Section 2810. Residential health care facilities; receivership

1.   The
  owner or owners of any residential health care facility may at any  time
  request  the  department  to take over the operation of such facility by
  the appointment of a  receiver.  Upon  receiving  such  a  request,  the
  department  may,  if  it  deems  such  action  desirable,  enter into an
  agreement with any such owners on the appointment of a receiver to  take
  charge  of  the  facility  under  whatever  conditions as shall be found
  acceptable by both parties. Receivership commenced  in  accordance  with
  the  provisions  of  this subdivision shall terminate at such time as is
  agreed upon by the parties, or at such time as either party notifies the
  other in writing that he wishes to terminate such receivership.
    2. a. As a means of protecting the health, safety and welfare  of  the
  patients   in   a   residential   health  care  facility,  whenever  the
  commissioner revokes the operating certificate of  such  a  facility  he
  shall  apply  to  the  supreme court in the county where the facility is
  situated for an order directing the owner of the land  and/or  structure
  on  or  in  which  the  facility  is  located  to  show  cause  why  the
  commissioner, or his designee, should not be appointed receiver to  take
  charge of the facility. In those cases where operating certificates have
  been  revoked  pursuant  to paragraph (a) of subdivision five of section
  twenty-eight hundred six of this chapter the supreme court shall appoint
  a receiver who may be the commissioner or his designee. Such application
  shall contain proof by affidavit that the facility has had its operating
  certificate revoked. Such order to show cause shall  be  returnable  not
  less  than  five  days  after service is completed and shall provide for
  personal service of a copy thereof and the papers on which it  is  based
  on  the  owner or owners of the land and/or structure on or in which the
  facility is located.  If any such owner cannot  with  due  diligence  be
  served  personally  within  the county where the property is located and
  within the time fixed in such order, then service may be  made  on  such
  person  by  posting  a  copy  thereof  in a conspicuous place within the
  facility in question, and by sending a copy thereof by registered  mail,
  return  receipt  requested, to such owner at the last address registered
  by him with the department, or in the absence of such  registration,  to
  the  address  set  forth  in the last recorded deed with respect to such
  facility.  Service shall be deemed complete on filing proof  of  service
  thereof  in  the office of the county clerk, or the clerk of the city of
  New York, as the case may be.
    b. On the return of said order to show cause, determination shall have
  precedence over every other business of the court unless the court shall
  find that  some  other  pending  proceeding,  having  similar  statutory
  precedence,  shall  have  priority.   The court may conduct a hearing at
  which all interested parties  shall  have  the  opportunity  to  present
  evidence pertaining to the application. If the court shall find that the
  facts warrant the granting thereof, then the commissioner, or any person
  designated  by  the  commissioner,  shall  be appointed receiver to take
  charge of the facility, and the court shall  determine  a  fair  monthly
  rental  for  the  facility,  and for the furniture, fixtures and movable
  equipment therein, taking into account all relevant  factors,  including
  the  condition  of  such  facility, and the condition of such furniture,
  fixtures and movable equipment, which amount shall, except in  the  case
  where the receiver is assuming an existing bona fide arm's length lease,
  not  exceed the amount which would be reimbursable to the facility under
  the medical assistance program for real property costs and for the costs
  of furniture, fixtures and movable equipment  if  each  patient  in  the
  facility  were  a  recipient of medical assistance. Such rental shall be
  paid by the receiver to the owner or owners of the facility and  to  the

