powered by LeadingAge New York

Important Legal Victory for NY CCRCs

LeadingAge NY is pleased to announce a favorable court ruling in the case of Good Shepherd Village at Endwell, Inc. (GSVE) versus Yezzi et al. The LeadingAge NY member brought suit in response to a contracted Continuing Care Retirement Community (CCRC) resident/family that sought to divest assets for the purpose of obtaining Medicaid coverage to pay for care in the community's skilled nursing facility.

This favorable ruling sets an important precedent in terms of preserving the integrity of the CCRC model as envisioned under State statute. An integral part of the CCRC concept is that seniors with the necessary resources choose to invest their resources in securing high quality long term care services and housing. To that end, these seniors enter into a contractual relationship with the CCRC. From the CCRCs perspective, the actuarial soundness and financial viability of the community model rests on individuals honoring those contractual obligations. As noted by the judge in this case:

"The financial viability of such communities is contingent... upon the applicants disclosing their assets and income prior to admission and contracting to spend down their assets and using their income to private pay for room, board and care. Only after the assets are exhausted, does the [CCRC] agree to accept Medicaid."

In finding in favor of GSVE, the judge goes on to say, "to allow the [defendants] to breach their agreement with Good Shepherd, would upend the financial model upon which Good Shepherd was created and authorized by the legislative structure implemented by the State.”

The basis for the judgment is that the defendants breached the admission agreement/contract by transferring assets that had been pledged for use for the resident’s care at GSVE, along with a finding of fraudulent conveyance stemming from the transfer of assets. The judge also ordered that the improperly transferred assets be restored to the resident's estate and made available to satisfy the defendants’ obligations and debt to GSVE. Finally, the judge ordered that GSVE is entitled to recover reasonable attorney's fees. 

LeadingAge NY congratulates GSVE on this important legal victory on behalf of our entire CCRC membership and we thank our CCRC members for coming together in support of GSVE. The text of the actual court decision is available by clicking here. Ultimately, the real winners in this case are New York seniors who want the option of investing in their long term care and housing needs by contracting with a CCRC.

Representing GSVE in this matter is David T. Luntz, principal, at Hinman Straub, PC (Hinman Straub also serves as counsel for LeadingAge NY).

Contact: Patrick Cucinelli, pcucinelli@leadingageny.org, 518-867-8827