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Lawsuit against Mt. Lebanon retirement community settled

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Monday, March 28, 2011

Silence could turn out to be golden, or at least fruitful, for the people who have tried for two years to get deposits back from a Mt. Lebanon retirement community's former owners.

In an unusual move, U.S. District Judge David Cercone on March 17 sealed the class-settlement proceedings in three federal cases the residents and estates of dead residents brought against the former developers and board members of Covenant at South Hills. Cercone declined comment.

They lost an estimated $26 million in entrance fees when the Bower Hill Road community's owners filed for bankruptcy and the new owner, Concordia Lutheran Ministries, didn't assume Covenant's obligation to repay up to 95 percent of fees to residents when they leave or their heirs when they die.

The defendants, including B'nai B'rith International and Greystone Development Co. LLC, requested a confidential settlement, saying in a court motion that disclosing the amount of money "would cause embarrassment and serious injury to the defendants, many of whom have devoted significant time and effort to charitable work and community projects for years."

The motion says the plaintiffs agreed to keep the settlement confidential. Lawyers in the case couldn't be reached for comment or declined comment.

Maurice Deul, 89, said he and other plaintiffs weren't consulted by their lawyers before they agreed to the seal, but that's not unusual.

"Of course not. If you have lawyers and they're negotiating for you, you let them do it," he said.

He and the other 80 named plaintiffs in the case are trying to get as much of their money back as they can, Deul said.

"The sooner they send us the checks, the better off we'll be," he said.

Court documents suggest at least 70 more individuals or estates have potential claims for reimbursement but didn't join the lawsuits. Typically, a step in class-action lawsuits includes a public notice advising other people with potential claims of settlement terms.

Rhonda Wasserman, a University of Pittsburgh law professor, said class-action settlements are made public in order to protect the interests of those with potential claims who weren't notified. She hadn't heard of a class-action case settled under seal.

The judge's seal apparently requires private notices rather than public notices, but Deul said that shouldn't be a problem since everyone with a potential claim was contacted.

Nicholas Pace, a behavioral scientist with a law degree who studies class-action lawsuits for RAND Corp., said it is hard to imagine the entire process would be secret.

"The settlement and the review process (of class actions) is probably one of the most public processes in civil litigation," Pace said. A lawyer could offer the "embarrassment" argument in just about any such lawsuit, he said.




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