B’nai B’rith will soon be defending a second class action lawsuit filed by residents and former residents of The Covenant at South Hills.
At least 34 residents will be named as plaintiffs in the new suit, which is expected to be filed this week in the Allegheny Court of Common Pleas by attorney William Clifford of the law firm Dickie McCamey. The complaint names as defendants B’nai B’rith International, B’nai B’rith Housing Inc., its officers and directors, and the developers of the property, Greystone Development Company, LLC, and Greystone Management Services.
The new lawsuit seeks to recover millions of dollars in entrance fee deposits paid by the residents when they purchased their interests in the continuing care retirement community located in Mt. Lebanon. The complaint alleges that 90 percent of those fees were to be refunded to residents under certain conditions.
The Covenant, which was plagued by financial problems since its opening in 2002, filed for bankruptcy protection last January, and the facility was sold by order of the court in September to Concordia Lutheran Ministries. Under the terms of Concordia’s purchase agreement, it is not required to refund the residents’ deposits.
The facility is now called Concordia of the South Hills.
Another group of 28 resident units filed a separate class action suit last month against B’nai B’rith and Greystone. Attorneys Theodore Goldberg, Howard Louik, and Michael Plummer represent that group, whose complaint also seeks the recovery of the residents’ entrance fee deposits, and alleges 13 counts of misconduct on the part of the defendants, including breach of contract, breach of fiduciary duty and fraud.
The new complaint alleges claims for violations of the Pennsylvania Continuing-Care Provider Registration and Disclosure Act and the Pennsylvania Unfair Trade Practices and Consumer Protection Law, as well as negligent misrepresentation, and breach of fiduciary duty.
According to Clifford, the crux of the complaint is that the defendants failed to disclose “relevant and pertinent financial information” which was required by law to be disclosed to the residents before they purchased their units.
“There were problems with this endeavor before they even opened up that they should have disclosed,” Clifford said. “Defaults [in financing payments] had already occurred. That’s our understanding.”
Plaintiffs in the new suit contend that B’nai B’rith is responsible for their losses, despite the fact that B’nai B’rith had set up The Covenant at South Hills as a separate corporation.
“Look at all the signs and the stationery [of the Covenant],” said one plaintiff in the new suit, who asked not to be named. “It all says B’nai B’rith. In the spring of 2003, we had a grand opening. They put up a tent and all the people from B’nai B’rith International were there. Alan Levin, [an officer of B’nai B’rith] was here in 2004 to meet with the Residents’ Council. The whole time, we thought our interests were being protected by B’nai B’rith.
“More than $200,000 of my money is gone. Now, B’nai B’rith claims poverty, and they had nothing to do with it. Did the Covenant just spring out of the ground?”
Clifford said he hopes to recover as much of the residents’ deposits as possible “from all or any of these defendants.”
“This is awful,” Clifford said. “I’ve met almost all of these folks and they’re nice people. They did not deserve this.”
(Toby Tabachnick can be reached at firstname.lastname@example.org or 412-687-1263)