FILED: NASSAU COUNTY CLERK 09/15/2023 05:39 PM
`NYSCEF DOC. NO. 545
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`INDEX NO. 617709/2022
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`RECEIVED NYSCEF: 09/15/2023
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`Exhibit 4
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`INDEX NO. 617709/2022
`FILED: NASSAU COUNTY CLERK 09/15/2023 05:39 PM
`Case 1:21-cv-01366-NGG-SJB Document 1 Filed 03/15/21 Page 1 of 97 PageID #: 1
`NYSCEF DOC. NO. 545
`RECEIVED NYSCEF: 09/15/2023
`
`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NEW YORK
`---------------------------------------------------------------------------------------------
`Donna Hodge, Annette Hall, Karen Grant Williams, Alexi Arias, Albert E.
`Percy, and Percy Jobs and Careers Corporation an IRC 501(c)(3) non-
`profit, as Class Representative,
`
`
`
`
`
`
`
`Plaintiffs,
`
`
`COMPLAINT
`Case No:
`
`
`
`
`
`
`All American School Bus Corp.; Allstate Administrators, LLC d/b/a
`Allstate ASO; Amerifalls, LLC D/B/A Niagara Rehabilitation and Nursing
`Center; Assistcare Home Health Services, LLC d/b/a Preferred Home
`Care of New York; Atlanticare Management LLC d/b/a Putnam Ridge;
`Avalon Gardens Rehabilitation & Health Care Center, LLC d/b/a
`Brookside Multicare Nursing Center and B&B Management LLC; Bay
`Park Center for Nursing & Rehabilitation LLC; Bay Park Center for
`Nursing and Rehabilitation LLC; South Point Plaza Nursing and
`Rehabilitation Center d/b/a Bayview Manor LLC; Bayview Rest Home,
`LLC d/b/a Bayview Home for Adults; Besure Home Health Services, Inc.;
`Birchwood Suites Realty LLC d/b/a Birchwood Rest Home; Blue Star
`Staffing, LLC; BNH Beach 17th St. LLC; Brookhaven Rehabilitation and
`Health Care Center, LLC; Caring Companion Services; Caring
`Professionals, Inc.; Cayuga Ridge, LLC d/b/a Cayuga Ridge Extended;
`Clear Choice Medical PC; Cold Spring Acquisition, LLC; Comfort Loving
`Care, Inc.; Comprehensive at Dunkirk LLC D/B/A Symphony Living at
`Dunkirk; Comprehensive at Lancaster LLC D/B/A Symphony Manor at
`Lancaster; Comprehensive at Orleans LLC, Comprehensive at Orleans-
`Payroll LLC,; Comprehensive at Williamsville LLC; Comprehensive at
`Williamsville-Payroll LLC; Comprehensive Cleaning Corp. D/B/A
`Comprehensive Cleaning Company; Curis Medical Staffing, LLC D/B/A
`Curis Medical Staffing, LLC; Diamond Hill Operator LLC D/B/A
`Diamond Hill Nursing and Rehabilitation Center; Eagle Home Care LLC
`D/B/A Eagle Home Care LLC; Eastchester Rehabilitation and Health
`Care Center, LLC; Elcor Management, LLC; Elcor Operating Company,
`LLC; Expert Care Staffing, LLC; Fair Management Consulting Company,
`LLC D/B/A Fair Management Consulting Co.; Garden Care Center, Inc.;
`Garden Home Care, LLC; Golden Gate Rehabilitation and Health Care
`Center LLC; Golden Living Centers, LLC; Greater New York Home Care,
`Inc.; Greater New York Home Care, LLC D/B/A Greater New York
`Services Inc.; Greenbriar Adult Home, LLC D/B/A Greenbriar Home for
`Adults; Harry's Nurses Registry, Inc.; HCS Certified Home Care NY, Inc.
