csea lawsuit

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STATE OF NEW YORK SUPREME COURT COUNTY OF ORANGE ____________________________________________________ In the Matter of the Application of CIVIL SERVICE EMPLOYEES ASSOCIATION, INC., LOCAL 1000, AFSCME, AFL-CIO, FRANK DZIERZEK, CATHY MAPES, KATHLEEN MCGINNIS, NANCY SCHOFIELD, EDWIN SIERRA, and MICHELE SIERRA, Petitioners, For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules, -against- COUNTY OF ORANGE, ORANGE COUNTY LEGISLATURE, L. STEPHEN BRESCIA as Legislative Chair, STEVEN M . NEUHAUS as Orange County Executive, and ORANGE VALLEY VIEW DEVELOPMENT CORPORATION, Respondents. NOTICE OF VERIFIED PETITION Index No. Date Filed: ____________________________________________________ PLEASE TAKE NOTICE that, upon the annexed Petition verified on June 23, 2014, together with the exhibits attached thereto, an application will be made by Petitioners CIVIL SERVICE EMPLOYEES ASSOCIATION, INC., LOCAL 1000, AFSCME, AFL-CIO, FRANK DZIERZEK, CATHY MAPES, KATHLEEN MCGINNIS, NANCY SCHOFIELD, EDWIN SIERRA, and MICHELE SIERRA, by their attorneys, STEVEN A. CRAIN and DAREN J. RYLEWICZ (Leslie C. Perrin, of counsel), at a Special Term to be held in and for the County of Orange, at the Orange County Court House at 285 Main Street, Goshen, New York, on July 23, 2014, at 9:30 a.m., or as soon thereafter as counsel may be heard, for an order and judgment granting the relief requested in the petition and for such other and further relief as this Court may deem just and proper.

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CSEA lawsuit against Orange County over Valley View nursing home transfer

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Page 1: CSEA Lawsuit

STATE OF NEW YORK SUPREME COURT COUNTY OF ORANGE ____________________________________________________ In the Matter of the Application of CIVIL SERVICE EMPLOYEES ASSOCIATION, INC., LOCAL 1000, AFSCME, AFL-CIO, FRANK DZIERZEK, CATHY MAPES, KATHLEEN MCGINNIS, NANCY SCHOFIELD, EDWIN SIERRA, and MICHELE SIERRA, Petitioners, For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules, -against- COUNTY OF ORANGE, ORANGE COUNTY LEGISLATURE, L. STEPHEN BRESCIA as Legislative Chair, STEVEN M . NEUHAUS as Orange County Executive, and ORANGE VALLEY VIEW DEVELOPMENT CORPORATION, Respondents.

NOTICE OF VERIFIED PETITION Index No. Date Filed:

____________________________________________________ PLEASE TAKE NOTICE that, upon the annexed Petition verified on June 23, 2014,

together with the exhibits attached thereto, an application will be made by Petitioners CIVIL

SERVICE EMPLOYEES ASSOCIATION, INC., LOCAL 1000, AFSCME, AFL-CIO, FRANK

DZIERZEK, CATHY MAPES, KATHLEEN MCGINNIS, NANCY SCHOFIELD, EDWIN

SIERRA, and MICHELE SIERRA, by their attorneys, STEVEN A. CRAIN and DAREN J.

RYLEWICZ (Leslie C. Perrin, of counsel), at a Special Term to be held in and for the County of

Orange, at the Orange County Court House at 285 Main Street, Goshen, New York, on July 23,

2014, at 9:30 a.m., or as soon thereafter as counsel may be heard, for an order and judgment

granting the relief requested in the petition and for such other and further relief as this Court may

deem just and proper.

Page 2: CSEA Lawsuit

PLEASE TAKE FURTHER NOTICE that, pursuant to CPLR § 7804(c), a verified

answer and supporting affidavits, if any, must be served at least five (5) days before the return

date of this proceeding.

PLEASE TAKE FURTHER NOTICE that, pursuant to CPLR § 7804(e), Respondents

are directed to file with the Clerk of the Court the appropriate papers relevant to this matter. The

failure to file an answer may result in judgment in favor of Petitioner.

PLEASE TAKE FURTHER NOTICE that venue is designated in Orange County

based on CPLR § 506(b) since the principal offices of the Respondents are located in the County

of Orange, and since the actions complained of took place in the County of Orange, New York.

