South Carolina Nursing Home Blog : South Carolina Nursing Home Lawyer & Attorney : Poliakoff & Associates Law Firm : Elderly Care, Senior Care

Levin and Associates had an interesting article in The Senior Care Investor discussing the bankruptcy and sale of IHS to THI and eventually Fundamental long Term Care Holdings LLc, owned and operated by Murray Forman and Leonard Grunstein.  Below are excerpts from the article:

Very few people remember what happened a little more than seven years ago, but in early
2003, an unknown entity (at least to the senior care world) stepped in at the last minute and snatched the remaining assets of a bankrupt Integrated Health Services (IHS) from the presumed
buyer, literally on the steps of the court house. Trans Healthcare Inc. (THI) thought it had the deal wrapped up for $97.5 million, but an entity called Abe Briarwood, backed by Cammeby’s
International, swooped in for $114 million in cash and was willing to assume the post-petition Medicaid and Medicare billing liabilities, something that made the court very happy.

We are certain that the founder of Cammeby’s, one Rubin Schron, had no idea where this initial acquisition would take him in the rough and tumble skilled nursing industry....  And, most certainly, he never thought he would now be in court pitted against a man he trusted with everything. After Cammeby’s made the winning bid at the 11th hour, THI at first tried to fight it, but then the two sides settled their differences when Cammeby’s hired THI to run the newly acquired IHS assets.  Then, in May 2004, we caught wind of an acquisition offer that was brewing for the former Mariner Health Care from none other than Cammeby’s, but under the name National Senior Care, and separate from its Integrated Health.  The purchase price for Mariner was just under $1.0 billion, and when you capitalized the lease payments, the total transaction value increased to about $1.25 billion. This resulted in a price per bed of $38,800 and a 9.2x multiple of annualized EBITDAR.  The
deal closed at the end of 2004, but perhaps the most longlasting impact on the target entity, which some time later had a name change to Sava SeniorCare, was the role that Mr. Schron’s attorney, Leonard Grunstein, came to play.
There were really two sets of problems that began to emerge. One was what transpired with the original acquisition of the Integrated Health assets and the role of Trans Healthcare, which eventually came to be known as Fundamental Long Term Care when Fundamental purchased the assets of THI, the sale of which some claim was under duress and fraudulent.  There is a separatelawsuit filed on July 1, 2010, against Leonard Grunstein, his brother Harry, Murray
Forman alleging, among other things, fraudulent conveyance, unjust enrichment, legal malpractice, fraud, breach of fiduciary duty, breach of lease agreements, tortious interference and aiding and abetting fraud. The lawsuit was filed by Allen Bodner and DMV Funding LLC and is seeking no less than $150 million in damages and no less than $300 million in punitive damages.
According to the complaint, Bodner owned 100% of DMV which purchased Cammeby’s loan to the Abe Briarwood/IHS deal, and there are 30 more pages as to what transpired among the various parties. The long and short of the complaint was that the plaintiffs believe they got screwed, to
put it bluntly, by people who were partnering with them and advising them.
The more interesting lawsuit, but sort of related, was filed on June 22, 2010, with Rubin Schron and his various holdings as the plaintiffs against a similar cast of characters including Leonard Grunstein, Murray Forman, the law firm Troutman Sanders, and the various Sava and Mariner
affiliates. To fully appreciate how unusual this lawsuit is, one must always keep in mind that Leonard Grunstein was Rubin Schron’s attorney. ....Mr. Grunstein did much of the legal work involved in the Mariner acquisition and subsequent Opco and Propco set-ups that evolved over time.
The relationship between Mr. Schron and Mr. Grunstein dates back to the 1980s, and according to the complaint, he apparently has referred to himself as Mr. Schron’s “general counsel.” According to the complaint, Mr Schron relied on legal advice from his attorney who began to organize things to the benefit of the attorney, and on financial advisory services from Mr. Forman, who was allegedly in cahoots with Mr. Grunstein. Mr. Schron never wanted to have anything to do with operating the nursing facilities; he just wanted a steady, but increasing, rental stream from the
real estate. In the case of the Mariner acquisition, according to the complaint, Mr. Schron put all the money up and ended up owning the real estate in Propco, while Grunstein/Forman retained ownership of the operating entity created to run the facilities, and all the excess cash flow, plus they received a small share of Propco—all without investing any of their own money.  In addition, according to the complaint filed, Mr. Schron was charged $14 million for financial advice in the Mariner deal by MetCap Advisory Services, which was 25% owned by Mr. Grunstein and 25% owned by Mr. Forman.   Other allegations in the nearly 100-page complaint include loans made to Opco that were never paid back to Mr. Schron, distributions taken by the Grunstein/Forman group
totaling more than $70 million, Grunstein billing Schron for non-existent legal work, and for allegedly not giving Schron the final closing documents for the original Mariner acquisition.
One also needs to remember that all of this recent legal action is on top of several issues earlier this year, when Mr. Grunstein and Mr. Forman sued Mr. Schron for more than $100 million for allegedly misappropriating significant sums of money from various partnerships in which they all had a stake.

