Dahlia Gardens Owners Surrender Their Operating License : Health: Board-and-care facility was charged with scores of violations, including lapses leading to two deaths.

The owners of an El Monte board-and-care home that had racked up scores of violations agreed to give up their operating license in a settlement with the state last week, avoiding an administrative trial on charges including inadequate supervision that allegedly led to the deaths of two mentally ill residents.

Even if owners Karl and Pearl Hoffman had stood trial before an administrative law judge, the maximum penalty still would have been a license revocation order, said Department of Social Services attorney Jay Dayvault.

The department has no power to seek jail time or criminal penalties for the 148 violations of state code that the Hoffmans’ Dahlia Gardens Guest Home has racked up since it opened eight years ago--78 of them during its last year of operation.

In two years, the Hoffmans will be eligible to apply for a new license to operate Dahlia Gardens or any other board-and-care home, but with their track record, approval would be unlikely, Dayvault said.

“It would be an uphill battle for them, and I think they understand that,” he said.

But the Hoffmans’ attorney, Douglas W. Otto, would not rule out a return to Dahlia Gardens.

“They are both concentration camp survivors,” Otto said of the Hoffmans, who are in their 70s and have been married almost 50 years. “Their life has pretty much been service to others. They have a special feeling about suffering in the world. After living a life dedicated to the needs of others, it’s hard to pull back.”

Otto said he is not aware of the couple’s plans.

The Hoffmans have declined comment since the state temporarily suspended their operating license on Feb. 28. But in a previous interview with The Times, Karl Hoffman, a native of Hungary who came to America more than 20 years ago, said any problems he had with the state were the result of misunderstandings on his part and that he had done nothing wrong.

Under terms of the settlement, the Hoffmans can seek a new licensee to run Dahlia Gardens but cannot be involved in its operation or management. The new licensee must be approved by the state.

Dahlia Gardens closed March 2 under a state order that cited chronic and serious code violations, including filth, poor nutrition and failure to dispense medication properly. State officials also cited the Hoffmans repeatedly for inadequate supervision, including lack of staff, using clients as staff and poorly trained personnel.

In March, 1992, unsupervised resident Cynthia Sue Shepardson, 41, died after getting into the home’s medicine cabinet and took an overdose of drugs. The home was cited for inadequate supervision in the incident, which was ruled a suicide by the Los Angeles County coroner.

On Feb. 8, 34-year-old Leonard Sutton, a schizophrenic, was watching TV in the recreation room when another 34-year-old schizophrenic allegedly beat him to death with a large rock. At the time, a housekeeper--the only staff person on duty for 73 residents--was washing dishes in another building.

“I don’t see how the state let (them) get off that easy,” said Sutton’s father, Leonard Sutton, 66, of Riverside.

State Assemblyman Martin Gallegos (D-Irwindale) said he might ask the Los Angeles County district attorney’s office to determine whether criminal charges against the Hoffmans are warranted.

Gallegos has asked the Social Services Department to justify why it allowed Dahlia Gardens to operate so long with such a record. He also asked the department for a “full-scale investigation” into its own practices.