Dated: June 23, 2014 Albany, New York Yours, etc., STEVEN A. CRAIN and DAREN J. RYLEWICZ Attorneys for Petitioners By: __________________________________ Leslie C. Perrin, of counsel Civil Service Employees Association, Inc. Box 7125, Capitol Station 143 Washington Avenue Albany, New York 12224 (518) 257-1443 TO: COUNTY OF ORANGE 40 Matthews Street Goshen, New York 10924 ATTN: Steven M. Neuhaus, County Executive

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Langdon C. Chapman, Esq. Orange County Attorney Office of the County Attorney 15 Matthews Street, Suite 305 Goshen, New York 10924

ORANGE COUNTY LEGISLATURE 15 Matthews Street, Suite 203 Goshen, New York 10924 ATTN: L. Stephen Brescia, Legislative Chair

ORANGE COUNTY LEGISLATURE

15 Matthews Street, Suite 203 Goshen, New York 10924 ATTN: Jean M. Ramppen, Clerk to the Legislature

ORANGE VALLEY VIEW DEVELOPMENT CORPORATION, LDC

c/o New York State Department of State One Commerce Plaza 99 Washington Avenue Albany, New York 12231-0001 ORANGE VALLEY VIEW DEVELOPMENT CORPORATION, LDC ATTN: Harris Beach, PLLC 445 Hamilton Avenue, Suite 1206 White Plains, New York 10601

Page 4: CSEA Lawsuit

STATE OF NEW YORK SUPREME COURT COUNTY OF ORANGE ____________________________________________________ In the Matter of the Application of CIVIL SERVICE EMPLOYEES ASSOCIATION, INC., LOCAL 1000, AFSCME, AFL-CIO, FRANK DZIERZEK, CATHY MAPES, KATHLEEN MCGINNIS, NANCY SCHOFIELD, EDWIN SIERRA, and MICHELE SIERRA, Petitioners, For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules, -against- COUNTY OF ORANGE, ORANGE COUNTY LEGISLATURE, L. STEPHEN BRESCIA as Legislative Chair, STEVEN M . NEUHAUS as Orange County Executive, and ORANGE VALLEY VIEW DEVELOPMENT CORPORATION, Respondents.

VERIFIED PETITION Index No. Date Filed:

____________________________________________________ Petitioners in the above-captioned matter, by their attorneys, STEVEN A. CRAIN and

DAREN J. RYLEWICZ (Leslie C. Perrin and Aaron E. Kaplan, of counsel), for their Verified

Petition, state:

NATURE OF PROCEEDING

1. Petitioners bring this action pursuant to Article 78 of the New York Civil Practice

Law and Rules (hereinafter “CPLR”) and for declaratory judgment pursuant to CPLR § 3001

seeking a determination that Respondents acted in violation of law when Respondents authorized

the creation of a Local Development Corporation known as the Orange Valley View

Development Corporation along with the transfer of all right, title, and interest in the County-

owned nursing home known as Valley View Center for Nursing Care and Rehabilitation to

Page 5: CSEA Lawsuit

Orange Valley View Development Corporation for purposes of the sale of that facility to a

private owner and operator. Petitioners seek an Order and Judgment invalidating the resolution

authorizing the creation of Orange Valley View Development Corporation and the transfer of

Valley View Center for Nursing Care and Rehabilitation to the Local Development Corporation,

as well as any transactions entered into between the County and the Local Development

Corporation purporting to convey an interest in the facility to the Local Development

Corporation while contemporaneously leasing back the property to the County.

THE PARTIES

2. Petitioner CIVIL SERVICE EMPLOYEES ASSOCIATION, INC., LOCAL

1000, AFSCME, AFL-CIO (hereinafter “CSEA”) is a private, not-for-profit corporation

authorized and existing under the laws of the State of New York, is an employee organization

within the meaning of Civil Service Law § 201(5), having as one of its primary purposes the

improvement of the terms and conditions of employment for public-sector employees, and is the

duly recognized and certified collective bargaining representative of a bargaining unit of

employees of Orange County, including the individually named Petitioners FRANK

DZIERZEK, CATHY MAPES, KATHLEEN MCGINNIS, NANCY SCHOFIELD, EDWIN

SIERRA, MICHELE SIERRA, and other similarly situated employees. CSEA sues on behalf of

said Orange County employees. CSEA’s headquarters are located at 143 Washington Avenue,

City of Albany, County of Albany, State of New York.

3. Petitioner FRANK DZIERZEK (hereinafter “Dzierzek”) is and was a resident and

taxpayer of the County of Orange, State of New York at all times relevant for purposes of this

proceeding. Petitioner Dzierzek owns and possesses certain real property assessed in said

County for upwards of $1,000 upon the assessment rolls thereof. Petitioner Dzierzek now is, and

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at all times hereinafter mentioned was, liable to and did pay taxes on such assessment to

Respondent Orange County and has paid such taxes within one year prior to the commencement

of this proceeding. Petitioner Dzierzek, at all times relevant for purposes of this proceeding, was

and is employed by Orange County as a Senior Groundskeeper in the Department of Residential

Health Care Services assigned to work at Valley View Center for Nursing Care and

Rehabilitation.

4. Petitioner CATHY MAPES (hereinafter “Mapes”) is and was a resident and

taxpayer of the County of Orange, State of New York at all times relevant for purposes of this

proceeding. Petitioner Mapes owns and possesses certain real property assessed in said County

for upwards of $1,000 upon the assessment rolls thereof. Petitioner Mapes now is, and at all

times hereinafter mentioned was, liable to and did pay taxes on such assessment to Respondent

Orange County and has paid such taxes within one year prior to the commencement of this

proceeding. Petitioner Mapes, at all times relevant for purposes of this proceeding, was and is

employed by Orange County as a Certified Nurse’s Aide in the Department of Residential Health

Care Services assigned to work at Valley View Center for Nursing Care and Rehabilitation.