And don’t forget that all three of them were defendants together when the Department of Justice charged them all with accepting kickbacks from Omnicare in return for pharmacy contracts. Without admitting guilt, they settled and agreed to pay the federal government $7.8 million
and $6.1 million to certain states.

Over the past two years the owners of Sava (Mariner) have been trying to sell off various pieces of the company (or the whole thing), notably the portfolio of mostly leased assets in California, but with little success. The obvious problems were pricing and financing.  Currently, Sava is the seventh largest skilled nursing company in the country with 184 facilities and 21,279 skilled
beds, and it is larger than half of the publicly traded skilled nursing companies.   Still, we believe that selling the assets is a real outcome, especially for Mr. Schron who we assume wants to be done with his relationship with his former attorney and financial advisor, and may even want to be out of the skilled nursing real estate business altogether. The other side, however, may
still not want to give up their cash cow, but the courts and the credit markets may make the decision for them.

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The Times-Tribune reported a lawsuit filed on behalf of former Jewish Home resident Elizabeth LaCoste against the Scranton nursing home, claiming aides were negligent when they left Mrs. LaCoste unattended in her wheelchair, which rolled away and crashed, throwing her onto the street. Mrs. LaCoste suffered a broken collarbone, a head injury, bruises and abrasions.

The preventable incident occurred after Mrs. LaCoste and several other residents had been driven from the nursing home to center city Scranton to watch a musical performance. Sometime between 1 and 1:30 p.m., Mrs. LaCoste was left alone and unsupervised in her wheelchair on a sidewalk that pitched toward Spruce Street. The wheelchair rolled toward the street and jumped the curb, heaving her out of the wheelchair and onto the street.  She suffered significant injuries and died months later.

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KCRA reported a lawsuit against El Dorado Care Center in California for the wrongful death of Johnnie Esco.  "Some people called her Sunshine. She'd walk in the room and the room would light up. She was my life," her husband of 61 years said.

Johnnie was 77 years old when she recovered from pneumonia, and went to El Dorado Care Center in Placerville for short term physical therapy to regain her strength, then go home. Two weeks after entering the nursing home, her health had deteriorated. She was rushed back to the hospital, where she died in 2008.

"If she had received proper care, she would still be alive today," Esco said.  He sued El Dorado Care Facility and parent company Horizon West, which owns 27 nursing homes.  "My wife's death was ruled unwarranted, but the facility was fined $18,000. That is ridiculous," Esco said.  "She basically did not receive care. She was neglected, warehoused," attorney Lesley Clement said.

The suit alleged the nursing home staff failed "to provide basic custodial and nursing care services, a failure to assess and treat her pain and a failure to prevent Mrs. Esco from developing a severe and life-threatening bowel impaction." It also alleged that Horizon West "failed to staff El Dorado Care with sufficient numbers of trained and supervised caregivers."

In taped depositions, employees say they were understaffed.  Research shows Horizon West increased its acuity levels, accepting more of the sickest and most expensive Medicare patients, while at the same time, decreased the nursing staff qualified to care for them.

Esco and Horizon West settled the lawsuit out of court. They won't say for how much, but KCRA 3 was told the nursing home paid a significant amount of money to Esco.

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Finally an Attorney General has indicted THI entities for resident abuse and neglect.   It is about time.  Hopefully, this will open the flood gates for other state attorney generals to investigate and indict these entities who have shown a pattern of neglect and careless indifference to their residents. See indictments here and here.   The indictments have a lot of factual information showing the lack of care provided to a vulnerable adult. 

Murray Forman and Leonard Grunstein own and operate Fundamental Long Term Care Holdings which own, operate, and control the hundreds of THI facilities in the U.S. managed by Fundamental Clinical Consulting (the successor company to indicted THI of Baltimore Management).

The pattern of poor care and careless indifference by Fundamental in their THI facilities is well known in the nursing home industry.  Hopefully, these indictments will change their policies and procedures but it is doubtful.

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The News & Observer had an article about the civil lawsuits that have been filed against Britthaven after a Britthaven nurse heads to court on murder charges in the morphine-related death of a patient, and serious injuries to two other patients.  Registered nurse Angela Almore ihas been charged with second-degree murder and patient-abuse charges related to the death of 84-year-old Rachel Holliday and morphine-induced injuries to six other patients.   A medical examiner reported that Holliday died of pneumonia and that the levels of morphine in her system likely contributed to her death. None of the patients had been prescribed morphine.

