On May 24, 2022 a Exhibit,Appendix was filed involving a dispute between Adriane Walrath, Alice Clare, Amy Henry, Andreana Cole, Angela Miczek, Angela Stewart, Anne Hotaling, Anne Nolan, Ann Marie David, Ann Testa, Ann Wertalik, Barbara Lahey, Barbara Perry, Barbara Powers, Barbara Schwant, Barbara Yankowski, Beth Sheedy, Bonnie Benson, Brian Forget, Carol Bradt, Carol Williams, Catherine Carey, Cathy-Jo Deamer, Chris Rakus, Colleen Dzikas, Cynthia Watroba, Daniel Stec, David Bonitatibus, David Schaperjahn, Deb Canary, Deborah Avery, Deborah Canary, Deborah Elliott, Deborah Giakoumis, Deborah Halek, Deborah Malkiewicz, Deborah Mark, Deborah Maureen Campbell, Deborah Mcdonald, Deborah Szala, Debra Dannunzio, Debra D'Annunzio, Denise Whitehouse, Diane Mauro, Diane Oconnor, Diane O'Connor, Diane Vakiener, Donald D'Alessandris, Donna Votino, Donna Votion, Doreen Sturgeon, Elaine Masi, Erica Regan, Frank Houlihan As Voluntary Administer Of The Estate Of Mary Houlihan, Frederick Ziemann, Gary Ambrosino, Gary Dunkerley, Gerald Mcginnis, Gina Faucett, Gina Martinelli-Painter, Hilary Buono, James Degroff, Janet Plourde, Janet Rizzo, Janey Rizzo, Jeanette Bearzi, Jean Nealon, Jerome Adach, Jerry Adach, Joan Ham, Joanne Pelletier, John Ham, John Henry, John Mezza, John Mihaly, John Rizzo, John Shakeshaft, Joseph Sacco, Joseph Testa, Joyce Staschak, Juanita Aikens-English, Judith Meisner, Judy Patrick, Karen B Dickson, Karen Bradley, Karen Brown, Karen Griffin, Karen Sacchetti, Karen Sachetti, Kathleen Adach, Kathleen Almond, Kathleen Bender, Kathleen Rubin, Kathleen Talasco, Kathryn Seward, Kathy Adach, Kathy Spagnola, Keith Lotich, Kelvin Isolda, Laura Chotskowski, Laura Mae Huggett, Laurie Briskie, Laurie Wasniski, Lee Sheldon, Leonard Adams, Leslie Lastra, Levern Mosier, Linda Bucciferra, Linda Goldstein, Linda Pusz, Linda Sung, Linda Vincent, Lori A Zampella, Lou-Ann Keast, Louann Keast, Louis Pietrocarlo, Lynn Dalessandris, Lynn D'Alessandris, Marc Marchand, Marianne L Ostrander, Maria Peart, Maria Sacco, Mark Kline, Martha Paraszczak, Maryann Ottaviano, Marybeth Sullivan, Mary Cieszynski, Mary Goldstein, Mary Hartshorne, Mary Houlihan, Mary Kelly, Mary Pagano, Marypat Ambrosino, Mary Pat Ambrosino, Mary Taber, Maureen A Kennedy, Maureen Battiste, Maureen Beebe, Maureen Campbell, Melinda Martin, Melinda Moran, Melissa Oclair, Melissa O'Clair, Michael Spina, Nancy Billsborrow, Nancy Hunter, Pamela Denny, Patrice Sheehan, Patricia Apa, Patricia Bonitatibus, Patricia Butler, Patricia Campoli, Patricia Caulfield, Patricia Flacke, Patricia Motyl, Patricia Pangburn, Patricia Severino, Patrick Ohanlon, Patrick O'Hanlon, Patti Apa, Paul Cieszynski, Paul Kilinski, Peggy Kilinski, People Of The State Of New York, By Letitia James, Attorney General Of The State Of New York, Peter Jones, Randal Herbert, Randy Stark, Rebecca Billsborrow, Rebecca Debiase, Richard Mark, Richard P Hahn, Sandra Civitello, Sandra Shepler, Sandy Civitello, Sharon Hoffman, Sheila Cristello, Sheila Etienne, Sherry Stark, Stephen Fishel, Sue Mckinney, Susan Carusone, Suzanne Zarillo, Suzen Golden, Tara Meaney, Theresa Bowman, Theresa Cassella, Thomas Billsborrow, Timothy Billsborrow, Tina Ohanlon, Tina O'Hanlon, Wendy Quay, William Fennicks, and Bishop Edward B Scha, Bishop Edward Scharfenberger, Bishop Emeritus Howard Howard Hubbard, Bishop Howard Hubbard, Board Of Trustees Of St Clares Retirement Income Plan, Jennifer Hubbard Administrator Of The Estate Of Howard Hubbard, Joseph Pofit, Robert Perry, Roman Catholic Diocese Of Albany, New York, St Clares Hospital Retirement Income Plan, The St Clares Corporation, The St Clares Corporation Fka St Clares Hospital Of Schenectady Ny, Very Reverend David Lefort, for Torts - Other (Breach of Fiduciary Duty) in the District Court of Schenectady County.