`D/B/A Girling Home Care of NY, Inc.; HCS Home Care of Westchester
`D/B/A A&J Home Care, Inc. & Careseekers; Heart to Heart Home Care
`D/B/A Mrs. Mary's Place HCS, Inc.; Heart to Heart Management LLC;
`Highgate LTC Management LLC D/B/A Northwoods Rehabilitation &
`Extended Care - Cortland; Highgate LTC Management LLC D/B/A
`Northwoods Rehabilitation & Extended Care - Hilltop; Highgate LTC
`1
`
`-against-
`
`
`
`
`
`
`
`
`
`

`

`INDEX NO. 617709/2022
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`NYSCEF DOC. NO. 545
`RECEIVED NYSCEF: 09/15/2023
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`Management LLC D/B/A Northwoods Rehabilitation & Extended Care -
`Rosewood; Highgate LTC Management LLC D/B/A Northwoods
`Rehabilitation & Extended Care; Highgate LTC Management, LLC d/b/a
`Northwoods Rehabilitation & Extended Care – d/b/a Northwoods
`Rehabilitation & Extended Care; Home Attendant Service of Hyde Park,
`Inc.; Home Health Care Services of New York Inc. D/B/A HCS Home
`Care; Hudson Pointe Acquisition LLC D/B/A Hudson Pointe at Riverdale
`Center for Nursing & Rehabilitation; Kingsbridge Heights Receiver, LLC;
`Laconia Nursing Home, Inc.; Little Neck Care Center, LLC; Little Neck
`Nursing Home LLC (“Little Neck”); Magna Management, LLC; MB
`Consultants, Ltd D/B/A Murray's Chicken; MB Food Processing, Inc.;
`Monsey Family Drugstore LLC; Morans Rest Home LLC; NAE Edison,
`LLC D/B/A Edison Home Health Care, LLC ; Nassau Operating
`Company, LLC; New Carlton Rehab & Nursing Center LLC; New Surfside
`Nursing Home; Niskayuna Operating Co., LLC d/b/a Pathways Nursing &
`Rehabilitation Center; NMC Acquisition, LLC d/b/a Nathan Miller Center
`for Nursing Care; North Sea Associates, LLC; Norwich Operating Co., LLC
`d/b/a Norwich Rehabilitation and Nursing Center; Omega Care Services,
`Inc. D/B/A Living Waters Home Care Agency; Optima Care Smithtown
`LLC D/B/A Brookside Multicare Nursing Center F/K/A Avalon Gardens
`Rehabilitation and Health Care Center, LLC; Optima Care Smithtown,
`LLC; Palffy Group, LLC; Park Avenue Operating Company, LLC; Parkview
`Care and Rehabilitation Center, Inc; Pharney Group, LLC; Premier Rehab
`Solutions, LLC d/b/a Sunharbor Manor; Prokeep Inc.; Ramapo Manor
`Nursing Center, Inc; Receiver Services, LLC D/B/A Harbour Health
`Multicare Center for The Living; Rosewood Care, LLC d/b/a Rosewood
`Rehabilitation and Nursing Center; Rosewood D/B/A Northwoods
`Rehabilitation & Extended Care –Troy; Ross Health Care Center, Inc.;
`Sanford Home for Adults, LLC; SC & BP Services, Inc. D/B/A SC & Bp
`Services, Inc.; Sentosa Care, LLC; Shorefront Operating, LLC d/b/a
`Seagate Rehabilitation & Healthcare Center; Stat Portable X-Ray, Inc.;
`Sunharbor Acquisition I, LLC d/b/a Sunharbor Acquisition, LLC;
`TCPRNC LLC d/b/a The Plaza Rehab & Nursing; Throgs Neck Operating
`Company, LLC; Townhouse Operating Company, LLC; Troy Operating
`Center, LLC d/b/a Diamond Hill Nursing and Rehabilitation Center;
`Upstate Dairy Farms, Inc.; West Lawrence Care Center Inc. d/b/a West
`Lawrence Care Center, LLC; White Plains Center for Nursing, LLC;
`Willoughby Rehabilitation & Health CareCenter LLC; Woodmere Dialysis,
`LLC; The Five Towns Premier Nursing Home and Rehabilitation Center;
`Woodmere Rehabilitation and Health Care Center, Inc. d/b/a Five Towns
`Premier Rehabilitation and Nursing,
`
`
`
`
`
`Employer Defendants,
`
`Gabor Adler; George Adler; Kwame Amoafo-danquah; Agnes Arnestein;
`Anthony Bacchi; Matthew Barbara; Paul Barbara; Aaron Becher; Pola
`Becher; Hershel Bedansky; Howard Belford; Scott Bialick; Robert Bleier;