5. Petitioner KATHLEEN MCGINNIS (hereinafter “McGinnis”) is and was a

resident and taxpayer of the County of Orange, State of New York at all times relevant for

purposes of this proceeding. Petitioner McGinnis owns and possesses certain real property

assessed in said County for upwards of $1,000 upon the assessment rolls thereof. Petitioner

McGinnis now is, and at all times hereinafter mentioned was, liable to and did pay taxes on such

assessment to Respondent Orange County and has paid such taxes within one year prior to the

commencement of this proceeding. Petitioner McGinnis, at all times relevant for purposes of

this proceeding, was and is employed by Orange County as a Licensed Practical Nurse in the

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Department of Residential Health Care Services assigned to work at Valley View Center for

Nursing Care and Rehabilitation.

6. Petitioner NANCY SCHOFIELD (hereinafter “Schofield”) is and was employed

by Orange County as a Courier in the Department of Residential Health Care Services assigned

to work at Valley View Center for Nursing Care and Rehabilitation.

7. Petitioner EDWIN SIERRA (hereinafter “Mr. Sierra”) is and was a resident and

taxpayer of the County of Orange, State of New York at all times relevant for purposes of this

proceeding. Mr. Sierra owns and possesses certain real property assessed in said County for

upwards of $1,000 upon the assessment rolls thereof. Mr. Sierra now is, and at all times

hereinafter mentioned was, liable to and did pay taxes on such assessment to Respondent Orange

County and has paid such taxes within one year prior to the commencement of this proceeding.

Mr. Sierra, at all times relevant for purposes of this proceeding, was and is employed by Orange

County as a Building Maintenance Mechanic in the Department of Residential Health Care

Services assigned to work at Valley View Center for Nursing Care and Rehabilitation.

8. Petitioner MICHELE SIERRA (hereinafter “Mrs. Sierra”) is and was a resident

and taxpayer of the County of Orange, State of New York at all times relevant for purposes of

this proceeding. Mrs. Sierra owns and possesses certain real property assessed in said County

for upwards of $1,000 upon the assessment rolls thereof. Mrs. Sierra now is, and at all times

hereinafter mentioned was, liable to and did pay taxes on such assessment to Respondent Orange

County and has paid such taxes within one year prior to the commencement of this proceeding.

Mrs. Sierra, at all times relevant for purposes of this proceeding, was and is employed by Orange

County as a Nursing Assistant in the Department of Residential Health Care Services assigned to

work at Valley View Center for Nursing Care and Rehabilitation.

Page 8: CSEA Lawsuit

9. Respondent COUNTY OF ORANGE (hereinafter “Orange County”) is a

municipal corporation within the State of New York, comprising the inhabitants within its

boundaries, formed for the purposes of exercising the powers and duties of local government,

with its principal place of business at 40 Matthews Street, Goshen, State of New York.

10. Respondent STEVEN M. NEUHAUS is the County Executive of the County of

Orange, is sued herein in his official capacity, and recommended and participated in the

decisions resulting in the creation of the Orange Valley View Development Corporation, a local

development corporation, as well as the plan to transfer the Valley View Center for Nursing Care

and Rehabilitation to the local development corporation for purposes of future sale to a private

owner/operator of the facility.

11. Respondent ORANGE COUNTY LEGISLATURE (hereinafter “Legislature”) is

the governing legislative body of Respondent Orange County, elected by the voters of Orange

County pursuant to New York County Law, with its principal place of business at 15 Matthews

Street, Goshen, State of New York.

12. Respondent L. STEPHEN BRESCIA is the Chair of the Legislature, is sued

herein in that capacity, and participated in the actions resulting in this proceeding.

13. The County, County Executive, Legislature, and Legislative Chair are, at times,

hereinafter collectively referred to as “the County Respondents.”

14. Respondent ORANGE VALLEY VIEW DEVELOPMENT CORPORATION

(hereinafter “OVVDC”) is a not-for-profit local development corporation (hereinafter “LDC”)

existing under the laws of the State of New York and is sued herein as a Respondent and

necessary party to these proceedings. The LDC was created for the sole purpose of accepting

transfer of and/or acquiring interests in certain County-owned real property in order to sell that

Page 9: CSEA Lawsuit

property, which sale, transfer and real property are the subject of this suit. Moreover, CPLR §

1001 necessitates joinder of parties who ought to be parties if complete relief is to be accorded or

who might be inequitably affected by a judgment in the action, and the relief requested in this

action, if granted, would affect OVVDC so as to require its joinder as a Respondent herein.

RELEVANT FACTS

15. Pursuant to the Municipal Home Rule of the State of New York, the Orange

County Charter (hereinafter “Charter”) sets forth the form of government of the County, which

consists of a County Legislature and a County Executive.

16. The powers and duties of the County Legislature are laid out in Article II, Section

2.02. Article II of the County Charter is attached hereto and made a part hereof as Petition

“Exhibit A.”

