Settlement Agreement

UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WASHINGTON
AT TACOMA

UNITED STATES,

           Plaintiff,

vs.

VANCOUVER HOUSING AUTHORITY;
DEPARTMENT OF SOCIAL
AND HEALTH SERVICES OF
STATE OF WASHINGTON;
COLDWATER SPRINGS ASSISTED
LIVING COMMUNITY, LLC;
EMERITUS CORPORATION;
SUNWEST MANAGEMENT, INC.;
and JAMES D. REED,

           Defendants.

I.     INTRODUCTION

1. The Plaintiff, United States, and Defendants, the Vancouver Housing Authority (VHA); Department of Social and Health Services of the State of Washington (DSHS); Coldwater Springs Assisted Living Community, LLC ("Coldwater"); Emeritus Corporation ("Emeritus"); Sunwest Management, Inc. ("Sunwest"); and James D. Reed ("Reed"), enter into this voluntary Settlement Agreement as a full and final resolution of all claims set out in the United States' Complaint. Unless otherwise specifically identified by name, "Defendants" hereinafter refers collectively only to the VHA, DSHS, Coldwater, Emeritus, and Sunwest. Defendant Reed is hereinafter referred to only by name.
2. The complaint, filed on Friday, September 24, 2004, in United States District Court for the Western District of Washington (Tacoma Division), alleges that Defendants and Reed discriminated on the basis of disability in violation of the Fair Housing Act, as amended by the Fair Housing Amendments Act of 1988, 42 U.S.C. §§ 3601-3619 ("the Act"), with respect to their past and present operation, or, as to DSHS, licensure of a state-licensed "boarding home" program, a community-based program that provides assistance with the tasks of daily living and other services. ⁽¹⁾ This "boarding home" program, known to tenants as an assisted living program, in the past provided services to certain qualifying residents of two Vancouver, Washington, apartment buildings as further described below.
3. Defendants and Reed specifically and affirmatively deny that they discriminated on any basis against any individuals or class and that their actions violated the Act, as further described and detailed below.
4. The parties agree that this Court has jurisdiction over the subject matter of this case. The United States, Defendants, and Reed desire to avoid costly and protracted litigation and have voluntarily agreed, as indicated by the signatures below, to resolve the issues in dispute without the necessity of trial.
5. The parties further stipulate as follows:
   1. VHA owns the Van Vista apartment building ("Van Vista") at 410 West 13^th Street in Vancouver, Washington and the Columbia House apartment building ("Columbia House") at 130 West 24^th Street in Vancouver, Washington.
   2. Coldwater and its managing agent, Sunwest (hereinafter referred to jointly as "Coldwater/Sunwest"), operate a "boarding home" for qualifying, low-income persons with disabilities ("boarding home tenants" or "boarding home residents") on floors two through six of Van Vista, pursuant to a contract with VHA and a license issued by DSHS. Defendants allege that subject to space availability, residents eligible for and desiring to receive boarding home services from Coldwater/Sunwest are offered residential units in those floors according to a waiting list established and maintained by Coldwater/Sunwest.
   3. Coldwater/Sunwest provide boarding home residents with boarding home services such as medication management, housekeeping, help with bathing, and meals in the dining room on the tenth floor of Van Vista as authorized by chapters 18.20 RCW and 388-78A WAC.
   4. VHA provides low-income housing for seniors ("VHA tenants") on floors seven, eight, and nine of Van Vista and on all floors of Columbia House. A number of such residents on floors 7 - 9 at Van Vista and at Columbia House are assessed by DSHS as having disabilities and receive in-home care from individual providers.
   5. Between approximately 1997, and July 9, 2001, Columbia House, LLC, was licensed by the Washington State Department of Health to provide boarding home services in up to 100 units in Columbia House and Van Vista.
   6. Emeritus was consultant and/or Temporary Manager for Columbia House, LLC, during certain parts of 2000 and 2001, when the boarding home program was operated at Van Vista and Columbia House as described immediately above.
   7. In July 2001, Coldwater became licensed to provide boarding home services at Van Vista, the boarding home program was consolidated to 60 units on floors 2 through 6 at Van Vista, and thereafter boarding home services have not been offered at Columbia House.
6. The United States alleges that Defendants and Reed implemented the changes described in Paragraph 5 in a manner that discriminated against persons with disabilities. Specifically, the United States alleges:
   1. that Defendants and Reed terminated the participation of Aaron Struck and Lisa Dice in the boarding home program because of their disabilities and not for any legitimate business reason;
   2. that Defendants' and Reed's actions forced Lillian Ball, Anita Brennan, and Leland Still to choose between keeping boarding home services that they needed or staying in an accessible apartment;
   3. that as a result, Ms. Ball and Mr. Still gave up their boarding home services and were terminated from the boarding home program, and Ms. Brennan lost her eligibility for an accessible apartment at Van Vista in order to retain the boarding home services ⁽²⁾; and
   4. that VHA tenants have sometimes not had full access to other areas of and activities in the building.
7. The Defendants and Reed deny the United States' allegations and deny that any of their actions violated the Act. In addition to procedural defenses, such as those based on the applicable Statutes of Limitation, mootness, and failure to exhaust administrative remedies that Defendants and Reed would assert, Defendants and Reed make the following allegations:
   1. Defendants and Reed have not discriminated against Aaron Struck, Lisa Dice, Lillian Ball, Anita Brennan, or Leland Still on account of their disabilities or for any other reason;
   2. Reasonable accommodations were promptly offered to Aaron Struck, Lisa Dice, Lillian Ball and Anita Brennan at the time the Van Vista boarding home was licensed to Coldwater in July 2001, by VHA, Emeritus and/or Coldwater/Sunwest;
   3. Operation or licensure of a boarding home in a manner in which boarding home units are located in a portion of a building distinct from unlicensed units for persons not receiving boarding home services does not violate state or federal laws against discrimination including without limitation the Act;
   4. There have never been any restrictions on access by any resident of Van Vista to any other area of the building and that VHA tenants do not fully participate in boarding home activities because they are not legally entitled to do so and because they do not pay for such activities (as boarding home tenants do);
   5. The actions alleged by the United States in Paragraph 6 above fail to constitute a pattern or practice of discrimination under 42 U.S.C. § 3614(a); and
   6. Termination of the licensed boarding home program at Columbia House and consolidation of the boarding home program at Van Vista upon licensure of Coldwater in July 2001 was consistent with state boarding home licensing laws and regulations, was undertaken for legitimate and legal reasons to effect appropriate provision of care and services to boarding home tenants, and did not violate state or federal laws against discrimination, including without limitation the Act.
8. Defendants' and Reed's entry into this Settlement Agreement, as well as their agreement herein to abide by the Act, does not operate as an admission of liability, nor a waiver of their position that the operation of Van Vista as described in Paragraph 5 above does not violate the Act. The Settlement Agreement therefore is not intended, and should not be construed, as a basis for denying federal funding to any of the Defendants or Reed from any source or for denying participation by any of the Defendants or Reed in any federal program because of noncompliance with the Act.
9. Defendants and Reed, who did not have the opportunity to review, answer, or affirmatively defend by written pleading the Complaint before its filing on Friday, September 24, 2004, have a material interest in preserving their business and professional reputations to the greatest degree possible. Because the allegations of the Complaint are directly related to this issue, Defendants and Reed may file answers and affirmative defenses to state their position on the plaintiff's claims in the public record. Any answers and affirmative defenses shall be filed no later than five (5) days after this Settlement Agreement is submitted to the Court.
10. This Settlement Agreement constitutes the entire agreement among the parties on the matters raised herein, and no other statement, promise or agreement, either written or oral, made by any party is enforceable under its provisions. It does not purport to remedy any other potential or unknown violations of the Act or any other Federal, State, or local law.
11. The date that the Court files the Order of Dismissal, attaching thereto this fully executed Settlement Agreement, signed by all parties as listed below, will be the Effective Date of this Settlement Agreement. However, the Order of Dismissal shall not take effect until five (5) days after the Order's entry or until each Defendant and Reed has filed an answer, whichever occurs first.

