Attorney General Bonta Announces Win in Fight to Protect Residents of Santa Cruz Nursing and Rehab Facility

Friday, April 14, 2023
Contact: (916) 210-6000,

OAKLAND — California Attorney General Rob Bonta today announced the successful resolution of a lawsuit that led to dramatic improvements in the services and operation of a Santa Cruz County skilled nursing facility. Many of the residents at the facility, the Hearts and Hands Post Acute & Rehab Center (Hearts and Hands), were diagnosed with dementia and treated for substance abuse disorders. The California Department for Justice (DOJ) and the Santa Cruz County District Attorney’s Office sued the facility after investigators found that it frequently discharged residents who were deemed too difficult — in violation of laws and rules meant to ensure their safety and continued care. This resulted in some of those residents being moved to inappropriate treatment, and housing, and in some cases, losing access to housing. Now, after almost three years of supervision by an independent monitor appointed at the request of DOJ and Santa Cruz County, Hearts and Hands has made significant changes and progress in its operations and compliance. Today’s settlement resolves the lawsuit against Hearts and Hands on the condition that it remains under supervision for at least two more years and pays civil penalties and investigation costs.
“Every one of us deserves access to the care we need, and to be treated with dignity and compassion,” said Attorney General Bonta. “For years, Hearts and Hands failed to properly treat vulnerable residents. I am glad to see that our lawsuit has improved conditions for these vulnerable residents and that Hearts and Hands is on a better path to meeting the standard of care its residents need. The California Department of Justice’s first priority is to protect the health and safety of Californians, especially those who are overlooked and underserved. I am grateful to our partners at the Santa Cruz County District Attorney’s Office for working with us to achieve the hopeful and heartening result of this case.”
“Public safety is always the number one goal of the Santa Cruz County District Attorney’s Office.  It’s gratifying to see our joint prosecution efforts reap positive change and benefits for our dependents and seniors, among the most vulnerable members of our community,” said Santa Cruz County District Attorney Jeffrey Rosell.
The investigation into Hearts and Hands first started in November 2018, when DOJ and the Santa Cruz District Attorney’s office began looking into allegations of improper discharges, substance abuse, and inadequate staffing at the facility.
DOJ investigators found that Hearts and Hands frequently failed to provide the mandatory notice to residents it discharged. Even when residents were provided with the appropriate discharge notice, they were sometimes inappropriately sent to temporary shelters or unlicensed ‘board and care’ homes that were not equipped to meet the residents’ needs. In other instances, the facility ‘discharged’ residents by calling law enforcement to essentially evict them in violation of regulations and laws. Investigators found evidence that indicated that Hearts and Hands did not have enough staff to care for its residents, and was relying on law enforcement to help manage behavior at the facility. Some of those who were removed by law enforcement ended up without a place to live.
In September 2019, DOJ and the District Attorney’s Office filed a lawsuit with the Santa Cruz County Superior Court, accusing Hearts and Hands of violating California’s Unfair Competition Law and False Advertising Law. Hearts and Hands voluntarily agreed to the appointment of an independent monitor who had full access to the facility’s personnel and records.
Since then, Hearts and Hands’ performance has improved dramatically. DMFEA investigators found the number of calls to law enforcement has dropped substantially, the facility is adequately staffed, and the independent monitor reported that a new administrator has brought the facility up to required performance standards.
Attorney General Bonta and Santa Cruz County District Attorney Jeffrey Rosell have thus agreed to resolve the lawsuit with a settlement agreement that requires Hearts and Hands to:

  • Continue operating under strict court-ordered terms and remain under independent monitoring for at least two more years;
  • Pay the costs of investigation, calculated to be $52,584.00; and
  • Pay civil penalties  —  $50,000 to be paid immediately, and $200,000 to be stayed unless Hearts and Hands violates any terms of the settlement.

A copy of the settlement agreement can be found here.
DMFEA receives 75% of its funding from the United States Department of Health and Human Services under a grant award totaling $53,792,132 for federal fiscal year 2022-2023 The remaining 25% is funded by the State of California. The federal fiscal year is defined as October 1, 2022, through September 30, 2023.

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