HILL VIEW MANOR Lawsuit by former buyers names Lawrence County, officials

The buyers assert they lost $5 million when the deal fell through.
By LAURE CIOFFI
VINDICATOR NEW CASTLE BUREAU
NEW CASTLE, Pa. -- The former buyers of Hill View Manor have named Lawrence County and three county officials in a lawsuit.
Sylvan Heights Realty Partners LLC and Americare Management Corporation, both of which share some of the same officers, filed the lawsuit last week contending the county breached contracts with both entities last year when the county nursing home sale failed.
The buyers say they have lost more than $5 million in the deal.
The lawsuit also alleges that County Commissioner Ed Fosnaught, county Controller Maryann Reiter and county Solicitor John Hodge "intentionally interfered with contractual relations" during negotiations. All three are also accused of civil conspiracy in the lawsuit.
"I think they've got a hell of a lot of nerve," Fosnaught said of the lawsuit. "I also wonder whose money they plan to use in filing their lawsuit. Whether it's their own money or the money belonging to the county they are still holding. I think they've done enough damage for one year."
County's lawsuit
The county filed a lawsuit in December to recover $140,000 it contends the buyers took from private-pay patient accounts before the sale.
At a hearing on that matter Monday, Hodge withdrew as the county's legal counsel because he is named in the other lawsuit. Common Pleas Court Judge J. Craig Cox delayed the court hearing for 60 days until the county can get a new attorney.
"I think I worked diligently to make this deal happen, and it didn't happen because of events I, myself, had no control over. The majority of the board of commissioners worked very hard, and to say we conspired to prevent this from happening is disingenuous," Hodge said about the lawsuit filed by Sylvan.
Sylvan's attorney Robert Krebs said he intends to ask the court to consolidate both cases to one.
Allegations
Sylvan's lawsuit contends the county didn't pay Americare, a management company hired by the county, $72,000 in management fees and $11,200 for the salary of a nursing home administrator hired by Americare for Hill View Manor.
Court papers also state the county caused the buyers to lose their bank loan because the county refused to guarantee the loan. Sylvan contends it lost in excess of $5 million because the deal fell through.
The lawsuit states that Fosnaught withheld information that the county failed to properly comply with its labor union agreement and give the workers 180-day notice of the sale, and he also pressured union officials not to waive the 180-day notice.
It also states that Fosnaught "falsely alleged a conversion of funds by the Plaintiff, Sylvan, of the private pay account in order to generate unfavorable publicity and, thereby, discouraging lending institutions from providing finances to Sylvan."
The commissioner also is accused of defaming principals of Sylvan and Americare, George B. Howley and John J. Hadgkiss.
Reiter and Hodge face the same allegations.
The lawsuit also contends that Reiter interfered with the sale by filing a preliminary injunction freezing Sylvan's bank accounts.
Court papers contend that Hodge interfered with the sale by stating that it was illegal for the county to provide loan guarantees for the buyer when county commissioners had negotiated a contract that called for a loan guarantee. Hodge notified commissioners that they could not guarantee a loan for a private entity in July 2003, preventing the closing of the deal.
The lawsuit contends that Fosnaught, Reiter and Hodge acted in concert with each other to prevent the sale of the nursing home.
Former Lawrence County commissioners Roger DeCarbo and Brian Burick, who were directly involved in the negotiations, were not named in the lawsuit.
Krebs would not say why DeCarbo and Burick are not named.
cioffi@vindy.com