Judge holds owners of Woodbury nursing home in contempt for nonpayment

A Nassau judge has held Long Island's second largest nursing home, Cold Spring Hills Center for Nursing & Rehabilitation, in contempt for failing to make court-ordered employee health care payments to a union benefit fund, court records show. 

State Supreme Court Justice Lisa Cairo on Tuesday also gave ownership of the Woodbury nursing home until April 17 to pay 1199SEIU National Benefit Funds $2.65 million — the amount needed to continue providing health care through May 22 to Cold Spring Hills' roughly 440 employees. 

“We welcome the court’s decision requiring Cold Spring Hills’ management to make their contractually required payments to the workers’ health benefit fund,” 1199SEIU United Healthcare Workers East said of the judge's actions.

“A stable workforce is critical for quality resident care and protecting employees’ health insurance is key to retaining the nursing home’s skilled caregivers,” the statement said.

The judge's ruling comes after she ordered the nursing home's owners last month to make financial restitution to the facility and have independent oversight of patient care.

Paul Kremer, a Manhattan-based attorney for Cold Spring Hills and its owners, declined to comment on Tuesday's order.

On Oct. 20, amid a long-running dispute between the nursing home and the union regarding health insurance payments, and in the wake of an 11-day informational picket by facility employees, Cairo ordered Cold Spring Hills to “make all required payments in a timely manner” to ensure that benefits remain available. 

Health benefits for employees at Cold Spring Hills, which have remained in effect during the dispute, were set to expire April 22.

In her Tuesday ruling, Cairo said that “CSH was under a court order to make timely payment to continue benefits to union employees and it failed to do so.”

State Attorney General Letitia James, who has been engaged in a lengthy legal battle with the leadership of the nursing home, sought the contempt order last month, arguing the behavior of co-owners Avi Philipson and Joel Leifer was “contemptuous and requires action to protect the vulnerable residents of Cold Spring Hills.” 

James said in a statement Wednesday: “The members of 1199SEIU provide critical care and support every day to the residents of Cold Spring Hills. Shortchanging them is unconscionable, and this court order that my office secured will help provide them with the benefits they have worked hard to earn.”

In a March 26 affidavit, Philipson denied that he had violated Cairo's October order, contending that health payments were not yet necessary, and that “even if payments to the Funds are technically past due, benefits are rarely terminated as a result.” Cold Spring Hills, he said, was prepared to “pay out of pocket” to obtain replacement insurance coverage for its unionized members if the current benefits were terminated.

Philipson told the court that Cold Spring Hills lacks the adequate cash reserves to cover the $2.6 million payment and the facility is running at a significant loss, in part, because of the long-running legal battle with James. But court records show that between October 2023 and January 2024, an entity owned 99% by Philipson transferred $2.5 million to Cold Spring Hills' operating account.

Mathew Varghese, who owns several nursing homes in Florida and Pennsylvania, recently withdrew his application to take partial ownership of Cold Spring Hills, Philipson said in the affidavit.

James filed suit against Cold Spring Hills in December 2022, arguing that its ownership neglected resident care and skirted state laws through a fraudulent business setup elaborately designed to enrich themselves. 

Last month, Cairo ordered the nursing home's owners to provide more than $2 million in restitution to the facility and install an independent health care monitor to oversee patient care. The ruling was a partial victory for Cold Spring Hills, which risked tens of millions of dollars in penalties, having a financial monitor installed and having one of its owners removed — all of which were rejected by the court.

With Jim Baumbach

By Robert Brodsky

robert.brodsky@newsday.com@BrodskyRobert

Robert Brodsky is a breaking news reporter who has worked at Newsday since 2011. He is a Queens College and American University alum.