DOH has received flak for approving Deitsch’s closure plan, which supporters say falls far short of the legal requirements. These requirements include assessing the seniors’ needs and preferences for alternate facilities, assisting them in transferring to appropriate facilities, and continuing to provide required services until the closure. None of these steps were included in the closure plan.

DOH also allowed Deitsch to continue to sign up new residents and take deposits without informing them that closure was imminent.

Most of the 122 original residents – some more than 100 years old – left the facility involuntarily after being told they had only 90 days to get out. A number have died since leaving, including Lillian Marks, age 107. Those who remain range in age from 88 to 99 years old and have various disabilities.

Advocates say that Deitsch did not abide by Justice Saitta’s previous orders to restore services, and has, in fact, been harassing the remaining seniors.

Families have complained of the facility’s failure to bathe residents and pay home health aides. They also list peeling paint, the closing of common rooms, inadequate heat and air conditioning, leaks in the ceiling, and rotten fruit and cheap food instead of special diets. In January the facility became infested with bedbugs.

Last month, residents said that Deitsch was trying to sweat them out. On June 22, Justice Saitta ordered Deitsch to turn the central air conditioning back on in residents’ rooms – something DOH argued was not required by state law.

A DOH lawyer told Justice Saitta that the seniors could use the window air conditioners in their own apartments.

“When operated correctly, the rooms will be adequately cool,” she said.

But the window units that Deitsch installed in their apartments are inadequate and don’t fit properly, families say. Gaps are blocked off with cardboard and the units must be turned off during rain storms.

“The decrease in services is mind-boggling,” Dr. Joyce Singer, daughter of one of the residents, told the Brooklyn Eagle. She added, “DOH’s position amazes me.”

Nancy Richardson, who visits her friend Annemarie Mogil, 93, at the facility every week, told the Eagle, “We certainly would like to see a rent abatement because conditions have deteriorated.”

In fact, Deitsch has attempted to raise the monthly fees, which average over $4,000.

Councilmember Brad Lander expressed delight with Justice Saitta’s ruling and castigated DOH.

“Despite repeated pleas to Governor Cuomo, the Cuomo Administration’s NYS Department of Health has repeatedly sided with Deitsch on motions in court, and failed to lift a finger to protect the residents,” he said in a statement.

“Sometimes, as we have seen in recent weeks, justice prevails. We celebrate Judge Saitta’s decision, and will continue to support the residents as they move forward to have their day in court,” he said.

“The job of the Department of Health is to protect the vulnerable, not hire lawyers to throw up roadblocks,” said attorney John O’Hara, who has eight wrongful death cases pending against the Prospect Park Residence.

In February, the facility settled a wrongful death action with the family of retired Civil Court Judge John L. Phillips a week before the explosive case would have gone to trial. In 2008, the prominent judge, who trained in kung fu and owned numerous properties in Brooklyn, including the historic Slave Theater in Bed-Stuy, froze to death in an unlicensed floor in the facility, O’Hara said. O’Hara represented the family in the case.

Prospect Park Residence agreed to pay $750,000 to Phillips’ family.

O’Hara says Phillips’ death, and the death of other seniors, “was a direct result of the owner’s misrepresentation …and the Department of Health’s lack of enforcement…which went on for years.”

In a letter to Attorney General Schneiderman, families and friends of the “Prospect Park Seven” accuse him of breaking his promise to “to protect vulnerable seniors.”

They noted that he told the New York Times on March 24 that he was “looking very carefully at the situation.”

“And yet, with all due respect Mr. Schneiderman . . . you’ve been missing ever since . . .”

The seniors have been receiving help from the Legal Aid Society, MFY Legal Services and pro-bono representation from Fitzpatrick, Cella, along with Councilmember Brad Lander, Assemblypersons James Brennan and Jo Anne Simon, former Assemblymember Joan Millman and Public Advocate Letitia James.

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Legal Details

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The Plaintiffs’ charges:

According to legal papers, residents charge that Prospect Park Residence, Deitsch and his co-defendants violated the state’s Social Services and Public Health laws by failing to provide them with required services, by improperly terminating their residency agreements, and by failing to properly assist them in finding appropriate placements.

The plaintiffs also charge that the defendants breached their fiduciary duty to the seniors by falsely representing that residents would be able to age in place at the residence, while failing to disclose that they actually planned to close it. They say the defendants engaged in deceptive business practices by bringing in new residents and taking upfront payments, even after they had decided to close, and that they negligently caused emotional distress to the residents.

Defendants arguments:

Deitsch and his co-defendants argue that the seniors had no right to sue over lack of services and poor treatment, and claimed the Prospect Park Residence did not owe a fiduciary duty to the residents.

The defendants also posited that joint stipulations entered into by the parties rendered moot causes of action relating to lack of services, relocation assistance and breach of residency agreements.

The co-defendants argued that all lawsuits against other entities and individuals, including Deitsch, should be dismissed because a corporate entity, 1 Prospect Park Residence LLC, is the operator, “and there is no basis to pierce the corporate veil.” They have also claimed that the LLC doesn’t have enough money to pay a court-appointed receiver to run the facility.

The defendants also say that state law had prevented them from notifying residents and potential residents that it had applied to close the facility, among other arguments.

DOH said that that their approval of Prospect Park Residence’s closure plan was not “arbitrary and capricious,” and that the State Social Services Law gives the DOH “exclusive enforcement powers,” meaning the residents had no standing to sue Deitsch — or DOH.

Justice Saitta’s ruling:

In his ruling, Saitta wrote that the plaintiffs had every right to sue the landlord for cutting back on services, as they are incorporated into the residency agreement. He said they also had the right to sue DOH.

“Discretionary actions of governmental agencies may be challenged where these actions violate statute, or constitute an abuse of discretion,” he wrote.

He dismissed the defendants’ claims related to the joint stipulation, as that provides only temporary relief.

Saitta also wrote that DOH had an obligation to assess the seniors’ needs and help them find the appropriate, least restrictive new facility.

“Where the plaintiffs are being forced to transfer because the operator is choosing to close the facility, NYSDOH has an obligation to ensure that the operator assesses the plaintiffs’ needs and assists the plaintiffs in locating the most integrated relocative setting during the closure period,” he wrote.

Regarding “piercing the corporate veil,” the general rule is that owners are not personally liable for the obligations of the corporate entity. The veil may be pierced, however, if the owner has abused the privilege, and the court may consider whether there was a failure to adhere to corporate formalities in terms of capitalization, comingling of assets or the use of corporate funds for personal use.

Saitta ruled that the defendants’ motion to dismiss charges relating to the corporate veil was premature, as there has been no discovery yet, and the information necessary to establish the facts is in the exclusive control of the defendants.

He also ruled that nothing in state law prevents an assisted living facility operator from notifying residents that it has applied to close the facility – and there is no requirement that the operator continue to admit new residents, as Deitsch had claimed.

He dismissed the claim that an assisted living facility does not owe a fiduciary duty to its residents.

Saitta also wrote that DOH’s contention that their approval of the closure plan was not arbitrary and capricious would not be grounds to dismiss the claim, and dismissed as inadequate the use of DOH emails and certain documents as evidence demonstrating the seniors received adequate service.

He also refused to dismiss claims that DOH might have violated the Americans with Disabilities Act and the Rehabilitation Act.

Saitta struck down other arguments as well, ruling in favor of the defendants in only one point: He dismissed, on technical grounds, plaintiffs’ complaint that the defendants negligently caused them emotional distress.

He let stand, however, their complaint of reckless infliction of emotional distress.

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