Zatopa&Stephens : Case Study : Non-Profit Corporations
Zatopa & Siegel, Attorneys at Law
Residential facilities with Non-public Schools

Case 1
A group of residential facilities in a specific county operate certified non-public special education schools (NPS). These facilities formed a consortium for purposes of contracting with the county office of education for serving special education students who were placed in their facilities by juvenile courts throughout California.

For many years, the agreement between the county and the consortium was to begin funding children from the date the children were placed in the facilities and then rates were negotiated between the consortium and the county in light of the policy. The county, however, based upon an audit by the state department of education, unilaterally changed the date from which funding began to the date of the first IEP held after the placement in the facilities, without renegotiating the daily rate. In essence, the county unilaterally reduced the daily rates paid to the facilities for their NPS services.

We were retained, and a state level mediation agreement with the county was reached. However, following the mediation agreement, the state department would not honor the agreement. A lawsuit to enforce the agreement was filed by our office in federal court. A mediation was held by a federal magistrate whereby the facilities received retroactive payments to compensate them for the prior losses and new rates were approved reflecting the change in the date when funding began.

Case 2
A residential facility with a NPS was having a great deal of difficulty with the local school when students who were not yet eligible for special education and those already with IEPs were placed in the NPS facility The local district exceeded the lawful timelines for assessing students for special education following the facility’s referral of these students for special education. In addition, the district denied eligibility for students who were clearly disabled. The district also failed to honor the student’s prior IEPs upon these students’ arrival in the facility and then failed to hold IEPs within the required 30-day timeline.

After our office was retained, we immediately trained the staff of the facility to understand the appropriate legal procedures and contacted the school district to discuss the procedural violations and cost to the facility for these violations. When the district refused to negotiate retroactive reimbursement to the facility for the lost days of NPS services to the students, we filed a complaint on behalf of the facility. Following the filing of the complaint, we negotiated a reimbursement claim with the district at an amount somewhat less than the total losses, as well as agreed-upon procedures to ensure the district followed the legal timelines and compensated the facility if the timelines were not followed.

Community Care Licensing
A facility provided residential services to emotionally disturbed students who frequently were aggressive and ran away from facilities. Although the facility had a track record of reducing the frequency and severity of these behaviors soon after the students were placed, Community Care Licensing (CCL), the state agency which licenses group homes, took a “zero tolerance” position with regard to these students.

An impasse occurred when the facility attempted to explain that completely eliminating these behaviors immediately upon arrival was impossible, while CCL steadfastly maintained a zero tolerance position. A licensing revocation action was initiated against the facility by CCL.

Our office was retained and we immediately met with CCL officials to discuss the reality of dangerous behaviors and the unrealistic and legally unsupportable position of “zero-tolerance.” We negotiated with CCL for a professional psychologist’s review of the aggressive or runaway cases and the need for a behavior intervention plan to reduce and even eliminate the behaviors or a determination that the student was inappropriate for the facility. These negotiations led to a positive relationship between CCL and the facility and the dismissal of the licensing action.
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