Electronically FILED by Superior Court of California, County of Los Angeles on 06/11/2020 12:58 PM Sherri R. Carter, Executive Officer/Clerk of Court, by M. Panganiban,Deputy Clerk

Exempt from filing fees pursuant to
Government Code section 6103

XAVIER BECERRA

Attorney General of California
JENNIFER M. ICIM

Supervising Deputy Attorney General
BENJAMIN G. DIEHL

Deputy Attorney General
State Bar No. 192984
300 South Spring Street, Suite 1702
Los Angeles, CA 90013
Telephone: (213) 269-6687
Fax: (916) 731-2125
E-maih Benjatnin.Diehl doj.ca.gov
Attorneys for Petitioner Sonia Angell, MD, ~PH,
Director of the California Departinent ofPublic
Health

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES, CENTRAL DISTRICT

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SONIA ANGELL, MD, MPH, DIRECTOR,
CALII"ORNIA DE~PARTVIENsT OF
PUBLIC HEALTH,

NOTICE OF RULING ON ORDER TO
SHO% CAUSE RE: CONFIRMATION
Petitioner, OF RECEIVER AND NOTICE OF
STATUS CONFERENCE

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Case No. 20STCP01013

LEGACY HKALTHCARE CENTER) LLC,
a California limited liability company;
ROSE GARDEN SUBACUTE de
REHABILITATION CENTER, LLC, a
California limited liability company; and
DOES I THROUGH 20, INCLUSIVE,

Dept;
Judge:

85

Hon. James C. Chalfant

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Respondents.
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NOTICE IS GIVEN that on June 5, 2020, the Court entered an order adopting its

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tentative ruling confirming the appointment of the receiver in this matter. True and correct copies

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of the Court's tentative ruling and its minute order adopting the tentative order as its ruling are

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attached as exhibits

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and 2, respectively.

NOTICE IS FURTHER GIVEN that the Court scheduled a Status Conference Re:
NOTICE OF RULING AND NOTICE OF STATUS CONFERENCE (Case No. 20STCPO I 0 I 3)

 Receivership for October 13, 2020 at 1:30 p.m. in Department 85 of Stanley Mosk Courthouse,
located at 111 N. IIill St., Los Angeles, CA, 90012.

NOTICE IS ALSO GIVEN that the Court vacated the trial setting conference previously
scheduled for June 25, 2020.
Dated: June 11, 2020

Respectfully Submitted,
XAVIER BECERRA

Attorney General of California
JENNIFER M. ICIM

Supervising Deputy Attorney General

)s/JJenjamin
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G.

Diehl

BENJAMIN G. DIEHL

Deputy Attorney General
Attorneys for Petitioner Sonia Angell, MD,
MPH, Director of the California
Department of Social Ser vices

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LA2020500725

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NOTICE OI'ULING AND NOTICE OF STATUS CONFERENCE (Case No. 20STCP01013)

  

EXHIBIT 1

Sonia Anaell. MD. MPH. Director.
California Deuartment of Public Health v.
Legacv Healthcare Center. LLC. et al.,
20STCP01013

Tentative decision on OSC re: confirmation
of receiver: granted

Petitioner Sonia Angell, MD, MPH, {"Angell" or "Director" ) Director of the California
Department of Public Health {"Department") seeks confirmation of the court's March 13, 2020
order appointing Ermel Don Doyle, Jr. (" Doyle") as Receiver for the skilled nursing facilities
known as Legacy Healthcare Center, located at 1570 North Fair Oaks Avenue, Pasadena,
California 91103 (" Legacy Facility" ) and Rose Garden Healthcare Ceuter, located at 1899 North
Raymond Avenue, Pasadena, California 91103 (" Rose Facility" ) (collectively, "Facilities" ).
The court has read and considered the moving papers (no opposition was filed), and renders
the following tentative decision.
A. Statement of the Case
1.

