Friday, March 21, 2014
Paula Span, writing for the New York Times' column, The New Old Age, offers several perspectives on the Vi of Palo Alto lawsuit filed by residents at this high-end, California continuing care retirement community (CCRC). In her first piece, "CCRC Residents Ask, 'Where's the Money?'" she sets forth competing viewpoints of the parties:
Though their suit covers several matters, concern over eventual refunds is at heart of the battle. In their complaint, the plaintiffs call the transfer of money from the local provider to its Chicago parent company “upstreaming.”
Management calls it standard business practice. Entrance fee repayments come not from a reserve, but from the eventual resale of an apartment after a resident moves out or dies, said Paul Gordon, a lawyer for Vi. “Once I pay someone, I can’t tell them what to do with it afterwards,” he said. “It’s their money.”
“The payments are going to be made,” Mr. Gordon said. “The rest is eligible for distribution as a return on investment” — i.e., as profit.
That’s a different arrangement from what residents believe they signed up for. Because the Chicago company has not assumed the debt owed for eventual refunds, residents “lost all the security and peace of mind they had paid for,” Mr. McCarthy [the attorney for Vi plaintiffs] said.
In her second article released the next day, Ms. Span takes a broader view than the single lawsuit involving Vi of Palo Alto, noting that "In Many States, Few Legal Rights for CCRC Residents," citing some of my work with states where resident-inspired changes are under consideration, and noting the important work of the National Continuing Care Residents Association, also known as NaCCRA.