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Second Appeal Brief
PA ID# 009-U68QT-00; TLC Health Care Network
PW ID# 1057 and 1095; Legal Responsibility
Citation: FEMA-1857-DR-NY, TLC Health Care Network, Legal Responsibility,
Project Worksheets (PW) 1057 and 1095
Reference: Work Eligibility; Legal Responsibility
Summary: From August 8 through August 10, 2009, extensive flooding from severe storms with heavy rain damaged the Medical Services Building. The Medical Services Building is owned by a partnership known as Memorial Drive Partners. FEMA prepared PW 1057 for the clean-up and removal of damaged portions of the Medical Services Building and prepared PW 1095 to repair the Medical Services Building. However, FEMA determined that PWs 1057 and 1095 were ineligible because the partnership, not the Applicant, was legally responsible for the work in PWs 1057 and 1095.
The Applicant stated in its first appeal that the Medical Services Building was used for eligible activities; 65 percent of the space was controlled and used by the Applicant; and the Applicant owned 65 percent of the facility. Therefore, the Applicant asserted that the damages sustained from the flooding were eligible at the prorated amount of 65 percent. The Regional Administrator partially granted the appeal allowing reimbursement of PW 732 for the replacement of pre-disaster quantities of Applicant-owned consumable supplies and inventory and for the replacement of Applicant-owned contents, such as furnishings and equipment. The appeal of PWs 1057 and 1095 was denied because FEMA determined that the Applicant was not legally responsible to repair the Medical Services Building. FEMA found that the partnership owned the facility and, under the lease agreement with the Applicant, was legally responsible for maintaining insurance to cover loss and damage to the facility.
In its second appeal, the Applicant provided a legal opinion that it is legally responsible under New York State law as a partnership. The Applicant owns 65 percent of the partnership assets and used approximately 65 percent of the space in the Medical Services Building for eligible medical services. Under New York State law, a partnership is not a separate legal entity. Because a partnership does not have a separate existence from its partners under State law, the Applicant has the legal responsibility for rebuilding the facility. Therefore, the Applicant is an eligible applicant that owns 65 percent of the Medical Services Building.
Issues: Does the Applicant have legal responsibility to repair damages to the Medical Services Building?
Rationale: 44 CFR §206.221(e), Definitions; 44 CFR §206.22(a), General work eligibility; Disaster Assistance Policy DAP9521.3, Private Nonprofit (PNP) Eligibility, dated July 18, 2007