Oregon

Former Manor Boss Sues PRS Over Ouster

Medford Mail Tribune | April 10, 2013 4:06 p.m. | Updated: April 10, 2013 11:06 p.m.

Contributed By:

GREG STILES

None

By GREG STILES

Mail Tribune

Former Rogue Valley Manor Executive Director Kevin McLoughlin has filed a $1.425 million suit against his one-time employer, Pacific Retirement Services.

In a complaint filed in Jackson County Circuit Court, McLoughlin alleges breach of contract, whistleblower protection and wrongful discharge claims against PRS. He seeks back pay, including bonuses and benefits, from his firing in August 2012 through the end of the trial, that is “reasonably believed to be in excess of $675,000.”

McLoughlin also claims to have suffered noneconomic harm in the form of anxiety, worry, distress, embarrassment and humiliation, and is asking $750,000 in compensation.

The suit, which incorporates a whistleblower element, also asks for McLoughlin’s reinstatement, and punitive damages.

McLoughlin was ousted from his position in a dispute between the Manor and PRS, its parent company, over control and management of the Medford retirement community. Members of the Manor’s board of directors were also removed from their positions by the PRS board.

“Kevin did provide information he was directed to provide to the Rogue Valley Manor Board,” said Richard Yugler, McLoughlin’s attorney. “Once PRS suspended him and directed him not to communicate with RVM he abided by that directive.”

While McLoughlin was paid by PRS, his chief responsibility was to Rogue Valley Manor and its board, Yugler said.

“His role as executive director caused him to have fiduciary and direct responsibility to the Rogue Valley Manor Board,” Yugler said. “Even though he was paid by PRS, his professional responsibilities also extended to RVM.”

Yugler likened it to the responsibility lawyers have to clients, even though they are paid by insurance companies, or to lawyers in a public defender role, even though they are paid by the state.

“Regardless of who pays, the responsibility of the executive director is to the Rogue Valley Manor Board,” Yugler said.

According to court documents, McLoughlin alleges his fiduciary responsibility to the Rogue Valley Manor Board required him to provide information requested by the Manor’s oversight panel as it geared up for a legal challenge to PRS’ control and alleged mismanagement of Manor funds.

PRS placed the Manor’s long-time executive director on administrative leave after McLoughlin provided data requested by Manor board lawyers in preparation for a temporary restraining order hearing. PRS also barred him from visiting its facilities or communicating with staff, residents, board members or attorneys representing the Manor.

The Manor board sought the restraining order to prevent the sacking of the board members and McLoughlin by PRS. The Manor board grew to be at odds with the PRS board over concerns that PRS was overcharging Manor residents and taking excessive financial risks with Manor properties .

The restraining order was denied and PRS fired McLoughlin and dismissed seven of the Manor’s nine board members on Aug. 24. Manor residents later gave notice of a $30 million clash action suit against PRS, but the matter was resolved out of court and approved in January.

“Kevin remains dedicated to the Manor residents and purposely did not make a demand on his part until the Rogue Valley Manor residents had reached a settlement with PRS,” Yugler said. “He didn’t want to impair their efforts and as far as we can tell, they are extremely supportive and grateful for his dedication to them.”

McLoughlin declined comment, while PRS Chief Executive Officer Brian McLemore did not return phone messages or respond to an email requesting comment.

Yugler said punitive elements of the case could be added later, if the judge makes a determination there is sufficient evidence. He said PRS did not make an offer to settle during a mediation hearing last month.

Reach reporter Greg Stiles at 541-776-4463 or business@mailtribune.com. Follow him on Twitter @GregMTBusiness, and read his blog at www.mailtribune.com/Economic Edge.

This story originally appeared in Medford Mail Tribune.

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