Petition

Angell commenced this proceeding on March 11, 2020, alleging causes of action for
appointment of receiver. The Petition alleges in pertinent part as follows.
Respondents Legacy Healthcare Center, LLC ('*Legacy" ) and Rose Garden Subacute k
Rehabilitation Center, LLC (" Rose" ) held licenses issued by the Department to operate the Legacy
Facility and the Rose I'acility, respectively. The Facilities are skilled nursing facilities under the
regulatory supervision of the Department. Legacy operated the Legacy Facility and Rose operated
the Rose Facility until February 5, 2020, when a duly appointed Temporary Manager assumed
operation of each Facility, pursuant to Health and Safety Code section 1325.5.
Respondents, which are under common management, leased the two Facilities on April 16,
2016, and commenced operating them on that date. In June 2019, Respondents became delinquent
on the re'nt for the Facilities. The owners of the Facilities filed unlawful detainer actions against
Respondents on September 12, 2019. Respondents subsequently stipulated to settle the unlawful
detainer action.
Respondents breached the terms of the settlement and on January 23, 2020 the court entered
judgment against them in the unlawful detainer actions. As a result of those judgments,
Respondents'ease agreements for the Facilities were terminated. Respondents no longer have
the right to possess the Facilities. Respondents'icense to operate the Facilities also expired on
December 27, 2019 and they failed to renew their licenses or pay the required renewal fees. After
December 27, 2019, Respondents were operating the Facilities with expired licenses.
Respondents have additionally failed to pay the required quality assurance fees to the
Department for both I acilities. Beginning on January 24, 2020, Respondents further failed to pay
wages due to employees of the Facilities, which caused many of the employees to threaten or
actually leave their employment, jeopardizing the care and safety of the Facilities'esidents.
The Department determined that Respondents'ctions constituted grounds for the
appointment of a Temporary Manager to operate the Facilities pursuant to Health and Safety Code
section 1325.5. Accordingly, Seelig A. Cussigh HCO, LLC. ("Seelig") was appointed as

 Temporary Manager, effective Februaiy 5, 2020.
Respondents have no right to control the Facilities and have operated them without a
license. Respondents'onduct places the Facilities at risk of closure. The Facilities collectively
offer 149 critically needed skilled nurshrg beds, and the Rose Facility additionally offers needed
subacute care. Closure of the Facilities v ould force the involuntary and potentially traumatic
transfer of the patients who receive care and deprive the community of needed health care
resources.
The Department seeks the appointment of a receiver to facilitate the negotiation and
execution of a Management and Operations Transfer Agreement ("MOTA") and/or a Change of
Ownership ("CLIOW") process, which v,ill euable the Facilities to remain capable of providing
critically needed services to the residents of the Facilities under the control of a new licensee.
2. Course of Proceedings
On March 13, 2020, Angell applied ex parte for immediate appointment of a receiver. The
court granted the ex parte application and appointed Doyle as receiver. The court instructed Angell
to electronically serve the order appointing receiver by March 16, 2020. The court ordered Angell
to file a Receiver's bond in the amount of $ 750,000, a TRO bond in the amount of $ 1,500, and an
ex parte bond in the amount of $ 1,500.

According to proofs of service on file, Defendants were personally served with the
Summons, Petition, and moving papers on'March 13, 2020. Dov E. Jacobs, (" Jacobs" ), Manager
of Respondents, was electronically served with the Order appointing Receiver on March 16, 2020.
Doyle filed his Oath of Receiver on March 16, 2020.
On March 24, 2020, the court granted Angell's ex parte application for order reducing
amount of receiver's bond, reducing the amour t to $ 100,000.
An undertaking in the amount of $ 1,500 was filed on March 30, 2020 and the Receiver's
bond in the amount of $ 100,000 was filed on April 3, 2020,
On April 29, 2020, Angell filed a Kotice of Non-Opposition.

8. Anulicable Law
Receivers are agents of the court and may be appointed only when authorized by statute.
Weil & Brown, California Procedure Before Trial, 9:734, 9(11)-B (The Rutter Group 2018); see
Marsch v. Williams, (1994) 23 CaL,App.4th 238, 245. The principal source of authority to appoint
a receiver is Code of Civil Procedure section 564.'arsch v, Williams, (1994) 23 Cal.App.4th
238, 245.
Whenever circumstances exist indicating that continued management of a long-term health
care facility by the current licensee would present a substantial probability or imminent danger of
serious physical harm or death to the patients, or there exists in the facility a condition in substantial
violation of this chapter or the rules and regulations adopted pursuant to this chapter, or the facility
exhibits a pattern or practice of habitual violation of this chapter or the rules and regulations
adopt.ed pursuant thereto, or the facility is closing or intends to terminate operation as a licensed
long-term health care facility and adequate arrangements for relocation of residents have not been
made at least 30 days prior to the closhrg or termination, the director may petition the superior