17. The powers and duties of the County Executive are laid out in Article III, Section

3.02. Article III of the County Charter is attached hereto and made a part hereof as Petition

“Exhibit B.”

18. The County Charter sets forth at Article XXIII the existence of a Department of

Residential Health Care Services, headed by a Commissioner appointed by the County

Executive. Article XXIII of the County Charter is attached hereto and made a part hereof as

Petition “Exhibit C.” According to Section 23.02, the Commissioner shall “manage and

supervise the Residential Health Care Institutions of the County.” Id.

19. Upon information and belief, the only facility under the auspices of the

Department of Residential Health Care Services is Valley View Center for Nursing Care and

Rehabilitation (hereinafter “Valley View”). Thus, the sole purpose of the Department, from its

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inception as an administrative unit of the County, has been to manage and supervise Valley

View.

20. The County Charter sets forth at Article II, Section 2.02(f) that the Legislature

may “create, alter, combine or abolish County administrative units” but that it must do so “by

local law.” Ex. A.

21. The Charter does not authorize the County Legislature to abolish, transfer, or sell

the Valley View Center for Nursing Care and Rehabilitation, or to effectively eliminate the

Department of Residential Health Care Services by doing so, to the extent that the Department is

mandated to exist by the Charter. Compare Ex. A with Ex. C. Nor does the Charter permit the

wholesale alteration of the Department of Residential Health Care Services by way of a

Resolution, rather than a local law. Ex. A.

22. The County has taken no steps to pass a local law to alter the structure, function,

or responsibilities of the Department of Residential Health Care Services.

23. Similarly, the County has taken no steps to amend the Charter, as would be

required pursuant to Municipal Home Rule Law and Open Meetings Law, in order to eliminate

the Department of Residential Health Care Services. No public notice, hearing, debate, or

discussion has been held with regard to the evisceration of that Department by way of the

elimination of the County-owned and -operated Valley View Center for Nursing Care and

Rehabilitation.

24. Orange County has owned and operated Valley View, which is a 360-bed skilled

nursing facility that provides long-term residential health care to County residents in one form or

another since 1831. The County operates the facility pursuant to New York State Department of

Health Certificate No. 3523301N. The facility contains a state-of-the-art Alzheimer’s/dementia

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care unit. All the beds are Medicare and Medicaid certified.

25. Upon information and belief, many residents at Valley View are subsidized by

federal Medicaid funds, are medically complex patients, and are among the County’s most

difficult to place receivers of long-term residential care.

26. In May of 2014, Valley View reported to the New York State Department of

Health that it had an occupancy rate of more than 96%.

27. In order to provide patient services and to maintain the facility that houses Valley

View, Orange County employs approximately 440 CSEA-represented employees, including the

individually named Petitioners.

28. As a result of negotiations, CSEA and Orange County have agreed upon and

executed a collective bargaining agreement (hereinafter “CBA”) covering various employees of

the County, including approximately 440 employees of the Valley View Center for Nursing Care

and Rehabilitation, for the period from January 1, 2007 through December 31, 2011. The cover

page and table of contents of the CBA are attached hereto and made a part hereof as Petition

“Exhibit D.” The remainder of the agreement will be provided in the event that its contents

become relevant to this proceeding, or upon request of the Court.

29. Pursuant to Article 14 of New York State Civil Service Law, the terms of the

CBA continue in full force and effect until such time as a successor agreement has been reached.

30. The individually named Petitioners, at all times relevant to this proceeding, were

and are employed by Orange County, holding titles in the Department of Residential Health Care

Services, assigned to work at Valley View. As employees of the County, the individually named

Petitioners are members of the Orange County Bargaining Unit and their employment is covered

by the CBA between CSEA and Orange County.

Page 12: CSEA Lawsuit

31. On April 9, 2014, the Orange County Legislature passed Resolution No. 98 of

2014 authorizing the creation of OVVDC as well as the transfer to OVVDC of the County’s

right, title, and interest in the real and personal property of Valley View. Resolution No. 98 of

2014 is attached hereto and made a part hereof as Petition “Exhibit E.”

32. In so resolving, the Legislature stated that Section 1411 of the LDC Act [codified

at § 1411 of the New York Not-for-Profit Corporations Law] “authorizes the legislative body of

the County, by resolution, to determine that certain real property of the County not required for

use by the County may be sold or leased to a not-for-profit local development corporation.” Ex.

E, fifth Whereas clause.

33. At the same time, the County resolved that the LDC’s purpose was to secure a

future licensed operator of the facility which operator would possess a willingness to continue to

run the facility as a nursing care facility, retain current patients, and consider employing current

employees. Ex. E, pp. 3-4.

34. The Resolution was passed by a vote of twelve in favor and nine opposed,

constituting a simple majority.

35. Upon information and belief, the County operated under the assumption that,

because it was utilizing the LDC to take title to and re-sell real property that had been declared

not required for use by the County, a simple majority was all that was required to permit the

transfer, rather than the two-thirds vote required under County Law § 215(5) for sales of County-

owned real property that has been determined to be no longer necessary for public use.

