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CSEA sues county over creation of LDC to sell nursing home

By Tom Rivers, Editor Posted 23 July 2013 at 12:00 am

Photo by Tom Rivers – The CSEA union is backing a lawsuit that seeks to keep the 120-bed nursing home in Albion as a publicly owned facility.

ALBION – The union representing 135 county employees at The Villages has sued the county, the County Legislature, its Chairman David Callard, and a newly formed local development corporation that is charged with selling the 120-bed nursing home.

The lawsuit alleges the county improperly formed the LDC – the Orleans County Health Facilities Corporation – and the county’s fee title is invalid. The suit alleges other “arbitrary and capricious actions” and wrongdoing by the county, including efforts “to circumvent the stringent requirements of public health law.”

The lawsuit is the second that seeks to stop the county and its LDC from selling The Villages of Orleans. The first lawsuit, filed by local resident Mary Bannister and nursing home employee Dawn Hazel, contested the LDC was improperly created by the Legislature. Acting State Supreme Court Judge James Punch ruled in favor of the county last month.

The new lawsuit was filed July 10 and is not the same as the first one, said Cindy Troy, president of the CSEA union in Orleans County.

“This is in a different direction,” she said.

Legislature Chairman David Callard declined to comment on the lawsuit, except to say he favors due process through the court system.

CSEA and county attorneys are to appear in court on Aug. 6.

The suit was brought in the names of nursing home employees Jan Standish, a dietary at the nursing home since 1990, and Mary A. Lewis, a custodial worker since 1990 and member of the CSEA bargaining unit. Both have family living at The Villages.

The lawsuit notes that the union has a two-year contract running until Dec. 31, 2014. The Legislature in September 2011 also passed a resolution saying the nursing home would remain a public facility, subject to public governance, until at least the end of 2014.

The LDC was incorporated on March 7, 2013. The three-member board is led by its chairman, former Yates Town Supervisor Russ Martino. Other members include Clarendon Town Supervisor Richard Moy and Richard DeCarlo, a former Gaines town supervisor.

CSEA outlines six points in the Article 78 lawsuit. They include:

The state only allows LDCs to be used for economic development, the CSEA attorneys say in the lawsuit. The county created the Health Facilities Corporation to sell the nursing home to a third party, which the CSEA attorneys say is outside the purposes of the not-for-profit corporations law.

The county also violated the not-for-profit corporations law by transferring an interest to the LDC while the county retained the operating assets and operating responsibility for the responsibility, according to the lawsuit.

The county needs to determine property sold or transferred to an LDC first is no longer required for use by the county, according to the lawsuit. The county made the move without “fact-based determination,” the plaintiffs allege. The state Department of Health projects a 360-bed nursing home need for the county by 2016. Currently there are 310 beds, suggesting the nursing home will be in demand.

The lawsuit also contends the Legislature was wrong to create the LDC to sell a county asset. The Legislature can’t delegate that authority, and it should determine whether a sale is in the best interests of the county.

The lawsuit also says the county’s creation of an LDC to sell the nursing home is an attempt to circumvent public health law. The state DOH highly regulates nursing homes. The county formed the LDC without approval of the public health council. The LDC also can’t acquire, sell or lease property without permission of the commissioner of health. The county “failed to comply any of these provisions,” according to the lawsuit.

The CSEA attorneys also allege the county used “legal fiction” to create the LDC with a lease hold on the nursing home. However, the county retains all interests, rights and obligations to occupy, operate and maintain the site.

The LDC would take ownership of the site when it is ready to approve a sale. The sale would be made on behalf of the county, but in the name of the Orleans County Health Facilities Corporation.

“This results in a questionable transaction that takes the county’s name off of the sale of the Villages to a new owner-operator,” the lawsuit states, calling the plan an “excess of the authority” to act under a county law.

The suit seeks to annul the Legislature’s resolution that created the LDC, annul the “illegal lease and leaseback” between of the Villages between the county and the LDC,  and declare the county’s delegation of authority a violation of the statue and the state Constitution.