'll further statutory references are to the Code of Civil Procedure unless otherwise stated.

 court for the county in which the long-term health care facility is located for an order appointing a
receiver to temporarily operate the long-term health care facility in accordance with this article.
Health & Safety Code $ 1327(a).
If at the conclusion of the hearing 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
patients, the court may issue an order appointing a receiver to temporarily operate the long-term
health care facility and enjoining the licensee fiom interfetdng with the receiver in the conduct of
his or her duties. The court shall in any such proceedings maire 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 matmer. Health k Safety Code
) 1327(b).
The appointment of a receiver rests largely in the discretion of the trial court. Mauuiora v.
Palo Alto Inn. Inc., (1967) 249 Cal.App.2d 706, 710. Because the appointment of a receiver is a
drastic remedy, courts will carefully weigh the propriety of such appointment, particularly if an
alternative remedy is available. Hoover v. Galbraith, (1972) 7 Cal.3d 519, 528; Citv and County
of San Francisco v. Dalev, (1993) 16 Cal.App.4th 734, 745.
C. Statement of Facts~
The Facilities are licensed by the Department as skilled nursing facilities and are Medicare
and Medi-Cal certified. Vivona Decl. $ 4, Exs. 1-2, The Facilities collectively have licenses for
149 skilled nursing beds, and the Rose Facility is licensed to offer subacute care. Vivona Decl.
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The licenses of Respondems to operate the Facilities expired on December 27, 2019.
Vivona Decl. $ 5. Respondents failed to renew their licenses or pay the required renewal fees and
have been operating the Facilities without a valid license since that date. Vivona Decl. $ 5.
Respondents are required to pay the state-mandated Quality Assurance Fee ("QA Fee") as a
condition for participating in the Medi-Cal program. Respondents have not paid QA fees for over
two years, and together owe back payments of approximately f1.4 million. Vivona Decl. /~6.
On February 4, 2020, after the Department determined that conditions at the Facilities
created a situation where the residents were in immediate danger of death or permanent injury by
virtue of the failure of the Facilities to comply with federal or state requirements, Department
Deputy Director T. Scott Vivona ("Vivona") appointed Seelig as the Temporary Manager of the
Facilities. Vivona Decl. f)8. Respondents did not challenge Seelig's appointment. Vivona Decl.
lllI 8-9, Exs. 3-6.
Doyle meets the statutory and regulatory qualifications to serve as the Receiver for the
Facilities and is willing and able to serve as the Receiver. Doyle Decl. f(6. Doyle holds licenses
in California as a licensed vocational nurse and nursing home administrator, is a member of the

Angell requests judicial notice of the Declaration of Arlene H. Rosales, including the
attached exhibits, filed in LASC Case No. 20STCV04552, Arlene H. Rosales. et al. v. Leuacv
Healthcare Center. LLC. et al., filed February 5, 2020 (Ex, I), The existence of Exhibit I, but not
necessarily the truth of its contents, is judicially noticed. Evid. Code 11452(d); Sosinskv v, Grant,
(1992) 6 Cal.App.4th 1548, 1551.
~

 California Receiver's Forum, and has extensive relevant experience. Doyle Decl,

f~$

1-8, Ex.

