Evictions at Reseda Care Center Called Illegal

A state health official said Monday that a bankrupt Reseda nursing home broke the law by suddenly evicting its patients late at night, and an angry federal judge appointed a trustee to take over three other financially troubled homes managed by the same Arizona company.

Sixty-three residents of the Reseda Care Center, some in wheelchairs, were ejected from the building and relatives were called to pick them up after 9 p.m. Friday. In one case, a family watching the eviction on late-night TV news realized that it was the same home where they had left a 106-year-old relative.

The trustee appointed by a federal bankruptcy court to handle the home’s affairs, Alfred Siegel, violated a California law that requires 30 days notice before the closure of any health facility, said Brenda Klutz, deputy director of licensing for the state Department of Health Services, on Monday.

“He obviously did not follow the law,” Klutz said.

The eviction was unnecessary in any case, she said, because the state has an emergency fund that could have been tapped to keep the facility open for at least a few days while other options were explored.

Sheri Bluebond, an attorney representing Siegel, said neither she nor her client had been notified by Klutz’s office that emergency funding was available.

Meanwhile, U.S. Bankruptcy Judge Arthur M. Greenwald, who has been hearing the convalescent home’s bankruptcy case, castigated attorneys and the court-appointed trustee in his Woodland Hills courtroom Monday, saying he was “shocked” and “very upset” over the eviction.

“I want to make it absolutely clear that this court doesn’t condone that conduct,” Greenwald said. “To move those patients out on short notice was never the intention of this court. The patients’ health and welfare was always paramount.”

He should have been advised of the impending closure, no matter how short the notice, Greenwald said.

Bluebond, defending Siegel’s decision to the judge, said that after he was appointed trustee of Reseda Care last Wednesday, he was besieged by “nonstop” phone complaints over unpaid bills by utility companies, the landlord, housekeeping services and food services. The nursing home lacked insurance, was $4,000 short on its last payroll and had another payroll due the next day, she said.

“There was no money for services,” Siegel told the judge. “These people needed to be somewhere safe. They hardly had enough food to last them through the weekend. I was not going to put 63 lives in jeopardy.”

The judge appointed another trustee to immediately take over the business operations of three other nursing homes managed by the same Arizona firm--still-functioning homes in Long Beach and Alta Loma and a home in Kern County that is already closed.

All three, and the Reseda home, are managed by Phoenix Health Group of Scottsdale, owned by Jon Robertson of Arizona, an attorney for Robertson said.

A high-ranking executive of HealthCare Capital Resources--which loaned money to the Phoenix group--alleged in court papers that Robertson paid himself $900,000 in salary in 1996 and had entered a rehabilitation center for a drug problem.

William F. Reed Jr., identified as chief operating and financial officer of HealthCare Capital, made the statements in a declaration in support of appointing a trustee for Reseda Care Center.

“It is my understanding that the substance being abused is cocaine because there have been repeated statements from the [nursing homes’] representatives that Mr. Robertson looted the [homes] and ‘put it up his nose,’ ” Reed stated in the declaration, which was filed in U.S. Bankruptcy Court on Sept. 9.

Robertson’s attorney, Marc Beilinson, replied that Reed had no information to back up his charges and that Robertson’s health was irrelevant because “he has not been involved in the day-to-day operations of the company in the last six months.”

Of particular concern to the federal bankruptcy judge is the state of the Alta Loma nursing home, which attorneys contend will be closed shortly unless a $50,000 commitment can be secured from a lender to keep it open for two more weeks, while the present owners look for a buyer.

Greenwald ordered the trustee to report back to him Wednesday morning on its financial situation, on the care being provided to its residents and whether provisions have been made to continue caring for them if the nursing home is shut down.

“These people are not going to be moved out in the wee hours of the morning or at night,” Greenwald said. “We’re not going to go through a Reseda again.”

Some relatives of patients at the Reseda home said they did not hear of the eviction until late that night. Others said they were not notified at all and saw reports of patients being removed on TV news shows.

Martin Witkin, 89, recovering from a dialysis treatment earlier in the day, rounded up his son and daughter-in-law to go to the aid of his wife, an Alzheimer’s patient, and rode with her in an ambulance to another convalescent home at 1:30 a.m. Saturday.

Bennie Cortese of Playa del Rey expressed anger as his 88-year-old mother, who has Alzheimer’s disease, was wheeled out on a gurney to a waiting ambulance about the same time.

“In business, OK, they’ll have a bankruptcy. But this is not a clothing store where you can take goods out and sell them. These are human beings. Where the hell are these people supposed to be transferred to? It’s a good thing they don’t know what is going on,” Cortese said.

But the patients weren’t the only victims. The nursing home hadn’t paid its employees for two weeks and others are missing wages for more than a month because some past paychecks have bounced, said Katrina Cimmarrusti, the facility’s former activities director.

In February, Cimmarrusti said she began noticing that deductions had been made from her paycheck for a 401(k) retirement account, but the money had not been invested. She managed to get some of the money in the account back, but not all of it, she said.

State health inspectors had cited the Reseda Care Center 10 times since July 1994 for violations of regulations, the most serious of which resulted in a $6,000 fine for patient care shortcomings, Klutz said. Last November, inspectors found 27 deficiencies--violations that are required to be corrected--she said. The statewide average per inspection is 20.

Consumer advocates expressed outrage Monday, saying that Reseda Care Center should not have been allowed to close.

“It’s shocking that a bankruptcy referee would have these kinds of powers,” said Patricia McGinnis, executive director of California Advocates for Nursing Home Reform, a watchdog group.

McGinnis said she does not primarily blame the state, but is perplexed at its apparent inaction. “Didn’t they know this was coming down the pike?” she asked.

Klutz said state officials had been closely monitoring the Reseda home over the previous two weeks to ensure patient care did not suffer and sent representatives there to check on such essentials as food and linens.

“Unfortunately, we have to rely on the information that is given to us. We were told up to the day and the hour of the [trustee’s] action that there were prospective licensees standing by [to take over]. We had no reason to believe otherwise,” Klutz said.

“We didn’t know about this until it was actually happening.”

Klutz noted that there were recent financial problems with two facilities operated by the same principal owners. In Orange County three weeks ago, the 139-bed Port Bay home in Costa Mesa was closed with a week’s notice. She said that transition--though it still did not meet legal muster--was much smoother, with state officials fully involved in the transition process.

Klutz said she has never, in her six years on the job, heard of a facility closing on such short notice as the Reseda center.

According to Dun & Bradstreet, Phoenix Health Group was incorporated in Arizona in June 1992, and by 1995 the company had annual sales of $7.5 million, net worth of $1.5 million and 114 employees at its various nursing-care facilities. But phone calls to Phoenix Health Group’s headquarters in Scottsdale would not go through Monday.

A recording warned: “The mailbox . . . is full.”

Times staff writer Barry Stavro and correspondent Claire Vitucci contributed to this story.