The case of Jadwiga Orlowski v. Britthaven Inc. is one of the cases pending.  The suit accuses Britthaven of negligence, including failure to monitor Orlowski, who suffered from dementia according to the complaint, and not providing a bed with side rails.

Her husband, Marian Orlowski, died of pneumonia on July 16 at age 86.  Orlowski was a former distinguished professor in pharmacology at The Mount Sinai School of Medicine in New York, was nominated for a Nobel prize in 2004 for his pioneering drug treatment for blood-plasma cancer.

"Later on that same day, Dr. Marian Orlowski was found on the floor of his room," states a legal complaint filed by the Orlowskis' attorney, Carmaletta Henson. "He had fallen and sustained serious personal injuries, including a fracture to his left hip."

Britthaven of Chapel Hill is one of four "special focus facilities" in the state. This designation by the federal Centers for Medicare and Medicaid Services notes a pattern of substandard care. Chapel Hill Health and Rehabilitation, along with the Brian Centers in Goldsboro and Gastonia (owned by SavaSeniorCare), are also on the list.

Last year, CMS ordered Britthaven of Chapel Hill to pay $216,400 in fines because it was out of compliance with Medicare requirements. Those penalties stem from the case of Mary Lou Barthazon, a 95-year-old woman who likely broke both thigh bones near her knees on Sept. 30, 2007, when a nursing assistant dropped her while trying to lift her from a chair to her bed, according to a federal judge.  The nursing assistant ignored Barthazon's care plan, which required a mechanical lift.  Her fractures went untreated for two weeks because the nursing assistant did not report the incident. Barthazon's daughter, Anne Blanchard, insisted Barthazon go to the emergency room on Oct. 14. She died four days later.

Blanchard has sued Britthaven, alleging negligence and wrongful death. In her motion to dismiss the lawsuit, Britthaven lawyer Pamela Robertson denies "that defendants had a duty to supervise or control the clinical care, treatment or judgment of any healthcare provider."

Robertson's motion also denies "that either state or federal nursing home standards, policies, regulations, rules or standards of participation establish the standards of health care applicable to Britthaven of Chapel Hill."

Britthaven tried to avoid a trial by forcing the case to arbitration. Superior Court Judge Abraham Penn Jones concluded that the contract was signed under duress as both she and her mother were suffering serious health problems and her 23-year-old daughter had only months earlier suffered partial paralysis in a rollerblading accident. Wrote Jones, "The contract is ... procedurally and substantively unconscionable."

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Dennis B. Roddy reported in the Pittsburgh Post-Gazette a case where the PA Appeals Court  declared that a local nursing home and its owner may be held liable in a patient neglect death.  The court's ruling means that nursing home owners can be sued for neglect in any of their homes. Corporate negligence liability includes not only hospitals and health maintenance organizations but also nursing homes.  The judges concluded that Grane, the parent firm, played a substantial role in managing the Highland facility, including establishing quality assurance.

"We conclude that plaintiff's evidence established that both Highland and Grane acted with reckless disregard to the rights of others and created an unreasonable risk of physical harm to the residents of the nursing home," the court declared in its ruling. "The record was replete with evidence that the facility was chronically understaffed and complaints from staff continually went unheeded."

Peter Giglione represented Richard Scampone in his suit on behalf of the estate of his mother, Madeline Scampone. She died from neglect Feb. 9, 2004, at Highland Park Care Center. Mrs. Scampone died of dehydration caused by understaffing.  Medical records were falsified and water was not provided to residents because the employees were overworked.

The Scampone estate won a judgment of $193,000 but sought and won a new trial after arguing that Judge Robert J. Colville erred in allowing the home's owner, Grane Healthcare, to be excluded from the suit.

The court also declared that employees of the company "not only were aware of the understaffing that was leading to improper patient care, they deliberately altered records to hide that substandard care by altering [Activities of Daily Living records] that actually established certain care was not rendered."

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The Milwaukee-Wisconsin Journal Online had an article about seven lawsuits filed against Mount Carmel Health and Rehabilitation Center, which has been cited for 35 care violations this year alone.  Wisconsin's largest nursing home is fighting evidence of substandard care in seven lawsuits, including six filed in the past six months.

In one case, staff repeatedly reported seeing a resident for more than 10 hours, even though he had fled the facility and was arrested for prowling.  The seven pending lawsuits allege that Mount Carmel chronically is understaffed and that residents in the 473-bed home are not getting adequate care.

Kindred Healthcare, the Louisville, Ky., company that owns Mount Carmel, simply is trying to maximize profits, said Jeff Pitman, a Milwaukee lawyer whose firm is handling four of the seven lawsuits.