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FILED: SCHENECTADY COUNTY CLERK 08/18/2023 11:29 AM INDEX NO. 2022-830 NYSCEF DOC. NO. 289 RECEIVED NYSCEF: 08/18/2023 Exhibit A FILED: SCHENECTADY COUNTY CLERK 08/18/2023 11:29 AM INDEX NO. 2022-830 NYSCEF DOC. NO. 289 RECEIVED NYSCEF: INDEX 08/18/2023 NO. 2022-830 FILED: SCHENECTADY COUNTY CLERK 08 /14/2023 03 : 3 0 PM) NYSCEF DOC. NO. 279 RECEIVED NYSCEF: 08/14/2023 SUPREME COURTOF THE STATE OF NEW YORK COUNTY OF SCHENECTADY PEOPLE OF THE STATE OF NEW YORK, BY LETITIA JAMES, Index No.: 2022-830 ATTORNEY GENERAL OF THE STATE OF NEW YORK, Hon, Vincent W. Versaci Plaintiff, v, ROMAN CATHOLIC DIOCESE OF ALBANY, BISHOP EDWARD SCHARFENBERGER, BISHOP EMERITUS HOWARD HUBBARD, VERY REVEREND DAVID LEFORT, JOSEPH POFIT, THE ST. CLARE'S CORPORATION, AND THE ST. CLARE'S RETIREMENT INCOME PLAN TRUST, Defendants, MARY HARTSHORNE, et al., Plaintiffs, v. ROMAN CATHOLIC DIOCESE OF ALBANY, Index No. 2019-1989 NEW YORK, et al., Defendants. STATE OF NEW YORK ) SS: RENSSELAER COUNTY ) AFFIRMATION OF PATRICK T. MORPHY IN OPPOSITION TO DEFENDANT BISHOP HOWARD HUBBARD'S MOTION TO COMPEL DEPOSITION OF PATRICK MORPHY Patrick T. Morphy, being duly sworn deposes and says: 1 1 of 6 FILED: SCHENECTADY COUNTY CLERK 08/18/2023 11:29 AM INDEX NO. 2022-830 NYSCEF DOC. NO. 289 RECEIVED NYSCEF: INDEX 08/18/2023 NO. 2022-830 F ILED : S CHENECTADY COUNTY CLERK 0 8 /14 / 2 0 23 0 3 : 3 0 PM) NYSCEF DOC. NO. 279 RECEIVED NYSCEF: 08/14/2023 1. I am a former Assistant Attorney General in the Office of the New York State Attomey General (the "OAG"), and I make this Affidavit in Opposition to the motion of defendant Howard Hubbard to compel my deposition in connection with the above-captioned actions. I am familiar with the facts and circumstances set forth herein and all information is based on personal knowledge, unless stated that it is based on information and belief. 2. I worked in the Albany office of the OAG from May 2007 through December 2013, at which time I retired from the practice of law. I shared responsibility during that time with another Assistant Attorney General in the Albany office for all the Charities Bureau's cases in a seven county area in and around Albany County. 3. In 2008, the Albany office of the OAG received a draft petition from counsel for St. Clare's Hospital ("SCH"), Hiscock & Barclay (now Barclay Damon) and partner Raymond McCabe, regarding the sale of substantially all of the assets of SCH to Ellis Hospital, and amendments to its certificate of incorporation (the "petition"). 4. Under a prior iteration of the New York Not-for-Profit Corporation Law ("NPCL"), in effect in the 2008-2010 time frame, a not-for-profit corporation was not required to, but generally would, submit its draft petition to the OAG and the OAG would review and provide comments or concerns. After such discussions, the petitioner would revise its draft petition, add the requisite exhibits and provide the OAG with a proposed order. Finally, the OAG would, if applicable, provide written consent to the proposed order, which consent would be provided to the court, along with the f'malized petition. I was the Assistant Attorney General who reviewed SCH's draft petition in 2008-2010. 