`David Bloom; Paula Bokow; Joel Brach; Natan Brach; Barry Braunstein;
`Murray Bresky; Steven Brown; Philip Buchsbaum; Richard Busell; Colin
`2
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`INDEX NO. 617709/2022
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`NYSCEF DOC. NO. 545
`RECEIVED NYSCEF: 09/15/2023
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`C. Hart; Ira Cammeyer; Alan Chopp; Joshua Chopp; David Cohen; David
`Crytryn; David Dachs; Solomon Eidlisz; Neil Einhorn; Scott Einiger;
`Abraham Eisen; Sam Eisen; Steve Eisman; Ignatius Elefant; Philipson
`Family Trust; Martin Farbeblum; Benjamin Farbenblum; Edward
`Farbenblum; Martin Farbenblum; Michael Farbenblum; Ed Farbenblum;
`Esther Farkovitz; Martin Farbenblum; Jordan Fensterman; Lori
`Fensterman; Robert Fensterman; Staci Fensterman; Samuel Ferrara;
`Mayer Fischl; Benjamin Fishoff; Patrick Formato; John Francher; David
`Freid; Moshe Freilich; Andrew Freundlich; Sigmund Freundlich; Leo
`Friedman; David Gast; Louis Gellis; William Gillick; Rivky Goldberger;
`Leon Goldenberg; Jeffrey Goldstein; Anne Gottlieb; Miklows Gottlieb;
`Niklos Gottlieb; Solomon Green; Joel Greenberg; Eric Greenberger; Eli
`Greenspan; Steven Greenstein; Avrumi Grossman; Marton Guttman;
`Valarie Henry; Johanan Hirsch; Leopold Hirsch; Libe Hirsch; Ruth
`Hirsch; David Hoffman; Pinchus Hoffman; Steven J Eisman; Anthony J.
`Bacchi; Jack Janklowicz; Leonard Janklowicz; Jack Janklowitz; Leonard
`Janklowitz; Shorefront Jewish Geriatric Center; David Jones; Judith
`Jones; Mendel Kaff; Eric Kalt; Yoel Karpen; Miriam Karpf; Allen Kass;
`Martin Kass; Martin Katz; Shelley Katz; Manny Kaufman; Yosef
`Kaufman; C Kenneth Tesslar; Alan Kessler; Arnold Klapper; George
`Klein; Larry Klein; Eleanor Kluger; Robert Kolman; Dean Korlik; William
`Korn; Irina Kostetsky; Howard Krant; Ephram Lahasky; Benjamin Landa;
`David Landa; Yechiel Landa; Nathan Landau; James Lapolla; Tibor
`Lebovich; Morty Lehasky; David Leifer; Barry Leistner; Chana Lerner;
`Michael Levitan; Rich Levitan; Teddy Lichtscein; Neuman LJ Partners;
`Isaac Madeb; Dovi Marc Faivish; Sam Mayerovitz; Girshas Minster;
`Neuman MN Partners; Gavriel Mordechaev; Gabriel Mordechey; Sharyn
`Mukamal; Katherine Muller; Laurie Netzer; Neuman Nn Partners; Leo
`Oberlander; Sander Oberlander; Milton Ostreicher; Susan Ostreicher;
`Irwin Peckman; Ben Philipson; Deborah Philipson; Bent Phillipson;
`Robert Pines; Israel Pollack; Jacob Pollack; Natan Pollack; Sylvia Pollack;
`Renee Pollak; Theodore Pollak; Michael Pruzansky; Diana R. Koehler;
`Jonathan Redner; Lawrence Reichenberger; Mark Reisman; Bursek
`Richard; Mayer Rispler; Brian Rosenman; Kenneth Rozenberg; Berish
`Rubenstein; Dina Rubenstein; Rivkie Rubenstein; Ira Rubin; Malky
`Saffran; Boruch Schepps; Pamela Schepps; Nat Scherman; Richard
`Schildron; Samuel Schlesinger; Jacob Schoenberger; Michael Scwartz;
`Leslie Shafrank; Henry Shayovitz; Agnes Shemia; Jeff Shemia; Alexander
`Sherman; Israel Sherman; Leah Sherman; Nat Sherman; Samuel
`Sherman; Warren Sherman; Hindy Sirkis; Moshe Sirkus; Motel Sirkus;
`Alexander Skoczlas; Joseph Skoczylas; Tali Skoczylas; Dominic Spira MD;
`Jonathan Steinberg; Miriam Steinberg; Ronald Stern; Mariam Sternberg;
`Lorraine Takesky; Mitch Teller; Kenneth Tessler; Aaron Unger; Eila
`Vinitzky; Julia Vinocurova; Yuliya Vinokurova; Jeffrey Vogel; Sherman
`Vogel; Peggy Weberman; Philip Weberman; Toby Weinberger; Zoltan
`Weinberger; Regina Weinstock; Ari Weiss; Berish Weiss; Berry Weiss;
`Michael Weiss; Robyn Weiss; Shlomie Weiss; Chaya Willinger; Robert