Among the allegations in the lawsuits:

• Lack of care led Vicenta Hernandez, 94, to suffer a fall and broken hip, which resulted in her death in November 2007.

• Mary Eva Richey, a one-month resident, developed multiple pressure sores that led to her death in January 2009.

• Edmond Strehlow, who lived at Mount Carmel for 3  1/2 months until April 2007, suffered multiple pressure sores that led to his death.

Richard Abel of Muskego said he visited his late wife, LaVerne, five days per week at Mount Carmel and that staff often ignored her pleas for help in getting to the bathroom and failed to keep a brace on her knee. Abel said he complained to staff and their supervisors on the floor, and then to administrators.

In January 2009, Kindred Healthcare, a successor of Vencor, resumed operation of Mount Carmel. After operating with a probationary license for one year, Kindred was given a full license in January of this year.

The citations issued this year include allegations that Mount Carmel:

• Failed to provide appropriate supervision and assistive devices to five out of 10 residents identified by the nursing home as being at risk for falls.

• Failed to assess and treat pain, depression and other problems experienced by a 51-year-old woman who speaks Spanish and who had part of her right leg amputated last December.

• Did not treat 16 of 32 residents reviewed "in a manner that maintained their dignity."

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The Boston Herald had a story about the lawsuit filed against a nursing home for failing to protect a resident from an assault by another resident.  Nursing homes have a duty to keep residents safe and protected. 

Elizabeth Barrow suffered blunt impact to her head and torso and widespread internal hemorrhaging. The cause of her death was ruled strangulation and suffocation by plastic bag.
Scott Barrow’s civil action filed in Newburyport Superior Court names Brandon Woods and members of its staff as defendants along with the resident who was involved. Laura Lundquist stands accused of brutally beating and strangling Elizabeth Barrow in September, then wrapping a plastic bag around her head as the centenarian widow lay in bed at  Brandon Woods.  Prosecutors have said Lundquist was upset over the number of visitors Elizabeth Barrow received and that her bed had a choice window view.

Elizabeth Barrow was “bruised and battered and strangled. This can’t be happening quietly at 6 in the morning,” said attorney Suzanne McDonough. “There’s a staff in this place for a reason. Otherwise, just call it a hotel.”

Lundquist is still undergoing a mental-health evaluation at Taunton State Hospital.

 “All (Brandon Woods) had to do was provide for safety,” she said. “We’re not talking about open-heart surgery or end-of-life decisions. It’s about day to day living in a residential facility.”
 

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The Record on NorthJersey.com had an article about the trial between the family of a resident who fell to his death from a window left open on the second floor at Preakness Healthcare Center.

“Simply put, as a result of their negligence, he suffered 23 days of hell,” said attorney Angelo Bisceglie, referring to Ora Tate  Tate had been admitted to Preakness by his sister, Loretta Tinsley, on July 3, 2006. He was found by a construction worker at about 7:30 a.m. lying 16 feet below his second-floor room window on July 28, 2006. Pulmonary problems and injuries led to his death three weeks later.

Bisceglie said it was unfortunate that Tate’s room had what is known as an “awning window,” which a person of average size could fall out of as Tate did.

Preakness staffers should have known that Tate might harm himself, given his psychological condition, and been placed in a room that would have been safer.

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ChicoER.com had an article about the pattern of bad care at nursing homes operated by Evergreen Healthcare. Six lawsuits are pending against  three nursing homes run by Evergreen Healthcare in Butte County.  The six suits, filed in 2008 and 2009, allege wrongdoing and/or inadequate and negligent care of residents.

Karen Borm, a registered nurse who worked at Twin Oaks, claimed she was wrongfully fired after she tried to intervene for a dying resident whose pleas for pain medication were ignored. Borm charged Twin Oaks failed to report to the state, as required, that this patient had fallen.

In another case, John Schroer, who was 89 at the time, was allowed to fall while in the bathroom at Twin Oaks. His suit stated he got no treatment for 24 hours for an extremely painful ankle, which turned out to have multiple fractures.

Stewart Smith claims his wife received inadequate care there and that when he complained, the nursing home retaliated by trying to limit his ability to visit her.

One lawsuit claimed that a patient named Fay Ward became extremely ill after a doctor's orders to clean and medicate her skin sores were ignored. She was sent to Biggs-Gridley Memorial Hospital, where she remained for about three weeks before she died on April 4, 2008.

Another suit stated that Alfonso Vigil, 92, was admitted to the facility and was at risk for falling and hurting himself.  The suit said staff left him alone in his room for hours. He was then found dead, having slipped down in his wheelchair and been strangled by the waist belt.

Robert Mills suffered various kinds of harm, including dehydration, malnutrition, infection and multiple falls with injuries.

The study found a correlation between the frequency of lawsuits and the frequency of citations issued by the state for inadequate care.

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