Administrative Penalty on Petitioner.

16. Further, the undersigned has considered the issues required by N.C. Gen. Stat. § 122C-24.1(f). Petitioner has not challenged the reasonableness of the amount of the penalty assessed, which was the lowest amount permitted pursuant to N.C. Gen. Stat. § 122C-24.1, and the amount assessed is reasonable under the circumstances.

RECOMMENDED DECISION

Based on the foregoing Findings of Fact and Conclusions of Law, the undersigned hereby determines that Respondent’s decision to assess a Type A Administrative Penalty in the amount of Five Hundred Dollars ($500.00) against the Petitioner should be UPHELD.

NOTICE

The Agency that will make the final decision in this contested case is the North Carolina Department of Health and Human Resources, Division of Health Service Regulation.

The Agency is required to give each party an opportunity to file exceptions to the recommended decision and to present written arguments to those in the Agency who will make the final decision. N.C. Gen. Stat. § 150-36(a). The Agency is required by N.C. Gen. Stat. § 150B-36(b) to serve a copy of the final decision on all parties and to furnish a copy to the parties’ attorney of record and to the Office of Administrative Hearings.

In accordance with N.C. Gen. Stat. § 150B-36 the Agency shall adopt each finding of fact contained in the Administrative Law Judge’s decision unless the finding is clearly contrary to the preponderance of the admissible evidence. For each finding of fact not adopted by the agency, the agency shall set forth separately and in detail the reasons for not adopting the finding of fact and the evidence in the record relied upon by the agency in not adopting the finding of fact. For each new finding of fact made by the agency that is not contained in the Administrative Law Judge’s decision, the agency shall set forth separately and in detail the evidence in the record relied upon by the agency in making the finding of fact.

This the 22d day of April, 2008.

______

Shannon Joseph

Administrative Law Judge

6