csea lawsuit
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CSEA lawsuit against Orange County over Valley View nursing home transferTRANSCRIPT
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.
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
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
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
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
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
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.
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
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
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
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.
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
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,
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
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.
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).
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
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.
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).
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
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 . . . .
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.
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
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
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
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