1,

D. Analvsls

Petitioner Angell seeks confirmation of the appointment of Doyle as Receiver, Angell
states that appointment of a receiver is warranted under Health and Safety Code section 1327, The
Facilities are skilled nursing facilities that are long-term care facilities as defined in Health 8c
Safety Code section 1326. App. at 5; Vivona Decl. $g 3-4, Exs. 1-2, Respondents have not
opposed the confirmation of the Receiver's appointment,
Angell provides evidence showing that the Facilities have failed to adequately safeguard
their residents for many months and that continued management of the Facilities by Respondents
would present a substantial probability or imminent danger of serious physical harm or death to
the patients. Vivona Decl. $ 10, Ex. 6. The evidence also demonstrates that Respondents have
failed to pay their employees and to meet other financial obligations, resulting in their operation
of the Facilities with expired licenses and their eventual eviction. Vivona Decl. fI$ 5-6. Angell
argues that this conduct constitutes a condition in substantial violation of applicable laws and
regulations and Respondents have exhibited a pattern or practice of habitual violation of applicable
laws and regulations, justifying confirtnation of the Receiver's appointment. App. at 9.
Angell also asserts that there is no reasonable alternative to confirmation of the
appointment of Receiver. The only alterative, a revocation of Respondent's licenses to operate
the Facilities, would require the transfer of patients to new facilities. App. at 9-10. Angell argues
that relocation is unfeasible as it would be potentially traumatic for the patients. App. at 10.
The evidence establishes that confirtnation of the appoinnnent of Receiver is warranted
and necessary due to the substantial probability or imminent danger of serious physical harm or
death to the patients and Respondeiits'iolation of applicable laws and regulations.
Angell also asserts that Respondents have a history of misconduct and failure to cooperate
with the Temporary Manager and should be enjoined from interfering with the Receiver and
divested of possession and control of the 1"acilities, pursuant to Health & Safety Code sections
1327(b) and 1329(a). App. at 11-12.
The appoinnnent of Ermel Don Doyle Jr. as Receiver for the Facilities is confirmed. The
appropriate bonds have been posted. A receivership status conference is set for October 13, 2020
at 1:30 p.m.

  

EXHIBIT 2

SUPERIOR COURT OF CALIFORNIA, COUNTY OF LOS ANGELES
Civil Division
Central District, Stanley Mosk Courthouse, Department 85

20STCP01013
SONIA ANGE(LL MD) MPH) DIRE(CTOR. CALIF. DEPT. OF
PUBLIC HEALTH vs LEGACY HEALTHCARE CENTER,
LLC, A CALII('ORNIA LIMITED LIABILITY COMPANY, et

June 5, 2020
11:00 AM

al.

Judge: Honorable James C. Chalfam
Judicial Assistant: J. De Luna
Courtroom Assistant: None

CSR: None
ERM: None
Deputy Sheriff: None

APPEARANCES:

For Plaintil'f(s): No Appearances
For Defendant(s): No Appearances

NATURE
Receiver

OF(

PROCEEDINCS,'ourt Order Order to Show Cause Re; Confirmation of
—

Order to Show Cause Re: Confirmation of Receiver was initially set for hearing on 4/7/2020,
then continued to 4/28/2020 and finally continued to 6/25/2020, due to the spread of Covid-19,
the need for social distancing, and the states of emergency having been declared by Governor
Gavin Newsom and President Donald Trtunp, and the General Orders issued by the Presiding
.ludge and Statewide Orders issued by the Chief Justice. Parties were directed to file their briefs
on schedule as if the initial hearing date remained as set.
The Court distributed its tentative ruling on the order to show cause hearing to Petitioner's
counsel on 6/3/2020, Petitioner notified opposing counsel of the courts tentative ruling on
6/4/2020. Petitioner's counsel notified the Court on 6/4/2020 that he submits on the tentative
ruling.

The court rules as 1'ollows:

Petitioner Sonia Angell, MD, MPH, Director of the California Department of Public Health
seeks confirmation of the court's March 13, 2020 order appointing Ermel Don Doyle, Jr. as
Receiver for the skilled nursing facilities known as Legacy Healthcare Center, located at 1570
North Fair Oaks Avenue, Pasadena, California 91103 and Rose Garden 1lealthcare Center,
located at 1899 Noith Raymond Avenue, Pasadena, California 91103 (collectively, "Facilities" ).
The court has read and considered the moving papers (no opposition was filed), and renders the
following tentative decision:

Minute Order

Page

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of 2

 SUPERIOR COURT OF CALIFORNIA, COUNTY OF LOS ANGELES
Civil Division
Central District, Stanley Mosk Courthouse, Department 85

20STCP01013
SONIA ANGELL MD, MPH, DIRECTOR, CALIF. DEPT.
HEALTH vs LEGACY HEALTHCARK CENTER,
LLC, A CALIFORNIA LIMITED LIABILITY COlVIPANY, et
al.