2 2 of 6 FILED: SCHENECTADY COUNTY CLERK 08/18/2023 11:29 AM INDEX NO. 2022-830 NYSCEF DOC. NO. 289 RECEIVED NYSCEF: INDEX 08/18/2023 NO. 2022-830 |F ILED : SCHENECTADY COUNTY CLERK 0 8 /14 / 2 O2 3 0 3 : 3 O PM) NYSCEF DOC. NO. 279 RECEIVED NYSCEF: 08/14/2023 5. Under the two-pronged test of N-PCL §511 regarding the transfer of all or substantially all assets in the 2008-2010 time frame, the OAG would consider whether (i) the consideration and terms of the transaction are fair and reasonable to the corporation, and (ii) the purposes of the corporation or interest of its members will be promoted. The Attorney General's role was to serve as a statutory party to assist the Court in making its determination under N-PCL §511 and to advise the Court that the requirements therein were, in the opinion of the Attorney General, satisfied. 6. SCH followed the process described above in paragraphs 4. The information I received regarding the proposed transaction in the 2008-2010 time frame, prior to giving the OAG's written consent to the proposed order in July 2010, was submitted to the OAG by . SCH's counsel, Hiscock & Barclay and Raymond McCabe. 7. The information received from SCH's counsel was maintained in my working file, and I have been informed by my counsel herein that the entirety of that file was included in the document production made by the OAG in the above-captioned action, bearing bates numbers OAG-SCC000001-001545 (the "production"). It was my consistent practice to document all conversations, meetings and updates to the status of a matter on which 1 worked, and those notes regarding the SCH proposed asset transfer were also included in the OAG's production as well, at bates numbers OAG/SCC001324-1340. See Morphy Notes, bearing bates OAG/SCC001324-1340, attached hereto as EE1 8. It was my understanding in 2008-2010 from reviewing the documentation and information from Hiscock & Barclay and Mr. McCabe that the New York State Berger Commission had issued its recommendation that SCH and Ellis merge into one entity for 3 3 of 6 FILED: SCHENECTADY COUNTY CLERK 08/18/2023 11:29 AM INDEX NO. 2022-830 NYSCEF DOC. NO. 289 RECEIVED NYSCEF: INDEX 08/18/2023 NO. 2022-830 IF ILED : S CHENECTADY COUNTY CLERK 0 8 / 14 / 2 0 2 3 O3 : 3 0 PM) NYSCEF DOC. NO. 279 RECEIVED NYSCEF: 08/14/2023 purposes of right-sizing the available healthcare facilities in the Schenectady area. It was also my understanding from that same source that negotiations concerning the merger between the two hospitals failed, and thereafter SCH agreed to close its doors, and transfer its assets to Ellis, in exchange for the payment of monies from the New York Department of Health ("DOH") to SCH. 9. My review of my notes in the production refreshes my recollection that I had one telephone conversation with the DOH, concerning the merger negotiations between SCH and Ellis during the asset transfer approval process on July 7, 2008. The reason for this call was as follows: Prior to the asset transfer being approved, Ellis had taken over operation of both hospitals, and it referenced the former SCH property as its "McClellan campus". Upon OAG and couit approval, SCH planned to formally transfer its real property to Ellis, including the SCH building, but it wanted to include in the transfer a deed restriction requiring Ellis to observe the Ethical and Religious Directives of the Catholic Church ("ERDs"), including those pertaining to