36. In addition, the County prepared and published a list of frequently asked

questions about the creation of the LDC and the use of the LDC to sell Valley View. The

“FAQs” sheet is attached hereto and made a part hereof as Petition “Exhibit F.” The first

Page 13: CSEA Lawsuit

question and response prepared by the County avers that Valley View will not be closed, but will

continue as a privately-owned and -operated nursing home, and cites a report by the New York

State Department of Health documenting the continued high demand for nursing home services

in Orange County. Id.

37. To this end, the New York State Department of Health, pursuant to its regulatory

obligations, estimates that by 2016 the need for residential health care facility beds in Orange

County will exceed the current number of beds in existence in Orange County -- which includes

the 360 beds at Valley View -- by almost 700 beds. The estimate is attached hereto and made a

part hereof as Petition “Exhibit G.”

38. OVVDC was incorporated on or about April 17, 2014. The OVVDC Certificate

of Incorporation is attached hereto and made a part hereof as Petition “Exhibit H.”

39. On May 5, 2014, at OVVDC’s initial meeting, the LDC selected the final member

of the board and, among other actions taken, entered into a ninety-nine (99) year Lease

Agreement with the Exclusive Option to Purchase Valley View from the County. At the same

time, the County and OVVDC entered into a Leaseback Agreement by which the County retains

the responsibility and financial obligation to continue to operate Valley View until such time as

OVVDC secures a private purchaser and unilaterally exercises its exclusive option to take fee

title to Valley View from the County. Based on the foregoing, the County will retain

responsibility for the continued operation of Valley View, along with related costs, until the

facility fee title is taken by OVVDC and the facility is transferred by OVVDC to a private buyer.

40. Following execution of the Lease and Leaseback agreements, the County has no

remaining authority with regard to the disposition of this County asset. OVVDC may exercise

its exclusive option to terminate the Leaseback and take fee title at any time. Ex. E. To this end,

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the Resolution states that OVVDC is established and the nursing care facility is transferred

specifically so that the LDC -- and not the County -- “can balance County fiscal realities with

quality of care for the patients, continuing availability of services for County residents,

employment opportunities through operations of the Facility and the other enumerated concerns

described” by the Legislature in the Resolution. Ex. E, ninth Whereas clause.

41. Shortly thereafter, on or about May 16, 2014, OVVDC issued a Request for

Proposals, seeking responses from bidders interested in purchasing Valley View. The RFP is

attached hereto and made a part hereof as Petition “Exhibit I.”

42. According to the RFP, any proposed purchaser must be one “who will continue to

offer excellent health care services at reduced costs to County residents and taxpayers.” Ex. I, p.

1, Notice to Proposers. In addition, each responder “will be required to provide evidence of

sufficient assets to purchase the Property, and to operate Valley View at the same or similar level

of service over the next five years.” Ex. I, p. 6, Terms and Conditions of Sale, ¶ 2. Further, the

proposed purchaser must agree to keep all residents at the facility, to continue to operate Valley

View at its current location, and not to re-sell any of the beds purchased. Ex. I, p. 6, ¶ 8; p. 7, ¶

14. Any proposed purchaser must be qualified to operate a skilled nursing facility. Ex. I, p. 10,

Proposer Qualifications.

43. Essentially, OVVDC is authorized to find a prospective buyer for Valley View. It

is envisioned by all Respondents that Valley View will continue to function as a long-term care

skilled nursing facility before and after sale to a private buyer.

44. According to the Resolution and the RFP, it is apparent that operations at Valley

View will continue, first by the County and, later, by a private owner/operator. To this end,

Resolution 98 of 2014 reserves to the County “the right to continue to operate the Facility under

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the County license” until the property is taken by the LDC. Ex. E, Eighth Whereas clause.

Further, the County has stated the intention for the nursing home to continue in its current

location and at its current level of services before and after the sale. Ex. F, Question 1; Ex. I.

45. The County will continue to be responsible for the operation and costs of Valley

View for the foreseeable future, until such time as OVVDC takes fee title. Exs. E, F, and I.

46. Although for the time being employees of Valley View will remain employees of

the County, Resolution 98 of 2014 does not provide that the future purchaser or operator must

offer employment to the current County employees assigned to work at Valley View.

47. Moreover, the RFP seeks to limit the transfer such that, even after sale to a third-

party purchaser, the County will retain the right to lease “a delineated portion of the Facility . . .

for the continued occupancy by the County for governmental offices pursuant to a lease

substantially similar to the Reservation of Rights Agreement” for the rental price of $10.00 per

square foot, per year, for up to ten years at the County’s discretion. Ex. I, p. 9, Reciprocal

Easements and County Retained Leasehold Interest.

48. When the County Respondents authorized the transfer of the County’s interests in

Valley View to the LDC for purposes of its sale to a private purchaser, and then entered into a

Lease and contemporaneous Leaseback agreement of Valley View with Respondent OVVDC,

for purposes of selling the facility, Respondents placed the individually named Petitioners’

County employment in jeopardy.

49. Responses to the RFP are due by June 24, 2014. Ex. I.

50. When Respondents sell Valley View, as planned, the individually named

Petitioners will lose their positions, their employment with Orange County, and their status as

municipal employees.

