Ex-Residents of Facility Due Refunds : Thousand Oaks: A $2.1-million settlement is reached in a lawsuit involving operators of La Serena retirement village.

Scores of elderly residents who lived in a Thousand Oaks retirement home before it was shut down in foreclosure are due refunds of up to $80,000 under terms of a lawsuit settlement, state officials announced Tuesday.

The $2.1-million settlement from the operators of La Serena Manor Retirement Village will be distributed by the state Department of Social Services to more than 100 former residents of the defunct Thousand Oaks care facility, officials said.

La Serena Manor Inc. was sued last year by the state for false advertising and unfair business practices after company officials refused to reimburse senior citizens amounts due on long-term care contracts but continued paying themselves hefty management fees, according to documents filed in Ventura County Superior Court.

“While they weren’t able to pay the mortgage and they were refusing to pay the refunds, they gave themselves some rather large chunks of money,” said Debra Ashbrook, the Department of Social Services senior attorney who oversaw the case.

“One month they got $229,000” in fees, she said.

The lawsuit named La Serena Manor Inc., Pacific Homes Inc. and Mort Swales, the president of both companies. Pacific Homes operates 11 senior citizen-oriented businesses in Southern California, including convalescent and retirement homes in Chula Vista, Claremont and La Jolla.

According to the lawsuit, the retirement home went bankrupt in 1986, but was purchased at a reduced rate by Pacific Homes, which then operated the facility under the name of La Serena Manor Inc.

But in 1988, the suit said, Swales told residents they would have to move within 30 days or pay higher fees.

A spokeswoman at Pacific Homes’ headquarters in Woodland Hills declined to comment. She said Swales was unavailable for comment Wednesday.

The lawsuit alleges the firm failed to hire a skilled nurse as it promised its residents and offered other incentives to get residents to move in but failed to deliver them.

Meanwhile, more than 100 elderly people who had invested in extended-care contracts with La Serena were denied refunds when they moved away from the retirement home, Ashbrook said.

“There were no reserves at that time and there were no operating funds,” Ashbrook said. “So there were some questions as to whether they were going to be able to make it.”

By 1989, the company was in such arrears that most of the residents were forced to move. La Serena went into foreclosure in January, 1989, and is operated today by other owners under the name Castle Hill Retirement Village, Ashbrook said.

“People apparently were leaving in droves,” she said. “They went to other facilities, they went to their family members. Most of them had written off these fees, thinking they couldn’t recover.”

In court documents, Swales denied any wrongdoing and blamed the state for his trouble. The company’s financial condition was well known to state officials when the sale of the retirement home was approved in 1986, Swales said in court papers. “La Serena and Pacific Homes should not be allowed to become victims of shifting political winds and philosophies within (the Department of Social Services),” he said.

The residents due refunds are those who lived at the home between 1986 and January, 1989.

Ashbrook said she has been able to contact 23 of the 105 people due refunds, and has so far returned about $500,000 of the $2.1-million settlement.