`Wolf; Peyman Younesi; Mark Zaffrin; Ephraim Zagelbaum; Kenneth
`3
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`INDEX NO. 617709/2022
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`NYSCEF DOC. NO. 545
`RECEIVED NYSCEF: 09/15/2023
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`Zitter; David Zohler,
`
`Owner Operator Defendants,
`
`Local 1199 of the Service Employees International Union,
`Union Defendant,
`
`Oriska Insurance Company,
`
`Rashbi Management, Inc.,
`
`Carrier Defendant,
`
`Trust Defendant,
`
`Oriska Corporation derivatively to the Carrier Defendant and by
`Subrogation to the Class,
`
`Derivative Defendant.
`---------------------------------------------------------------------------------------------
`
`The Plaintiffs, Donna Hodge, Annette Hall, Karen Grant Williams, Alexi Arias,
`Albert E. Percy, Percy Jobs and Careers Corporation an IRC 501(c)(3) non-profit, as Class
`Representative, by their attorney James M. Kernan, ask the indulgence of the reader, as
`we try to describe the events in which we are even now continuing to be engulfed, for all
`of the deficiencies by this Complaint that have dared on this pleading to bring forth so
`great an urgency, state as follows:
` INTRODUCTION
`This case is about negligent failure of the Employer Defendants to monitor and supervise
`the operation of their Employee Income Security Retirement Act (“ERISA”) Plan for the
`benefit of the employee Class Plaintiff.
`JURISDICTION
`Federal question jurisdiction exists in this case based on preemption of Plaintiffs’ claims
`under the Employee Retirement Income Security Act of 1974, (“ERISA”), 29 U.S.C. §
`1001 et seq. (1132(a)). This court has original jurisdiction over ERISA actions and subject
`matter jurisdiction to entertain this action under 28 U.S.C. §§ 1331 and 1345, 29 U.S.C. §
`1132(e), 29 U.S.C. § 1001 et seq. and “prohibited transaction penalty proceedings” (as
`defined in §2570.2(o) under section 502(i) of the ERISA). To the extent that any claim in
`the Complaint is not preempted, it forms part of the same case or controversy under 28
`U.S.C. § 1367(a).
`Federal question jurisdiction also exists in this case based upon the Occupational
`Security Occupational Safety and Health Act of 1970 (“OSHA”), 29 U.S.C. § 651 et seq.
`Federal question jurisdiction also exists in this case based upon the Civil Rights Act of
`1964 as amended in 1991, 42 U.S.C. § 2000 E-2 et seq.
`
`1.
`
`2.
`
`3.
`
`4.
`
`4
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`INDEX NO. 617709/2022
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`5.
`
`6.
`
`7.
`
`8.
`9.
`
`10.
`11.
`
`12.
`
`13.
`
`14.
`
`15.
`
`16.
`
`DEFINITIONS
`The five prerequisites for an ERISA welfare benefit plan, program or fund are a: “(1) plan,
`fund or program, (2) established or maintained, (3) by employers, (4) for purpose of
`providing for health, statutory disability, workers’ compensation, apprenticeship,
`training, continuing education, safety to participants or their beneficiaries of the
`Employers.”
`The assets of a plan, fund or program under by ERISA, may be used only for two purposes:
`(1) to pay benefits to participants and beneficiaries, (2) to pay the reasonable expenses
`of administering their Plan.
`The Class named herein is the real party in interest with standing to sue under ERISA
`Section 502(a)(2) for relief under ERISA Section 409, 29 U.S.C. § 1109 and Section
`409(a).
`The Employer Defendants are plan sponsors of their Plan and Program.
`Trust Defendant Rashbi Management, Inc. is the settlor and administrator of a trust for
`the Plan and Program.