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AS AND FOR A FIRST CLAIM

Petitioners reallege and repeat paragraphs 1 through 50 as if fully set forth herein.

51. As a municipal corporation, Respondent Orange County’s authority is limited to

those powers delegated to it by the State.

52. N.Y. County Law § 215(5) states, county-owned real property may be sold when

the Legislature “shall determine that [it] is no longer necessary for public use . . . by resolution

adopted by the affirmative vote of two-thirds of the total membership” taken by roll call vote.

53. In conjunction with County Law §215(5), Not-for-Profit Corporations Law §

1411 permits the sale or lease of county-owned real property specifically to a Local

Development Corporation when, by resolution, that property has been determined to be “not

required for use by such county.” N-PCL § 1411(d)(1). Nothing in the LDC statute obviates the

requirement of County Law § 215(5) that the sale of county-owned real property to the LDC

must nevertheless be effected pursuant to a resolution adopted by the Legislature and passed by

an affirmative two-thirds vote.

54. In Resolution No. 98 of 2014, the County authorized the creation of OVVDC and

the transfer of Valley View to OVVDC so that OVVDC may seek out and select a prospective

purchaser of the County-owned real property of the nursing home. That resolution was passed

by a simple majority vote of twelve in favor and nine opposed, rather than by a two-thirds vote.

Ex. E.

55. Insofar as Respondents have passed a resolution to sell County-owned real

property and entered into a lease agreement with the LDC to effect that sale, and did so by a

simple majority vote rather than by a two-thirds vote, such action was in excess of the authority

to act under N.Y. County Law § 215(5).

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56. Therefore the authorization to sell, and the later transfer to the LDC of, Valley

View was in violation of law.

AS AND FOR A SECOND CLAIM

Petitioners reallege and repeat paragraphs 1 through 56 as if fully set forth herein.

57. The Department of Residential Health Care Services was established and is

mandated to exist by the County Charter.

58. The County established Valley View Center for Nursing Care and Rehabilitation,

a residential health care institution.

59. Pursuant to the Charter, the Department of Residential Health Care Services is

responsible for the management and supervision of Valley View. Presently, and since its

creation, that is the Department’s only purpose.

60. The elimination of the Department’s responsibility for oversight of Valley View

has the effect of making the Department defunct and is equivalent to abolition of the Department.

61. Elimination of the Department’s responsibility for oversight of Valley View has

not been effected by an amendment to the County Charter. There has been no public notice, nor

public hearing, debate, or discussion with regard to the elimination of the facility as a county-

owned and -operated public facility or, consequently, the elimination of the Department and the

public employment positions at the facility.

62. The legislative equal dignity rule requires that a Department or facility created by

or given specific authority by a legislative act can only be abolished or altered by a correlative

legislative act.

63. The County Legislature lacked the authority to simply resolve to transfer

responsibility for Valley View to the LDC for sale to a private owner/operator without effecting

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an amendment to the Charter eliminating the Department.

64. The changes effected without passing an amendment to the County Charter were

arbitrary, capricious, an abuse of discretion, violative of law, and in excess of the County

Respondents’ jurisdiction.

AS AND FOR A THIRD CLAIM

Petitioners reallege and repeat paragraphs 1 through 64 as if fully set forth herein.

65. The Department of Residential Health Care Services is established by the County

Charter.

66. Pursuant to the Charter, the Department is responsible for the management and

supervision of any residential health care facility established by the County.

67. The County established Valley View, which is under the supervision of the

Department.

68. The County Charter specifically directs that any administrative unit created by the

Charter may only be combined, altered, or abolished by the passage of a Local Law to that effect.

Elimination of the Department’s responsibility for oversight of Valley View constitutes abolition

or alteration of the Department which has not been effected by passage of a corresponding Local

Law altering the character of the Department or the responsibility for oversight of Valley View.

69. The legislative equal dignity rule requires that a Department or facility created by

or given specific authority by a legislative act can only be abolished or altered by a correlative

legislative act.

70. The County Legislature lacked the authority to simply resolve to transfer

responsibility for Valley View to the LDC for sale to a private owner/operator without passing a

Local Law.

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71. The changes effected without passing a Local Law were arbitrary, capricious, an

abuse of discretion, violative of law, and in excess of the County Respondents’ jurisdiction.

AS AND FOR A FOURTH CLAIM

Petitioners reallege and repeat paragraphs 1 through 71 as if fully set forth herein.

72. As a municipal corporation, Respondent Orange County’s authority is limited to

those powers delegated to it by the State.

73. N.Y. County Law § 215(2) states, “all contracts and conveyances made by or to

the county, or on its behalf, shall be made in the name of the county.”

74. In Resolution No. 98 of 2014, the County authorizes OVVDC to seek out and

select a prospective purchaser and, if a satisfactory purchaser is located by OVVDC, OVVDC is

authorized to unilaterally exercise its exclusive option to take fee title to Valley View in order to

then transfer ownership to a third party. Ex. E.

75. Pursuant to Resolution No. 98 of 2014, upon the sale of the facilities by OVVDC

the County will receive the net proceeds of the sale. Id.

