Garcia & Artigliere File Class Action Against California Nursing Home

Garcia & Artigliere have filed a lawsuit against Rancho Seco Care Center, LLC and Sweetwater Care Resource LLC on behalf of the residents of the skilled nursing facility. The complaint alleges that the plaintiffs were denied the rights afforded to all residents of skilled nursing facilities in California – most specifically the right to live in a facility that employs “an adequate number of qualified personnel to carry out all of the functions of the facility.”

What does the lawsuit claim?

Per court documents, the Defendants engaged in act of financial mismanagement with “the objective to limit costs so as to maximize profit for DEFENDANTS’ individual directors, officers, and managers at the expense of the health and safety of residents.” The complaint alleges that the Defendants purposely:

• commingled funds and other assets;
• failed to segregate funds of the separate entities, and the unauthorized diversion of corporate funds or assets to other than corporate uses;
• treated the assets of each corporation as their own;
• held out that they are individually liable for the debts of each corporation;
• failed to maintain minutes or adequate corporate records;
• had sole ownership of all of the stock in a corporation by one individual or the members of a family;
• failed to adequately capitalize the corporations;
• used the corporations as a mere shell, instrumentality or conduit for a single venture or the business of an individual or another corporation;
• disregarded legal formalities and the failure to maintain arm’s length relationships among related entities;
• diverted of assets from a corporation by or to a stockholder or other person or entity, to the detriment of creditors, or the manipulation of assets and liabilities between entities so as to concentrate the assets in one and the liabilities in another; [and]
• the contracting with another with intent to avoid performance by use of a corporate entity as a shield against personal liability, or the use of each corporation as a subterfuge of illegal transactions

Plaintiffs also allege that the facility failed in their duty to provide “an adequate number of qualified personnel to carry out all of the functions of the facility” including, and as to that which this lawsuit references, “Direct Caregivers” as that term is defined in 22 Code of Regulations §72038.3.

Why Rancho Seco Care Center, LLC and Sweetwater Care Resource LLC are in violation of the law

Under California law, residents of skilled nursing facilities have a variety of rights, including:

• Admissions Rights
• Quality of Life
• Visitors
• Privacy and Confidentiality
• Choosing How to Spend Your Time
• Grievances
• Participation in Groups and Activities
• Living Accommodations
• Quality Care
• Protection of Money and Possessions
• Medical Care and Treatment
• Freedom from Abuse
• Transfer and Discharge Rights
• Resident Records
• Free Choice
• Participation in Care Planning
• Freedom from Physical and Chemical Restraints

These rights are afforded in order to allow residents to keep their basic civil and human rights and liberties when residing in a skilled nursing facility. The Plaintiffs and their representatives signed these agreements and understandings when applying to or remaining in the nursing home. However, Plaintiffs allege the following:

Before, during, and after the admissions processes of Plaintiff and each class member, the DEFENDANTS actively and intentionally concealed from Plaintiff and class members that at all times relevant hereto the FACILITY did not employ “an adequate number of “Direct Caregivers”, as the term “Direct Caregivers” is defined 22 Code of Regulations §72038, to carry out all of the functions of the facility” in violation of Health & Safety Code §1599.1(a) (as expressly incorporated by Title 22 C.C.R. §72527(a)(25)) as mandated by Title 22 of the California Code of Regulations §72329.1(a).

It is alleged that the concealments by DEFENDANTS alleged in the immediately preceding paragraph were intended to deceive Plaintiff and members of the class into believing that the FACILITY were properly operated to induce Plaintiff and class members into becoming and/or remaining residents of the FACILITY.

Plaintiffs allege that the defendants “chronically understaffed” the facility in regard to direct caregivers, which is a violation of the Nursing Home Bill of Rights. Court documents further state:

Plaintiff and the class members, as persons unknowledgeable and unsophisticated in the operation of skilled nursing facilities in the State of California and having no knowledge of the material concealments by DEFENDANTS alleged herein, justifiably relied on the material terms of, and the representations set forth in, the DEFENDANTS’ uniform Admission Agreement in entering into the admission agreement and becoming and/or remaining residents of the FACILITY thereby assuming the obligation of payment to the DEFENDANTS.

This means that residents were promised a certain level of care, yet did not receive this standard of care and suffered financial harm “by being deprived of the value of payments made for skilled nursing services when these services were not actually rendered consistent with the DEFENDANTS’ representations.”

Court documents allege the Defendants committed fraud by “artificially and fraudulently” inflating the reported nursing staff ratios by reporting the hours of employees not providing direct nursing care. This can be noted in their own timekeeping records, which do not take into account rest breaks taken by nurses. For example, Defendants would report a full eight-hour shift to the Department of Public Health, even though each nurse is afforded two 10-minute breaks, which knocks that eight hours down to 7.66 hours. When these numbers are extrapolated on a facility-wide basis, the effects are “dramatic.”

Plaintiffs relied on these misrepresentations when becoming and/or remaining residents of the facility. As a result, the Defendants are alleged to have violated (and continue to violate) the Consumer Legal Remedies Act.

The complaint goes on to note the following:

In addition, these class members made monetary payments to the DEFENDANTS in return for skilled nursing services of the standard promised by the DEFENDANTS in the uniform Admission Agreement and its attachments which are incorporated into the Admission Agreement as alleged above. The class has suffered pecuniary harm in that the DEFENDANTS did not provide such services of the standard represented. In addition, Plaintiff and class members have suffered pecuniary harm in that DEFENDANTS misrepresented that entering into an admission agreement with DEFENDANTS conferred the statutory resident right under Health & Safety Code §1599.1 of Plaintiffs and class members to reside in a facility that employs “an adequate number of qualified personnel to carry out all of the functions of the facility” when in fact the transaction of entering into an admission agreement with DEFENDANTS did not confer such right.

Garcia & Artigliere fights for nursing home residents throughout the country

Understaffing is a common though dangerous dereliction of duty in nursing homes throughout the country. Residents are at greater risk of injury and illness when staffing levels are lower than required. Staff members are also unable to work at their best when they are pulled in too many directions. The short version is, understaffing makes nursing homes dangerous – and purposely keeping nursing homes understaffed solely for financial gain is an egregious act of negligence. At Garcia & Artigliere, we refuse to let this type of neglect go unchallenged.

If you are a nursing home resident or the representative of a loved one, it is important to know you have certain rights under California law. If you feel your or your loved one’s rights are being violated, the elder abuse lawyers at Garcia & Artigliere are here to help you assert those rights. We have the experience and skill to hold nursing homes accountable. Contact our firm to schedule a free consultation to discuss your rights. We have offices in Long Beach, Los Angeles, Louisville, Phoenix, and New Orleans.