`The Class asserts claims for relief for benefits under the Plan and Program.
`Under ERISA, the Employer Defendants’ Plan is required to be administered “solely in
`the interest of the participants and beneficiaries” and “for the exclusive purpose of …
`providing benefits to participants and their beneficiaries.” 29 U.S.C. § 1104(a)(1).
`The Plan assets must be maintained in a Plan trust to provide payment for benefits, to
`comply with the Program and ERISA.
`The Employee Retirement Income Security Act (ERISA), codified at 29 USC§ 1001 et seq.,
`governs "employee welfare funds”, which are defined, 29 USC§1002(1) “as: any plan,
`fund, or program which was heretofore or is hereafter established or maintained by an
`employer or by an employee organization, or by both, to the extent that such plan, fund,
`or program was established or is maintained for the purpose of providing for its
`participants or their beneficiaries.”
`The Program was established and maintained by the Employer Defendants for the
`purpose of providing benefits for its participants or their beneficiaries, through the
`purchase of insurance covering health, disability and workers' compensation.
`Each of the Employer Defendants are plan sponsors (“Plan Sponsors”) under the
`Program, the employer-sponsored Program governed by ERISA, in which the Class of
`employees participate.
`Employer Defendants, as a result of exercising control and management over Fund
`Assets under 29 U.S.C. 186(c)(5) "employee benefit plans" within the meaning of 29
`U.S.C. 1002(37), (1), (2) and (3), the Employer Defendants are fiduciaries under ERISA,
`as defined in 29 U.S.C. § 1002(1)(a) of ERISA.
`
`
`
`5
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`INDEX NO. 617709/2022
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`17.
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`18.
`
`Under ERISA, a fiduciary is required to "discharge his duties with respect to a plan solely
`in the interest of the participants and beneficiaries, for the exclusive purpose of providing
`benefits to [them]." 29 U.S.C. §1104(a)(1).
`The Owner Operator Defendants are Parties in Interest and/or fiduciaries, along with a
`myriad of other persons named as Parties in Interest pursuant to ERISA § 3(14), 29 U.S.C.
`§ 1002(14) which defines a “party in interest” to an employee benefit plan, in relevant
`part, as:“(A) any fiduciary (including, but not limited to, any administrator, officer,
`trustee, or custodian), counsel, or employee of such employee benefit plan; (B) a person
`providing services to such plan; (C) an employer any of whose employees are covered by
`such plan; and (D) an employee organization any of whose members are covered by such
`plan.”
`ERISA Section 502(a)(2) provides for relief under ERISA Section 409, 29 U.S.C. § 1109
`and Section 409(a) which provides that a fiduciary is personally liable to a plan for any
`losses their Plan suffers as a result of the fiduciary’s breach and must restore to their Plan
`any profits the fiduciary realized as a result of a misuse of plan assets to the damage of
`Plaintiffs. Carrier Defendant is subrogated to the rights of the Defendant Class.
`20. ERISA § 406, 29 U.S.C. § 1106, prohibits certain transactions between their Plan and
`Parties in Interest. Specifically, ERISA § 406(a) (1), 29 U.S.C. § 1106(a) (1), provides: “A
`fiduciary with respect to a plan shall not cause the plan to engage in a transaction, if he
`knows or should know that such transaction constitutes a direct or indirect(A) sale or
`exchange, or leasing, of any property between the plan and a party in interest;(B) lending
`of money or other extension of credit between the plan and a party in interest;(C)
`furnishing of goods, services, or facilities between the plan and a party in interest;(D)
`transfer to, or use by or for the benefit of a party in interest, of any assets of the plan; or
`(E) acquisition, on behalf of the plan, of any employer security or employer real property
`in violation of section 1107(a) of this title.”
`21. Under 29 U.S.C.S. §1003(b)(3), their Plan of the Employer Defendants must be
`maintained solely for the purpose of complying with applicable workers’ compensation
`laws, therefore their Plan and Program is preempted by ERISA, 29 U.S.C.S. § 1001 et seq.
`22. As part of the scheme the Employer Defendants as fiduciaries used Fund Assets to satisfy
`other personal or business obligations or otherwise underfunded the obligations,
`breaching their fiduciary duty under ERISA. Under ERISA, any person who is a fiduciary
`with respect to the plan who breaches any one of the responsibilities, obligations, or
`duties imposed upon fiduciaries is personally liable "to make good to such plan any losses
`to the plan resulting from each such breach, and to restore the plan any profits of such
`fiduciary which have been made through the use of assets of the plan by the fiduciary..."
