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Member CCRC Prevails in Litigation

The NYS Supreme Court-Appellate Division, Third Department has just issued a favorable decision in Good Shepherd Village at Endwell, Inc. v. Yezzi, a lawsuit involving a contract for Fee-For-Service Continuing Care Retirement Community (FFSCCRC) services.  LeadingAge New York filed an amicus (“friend of the court”) brief in the case.

The case involved a couple that obtained residency at Good Shepherd Village at Endwell (GSVE) by paying entrance fees and monthly fees for services received. Three years into their residency, one spouse’s needs increased such that she required placement in the CCRC’s nursing home. At that point, the individual transferred her assets to another family member and obtained Medicaid eligibility.  The plaintiff, GSVE, alleged breach of contract, fraudulent conveyance, civil conspiracy and violations of the Medicaid Act.  NYS Supreme Court found for GSVE, and the Yezzi family appealed.

On Nov. 5th, the Appellate Division issued a unanimous opinion affirming the Supreme Court’s decision in all respects. The opinion provides detail about the CCRC model as well as the particulars of the Yezzi’s residency agreement with GSVE. The opinion also details the changes to spousal immunity resulting from the Federal Deficit Reduction Act of 2005 and the 2006 NYS Department of Health administrative directive specifying that, in the CCRC context, residents may be required to spend declared resources on their care before applying for Medicaid.   

The Court went on to confirm that defendants breached the admission agreements by transferring assets that had been pledged for use for their care at GSVE. The court also confirmed that summary judgment is proper with respect to the fraudulent conveyance causes of action in the complaint.

LeadingAge NY had been concerned that if the Supreme Court decision was overturned, FFSCCRCs would not be able to rely on resources that residents pledge when admitted to the community, which could seriously endanger the financial viability of the FFSCCRC model and even have implications for other CCRCs. In fact, we have received reports of similar activity in Rochester and have shared this decision with other member CCRCs throughout the State.

Contact: Dan Heim, dheim@leadingageny.org, 518-867-8866