    Therefore, it is hereby AGREED as follows:

    II.     AGREEMENT NOT TO VIOLATE THE ACT

12. Defendants and Reed agree not to discriminate on the basis of disability as prohibited by the Act. By entering into this Agreement, Defendants and Reed do not concede that the operation or licensure of a boarding home as described in Paragraph 5 above constitutes a violation of the Act. For its part, the United States agrees that nothing in this Agreement requires the Defendants or Reed to change the current operation or licensure of Van Vista as described in Paragraph 5, except as specified in Sections III through VII.

    III.     OPERATION OF VAN VISTA

13. The United States alleges that VHA tenants have sometimes not had full access to other areas of and activities in the building. Defendants and Reed contend that there have never been any restrictions on access by any resident of Van Vista to any other area of the building and that VHA tenants do not fully participate in boarding home activities because they are not legally entitled to do so and because they do not pay for such activities (as boarding home tenants do). Nonetheless, in an effort to resolve this litigation, within thirty (30) days of the Effective Date, Defendants VHA and Coldwater/Sunwest agree to implement the following policies and procedures at Van Vista regarding shared access to floors, meals, and activities for all residents, including VHA tenants and all boarding home tenants, (referred to collectively as "Van Vista residents"):
    1. All floors of Van Vista are equally open and accessible to all Van Vista residents.
       1. Van Vista residents are free to access all other residential floors and to visit or socialize on an equal basis.
       2. Common areas of Van Vista, including the lobby area and meeting rooms on the first floor, are equally accessible to all boarding home and Van Vista residents except when reserved or used for specific programmatic activities, as provided below.
       3. Dining room facilities on the tenth floor of Van Vista will operate as follows:

          (1) VHA tenants may pay a posted, pro rata share to purchase any and all daily meals served in the dining room at the times scheduled for dining.

          (2) During off hours, the dining room will be treated as a common area accessible to all Van Vista residents.