  owner or owners of the furniture, fixtures and movable equipment therein
  for each month that the receivership remains in effect.
    c.  Any receiver appointed pursuant to this subdivision shall have all
  of the powers and duties  of  a  receiver  appointed  in  an  action  to
  foreclose  a  mortgage  on  real property, together with such additional
  powers and duties as are herein granted and imposed. The receiver  shall
  with all reasonable speed but, in any case, within eighteen months after
  the  date  on which the receivership was ordered provide for the orderly
  transfer of all patients in the facility to  other  facilities  or  make
  other provisions for their continued safety and health care.  During the
  interim  period  when  such  patients  must  remain in the facility, the
  receiver may correct or eliminate those  deficiencies  in  the  facility
  that  seriously  endanger  the  life,  health or safety of such patients
  provided that such correction or elimination of  deficiencies  does  not
  include  major alterations of the physical structure of the facility. He
  shall, during this period, operate the facility in such a manner  as  to
  guarantee  safety  and adequate health care for such patients.  He shall
  have the power to let contracts therefor or incur expenses provided that
  where individual items of repairs, improvements or supplies exceed three
  thousand dollars, the receiver shall obtain  price  quotations  from  at
  least  three  reputable  sources.  The receiver shall not be required to
  file any bond. He shall collect incoming payments from all  sources  and
  apply  them to the costs incurred in the performance of his functions as
  receiver.  The receiver shall honor all existing leases,  mortgages  and
  chattel  mortgages that had previously been undertaken as obligations of
  the owners or operators of the facility.   No security interest  in  any
  real  or  personal  property comprising the facility or contained within
  the facility, or in any fixture of the facility, shall  be  impaired  or
  diminished  in  priority  by the receiver. The receiver shall compensate
  the owner or owners of any goods held in inventory for those goods which
  he uses or causes to be used by reimbursing the  costs  of  such  goods,
  except  that  no  such compensation shall be made for any such goods for
  which the  owners  or  operators  of  the  facility  have  already  been
  reimbursed.  Neither the receiver nor the department shall engage in any
  activity that constitutes a confiscation of property without the payment
  of fair compensation.
    d. The receiver shall be entitled to the same  fees,  commissions  and
  necessary  expenses  as receivers in actions to foreclose mortgages. The
  receiver shall be liable only in his official  capacity  for  injury  to
  person  and  property  by reason of conditions of the facility in a case
  where an owner would have been liable; he shall not have  any  liability
  in  his  personal  capacity, except for gross negligence and intentional
  acts. The personnel and facilities of the department shall be  available
  to  the receiver for the purposes of carrying out his duties as receiver
  and the cost of such services shall be deemed a necessary expense of the
  receiver.
    e. (i) The court shall terminate the receivership only  under  any  of
  the following circumstances:
    (a) eighteen months after the date on which it was ordered;
    (b)   when   the  department  grants  the  facility  a  new  operating
  certificate, whether the structure of the facility or the land on  which
  it is located shall be under the same or different ownership; or
    (c)  at  such  time  as  all of the patients in the facility have been
  provided alternative modes of health care, either in another facility or
  otherwise.
    (ii) At the time of termination, the receiver shall render a full  and
  complete  accounting  to the court and shall make disposition of surplus
  money at the direction of the court.

    f. (i) Any person who is served a  copy  of  an  order  of  the  court
  appointing  the  receiver  shall,  upon  being  notified of the name and
  address of the receiver, make all payments for  goods  supplied  by  the
  facility,  or  services  rendered  by  the  facility, to the receiver. A
  receipt  shall  be  given  for each such payment, and copies of all such
  receipts shall be kept on file by the receiver.  The amount so  received
  shall be deposited by the receiver in a special account which shall also
  be used for all disbursements made by the receiver.
    (ii) Any person refusing or omitting to make such a payment after such
  service  and  notice  may  be sued therefor by the receiver. Such person
  shall not in such suit dispute the authority of the receiver to incur or
  order such expenses, or the right of the receiver to have such  payments
  made  to him. The receipt of the receiver for any sum paid to him shall,
  in all suits and proceedings and for every purpose, be as  effectual  in
  favor  of  any  person  holding the same as actual payment of the amount
  thereof to the owner or other person or persons who would, but  for  the
  provisions of this subdivision, have been entitled to receive the sum so
  paid.  No  patient shall be discharged, nor shall any contract or rights
  be forfeited or impaired, nor any forfeiture or liability  be  incurred,
  by  reason  of any omission to pay any owner, contractor or other person
  any sum so paid to the receiver.
    g. Any other provision of this chapter notwithstanding, the department
  may, if it  deems  appropriate,  grant  to  any  facility  operating  or
  scheduled to operate under a receivership authorized by this subdivision
  an  operating  certificate the duration of which shall be limited to the
  duration of the receivership.
    h. No provision contained herein shall be deemed to relieve the  owner
  or  any other person of any civil or criminal liability incurred, or any
  duty imposed by law, by reason of acts or omissions of the owner or  any
  other  person  prior  to  the appointment of any receiver hereunder, nor
  shall anything contained herein  be  construed  to  suspend  during  the
  receivership  any  obligation  of  the owner or any other person for the
  payment of taxes or other operating  and  maintenance  expenses  of  the
  facility  nor  of  the  owner  or  any  other  person for the payment of
  mortgages or liens.
    * 3. The commissioner  is  authorized  to  make  non-interest  bearing
  payments  to  receivers  appointed  pursuant  to this section within the
  amounts made available therefor by  the  legislature.  No  such  payment
  shall  be  made  unless  the  commissioner  reasonably  anticipates that
  repayment  shall  be  made  prior  to  or  upon   termination   of   the
  receivership. Any such payment to a receiver shall be made pursuant to a
  repayment  agreement  entered into by the receiver with the commissioner
  which shall specify a time within which full  repayment  must  be  made.
  Repayments by receivers shall be applied to reimburse any first instance
  appropriation made for the purposes of this subdivision.
    * NB (Effective pending Federal Law)