Carson City sober-living facility closes, declares bankruptcy after client's death: Part II

On July 25, Joe Tummarello, a long-term client with Carson City-based sober-living facility Lyfe Recovery, passed away at Carson Tahoe Hospital. By all accounts, a month before his death he had been in fine health for a man of 76. He dealt with COPD and needed an oxygen tank to breathe in the high altitude of northern Nevada, but a check-up with his doctors during May of 2019 showed he was nowhere near the brink of death.

However, after being relocated to Carson City from Lyfe Recovery’s Reno facility, Joe’s medication was withheld and he was denied medical intervention after a rapid deterioration of his health, which ultimately, it is alleged, led to his death.

To read Part I of this investigative series, click here.

“Fifteen minutes before we’re supposed to have group, I get a knock at the door and here’s this guy with an oxygen tank dropped off on the doorstep by an Uber,” said former Lyfe Recovery House Manager Daniel Arnold. “No one told me who he was or what I was supposed to do with him. I called (Lyfe-Recovery Owner) Stacey Payne who essentially told me to bear down and deal with it myself. I told her, ‘I don’t think this guy should be here, I think he needs a higher level of care.’ She said she’d look into it.”

When Arnold returned, Joe was settled in. Unbeknownst to Arnold, the other residents had taken Joe’s bag and stashed it in the hall closet. Inside were his medications that were not listed in his intake forms, and the absence of those medications would ultimately contribute to his death two weeks later. Arnold said he believed the residents had hidden Joe’s bags on purpose, for no reason other than to be mean and vindictive to the new arrival.

“I didn’t know what to do,” said Arnold. “There was no paperwork. I did the best I could, I made sure he was comfortable to the best of my ability. He showed up with absolutely nothing but his clothes and his breathing machine and his oxygen tanks.”

Arnold worked for Lyfe Recovery for a total of four months, and left without notice shortly after Joe was taken to the hospital. According to him, he was never paid for his time with the company.

“When I was hired, I was told I’d be paid $12 an hour with free rent in the house,” said Arnold. “They said I’d have a 90 day probationary period and then I’d start being paid. I never saw a dime, so I left.”

Arnold said that Joe came without any food, and the other residents would “feed him different things” that they had left over, and Arnold would try to make a big meal for everyone in the house about once a week.

“I tried to keep him comfortable until he could transition out of there,” said Arnold. “I kept telling (Payne) he needed medical help and she kept saying she was going to figure it out and I needed to hold out. She did make sure to send me a form to fill out with his debit card information, and kept calling me to harass me to get him to pay.”

Arnold said during the months he worked there, things quickly spiraled out of control. Payne would show up like clockwork to pick up the rent checks Arnold collected, he said, but would either drop off half the amount of supplies she was supposed to or none at all.

According to Arnold, Payne was supposed to provide household supplies such as paper towels, laundry soap, cleaners, coffee, creamer, antibacterial soap, shower cleaner and more, in addition to drug tests.

“For three of the four months I was there, we didn’t have drug tests,” said Arnold. “I kept saying, ‘we need drug tests, we need these supplies.’ She’d tell us to make do; she was kind of a slumlord.”

Many of the Edmonds House clients were placed there by the courts through their drug diversion programs, and were being tested for drugs and alcohol on a regular basis by the Department of Alternative Sentencing. However, for those clients Arnold described as “pay-as-you-go,” they were on their own as far as their sobriety being checked and maintained.

Payne had a contract with the Carson City courts to supply sober-living housing to their clients on Alternative Sentencing who needed a stable environment to help them as they transitioned into their new, sober lives. However, the court’s placements were random and unscheduled, all dependent on when new clients were arrested or released from jail. Sometimes they were able to place one client a month at Lyfe Recovery, another month it might be four, but the following month there might not be any clients to place in the house.

Payne said in order to make rent she needed to keep the house full. “Full” was approximately ten people in the house, and they each paid $750 a month to stay in the facility. Arnold said that while he worked at Lyfe Recovery for those four months, Payne collected around $30,000 in rent from the clients, whether through him or through the courts.

“What really bothered me is, if these guys relapsed, they could buy their way back in,” said Arnold. “They could either be kicked out, or pay a $150 re-intake fee and they’d get to stay. There was no consequences. In my experience, in that type of household, she had a lot of things backwards.”

According to Arnold, he was in constant contact with Payne about the need to relocate Joe. On one occasion, Arnold found Joe outside in another resident’s car, and it appeared he was trying to get it started.

Arnold told Payne he had been searching for Joe for approximately fifteen minutes when he found him in the car. Joe seemed to be confused, and didn’t understand where he was or what he was doing. It took them quite some time to get him out of the car, and when they did, Arnold took him back inside and contacted Payne.