`29 U.S.C. §1109(a).
`
`19.
`
`
`
`6
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`INDEX NO. 617709/2022
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`NYSCEF DOC. NO. 545
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`23.
`
`24.
`
`25.
`
`26.
`
`This case is to recover damages from the Employer Defendants and
`their Owner Operator Defendants for liability to the employee Class
`Plaintiff for mismanagement of employment activities and practices
`regarding an ERISA Plan
`The Employer Defendants and the Owner Operator Defendants established a Plan,
`“established or is maintained for the purpose of providing benefits for its participants or
`their beneficiaries, through the purchase of insurance or otherwise,” the beneficiaries
`being employee Class Plaintiff. Reference Intervention Pg 107 Par 229.
`Each Employer Defendants retained authority of their Plan assets and payments from
`their Plan as fiduciaries. Under ERISA, any person who is a fiduciary with respect to the
`plan who breaches any one of the responsibilities, obligations, or duties imposed upon
`fiduciaries is personally liable "to make good to such plan any losses to the plan resulting
`from each such breach, and to restore the plan any profits of such fiduciary which have
`been made through the use of assets of the plan by the fiduciary..." 29 U.S.C. §1109(a).
`Intervention Pg 136 Par 336.
`The Employer Defendants and their Owner Operator Defendants failed to manage
`employment benefits and breached fiduciary duties to members of the Class Plaintiff.
`This Case is for benefits that were not provided by the Employer Defendants under an
`Employee Retirement Income Security Act (“ERISA”) Plan and Program. The Plan under
`the Program is established and maintained by Employer Defendants engaged in
`commerce or industry or activity affecting commerce, governed by 29 U.S.C. § 1003, as
`an “employee benefit plan” defined as a “welfare benefit plan” under 29 U.S.C. § 1002(3).
`The Employer Defendants and their Owner Operator Defendants have a duty arising
`from governance and fiduciary responsibility over Plan assets, which has been breached
`causing liability arising out of mismanagement of employment activities and practices
`by:
`a. Failing to have in place policies and procedures to manage benefits expensed for
`their employees, the Class Plaintiff;
`b. Failing to establish and monitor material internal control of payment and transfer
`of funds within and out of the Plan pursuant to the plan deficiencies, such as the
`handling of Plan assets or poor plan administration or accounting procedures;
`c. Failing to identify and monitor the Plan activities and transfer of funds, now
`discovered by the Plaintiffs to be prohibited transactions involving the Plan;
`d. Failing to monitor the flow of funds within the Plan in order to determine that the
`contributions to the plan were used exclusively for and timely applied to the
`purposes of Plan for the Plan beneficiaries and participants;
`e. Failing test to determine whether contributions to the Plan were used exclusively for
`the beneficiaries of the Plan;
`f. Failing to review and supervise the operation of the Plan to determine that Plan
`assets were utilized to the purposes of the Plan;
`
`
`
`7
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`27.
`
`28.
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`29.
`
`g. Failing to review and supervise the disposition of any and all Plan assets to
`determine compliance with ERISA;
`h. Failing to assure that Plan assets which were accrued and expensed by the Employer
`Defendants were maintained in trust to provide benefits;
`i. Failing to assure that the financial statements of the Plan fairly presented the
`financial condition of the Plan, and to detect any fraud that would affect the
`operation of the Plan to check for prohibited transactions, or other ERISA
`violations.
`It is foreseeable to the Employer Defendants and the Owner Operator Defendants that
`the members of the Class Plaintiff are employees within the zone of persons covered by
`these duties, the breach of which has caused damages to the employee Class Plaintiff.
`This mismanagement of Plan assets resulted in staff that was sorely unprepared,
`unskilled, and untrained, lacking basic safety and risk management knowledge, tools and
`supervision to protect themselves as the Class, the patients they care for, and the public.
`Then the COVID-19 pandemic struck, causing illness, injury and death.