OI'UBLIC

Judge: Honorable James C. Chalfant
Judicial Assistant: J. De Luna
Courtroom Assistant: None

June 5, 2020
11:00 AM

CSR: None
ERM: None
Deputy Sheriff: None

The appointment of Ermel Don Doyle Jr. as Receiver for the Facilities is confirmed. The
appropriate bonds have been posted,
The court's tentative ruling is adopted as the final order of the court and is filed this date.
Status Conference Re: Receivership is scheduled for 10/13/2020 at 01:30 PM in Department 85
at Stanley Mosk Courthouse.

Accordingly, the Order to Show Cause Re; Confirmation of Receiver scheduled for 06/25/2020,
and Trial Setting Conference scheduled for 06/25/2020 are advanced to this date and vacated,
Petitioner is directed to give notice.
Certificate of Mailing is attached.

Minute Order

Page 2 of 2

 ATTACHMENT
SECTION 6. DECLARATION OF MAILING: A copy of this Request for Entry of Default was mailed
first-class, postage prepaid, in a sealed envelope addressed to each defendant's attorney of
record or, if none, to each defendant's last l&nown address as follows:
1.

Legacy Healthcare Center,

Legacy Healthcare Center,

1570

LLC:

LLC

N. FAIR OAI&S AVENUE

PASADENA CA 91103

Legacy Healthcare Center,

11600 W. WASHINGTON
LOS ANGELES CA 90066

2.

LLC

BLVD.

Rose Garden Subacute K Rehabilitation Center,

Rose Garden Subacute S. Rehahilitation Center,
1899 N. RAYMOND AVE.
PASADENA CA 91103
Rose Garden Subacute

5 Rehabilitation Center,

11600 W. WASHINGTON
LOS ANGELES CA 90066

BLVD.

LLC

LLC

LLC:

 DECLARATION OF SERVICE BY ELECTRONIC MAIL and U.S. MAIL
Case Name:

Rosales, Arlene H. v. Legacy Healthcarc Ctr., LLC; Rose Garden Subacute
& Rehab. Ctr. LLC, ct al.

Case No.'20STCV04552

employed in the Office of the Attorney General, which is the office of a member of the
California State Bar, at which member's direction this service is made. I am 18 years of age or
older and not a party to this matter. I am fiuniliar with the business practice at the Office of the
Attorney General for collection and processing of correspondence for mailing with the United
States Postal Service. In accordance with that practice, correspondence placed in the internal
mail collection system at the Office of the Attorney General is deposited with the United States
Postal Service with postage thereon fully prepaid that same day in the ordinary course of
business.
I am

On June 11. 2020, I served the attached NOTICE OF RULING ON ORDER TO SHOW
CAUSE RK: CONFIRMATION OF RECEIVER AND NOTICE OF STATUS
CONFERENCE by transmitting a true copy via electronic mail. In addition, I placed a true
copy thereof enclosed in a sealed envelope, in the internal mail system of the Office of the
Attorney General, addressed as follows;

SEE ATTACHED SERVICE LIST
declare under penalty of perjury under the laws of the State of California the foregoing is true
and correct and that this declaration was executed on June 11, 2020 at Los Angeles, California.

I

Stacy McKellar
Declarant
LA2020500725

Isl Stacy lvfcKellar
Signature

 DECLARATION OF SERVICE BY ELECTRONIC MAIL and IJ.S. MAIL
Case Name:
Case No.:

Rosales, Arlene H. v, Legacy Healthcare Ctr., LLC; Rose Garden Subacute
& Rehab. Ctr. LLC, et al.
20STCV04552

SERVICE LIST

Legacy Healthcare Center, LLC
1570 N. Fair Oaks Avenue
Pasadena CA 91103

Legacy Healthcare Center, LLC
11600 W. Washington Blvd.
Los Angeles CA 90066

Rose Garden Subacute & Rehabilitation
Center, LLC
1899 N. Raymond Ave.
Pasadena CA 91103

Rose Garden Subacute & Rehabilitation
Center, LLC
11600 W. Washington Blvd.
Los Angeles CA 90066

Dov E. Jacobs,
Email: devi ihcm.corn

Dawn Coulson,
Email; dcoulson@eppscoulson.corn

Michael Bubman,
Email: mbubman@mbnlatvyers.corn