Copyright © 2021 Albuquerque Journal
The state Attorney General found no misuse of funds by the La Vida Llena retirement community or its parent company, but both of the not-for-profit organizations have agreed to give residents a greater voice in La Vida Llena financial operations.
The agreement signed Tuesday by representatives of La Vida Llena, Haverland Carter LifeStyle Group and the Attorney General’s Office was aimed at resolving concerns raised by the AG’s Office in late 2019 about the corporate structure and business conduct of the companies.
“The corporation has agreed to make important changes and focus on the safety of the La Vida Llena community; and we will continue to work with other oversight agencies to ensure compliance and protect the safety and well-being of its residents,” Attorney General Hector Balderas told the Journal in an email.
According to the agreement, the AG “did not uncover any instance of misappropriation of funds by (Haverland Carter) and did not uncover evidence that (Haverland Carter’s) actions contravened the charitable purpose of LVL.”
However, La Vida Llena and Haverland Carter agreed to allow a majority of a reconstituted La Vida Llena board of directors to come from the community, including residents, and the board will have fiduciary responsibility, the agreement states.
E. DeAnn Eaton, CEO of Haverland Carter, issued a statement saying, “While we vigorously disputed wrongdoing by LVL, HCLG and our team members, we agreed to modernize the bylaws governing La Vida Llena. We did so to put the AG’s concerns to rest and to strengthen the relationship between our companies.”
As a continuing care community for more than 400 seniors in the Northeast Heights, residents have paid significant entrance fees, sometimes as much as hundred of thousands of dollars, followed by monthly fees for lifetime housing and continuing care, including assisted living, memory care, and nursing home services, if needed.
Some residents complained that their payments to La Vida Llena were being used to open continuing care communities in Rio Rancho and other states, creating potential financial risk.
The AG’s Office in late 2019 issued a Notice of Action expressing its concerns and demanded mediation.
As previously reported by the Journal, Balderas wrote a letter to the state Department of Health that “Haverland Carter used its control of LVL to fuel Haverland Carter’s corporate expansion by leveraging LVL’s charitable assets for the construction and acquisition of additional continuing-care communities. Ultimately these findings raise serious concern regarding the fiduciary duties Haverland Carter owes to LVL under” the state’s Charitable Solicitations Act and common law.”
The new agreement states that the AG has now withdrawn its “Notice of Action.”
The agreement states:
• Within three months La Vida Llena will establish a board of directors to serve as the fiduciary board of the nonprofit corporation, replacing its current advisory board.
• Seven of the 13 board members are to be residents or community members, and the chair of the board will be elected by the community directors.
• When possible, at least eight on the board shall be members representing the four churches that founded La Vida Llena in 1979: United Methodist Church of America, Presbyterian Church USA, Episcopal Church in the United States of America, and the Evangelical Lutheran Church in America.
• The restructuring requires “shared approval power” between the parent company and the La Vida Llena board of directors “with respect to the retirement community’s operating and capital budgets, incurrence of debt, and how certain assets of LVL are disposed of.”
While Haverland Carter and La Vida Llena “disputed that the Attorney General’s issue of concern constituted any violation of any provision (of the state’s charitable solicitations act) because of their business conduct or corporate structure, both entities engaged in good faith efforts with the Attorney General to address and resolve issues of concern,” the agreement states.
“I’m very pleased to see it’s been resolved in such a manner that will restore fiscal responsibility to the folks who made their monthly payments and made fairly substantial initiation fees,” said Sen. Bill Tallman, D-Albuquerque, who first contacted the AG’s Office about the residents’ concerns in 2018. “It’s a good example of where government can step in and make an impact in people’s lives.”
Eaton told the Journal in a statement on Friday that the corporation worked with the attorney general for more than a year to resolve the concerns and emphasized that the AG found “no conduct that harmed any of our residents or their families, financially or otherwise.”
Eaton also said the revised bylaws are “very clear” that prior financial decisions made by La Vida Llena won’t be undone.
She noted “all previous actions by the Board were done according to governing rules and regulations in place and to meet the charitable purposes of serving seniors.”
The agreement states that the parent company and La Vida Llena undertook a restructuring in 2012 and amended its bylaws, which removed most decision-making authority from La Vida Llena’s then board of directors and vested authority over La Vida Llena to its parent company. In 2017, the board of directors was renamed as an “advisory” board.
In a memo to residents, families and staff this week, Eaton wrote that “The bylaws will give clearer guidance to fiscal decision making, which decisions are to be made by (Haverland Carter), which are joint, and which rest solely with LVL.”
The Attorney General’s Office stated that the “issues of concern” resolved by the agreement, “may at any time be reopened by the Attorney General for further proceedings … if newly discovered evidence justifies such action.”
Tallman said the agreement is a victory for residents.
“LVL residents should be very pleased that their money is now under their control.”