Another Massachusetts senior living operator has settled a class action lawsuit over contract language that conflicts with the state’s security deposit statute.
Salmon Health and Retirement, an assisted living community owner, operator and management company, recently reached a $1 million settlement in a class action lawsuit over allegations of illegal fees charged to residents.
The case began when Joel Burman filed suit in 2020 on behalf of the estate of his mother, Mary Burman, a former Salmon Health assisted living resident. The lawsuit alleged that the company’s practice of charging community fees and the last month’s rent violates state law that prohibits charging applications fees. The Burmans also alleged that the fees violated the Massachusetts Consumer Protection Act.
Salmon CEO Matthew Salmon said he’s thankful the situation has been addressed and is no longer an issue for the company or its residents.
“No court or government agency has ever found that Salmon did anything improper, and to the contrary, all of our contracts have been reviewed and approved by the commonwealth of Massachusetts,” Salmon said. “Unfortunately, claims were filed in Massachusetts against many assisted living residences following an unanticipated ruling that found that the unique laws governing residential tenancies also applied to assisted living residences.”
Benchmark Senior Living entered a similar class action settlement with assisted living residents in Massachusetts in 2021, as did Brookdale Senior Living in 2018.
In 2019, the Massachusetts Supreme Judicial Court issued a decision that all fees charged by assisted living communities are exempt from compliance with the state’s security deposit law only if they satisfy the “distinctive service test” — that is, the fees collected must be used for services that are distinctive to assisted living as opposed to services provided in a traditional landlord-tenant setting.
The state’s security deposit statute prohibits many practices, such as charging application fees, that are common in other states.
Named in the Salmon Health lawsuit were Continuing Care Management, Whitney Place at Sharon, Whitney Place at Sharon Limited Partnership, Whitney Place at Sharon Management and SHI II Whitney Place Sharon. Whitney Place at Sharon is an assisted living and memory care community in Sharon, MA.
Salmon Health denies any wrongdoing in the settlement agreement and the court has not decided the matter. A final approval hearing on the settlement is scheduled for May 9.
The settlement applies to all current and former residents of Massachusetts assisted living communities managed, owned or operated by Salmon Health. Under the terms of the settlement, upon final approval, class members can receive a share of the net settlement fund based on the amount they paid in fees. Exact payments will vary depending on the number of participating class members.
Any leftover funds will be used for a second round of payments. Funds unclaimed after 90 days will be donated to the Massachusetts IOLTA (Interest On Lawyers Trust Accounts) Committee. Claims must be submitted by June 6.