`COVID-19 is a communicable disease, communicable as were other diseases through
`history, such as tuberculosis, smallpox, polio, various strains of flu, and other pestilence
`identified as far back as biblical times. The training, knowledge, equipment, and
`supervision to address COVID-19 are the same protocols known for ages: quarantine,
`sterilization, proper use of protective equipment, just basic good practices. Much
`literature existed from the State and the Center for Disease Control ("CDC"), but that
`knowledge was not imparted to staff. The Plan assets should not have been diverted from
`benefiting the employee Class, ignoring the need for training and continuing education,
`as well as ignoring the ERISA purpose to provide benefits for disability, medical and lost
`wage reimbursement.
`From the ATTORNEY GENERAL REPORT of January 30, 2021 COVID-19 pandemic and
`the OAG investigation findings to date: The pandemic has laid bare the risks to
`vulnerable nursing home residents that are inherent in deficient staffing. AG Report page
`23.
`31. When in March 2020 the pandemic struck, the images of workers in bubble suits,
`personal protection equipment, was not visible, as it is today.
`As nursing home residents and staff COVID-19 infections rose during the initial wave of
`the pandemic, staffing absences increased at many nursing homes. As a result, pre-
`existing low staffing levels decreased further to especially dangerous levels in some
`homes, even as the need for care increased due to the need to comply with COVID-19
`infection control protocols and the loss of assistance from family visitors. AG Report page
`23.
`There were complaints of alleged critically low staffing levels at the facility and one
`resident’s son voiced concern about the care his mother was receiving. His mother was
`
`30.
`
`32.
`
`33.
`
`
`
`8
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`never tested for COVID-19, but later died while exhibiting COVID-19 symptoms. For
`several weeks, the facility was short of caregivers due to COVID-19 illness and quarantine,
`and most of its management was either out ill or working remotely. AG Report page 24.
`34. During one period of time between late March and early April of 2020, at one facility the
`director of nursing, the assistant director of nursing, and the medical director were all
`out ill and the administrator was working from home, leaving onsite management of the
`entire facility in the hands of just two nurse supervisors. Two to three weeks later,
`residents started dying from COVID-19. During the week of April 5, 2020, 33 residents
`died – 15 percent of all the patients in the facility. In mid-April, the administrator was
`overwhelmed and stated that the facility’s greatest need was staffing. The OAG Report
`found insufficient staffing, especially on the weekends. AG Report page 24.
`An RN stated that during a weekend late in May, during the day shift, one nurse called
`out and another nurse was a “no call no show,” leaving one nurse for the entire building.
`The same RN stated that on a later day in May, she worked an overnight shift for which
`she was the only nurse for three units. Facility records indicate that only one nurse was
`on duty during the day shift the following day. AG Report page 24.
`36. Another employee alleged that the staffing levels at the facility were so low that CNAs,
`rather than nurses licensed to do so, were dispensing medications to residents. According
`to various staff members, the facility required staff who were not licensed clinicians to
`take an eight-hour temporary CNA course and to cover shifts working as CNAs. AG
`Report page 24.
`For-profit nursing homes in the New York City area with low staffing levels were
`decreased further in March due to staff illness and quarantine from COVID-19. A nursing
`supervisor alleged in mid-April that she had been working for 21 days straight, 14 hours
`per day, and described a facility stretched to the absolute limit to care for its residents.
`The following week, the nurse and the administrator conveyed that staffing levels had
`improved and that staff who had been out sick and quarantined were returning to work,
`staff were working extra shifts, and the facility used agency staffing of direct caregivers
`to supplement care provided by facility employees. AG Report page 24.
`Then there occurred the now-reversed DOH March 25, 2020 directive regarding nursing
`homes, which reads: “No resident [of a nursing home] shall be denied re-admission or
`admission to the NH (nursing home) solely based on a confirmed or suspected diagnosis
`of COVID-19. NHs are prohibited from requiring a hospitalized resident who is
`determined medically stable to be tested for COVID-19 prior to admission or
`readmission.”
`Pre-pandemic low staffing model simply snapped under the stress of the pandemic, AG
`Report page 24.
`Staff would have been tried and proven if the Employer Defendants’ ERISA Plan had
`been allowed to function for the benefit of the employee Class Plaintiff. The Employer
`
`39.
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`40.
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`
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`9
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`35.
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`37.
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`38.