       4. On-site social and educational activities sponsored for boarding home tenants by Coldwater/ Sunwest ("activities") will be available to all VHA tenants as follows:
          1. Activities for which the marginal cost of an additional participant is de minimus (including lectures or discussion groups) will be available - and advertised - to all Van Vista residents.
          2. Activities for which the marginal cost of an additional participant is not negligible (such as the cost of providing art supplies for a craft project) will be available - and advertised - to all Van Vista residents, provided that:

             (a) VHA tenants pay a posted, pro rata share; and

             (b) the extension of the particular activity to VHA tenants on this basis does not otherwise pose a significant administrative burden to Coldwater/Sunwest.

             (3) Coldwater/Sunwest will notify Van Vista residents of planned or regularly scheduled activities that are generally available pursuant subparagraph (1) or (2) above. This requirement may be satisfied by posting one flyer or notice on an accessible, visible bulletin board on the first floor and one such flyer or notice on the inside of each of the Van Vista elevators. Such notice will provide the date, time, and location of the activity, state that it is open to all Van Vista residents, and, if applicable, list the participant fee for VHA tenants.

    IV.     RETROFITTING OF APARTMENTS

14. Within two hundred forty (240) days from the Effective Date, Defendant VHA will retrofit two Van Vista apartments, as further identified below, to make such apartments fully "accessible for persons with mobility impairments" pursuant to regulations promulgated by the Department of Housing and Urban Development [HUD] in effectuation of Section 504 of the Rehabilitation Act 29 U.S.C. § 794. In particular, the "entire dwelling unit" of each such apartment, see 24 C.F.R. § 8.22(b)(1), will be retrofitted to be "made accessible for persons with mobility impairments," as set out in 24 C.F.R. § 8.22(b), and which accessibility is further defined as providing accessibility equal to or greater than that required by the Uniform Federal Accessibility Standards (UFAS), pursuant to 24 C.F.R. § 8.32. ⁽³⁾

    These retrofits will be done and approval will be obtained consistent with state regulations applicable to boarding home construction.

15. The apartments to be retrofitted as set out above are any two Van Vista apartments on floors two through six that, as of the Effective Date, are currently not accessible for persons with mobility impairments and that have not been modified, fully or partially, to make more accessible for persons with mobility impairments.
16. VHA will pay all expenses associated with these retrofits.
17. Upon reasonable notice to Defendants, representatives of the United States will be permitted to inspect the modifications made by Defendants to determine if they have been completed in accord with specifications of the Uniform Federal Accessibility Standards. The parties may have representatives present for any inspections performed pursuant to this Paragraph. If the inspection indicates that not all of the required retrofits have been made as specified in the Uniform Federal Accessibility Standards, the United States may conduct subsequent inspections, upon reasonable notice to Defendants and after allowing a reasonable time to remedy the deficiencies, to verify that the deficiencies have been corrected.
18. VHA and Coldwater/Sunwest will minimize any inconvenience to boarding home tenants or VHA tenants caused by the retrofits by retrofitting vacant units, if possible. However, in the event that it is necessary to retrofit a unit where a tenant is residing, VHA and Coldwater/Sunwest will, at their sole expense, provide alternative comparable accommodations and services for the resident until the modifications are completed. Where it becomes necessary for the retrofitting work to displace tenants units adjacent to the ones being retrofitted, these tenants will also be afforded alternative comparable accommodations and services for the resident until the modifications are completed. If sufficient numbers of boarding home tenants fail to voluntarily vacate units that can be retrofitted as called for by Paragraph 14 within six (6) months of the Effective Date of this Settlement Agreement, VHA shall select units for retrofitting, and Sunwest shall provide advance notification to affected residents of a room transfer consistent with state law notice requirements. The notice shall also inform affected residents that the room transfer is necessary to comply with this Settlement Agreement. VHA and Coldwater/Sunwest will, at their sole expense, provide alternative comparable accommodations and services for these residents until the modifications are completed. In any event, the retrofits will be completed and approved through the inspection process set forth in Paragraph 17 within 240 days of the Effective Date of this Settlement Agreement.
19. [This paragraph was left intentionally blank.]
20. Coldwater/Sunwest may not charge tenants any additional rent, deposit or other fee for the apartments in which retrofits are implemented solely because of the contemplated or completed retrofits.
21. Each retrofitted apartment will be made available first to those residents, if any, who qualify for and elect the housing option set out in Paragraph 22(a) below. Throughout the duration of the Settlement Agreement, residents and prospective residents with mobility impairments will have first priority for the retrofitted apartments.
22. Coldwater/Sunwest shall cooperate to the fullest extent possible to afford VHA the opportunity to comply with its retrofitting obligations under this Settlement Agreement.

    V.     OFFERING ALTERNATIVE HOUSING

23. According to the notification procedures described in Paragraph 23, VHA, Coldwater/Sunwest will offer and make available each of the following alternative, accessible housing arrangements to each and every person who (1) resides in Van Vista apartment numbers 707, 807, and 907 ⁽⁴⁾ as of the Effective Date (hereinafter "Residents 707, 807, and 907"); (2) qualifies for boarding home service pursuant to Chapter 388-78A WAC; and (3) may benefit from a wheelchair-accessible apartment because of a mobility impairment.