76. Based upon the Resolution, along with the Lease and Leaseback agreements,

upon the finding of a purchaser, OVVDC will take ownership of the property, sell said property

to a third party, and pay over the net proceeds to the County. Therefore, the County property

will be sold on behalf of the County but in the name of OVVDC.

77. Insofar as Respondents have passed a resolution and entered into a lease

agreement, from which the combined effect is to convey County property in a name other than

that of the County, such action was in excess of the authority to act under N.Y. County Law §

215(2).

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AS AND FOR A FIFTH CLAIM

Petitioners reallege and repeats paragraphs 1 through 77 as if fully set forth herein.

78. As a municipal corporation, Respondent Orange County’s authority is limited to

those powers delegated to it by the State.

79. In § 1411(d)(1) of the Not-for-Profit Corporations Law, the State delegates to

each county’s governing body the authority to transfer real property owned by the County to a

Local Development Corporation created under the statute as follows:

The local legislative body of a county . . . may by resolution determine that specifically described real property owned by the county . . . is not required for use by such county . . . and authorize the county . . . to sell or lease such real property to a local development corporation incorporated . . . under this article.

80. Thus, a County lacks authority to sell or lease county-owned real property unless

it first determines that such property is not required for county use.

81. Here, in Resolution No. 98 of 2014, the County Respondents averred that Valley

View was not required for use by the County. Ex. E.

82. Further, in Resolution No. 98 of 2014, Respondent County Legislature proposed

to transfer Valley View to OVVDC subject to the County’s reserved leasehold interest, following

which transactions the County would continue operation of Valley View until such time as

OVVDC locates a buyer and acts to transfer ownership to a third party. Ex. E.

83. Presently, the County continues to be responsible for the operations and operating

costs associated with the provision of services at Valley View. See Exs. E, F.

84. Indeed, the County will remain responsible for Valley View’s operations for an

indeterminate period of time into the future.

85. Moreover, the County has indicated its intent to lease portions of the Valley View

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campus, even after it is sold to a third party, for purposes of continuing to use the space that is

currently allocated for certain County services, including but not limited to various governmental

offices. Ex. I.

86. Consequently, the County has conceded the County’s need for the facility and

services rendered therein.

87. Moreover, the RFP seeks to require any interested purchasers to continue to

operate Valley View as a nursing home for at least five (5) years into the future, as well as to

preclude the re-sale of any beds purchased. Ex. I. Thus, the Respondents seek to preserve the

services provided within the County, for current and future County residents.

88. Insofar as Respondents acted to transfer an interest in county-owned real property

while retaining the operating responsibility for same, and in the face of an admitted need for the

facilities and services, as well as the intent for the facilities and services to continue to function

in their current capacity, it is apparent that such property is required for use by the County.

Therefore the determination that the property is not required for use by the County was arbitrary

and capricious, and the transfer was violative of the law.

AS AND FOR A SIXTH CLAIM

Petitioners reallege and repeats paragraphs 1 through 88 as if fully set forth herein.

89. Article IX, Section 2(c) of the New York State Constitution states:

In addition to powers granted in the statute of local governments or any other law, (i) every local government shall have power to adopt and amend local laws not inconsistent with the provisions of this constitution or any general law relating to its property, affairs or government and, (ii) every local government shall have power to adopt and amend local laws not inconsistent with the provisions of this constitution or any general law relating to the following subjects, whether or not they relate to the property, affairs or government of such local government, except to the extent that the legislature shall restrict the adoption of such a local law relating to other than the property, affairs or government of such local government . . . .

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90. Under the New York Constitution, a local government may not delegate authority

which has been granted to it by statute.

91. In § 1411(d)(1) of the Not-for-Profit Corporations Law, the State Legislature

delegates to each county’s governing body the authority to transfer real property owned by the

county to a Local Development Corporation created under the statute as follows:

The local legislative body of a county . . . may by resolution determine that specifically described real property owned by the county . . . is not required for use by such county . . . and authorize the county . . . to sell or lease such real property to a local development corporation incorporated . . . under this article. 92. In Resolution 98 of 2014, the County authorizes OVVDC to “balance County

fiscal realities with quality of care for patients, continuing availability of services for County

residents, employment opportunities through operations of [Valley View] and the other

enumerated concerns” of the Legislature as described in the Resolution in conjunction with the

sale of Valley View to a private purchaser. Ex. E, ninth Whereas clause. In order to balance

these concerns, the County has given OVVDC authority to unilaterally exercise an exclusive

option to take fee title to Valley View at any time, following which OVVDC is authorized to sell

Valley View to the purchaser chosen solely by OVVDC.

93. Pursuant to Not-for-Profit Corporations Law § 1411(d)(1), it is the county

legislature that must affirmatively act to transfer property to an LDC, where that property has

been determined to be not required for use by the county.

94. Further, pursuant to New York County Law § 215, it is the county legislature that

must determine whether to sell county-owned real or personal property. County-owned real

property may only be sold by a county where that property has been determined to be no longer

necessary for public use.

