Owner of Hill City Facility Sues State over Closure

The owner of Chappy's Golden Shores has filed a civil lawsuit over the facility's closure. The owner of Chappy's Golden Shores has filed a civil lawsuit over the facility's closure. |  Photo: WDIO-TV file

Created: March 14, 2019 06:11 PM

The owner of Chappy's Golden Shores has filed a civil lawsuit against the Commissioner of the Minnesota Department of Health over the closure of the long term care facility in Hill City.

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Chappy's owner Theresa Olson filed the suit in state court Thursday, with two former employees also named as plaintiffs and two MDH investigators also named as defendants.  It alleges official misconduct in investigations, official misconduct outside the scope of investigations, and four counts of denial of procedural due process.

The plaintiffs allege "repeated and wide-ranging misconduct" by MDH and the investigators. They say the defendants concealed evidence, coerced witnesses, and failed to consider documentation from Chappy's before deciding to close the facility in December.

In February, the MDH issued a report saying that ten clients had been the subject of maltreatment at the facility and that Chappy's actions posed an imminent risk of harm to the health and safety of the persons in its care.

In response to the lawsuit, MDH issued a statement saying, "Our goal throughout the process has been to protect the safety and well-being of the vulnerable adults who had received services from Chappy’s Golden Shores. The public documents clearly show the basis for our actions."

Olson alleges that the allegations of maltreatment came from disgruntled former employees fired for drug use and a relative who had tried to run over employees with a car.

The suit also alleges that one of the plaintiffs lost her job at a Grand Rapids drug store after her supervisor received a call from an MDH employee.  Another plaintiff alleges that MDH has told prospective employers that they should not hire anyone who worked at Chappy's.

The suit asks for a jury trial, seeking a new investigation and damages in excess of $1 million.

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