1. Coldwater/Sunwest will offer Residents 707, 807, and 907 the opportunity to receive priority status on a waiting list for the next available, wheelchair-accessible unit in the Van Vista boarding home (floors two through six). Coldwater/Sunwest will place the names of residents who select this option within thirty (30) days of receiving notice at the top of a waiting list for the next available, wheelchair-accessible apartment on Van Vista floors two through six, i.e., apartment numbers 507, 607, and the two apartments to be retrofitted pursuant to Section IV above. If more than one such resident elects this option, the names will be listed in the order in which the residents return the election forms. Whenever any such apartment becomes available, Coldwater/Sunwest will provide written notice to the next listed resident on the waiting list and move the first resident (provided he or she still qualifies for and wishes to receive boarding home care) within thirty (30) days of when the accessible apartment becomes available for tenancy. Coldwater/Sunwest will provide packing and moving services at no cost to the resident.
2. Coldwater/Sunwest will offer Residents 707, 807, and 907 the opportunity to move to any available, wheelchair-accessible apartment in any other boarding home licensed to or managed by Coldwater or Sunwest in the Vancouver area, provided that the individual otherwise qualifies for residency. Residents will be provided with a list of such apartments and information regarding these boarding homes as set out in Paragraph 23 below. Within thirty (30) days of receiving notice that a resident has elected this option, Coldwater/Sunwest will move the resident to the available boarding home of that person's choosing. Coldwater/Sunwest will provide packing and moving services at no cost to the resident.
3. Residents 707, 807, and 907 shall be notified that if they do not avail themselves of the opportunities set forth above in subparagraphs (a) or (b), they may continue to reside in their current Van Vista apartments as VHA tenants.
4. Coldwater/Sunwest will pay for and effect any evaluation necessary to determine a resident's medical eligibility for the boarding home options described in subparagraphs (a) and (b) above unless such evaluation can be obtained in a timely manner through public resources.

24. Within fourteen (14) days of the Effective Date, Coldwater/Sunwest will provide written notification, in the form of Exhibit A, to Residents 707, 807, and 907, informing such residents of the three housing options described in Paragraph 22. The notice will provide residents thirty (30) days in which to make an election, list contact information of a Van Vista staff person designated by Coldwater/Sunwest to respond to inquiries regarding this matter, attach information describing each boarding home described in Paragraph 22(b) above, and provide a simple means for returning the attached election form. Any resident who does not return an election form, attached as Exhibit B, within thirty (30) days of receipt will be deemed to have elected the option described in Paragraph 22(c) above. Residents who elect or are deemed to have elected this option will not otherwise waive eligibility for housing opportunities exclusive of this Section.
25. As Coldwater/Sunwest's lessor at the Van Vista boarding home, VHA shall cooperate to the fullest extent possible to allow Coldwater/Sunwest to fulfill its obligations under this Section V.

    VI.    NOTICE TO EMPLOYEES AND TENANTS OF
    DEFENDANTS' POLICIES AND PROCEDURES

26. Within fourteen (14) days of the Effective Date, Defendants VHA and Coldwater/Sunwest will post and prominently display in the lobby of Van Vista a sign no smaller than ten (10) by fourteen (14) inches indicating that all dwellings are available for rent on a nondiscriminatory basis. A poster that comports with 24 C.F.R. §110 will satisfy this requirement.
27. Defendants VHA and Coldwater/Sunwest will provide the following notices and instructions to all "Van Vista Staff," defined as all employees, contractors and other agents of VHA and Coldwater/Sunwest who regularly supervise or perform work at Van Vista related to the provision of services to residents or whose duties include showing, renting or managing dwelling units at Van Vista:

a. Within fourteen (14) days of the Effective Date, distribute copies of these documents to Van Vista Staff:
1. This Settlement Agreement;
2. HUD's brochure entitled, "Fair Housing: Equal Opportunity for All;
3. Exhibit C (policy memorandum to staff regarding tenant access to all floors, dining room policy, and participation in Coldwater/Sunwest's on-site activities).
1. Within thirty (30) days of the Effective Date, instruct Van Vista Staff of their duties or obligations under the Settlement Agreement, including the specific policies set out in Section III (Operation of Van Vista) as well as under the Act.
2. Distribute the documents identified in subparagraphs (a) and (b) above to Van Vista Staff hired after the Effective Date, within thirty (30) days of such staff members' hire date.

28. Defendants VHA and Coldwater/Sunwest will provide the following notices to all residents of Van Vista as follows:

1. Within fourteen (14) days of the Effective Date, distribute Exhibit D to all boarding home tenants and Exhibit E to all VHA tenants (notice letters regarding tenant access to all floors, dining room policy, and participation in Coldwater/Sunwest's on-site activities).
2. Within thirty (30) days of the move-in date of each boarding home tenant and VHA tenant whose tenancy begins after the Effective Date, distribute Exhibit D to each such boarding home tenant and Exhibit E to each such VHA tenant.

