Class Action Claims Simpson Senior Services Shifts Cost of Retirement Unit Upgrades to Former Residents [UPDATE]
by Erin Shaak
Last Updated on February 17, 2021
MacLeod v. Jenner’s Pond, Inc. et al.
Filed: July 15, 2020 ◆§ 2:20-cv-03485
According to a class action, residents who left Simpson Senior Services communities were denied full entrance fee refunds due to improper “Market Upgrade” deductions.
Jenner's Pond, Inc. Jenner's Pond Retirement Community Simpson Senior Services Simpson Senior Housing and Community Services, LLC Simpson Meadows Simpson House, Inc.
Pennsylvania
Case Updates
February 9, 2021 – Motion for Emergency Relief Granted in Part
The judge overseeing the case detailed on this page has granted in part and denied in part the plaintiff’s motion for emergency relief.
In an order issued February 9, the judge ordered that Jenner’s Pond provide the plaintiff with the contact information for all individuals who were contacted by the defendant about settling their claims and the date on which they were contacted. Jenner’s Pond was also ordered to disclose whether the individuals signed a settlement agreement and provide copies of all documents sent to them.
Further, the order stated that counsel for both parties shall draft a curative notice to be sent to those who were previously contacted by the defendant. Per the order, the notice will explain that paragraph five of the settlement agreement only releases claims related to the case detailed on this page and not any other claims the individuals may have against Jenner’s Pond. Importantly, the notice will clarify that those affected have the right to consult an attorney at their own expense before engaging in further negotiations or executing the settlement agreement.
The notice will also explain that the proposed class action complaint, a copy of which will be enclosed with the notice, sets forth the plaintiff’s claims and note that Jenner’s Pond denies liability.
The plaintiff’s and defendant’s counsel will either send the aforementioned notice by February 19, 2021 or will advise the court that they were unable to agree upon the contents of the notice.
January 25, 2021 – Plaintiff’s Counsel Files Motion for Emergency Relief
The attorneys for the plaintiff in the case detailed on this page have filed a motion for emergency relief seeking to bar Jenner’s Pond from contacting proposed class members with settlement offers in exchange for releasing their claims.
According to a memorandum in support of the motion for emergency relief, the plaintiff’s counsel was contacted by several proposed class members, i.e., those looking to be covered by the lawsuit, who were concerned about the “tactics” employed by the defendant to apparently dissuade them from participating in the lawsuit.
The individuals stated that they were contacted by Jenner’s Pond’s director of residential services and the company’s attorney, who attempted to “pressure[]” them into signing settlement agreements through which they would receive “small payments” in exchange for releasing their claims in the lawsuit, the memo relays.
Per court documents, the settlement offers represented only “a fraction” of the damages amount sought through the lawsuit and included a confidentiality provision that would prevent the individuals from sharing any information with the plaintiff’s attorneys. The defendant’s representatives allegedly did not provide proposed class members with a copy of the complaint or contact information for the plaintiff’s attorneys, nor any financial information relating to the retail value of their units, the amounts deducted for “market upgrades” or the damages sought through the lawsuit.
The proposed class members told the plaintiff’s counsel they felt “pressured” to accept the offers, which in one case represented only 10 percent of the damages sought in the case, according to court documents. The plaintiff’s attorneys claim the “one-sided” communications present a danger to proposed class members’ interests.
“Both Counsel for Defendant and Defendant have engaged in coercive, misleading communications designed to promote Defendant’s interests in this litigation at the great expense of class members’ material interests,” the plaintiff’s attorneys wrote. “Thus, the Court is well-within its ‘broad’ authority to step in and protect those otherwise unprotected individuals.”
The plaintiff seeks an emergency order barring the defendant from continuing its “misleading communications” with proposed class members, requiring it to supply the plaintiff’s counsel with contact information for the individuals who were contacted regarding the settlement of their claims, ordering the defendant to identify a corporate representative to be deposed on the matter, and allowing anyone who signed a settlement releasing their claims to rescind the agreement.
A hearing on the motion is scheduled for February 9, 2021.
According to a proposed class action, residents who left Pennsylvania senior living communities operated by Simpson Senior Services were denied full entrance fee refunds due to improper “Market Upgrade” deductions, sometimes in excess of $100,000.
Filed against the operators of the Jenner’s Pond, Simpson Meadows, and Simpson House communities, the lawsuit says that seniors looking to live in one of the defendants’ facilities must sign a form agreement stipulating they’ll pay hundreds of thousands of dollars in entrance fees. In exchange, the defendants agree to refund a portion of the entrance fees when a resident leaves the community and his or her unit is resold, the case says.
The lawsuit alleges, however, that the defendants, in violation of their contracts, have deducted unlawful “Market Upgrades” from residents’ entrance fee refunds in excess of $100,000 for purported renovations that were neither mentioned in nor permitted by the initial agreements.
The plaintiff in the case says she signed a “Continuing Care Agreement” before moving into the defendants’ Jenner’s Pond facility in 2007. Under the agreement, the plaintiff was permitted to reside in an apartment in exchange for monthly service fees and an “Entrance Payment” of $290,000, according to the suit.
The contract, which the suit claims is provided to all senior living residents in Simpson retirement communities, further stipulated that the defendants were to pay the plaintiff or her estate a refund of 50 percent of the resale value of her unit after she left, the complaint says. Moreover, the contract permitted the defendants to deduct from the refund only necessary “maintenance, repairs or replacements” to the unit, the lawsuit relays.
As the lawsuit tells it, because the defendants maintained “exclusive control” over the repairs and resale of residents’ units, they were in a position of fiduciary trust with residents, who were forced to rely on the companies to resell their apartments in good faith and maximize their refunds.
“As such, Defendants had a duty of candor and honesty and a duty to act in residents’ best interests when reselling the units,” the complaint reads.
After the plaintiff moved out of the Jenner’s Pond facility in December 2018, the defendants sold her unit the following March for $360,000, the case says. Despite being required to pay the plaintiff 50 percent of the unit’s resale value, the defendants sent the woman a check for only $124,377, the suit claims.
After inquiring about her reduced entrance fee refund, the plaintiff was allegedly told that the defendants “deducted the market upgrades ($111,247.00) from the sale price of $360,000 which gave us the resale value of $248,753.00. The refund amount is $124,377.00 which is based on 50% of the resale value.”
The lawsuit alleges that by using residents’ money to make “capital improvements” to the defendants’ property that were “entirely within Defendants’ sole discretion and control” and then reducing residents’ payments by those amounts, Simpson has engaged in self-dealing.
According to the suit, the agreements signed by residents do not provide for such “Market Upgrade” deductions, which fall outside the scope of the stated “maintenance, repairs, and replacements” permitted under the contract and are not even mentioned within the document.
The lawsuit, which looks to cover all former residents of a Simpson retirement community whose refund payments were reduced by a “Market Upgrade,” claims the defendants have “inappropriately and routinely” imposed their costs of capital improvements on former residents in violation of contractual terms.
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