“On July 11, (Arnold) texted me,” said Payne. He said ‘we need to figure out another place for Joe, he was in (another resident)’s car and he was about to drive, now he is refusing to get out, what should I do?’ My question was, why were the keys in the car? Then he says (another resident) showed up and they got him out of the car and he wasn’t sure how to handle it. At that point, I did think we’d have to do something.”

Payne said she began looking for help; however, when asked what services she had contacted, she said she didn’t call Aging and Disability Services, the Sheriff’s Office, or any nursing homes.

“I told (Arnold), it’s not easy to just move someone in and out, especially a senior with a disability,” said Payne. “I said, I know his mental state isn’t healthy but I don’t want to uproot him two weeks after we just moved him from Downey.”

When first asked about Joe, Payne said he seemed to be in fine health and didn’t have any issues, other than an oxygen tank. However, during the conversation, she admitted it appeared he had “pretty severe memory issues and dementia” and should probably have been placed in a memory care facility.

“It seemed he didn’t always realize what he was doing, and I said ‘I’ll call senior services and I’ll figure it out by the end of the month.’ I told (Arnold) to figure out who his doctor was.”

Arnold told her Joe couldn’t remember who his doctor was, and the line of inquiry apparently stopped there.

On July 11, Payne said she asked Arnold for Joe’s list of medications and family’s contact information. Arnold told her he didn’t have any medical information, but gave her Joe’s son’s number to call.

“I’m pretty sure I called him that night,” said Payne. Joe’s son denies ever receiving a call from anyone at Lyfe Recovery; at this point in mid-July, he had no knowledge Joe had even been relocated to Carson City.

Payne said she called Ellen Jackson from Spirit of Hope to meet with Joe since Jackson ran group homes for senior citizens, and Payne said she thought he’d do better there.

“(Payne) never contacted me,” said Jackson. “I was told about Joe from someone in the house who was concerned about his well being.”

The weekend Jackson received a message from Arnold about Joe potentially needing to go to the hospital, he also called Stacey and relayed the same fears to her, according to Arnold.

“I told her I thought he needed to go to the hospital, and she told me not to worry, that it’s all normal for someone with dementia,” said Arnold. “She knows more about the medical field than I do, so I believed her. She was my boss.”

The Intervention

Jackson has been running sober living group homes in the area for more than five years, and focuses primarily on providing care for senior citizens, up until the point where they need a higher level of care.

According to Jackson, after she found Joe in critical condition at Lyfe Recovery and transported him to Carson Tahoe, she knew it was only a matter of time before Lyfe Recovery went under.

An hour or two after Joe was taken into the ICU, Jackson received a call from the hospital. Joe’s team consisted of a social worker, a nurse and a doctor who all in turn got on the phone with Jackson to try to determine who Joe was, where he had come from, and what had happened to him.

“I explained again how I got him, and they wanted to know immediately how to contact Lyfe Recovery,” said Jackson. “The only number I had was (Arnold), and I told them to call him.”

Arnold kept calling Jackson throughout the night to find out how Joe was doing.

“I said, ‘Well, I don’t know, I just know it’s pretty bad,’” recalled Jackson. “I told him he’d better not let (Payne) ever do this to him again, because I can’t see it going anywhere good.”

According to Jackson, Arnold seemed distraught. He told her he hadn’t had any idea how to handle the situation, that Joe had showed up in an Uber and Arnold was left to figure out how to care for him on his own. Jackson told Arnold that Joe may die, and Arnold told her he hadn’t known it was serious.

“I thought then that I didn’t want to have anything to do with either of them after that,” said Jackson.

“I don’t have any sort of medical training,” said Arnold. “I did the best I could. Stacey is going to try to put the blame on me, and I don’t really feel like that’s fair because I kept telling her that I wasn’t equipped to deal with his medical issues. I wouldn’t be surprised if she didn’t want to relocate him because she wanted his rent. I wouldn’t blame his family if they wanted to sue.”

“Listen, $750 wasn’t going to make a difference at that point,” said Payne when asked if she’d kept Joe in the house knowing he had medical issues because she needed to make rent. “We’re bankrupt.”

Financial Troubles

Johna Smith, Payne’s previous Director of Operations at Lyfe Recovery, knew for a long time there were financial troubles with the business. Payne often spoke of bankruptcy, and Smith — along with several other employees — would often go weeks or months without seeing a paycheck.

“I left because she couldn’t afford to pay me,” said Smith. “I knew essentially things were going downhill for her after the UHC contract fell through, which is why I offered to take over the two houses in Vegas. We don’t intermix our businesses, and we aren’t on great terms. She had a lot of credit card debt, and a lot of investors. I don’t know if she was trying to pay them back first before paying employees or rent; I was limitedly involved in the finances. I know Downey was shut down because she couldn’t afford to pay the rent. They kept the Carson House open as long as they did because of the guaranteed money from the courts.”

In total, Payne believes Lyfe Recovery is approximately $140,000 in debt; a substantial amount of which is owed to landlord Carl Bassett for back rent.