VII.    RECORD KEEPING AND MONITORING

29. Defendant Coldwater/Sunwest will ensure that each of the following are maintained:
    1. Dated copies of all notices disseminated to Van Vista Staff employed by or associated with Coldwater and/or Sunwest ("Van Vista's boarding home staff") and boarding home tenants pursuant to Sections III, V, and VI above. This requirement may be met by maintaining a dated copy of a sample of each such notice and a list of recipients by name, job title, or apartment number.
    2. Dated copies of cover memoranda to Van Vista's boarding home staff accompanying distribution of copies of this Settlement Agreement and HUD brochures. This requirement may be met by maintaining a dated copy of a sample of each such memorandum and a list of recipients by name or job title.
    3. Copies of statements signed and dated by Van Vista's boarding home staff indicating that, in accordance with Paragraph 26 above, they have received instruction regarding their obligations under the Act and this Settlement Agreement.
    4. Copies of the following records concerning housing options offered to Van Vista Residents 707, 807, and 907 pursuant to Section V above:
       1. Election notices sent to Van Vista Residents 707, 807, and 907;
       2. Completed and returned election forms;
       3. Waiting list maintained for accessible units on floors two through six;
       4. Letters sent to residents informing them of accessible units; and
       5. First and last page of each new lease entered by Van Vista Residents 707, 807, and 907 as a result of exercising housing options set out above.
    5. A dated photograph of the Fair Housing poster in Van Vista's lobby.
30. Defendant VHA will ensure that each of the following are maintained:
    1. Dated copies of all notices disseminated to Van Vista Staff employed by or associated with VHA and VHA tenants pursuant to Sections III, V and VI above (i.e., offering alternative housing and notice to employees and tenants). This requirement may be met by maintaining a dated copy of a sample of each such notice and a list of recipients by name, job title, or apartment number.
    2. Dated copies of cover memoranda to Van Vista's VHA staff accompanying distribution of copies of this Settlement Agreement and HUD brochures. This requirement may be met by maintaining a dated copy of a sample of each such memorandum and a list of recipients by name or job title.
    3. Copies of statements signed and dated by Van Vista's VHA staff indicating that, in accordance with Paragraph 26 above, they have received instruction regarding their obligations under the Act and this Settlement Agreement.
    4. A dated photograph of the Fair Housing poster in Van Vista's lobby.
31. Within six (6) months of the Effective Date and every six (6) months thereafter for the period in which this Settlement Agreement is in effect, ⁽⁵⁾

    Defendants VHA and Coldwater/Sunwest will deliver to counsel for the United States ⁽⁶⁾ dated copies of all notices disseminated to respective Van Vista Staff, boarding home tenants, and VHA tenants pursuant to Sections III, V, and VI above. This requirement may be met by providing a dated copy of a sample of each such notice and a list of recipients by name, job title, or apartment number.

32. During the period in which this Settlement Agreement is in effect, Defendants will preserve all records that are the source of, contain, or relate to any of the information pertinent to the obligations under this Settlement Agreement. Upon reasonable notice to counsel for the Defendants, representatives of the United States will be permitted to inspect and copy all such records at any and all reasonable times.
33. During the period in which this Settlement Agreement is in effect, Defendants will ensure the maintenance of copies and records of all housing discrimination complaints alleging discrimination on the basis of disability by any of the Defendants at Van Vista or Columbia House.
34. During the period in which this Settlement Agreement is in effect, the Defendants will notify counsel for the United States in writing within fourteen (14) days of receipt of any written or oral complaint against them or any of their agents or employees, made by any resident of or applicant to Van Vista or Columbia House regarding discrimination in housing based on disability at Van Vista or Columbia House. If the complaint is written, a copy of the complaint will be provided with the notification; if the complaint is oral, a written summary of the complaint will be provided with the notification. The notification will include the full details of the complaint, including the complainant's name, address, and telephone number (unless the complaint is made anonymously). If the complainant requested that their name and identifying information be withheld from disclosure, Defendants will not disclose that identifying information to the United States. All information concerning the actual or attempted resolution of any such complaint will be provided to counsel for the United States within fourteen (14) days of its resolution.

VIII.     PAYMENTS TO AGGRIEVED PERSONS

35. Within ninety (90) days of the Effective Date, Defendants Emeritus and Coldwater/Sunwest will pay all reasonable, necessary, and customary costs associated with establishing two special needs trusts. The sole beneficiary of the first trust will be Lisa Dice ("Dice Special Needs Trust"), and the sole beneficiary of the second trust will be Leland Still ("Still Special Needs Trust"). The Dice Special Needs Trust and the Still Special Needs Trust should be established in accordance with applicable state and federal law, seeking and obtaining approval of the appropriate court, if necessary, to provide and ensure for each Special Needs Trust that:

