Rite of Passage sues Nevada over contract issues

The nonprofit organization contracted to run Nevada’s juvenile correctional facility in Clark County is suing the state over contract issues.

The law firm of Snell &Wilmer filed the lawsuit Thursday in Carson City District Court. The state closed Red Rock Academy, the state’s only maximum-security juvenile facility, on March 10.

The state’s contract with Rite of Passage was set to expire Sept. 30, 2017. The state said both parties reached an amicable agreement to end the relationship, but the nonprofit claims it was forced to sign the agreement, with the state threatening to issue a termination notice for cause. The organization signed the amendment and later sought to revoke it.

“We were coerced into this contract amendment,” Lawrence Howell, former executive director for Red Rock Academy, said Friday morning. “This amendment is a breach of the contract.”

In the lawsuit, Rite of Passage contends the amendment is invalid and alleges a breach of the original contract by the state, violation of due process, and fraud and misrepresentation.

Mary Woods, spokeswoman for the state’s Department of Health and Human Services, which oversees the state’s three juvenile correctional facilities, said state officials can’t comment on litigation. Rite of Passage also claims it spent more money than it was obligated to under contract agreements to maintain the facility.

“We have repeatedly reached out to the state and they have been non­responsive,” Howell said.

The lawsuit claims the Division of Child and Family Services turned over Red Rock in “inoperable conditions with defects including graffiti throughout the facility, dried feces on walls, holes in the security fence, and inoperable security systems including cameras, locks and doors.”

The state also “has denied payment for purchases made pursuant to the contract,” according to the lawsuit.

Howell said Rite of Passage spent about $1 million on the facility and that the nonprofit has been misrepresented by the state. Nonprofit officials want the truth to come to light, he said.

Both parties used to meet regularly and it was believed Red Rock was compliant with all contract obligations and that Rite of Passage was correcting issues cited in a legislative audit in 2014, according to the lawsuit.

“Conflicts, however, began to arise between DCFS and Rite of Passage when Rite of Passage reported physical and or mental abuse sustained by a number of young men transferred to the facility from Nevada Youth Training Center in Elko,” the lawsuit reads. “Officials from DCFS and the state were upset by those reports of abuse and advised the facility super­intendent and the executive director of Rite of Passage to cease making such reports.”

Further conflicts arose in 2014 including instances when state employees committed security breaches and left dangerous tools in the presence of youth, among other things, according to the lawsuit.

On March 9, the state “issued this one-hour ultimatum, DCFS emailed Rite of Passage a ‘draft’ letter terminating the contract ‘for cause’ and identifying an ‘attached list of deficiencies,’ ” the lawsuit reads. “No such ‘list’ was, however, attached or otherwise provided to Rite of Passage.”

The amendment said that changes to the original contract should not take effect until approved by the Board of Examiners.

But Mike Willden, chief of staff for Gov. Brian Sandoval’s office, defended the amendment earlier this month and said the clerk of the Board of Examiners could sign contract amendments that have no dollar value and shorten or extend the time of a contract.

The original contract only specifies that amendments should be approved by the Nevada attorney general’s office and the Board of Examiners. It also says that, unless otherwise specified, termination should not be effective until 90 days after either party has served written notice of termination for default, or notice for termination without cause.