reproductive care. As set forth in my notes, I consulted the Ellis website which stated that patients who went to the McClellan emergency room needing care prohibited by the ERDs would be stabilized and transported to the Ellis emergency room for further care. 10. I felt it important to ensure that this arrangement regarding transfer of patients was acceptable to the OAG's Health Care Unit which had limited information and, in turn, referred me to the DOH. I spoke with DOH attorney Martin Bienstock on July 7, 2008, and my notes regarding that call read as follows:"[Bienstock] points out that this is an issue that all Catholic hospitals would face if they have emergency rooms. How can they 4 4 of 6 FILED: SCHENECTADY COUNTY CLERK 08/18/2023 11:29 AM INDEX NO. 2022-830 NYSCEF DOC. NO. 289 RECEIVED NYSCEF: INDEX 08/18/2023 NO. 2022-830 {F ILED : S CHENECTADY COUNTY CLERK 0 8 / 14 / 2 O2 3 O3 : 3 O PM) NYSCEF DOC. NO. 279 RECEIVED NYSCEF: 08/14/2023 adequately provide a full range of services to pregnant women who present at their emergency rooms. Martin suspects that there are state regulations on this issue. The Health Department wanted this agreement to happen and were not interested in placing place." road blocks in See Ex. 1 at OAG/SCC001324. These notes are entirely consistent with my memory of the conversation. Mr. Bienstock did not elaborate on his comment regarding the DOH wanting this agreement to happen and I did not follow up. I do not have any information or knowledge regarding the meaning of this statement. 11. As a result of that conversation, I was satisfied that the deed restriction did not pose an unsolvable problem. I did not discuss with Mr. Bienstock the Berger Commission recommendation, the settlement reached between SCH and DOH, or the St. Clare's Retirement Income Plan (the "Pension Plan"). 12. The OAG ultimately approved SCH's proposed order in July 2010, and the Petition was thereafter granted by Judge Mark Powers. 13. My review of the production further refreshes my recollection as follows: a. The analysis I and the OAG conducted, under the two-prong test set forth above, determined whether the consideration to be received by SCH for the sale of its assets to Ellis was sufficient. As my notes reflect, SCH's assets were worth million" "about $20 (see Ex. 1, OAG/SCC-001324) and, according to the final settlement documents between SCH and DOH, SCH received approximately $50 million. As the monies far exceeded the value of the assets, that concluded our analysis on the matter. 5 5 of 6 FILED: SCHENECTADY COUNTY CLERK 08/18/2023 11:29 AM INDEX NO. 2022-830 NYSCEF DOC. NO. 289 RECEIVED NYSCEF: INDEX 08/18/2023 NO. 2022-830 (F ILED : SCHENECTADY COUNTY CLERK 0 8 /14 / 2 023 03 : 3 0 PM) NYSCEF DOC. NO. 279 RECEIVED NYSCEF: 08/14/2023 b. I had no discussions, communications or meetings with anyone at DOH, including Messrs. Clyne and Benjamin, regarding the Pension Plan, the Berger Commission recommendations, the settlements reached between St. Clare's Hospital and the DOH, and the funding of the Pension Plan. Any statements to the contrary are incorrect. c. The OAG had no role whatsoever in the Berger Commission's determinations, the negotiations among DOH, SCH and Ellis, the decision by SCH to close or the . . Pension Plan. Patrick T. IV1orphy Sworn and subscribed this /lth day of August, 2023 Notary Public M. KELLEY CI SPER Notary Publ:c. Slitte of New York #0 TCA5i 9558 Qualified in Gmucoa Count Co.Tmissier, Expi:4 S.25, 20 6 6 of 6