1. any existing or future governmental assistance will be the primary source of the trust beneficiary's medical, custodial, and financial support;
2. the trust's income or principal will be disbursed only at the discretion of the trustee for the trust beneficiary's supplemental needs; and none of the trust's income or principal will be applied in such a manner as to supplant, impair, or diminish any governmental benefits or assistance for which the trust beneficiary may be eligible or which the beneficiary may be receiving, rendering the trust corpus unavailable as a resource applicable to the beneficiary's eligibility for governmental benefits.
3. Defendants Emeritus and Coldwater/Sunwest cannot warrant or guarantee that the Special Needs Trusts will not impact or negatively affect the beneficiaries' right or eligibility for government benefits or assistance.
4. The United States will obtain copies of billing statements from the attorney(s) who prepare the Dice Special Needs Trust and the Still Special Needs Trust and forward them to Defendants Emeritus and Coldwater/Sunwest. Provided that such attorney(s) are licensed to practice in the State of Washington and are in the practice of customarily preparing the type of special needs trusts described herein, Defendants Emeritus and Coldwater/Sunwest shall each pay 50% of billing statement(s) for the preparation of the Dice Special Needs Trust and Still Special Needs Trust by forwarding the appropriate amount due directly to such attorney(s), with a copy to the attorneys for the United States. Once the Special Needs Trusts are established and payment is made by Defendants Emeritus and Coldwater/Sunwest (to the attorney(s) for the trust preparation costs described above and for payments of damages to the trusts in consideration of execution of releases as described below), Defendants Emeritus and Coldwater/Sunwest are fully and finally discharged from any liability or obligation to the beneficiaries.
5. The costs associated with establishing the Dice Special Needs Trust and the Still Special Needs Trust will be separate and apart from their additional obligation of Emeritus/Sunwest to pay the full amount of damages specified below.