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95. Here, the County’s delegation of authority to OVVDC to decide whether to take

fee title to Valley View, and to whom to sell Valley View after taking fee title, as well as for

OVVDC to determine the proper balance among the County’s fiscal realities and other stated

concerns violates Not-for-Profit Corporations Law § 1411(d)(1), County Law § 215, and the

New York State Constitution and was thereby in excess of the County’s authority to act.

AS AND FOR A SEVENTH CLAIM

Petitioners reallege and repeats paragraphs 1 through 95 as if fully set forth herein.

96. As a municipal corporation, Respondent Orange County’s authority is limited to

those powers delegated to it by the State.

97. In Article 28-A of the Public Health Law, the State establishes a means of

creation of a not-for-profit corporation, which may acquire from a municipality real property and

obtain bonds and other loans for the purposes of providing nursing home accommodations. See,

N.Y. Public Health Law §§ 2852, 2856.

98. Pursuant to § 2856 of the Public Health Law, a Nursing Home Company may not

acquire, sell, or lease real property, or issue bonds and notes without approval of the

Commissioner of Health.

99. Section 2582 of the Public Health Law enumerates a number of requirements for

the articles of incorporation of a Nursing Home Company, including, “That the real property of

the company shall not be sold, transferred, encumbered or assigned except as permitted by the

provisions of this article.” The additional requirements as provided in Public Health Law § 2853

are not found within the articles of incorporation of OVVDC.

100. The incorporation of OVVDC, the lease of the property of Valley View to

OVVDC, and the leaseback of that facility to Orange County, as provided by Resolution No. 98

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of 2014 are actions taken without approval by the Commissioner of Health and in violation of

New York Public Health Law Article 28-A.

101. Insofar as Respondents acted to create a not-for-profit corporation to own

property which includes a nursing home, Respondents have done so in circumvention and

violation of the Public Health Law and the authority of the Commissioner of Health, and such

action was in excess of their authority and was arbitrary and capricious.

RELATED CASE

102. An Article 78 Special Proceeding has been filed in State Supreme Court, Orange

County, asserting violations of County Law and the County Charter on behalf of several

residents and certain employees of Valley View. The case is ANNE-MARIE FITZPATRICK, et

al. v. COUNTY OF ORANGE, et al., Index No. 2014-2896, filed April 16, 2014. That case is

assigned to Supreme Court Justice Elaine Z. Slobod who has issued a decision on the merits,

granting the petition to the extent of annulling the Resolution as contrary to County Law §

215(5) since it was unsupported by sufficient affirmative votes. The decision dated June 16,

2014, is attached hereto and made a part hereof as Petition “Exhibit J.”

WHEREFORE, Petitioners respectfully request an order and judgment granting the

following relief:

a. annulling Orange County Legislature Resolution 98 of 2014;

b. overturning and annulling the illegal lease and leaseback of Valley View Center

for Nursing Care and Rehabilitation between the County and Orange Valley View Development

Corporation;

c. declaring the process adopted through Orange County Resolution No. 98 of 2014

in conjunction with the lease and leaseback agreements between the County and OVVDC for

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purposes of effectuating the sale of Valley View violative of law;

d. declaring the County’s delegation of authority to OVVDC as to the decision to

take fee title and sell Valley View as in violation of statute and the New York State Constitution;

e. in the event that the Court determines that there are any questions of fact, an order

permitting discovery and disclosure, and conducting a trial of such issues of fact;

f. granting any such other, further, and different relief as this Court deems just and

proper.

Dated: June 23, 2014 Albany, New York Yours, etc., STEVEN A. CRAIN and DAREN J. RYLEWICZ Attorneys for Petitioners By: __________________________________ Leslie C. Perrin, of counsel Aaron E. Kaplan, of counsel Civil Service Employees Association, Inc. Box 7125, Capitol Station 143 Washington Avenue Albany, New York 12224 (518) 257-1443 PL/14-0382/LCP/kb/Notice of Petition &Verified Petition #353516

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STATE OF NEW YORK SUPREME COURT COUNTY OF ORANGE In the Matter of the Application of CIVIL SERVICE EMPLOYEES ASSOCIATION, INC., LOCAL 1000, AFSCME, AFL-CIO, FRANK DZIERZEK, CATHY MAPES, KATHLEEN MCGINNIS, NANCY SCHOFIELD, EDWIN SIERRA, and MICHELE SIERRA, Petitioners, For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules, -against- COUNTY OF ORANGE, ORANGE COUNTY LEGISLATURE, L. STEPHEN BRESCIA as Legislative Chair, STEVEN M . NEUHAUS as Orange County Executive, and ORANGE VALLEY VIEW DEVELOPMENT CORPORATION, Respondents.

VERIFIED PETITION

STEVEN A. CRAIN and DAREN J. RYLEWICZ (Leslie C. Perrin and Aaron E. Kaplan, of counsel)

Attorneys for Petitioners Civil Service Employees Association, Inc.

Box 7125, Capitol Station 143 Washington Avenue Albany, New York 12224

Phone: (518) 257-1443 Fax: (518) 449-1525