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`

`

`INDEX NO. 617709/2022
`FILED: NASSAU COUNTY CLERK 09/15/2023 05:39 PM
`Case 1:21-cv-01366-NGG-SJB Document 1 Filed 03/15/21 Page 10 of 97 PageID #: 10
`NYSCEF DOC. NO. 545
`RECEIVED NYSCEF: 09/15/2023
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`41.
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`42.
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`43.
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`44.
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`45.
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`46.
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`47.
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`48.
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`49.
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`50.
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`Defendants’ Plan meets the five prerequisites for an ERISA welfare benefit plan: “(1) plan,
`fund or program, (2) established or maintained, (3) by employers, (4) for purpose of
`providing for health, statutory disability, workers’ compensation, apprenticeship,
`training, continuing education, safety to participants or their beneficiaries of the
`Employers.” Intervention Pg. 107 Par 230 (refers to the Amended Complaint in
`Intervention1).
`The assets of their Plan, under ERISA, may be used only for two purposes: (1) to pay
`benefits to participants and beneficiaries, (2) to pay the reasonable expenses of
`administering their Plan. Intervention Pg. 108 Par 231.
`The Class named herein is the real party in interest with standing to sue under ERISA
`Section 502(a)(2) for relief under ERISA Section 409, 29 U.S.C. § 1109 and Section
`409(a). Intervention Pg. 108 Par 232.
`The Employer Defendants are plan sponsors of the Program. Intervention Pg. 108 Par
`233.
`The Class asserts claims for relief for benefits under the Program. Intervention Pg. 108
`Par 234.
`A sub-class of employees (the "Defendant Sub Class") is those injured on the job while
`working for the Employer Defendants. Intervention Pg. 108 Par 235.
`An additional sub-class of employees is black and Spanish surnamed persons previously
`certified as a class as hereinafter set forth (the “Percy Sub- Class “).
`Under ERISA, the Employer Defendants’ Plan is required to be administered “solely in
`the interest of the participants and beneficiaries” and “for the exclusive purpose of …
`providing benefits to participants and their beneficiaries.” 29 U.S.C. § 1104(a)(1).
`Intervention Pg. 108 Par 236.
`Employer Defendants have failed to maintain their Plan assets in a Plan trust to provide
`payment for benefits, negligently failing to comply with the Program and ERISA.
`Intervention Pg. 108 Par 237.
`This case is about failure to monitor and supervise the operation of their Plan to invest
`in staff, the employee Class Plaintiff, the benefit funds as set forth herein. Staff referred
`to herein, and by the report of the New York State Attorney General, referenced here as
`the AG Report, is the employee Class Plaintiffs for these Employer Defendants.
`If the benefits had been provided, especially the training, apprenticeship, and continuing
`education, the debacle now known as the COVID-19 pandemic, would have been
`
`1 Intervention refers to the Amended Complaint in Intervention in an
`intervention by Order of Justice Libert in Nassau County Action Index number
`609877/2019,which was not appealed and is final, now removed to related Case
`20-cv-06291.
`To access the document in the link above you may need to register for a Free
`Pacer Account. https://pacer.psc.uscourts.gov/pscof/registration.jsf
`10
`
`

`

`INDEX NO. 617709/2022
`FILED: NASSAU COUNTY CLERK 09/15/2023 05:39 PM
`Case 1:21-cv-01366-NGG-SJB Document 1 Filed 03/15/21 Page 11 of 97 PageID #: 11
`NYSCEF DOC. NO. 545
`RECEIVED NYSCEF: 09/15/2023
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`51.
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`52.
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`manageable. These are welfare benefits regulated by ERISA, benefit funds paid into a
`Plan under ERISA, a Plan that was not administered for the benefit the employee Class
`Plaintiff. The diversion easily proven is traced from Medicaid/Medicare payment to the
`Employer Defendants, Owner Operator Defendants and Parties-in-Interest Defendants.
`The diversion in fact exceeds $68 million when considering all the Employer Defendants
`identified in this Complaint.
`The negligence of the Employer Defendants may never have been discovered but for the
`advent of the spread of the COVID-19 pandemic.
`The defalcation regarding the ERISA Plan assets that the Employer Defendants and
`Owner Operator Defendants failed to detect, as set forth herein became known when
`Oriska Corporation commenced actions against some of the Employer Defendants to
`subrogate for the injuries sustained due to the unsafe workplace, negligence and
`culpability of the Employer Defendants, in the following cases which have all been
`removed