36. Defendants DSHS, Emeritus, and Coldwater/Sunwest will pay a total of ONE-HUNDRED-THOUSAND DOLLARS ($100,000) in damages.
37. In return for the payments described in Paragraphs 36 and 39 through 42, pursuant to the procedures set out in those paragraphs, the United States shall obtain, from each recipient described below, an executed release agreement in a form similar to those attached as Exhibits F, G, and H, as indicated below, and provide those releases to the Defendants.
38. The United States will notify Defendants Emeritus and Coldwater/Sunwest of the establishment of the Dice Special Needs Trust. Within five (5) business days of such notification, Defendants Emeritus and Coldwater/Sunwest will pay to the Dice Special Needs Trust of Lisa Dice the total lump sum of thirty-five thousand dollars ($35,000). This sum will resolve all claims of Ms. Dice for alleged damages, costs and attorney fees, including all future costs and fees incurred for monitoring of the Settlement Agreement, except as otherwise provided herein. This amount will be paid by check, made payable to the Dice Special Needs Trust, and delivered to counsel for the United States. Upon or before receipt of said check by the United States, Ms. Dice will execute a release agreement in form similar to that attached as Exhibit F, and same will be delivered to counsel for the United States. Said release will include a release of liability pursuant to paragraph 34(c) above and a statement verifying the withdrawal of her HUD complaint, No. 10-01-0388-8. When counsel for the United States has received both the check from Defendants and the release from Ms. Dice, counsel for the United States will deliver the release to counsel for Defendants and the check to the Dice Special Needs Trust.
39. The United States will notify Defendants Emeritus and Coldwater/Sunwest of the establishment of the Still Special Needs Trust. Within five (5) business days of such notification, Defendants Emeritus and Coldwater/Sunwest will pay to the Still Special Needs Trust the total lump sum of thirty-thousand dollars ($30,000). This sum will resolve all claims of Mr. Still for alleged damages, costs and attorney fees, including all future costs and fees incurred for monitoring of the Settlement Agreement, except as otherwise provided herein. This amount will be paid by check, made payable to Still Special Needs Trust, and delivered to counsel for the United States. Upon or before receipt of said check by the United States, Mr. Still will execute a release agreement in form similar to that attached as Exhibit F, and same will be delivered to counsel for the United States. Said release will include a release of liability pursuant to paragraph 34(c) above. When counsel for the United States has received both the check from Defendants and the release from Mr. Still, counsel for the United States will deliver the release to counsel for Defendants and the check to the Still Special Needs Trust.
40. DSHS will award the estate of Aaron Struck a total of five-thousand dollars ($5,000), to be apportioned as follows. Pursuant to 42 U.S.C. § 1396p(b)(1)(B) and its State Medicaid Plan, DSHS is required to make reasonable efforts to recover the costs of medical care provided to any individual under Title XIX of the Social Security Act from the estate of such individual, including the estate of Aaron Struck. However, DSHS agrees to compromise its ability to recover against the settlement proceeds awarded to Aaron Struck's estate, provided that 15% (fifteen percent) of the settlement proceeds is immediately recovered by its Office of Financial Recovery. Consequently, and to avoid unnecessary administrative burdens, within thirty (30) days of the Effective Date, Defendant DSHS shall pay to the estate of Aaron Struck the sum of four-thousand two-hundred fifty dollars ($4,250) and shall pay to DSHS Office of Financial Recovery the sum of seven-hundred fifty dollars ($750). Such payments will resolve all claims of the estate of Aaron Struck for alleged damages, costs and attorney fees, including all future costs and fees incurred for monitoring of the Settlement Agreement, except as otherwise provided herein. The amount of four-thousand two-hundred fifty dollars ($4,250) will be paid by check, made payable to the estate of Aaron Struck, and delivered to counsel for the United States. Upon or before receipt of said check by counsel for the United States, the executor of Aaron Struck's estate will execute a release agreement in form similar to that attached as Exhibit G, and same will be delivered to counsel for the United States. Said release will include a release of liability pursuant to paragraph 34(c) above. When counsel for the United States has received both the check from Defendant DSHS and the release from the executor of Aaron Struck's estate, counsel for the United States will deliver the release to counsel for Defendants and the check to the executor of Aaron Struck's estate. Defendant DSHS shall provide a copy of the check for seven-hundred fifty dollars ($750) issued to DSHS Office of Financial Recovery to counsel for the United States. DSHS, by accepting said remittance of seven-hundred fifty dollars ($750), will release and waive any claim to further recovery from the estate of Aaron Struck of any part of the remaining balance of four-thousand two-hundred fifty dollars ($4,250).
41. Within thirty (30) days of the Effective Date, Defendants Emeritus, Coldwater/Sunwest, and DSHS will pay to Gary and Joe Ann Struck (brother and sister-in-law of Aaron Struck) the total lump sum of twenty-five thousand dollars ($25,000). This sum will resolve all claims of Gary and Joe Ann Struck for alleged damages, costs and attorney fees, including all future costs and fees incurred for monitoring of the Settlement Agreement, except as otherwise provided herein. This amount will be paid by check, made payable to Gary and Joe Ann Struck, and delivered to counsel for the United States. Upon or before receipt of said check, Gary and Joe Ann Struck will execute a release agreement in form similar to that attached as Exhibit H, and same will be delivered to counsel for the United States. Said release will include a release of liability pursuant to paragraph 34(c) above. When counsel for the United States has received both the check from Defendants and the release from Gary and Joe Ann Struck, counsel for the United States will deliver the release to counsel for Defendants and the check to Gary and Joe Ann Struck.
42. DSHS will award the estate of Lillian Ball a total of five-thousand dollars ($5,000), to be apportioned as follows. Pursuant to 42 U.S.C. § 1396p(b)(1)(B) and its State Medicaid Plan, DSHS is required to make reasonable efforts to recover the costs of medical care provided to any individual under Title XIX of the Social Security Act from the estate of such individual, including the estate of Lillian Ball. However, DSHS agrees to compromise its ability to recover against the settlement proceeds awarded to Lillian Ball's estate, provided that 15% (fifteen percent) of the settlement proceeds is immediately recovered by its Office of Financial Recovery. Consequently, and to avoid unnecessary administrative burdens, within thirty (30) days of the Effective Date, Defendant DSHS shall pay to the estate of Lillian Ball the sum of four-thousand two-hundred fifty dollars ($4,250) and shall pay to DSHS Office of Financial Recovery the sum of seven-hundred fifty dollars ($750). Such payments will resolve all claims of the estate of Lillian Ball for alleged damages, costs and attorney fees, including all future costs and fees incurred for monitoring of the Settlement Agreement, except as otherwise provided herein. The amount of four-thousand two-hundred fifty dollars ($4,250) will be paid by check, made payable to the estate of Lillian Ball, and delivered to counsel for the United States. Upon or before receipt of said check by counsel for the United States, the executor of Lillian Ball's estate will execute a release agreement in form similar to that attached as Exhibit G, and same will be delivered to counsel for the United States. Said release will include a release of liability pursuant to paragraph 34(c) above. When counsel for the United States has received both the check from Defendant DSHS and the release from the executor of Lillian Ball's estate, counsel for the United States will deliver the release to counsel for Defendants and the check to the executor of Lillian Ball's estate. Defendant DSHS shall provide a copy of the check for seven-hundred fifty dollars ($750) issued to DSHS Office of Financial Recovery to counsel for the United States. DSHS, by accepting said remittance of seven-hundred fifty dollars ($750), will release and waive any claim to further recovery from the estate of Lillian Ball of any part of the remaining balance of four-thousand two-hundred fifty dollars ($4,250).
43. Defendants will permit the United States, upon reasonable notice, to review any records it reasonably believes may facilitate its determinations regarding compliance with the terms of this Settlement Agreement. The parties agree that neither this provision nor any other provision of this Settlement Agreement shall require any of the parties or their legal counsel to waive any legal privileges which may act to preclude the production or availability of a record or document.
    
    

IX.    TIME FOR PERFORMANCE

44. Any time limits for performance imposed by this Settlement Agreement may be extended by the mutual written agreement of the parties. Any extension of an obligation of one or more parties need only be by written mutual agreement of the United States and any affected parties to the Settlement Agreement.
    