“Basically, we’re bankrupt,” said Payne. “The company is bankrupt. In our population we don’t charge an exorbitant amount. In this particular clientele we don’t bill Medicaid, Medicare or insurance. Our only revenue is what we have from the clients paying their rent.”

According to Smith, when she took over the southern Nevada houses, the utilities were behind and she had to pay approximately $1,000 to get them in the clear.

In the North, the debts were much higher.

“I have an obligation to these guys that live there to keep the lights on,” said Payne. “As soon as the internet is disconnected because I couldn’t pay the bill, my phone starts blowing up. Running a company like this, there are operational expenses like insurances and supplies, and you’re just dealing with sob stories on why these guys don’t have a job. Do you kick them out or do you listen to their promises that they’re going to pay?”

Each client was expected to pay $750 a month with a $150 intake fee. Most stayed for approximately three months, according to Payne, and they could have up to 10 clients in the house at one time. Usually, the beds were full, but the courts were inconsistent about filling the house, so Payne was forced to rent out beds to what Arnold had described as “pay-as-you-go” clients.

According to Payne, she gave the courts a deal of $550 per client to give them a break. According to the courts, they were paying the normal $750 per client per month, or a prorated amount if they were leaving early or being placed past the first of the month.

“I would tell these guys, Motel 6 wouldn’t let you live there if you don’t pay rent,” said Payne. “Unfortunately, while trying to help people, we got stomped on as the little guy. I can’t afford to support the entity anymore and I’m not willing to have my own water shut off.”

Things went downhill after the UHC contract was terminated.

“We had a lot of staff we had to hire to help manage the three houses in Reno for the UHC program,” said Payne. “We saved UHC three million dollars in the year they had us, and they left us bankrupt. It’s a really horrible situation for us.”

When Lyfe Recovery Services partnered with the Carson City Courts to provide sober living to their clients on Alternative Sentencing, Drug Court, or Parole and Probation, things seemed to be looking up. The court could guarantee payment, unlike the pay- as-you-go clients who were often in-between jobs.

However, the courts couldn’t guarantee any specific amount of clients. Placement was random at best, and Lyfe Recovery was struggling. Despite collecting thousands of dollars in rent each month from clients, Lyfe Recovery always seemed to be behind on rent and landlord Carl Bassett had already evicted them from their other facilities and put the houses in Reno used for sober-living up for sale.

Towards the end of Lyfe Recovery’s life span, Payne began talking to a woman named Kathryn McCool about taking over the facility, because Payne could no longer handle the financial burden and wanted out.

“I first contacted Stacey Payne because I was trying to find out more about what she was doing and the services she was providing, and I wanted to become a provider for the courts,” said McCool. “Right away she started telling me she needed to file bankruptcy, that all of her houses had shut down except for this one on Edmonds. She would tell me from time to time, ‘I want you to take it over under your own non-profit.’”

McCool worked with Payne for awhile and became familiar with the Edmonds house and its clients. She would stop by and check in on things from time to time, and was approached by landlord Carl Bassett on the weekend of July 30. According to McCool, he said that they’d be happy to turn over the house and clients to her to run the program.

Basset told her he wasn’t going to renew the lease with Payne, she said, and he’d write a new lease that very day for McCool to take over, after which he would send over a maintenance crew and cleaning crew and she could start from scratch.

McCool said she was primed to take over the facility when Payne’s business partner and investor, a Las Vegas attorney named Ken Thomas, showed up and essentially told them he wasn’t going to give up on the business.

“He told me, ‘I’m not walking away, Stacey owes me $40,000,’” said McCool. “I said, I don’t know what to tell you, if you don’t sign it over to me then it’s yours, do whatever you’re going to do, but you’ll continue to accumulate debt.”

According to McCool, she was told very briefly that a gentleman had died that had been a client of Lyfe Recovery. She went to the house to check on the clients at a later date, and saw oxygen tanks scattered around the room. When she asked who they belonged to, the other residents said, “Joe,” but didn’t know his last name. They said Arnold was supposed to call someone to pick them up, but he had quit and left.

She spoke to Arnold, who was concerned Payne was going to try to “pin it on" him and accuse him of not providing proper care.

“I said, ‘(Arnold), you weren’t trained to provide that care,’” said McCool. According to McCool, it was within a few days after Joe was taken to the hospital that Arnold left without notice.

The house was in disarray, said McCool. There were cockroaches, medication on dressers, food rotting in bedrooms, all of which were against house standards. Most importantly, without Arnold, there was no supervision in the home.

After Arnold left, things spiraled further out of control, and soon after, Lyfe Recovery closed its doors for good.

This is Part II of a three-part series. Tomorrow, we'll investigate the aftermath of Joe's death and its affect on his family, as well as the alleged lies that piled up surrounding the death of Lyfe Recovery.