    

    X.     ENFORCEMENT OF SETTLEMENT AGREEMENT
    AND DISMISSAL OF ACTION

45. On Friday, September 24, 2004, the United States filed a Complaint in District Court for the Western District of Washington (Tacoma Division). This Settlement Agreement is being filed contemporaneously with all parties' joint motion for entry of an Order dismissing the action without prejudice, pursuant to Fed. R. Civ. P. 41(a)(2). The motion is in a form substantially similar to that of Exhibit I and includes a proposed Order of Dismissal without Prejudice, to which this Settlement Agreement will be attached and filed with the Court's Order. However, in order to ensure that Defendants and Reed have an opportunity to answer this Complaint, the Order of Dismissal shall not take effect until five (5) days after its entry or until each Defendant has filed an answer, whichever occurs first.
46. Any party, upon the failure of any other party to perform in a timely manner any act required by this Settlement Agreement, or upon any other material violation of this Settlement Agreement, may petition the Court at any time during the duration of this Settlement Agreement to enforce the Settlement Agreement with respect to the allegedly breaching party. In the event the Court finds that a party has breached the Settlement Agreement, the Court may impose any remedy authorized by law or equity on such breaching party, including but not limited to an order requiring performance of an act, deeming an act to have been performed or awarding any damages, costs and/or attorneys' fees which may be occasioned by the violation of this Settlement Agreement.
47. Notwithstanding the preceding Paragraph, the parties to this Settlement Agreement will endeavor in good faith to resolve informally any differences regarding interpretation of and compliance with this Settlement Agreement prior to bringing such matters to the Court for resolution.
48. This Settlement Agreement will remain in effect for two (2) years after the Effective Date. At the conclusion of two (2) years from the Effective Date, if no enforcement motion is pending, the Complaint shall be Dismissed with Prejudice upon motion. Notwithstanding the above terms, nothing in this Settlement Agreement shall be construed to require Coldwater/Sunwest to continue operating a boarding home at Van Vista if, in its sole business judgment, continued operation is not financially warranted or if unforeseen circumstances make continued operation infeasible.
49. This Settlement Agreement constitutes a full and final settlement of all claims of violation of the Fair Housing Act that were alleged, or could have been alleged, by the United States in this action pursuant to 42 U.S.C. § 3614(a) arising out of Defendants', Reed's, and licensees' ownership, operation, and/or licensure of Columbia House and Van Vista, and the United States therefore hereby releases Reed and all Defendants and licensees, including their principals, officers, directors, employees, agents, affiliates, subsidiaries and related parties from any further liability for all claims of violation of the Fair Housing Act that were alleged, or could have been alleged, by the United States in this action pursuant to 42 U.S.C. § 3614(a) arising out of the ownership, operation and/or licensure of either Van Vista and Columbia House.

    XI.    COSTS OF LITIGATION

50. Each party to this litigation will bear its own costs and attorney's fees associated with this litigation.

For the United States:

For the Vancouver Housing Authority:

For the Department of Social and Health Services of the State of Washington:

For Sunwest Management, Inc.:

_________________________
J. Wallace Gutzler
Executive Vice President

Approved as to form:

_______________________
John E. Pollino (WSB # 22593)
Of Attorneys for Sunwest Management, Inc., and
Coldwater Springs Assisted Living Community, LLC

For Coldwater Springs Assisted Living Community, LLC:

_________________________
Jon M. Harder
Manager

Approved as to form:

_______________________
John E. Pollino (WSB # 22593)
Of Attorneys for Sunwest Management, Inc., and
Coldwater Springs Assisted Living Community, LLC

For Emeritus Corporation:

For James D. Reed:

_________________________

1. See Wash. Rev. Code Ann. § 18.20.020 (2000).

2. Mr. Still, Ms. Brennan, and Ms. Dice filed fair housing complaints with the Department of Housing and Urban Development (HUD) regarding the alleged discrimination. The United States alleges, and Defendants deny, that Reed and Emeritus pressured Mr. Still and Ms. Brennan to withdraw their complaints. Ms. Brennan's withdrawal was not accepted by HUD, and she later reached an agreement resolving her complaint. Mr. Still withdrew the complaint and declined to refile it. The Defendants and Reed allege, and the United States denies, that Mr. Still's complaint was resolved at the administrative level. Ms. Dice's complaint is still pending, but will be withdrawn as a condition of receiving the payment of monetary damages into a Special Needs Trust in this case. See ¶ 32.

3. These regulations are cited to identify the standard of accessibility required by the Settlement Agreement and should not be deemed evidence that the apartments would otherwise be or not be required to meet these standards.

4. These are the accessible units on floors 7, 8, and 9.

5. The only exception to this schedule is the last report, which will be due thirty (30) days before the expiration of the term of the Settlement Agreement.

6. All documents or other communications required by this Order to be sent to counsel for the United States shall be addressed as follows: Chief, Housing and Civil Enforcement Section, Civil Rights Division, DJ 175-82-124, United States Department of Justice, 950 Pennsylvania Avenue N.W.- G St., Washington, D.C. 20530, or as otherwise directed by the United States.