Licensed practical nursing students suing the defunct Stone Academy for damages arising from its abrupt closure in February are “likely to prevail” on claims of unfair trade practices and breach of contract, a judge wrote Monday in a preliminary ruling.
Superior Court Judge Barbara Bellis granted a prejudgment remedy of $5 million, a step that requires the defendants to post a bond or take other steps to secure assets necessary to pay damages if found liable at trial. Lawyers for the students had sought a $10 million prejudgement.
Bellis rejected Stone’s claim that the closure was the fault of the state Office of Higher Education, concluded that one of the defendants falsely testified at an evidentiary hearing and indicated she would certify the suit brought by eight students as a class action on behalf of hundreds or more.
“This is the first time in the dispute between 1,000-plus nursing students and Stone Academy and its principal owners where a court has heard evidence … and found probable cause the class will be certified and we will prevail,” said David Slossberg, a lawyer representing the eight students.
Lawyers for the trust that controls Stone Academy and the other defendants had no immediate comment.
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The for-profit trade school had been owned for 20 years by Mark Scheinberg, a founder of Goodwin University in East Hartford, until the U.S. Department of Justice imposed a $1 million fine and forced him to divest in 2022 over claims he had concealed the rate of loan defaults by Stone students.
Scheinberg’s stepson, Joseph Bierbaum, was Stone’s chief executive officer, and his brother, Richard Scheinberg, is a trustee for the Creative Career Trust that assumed ownership in 2022. Bierbaum and both Scheinbergs are defendants in the lawsuit.
“On the issue of the closure, the court rejected the testimony of the defendant Joseph Bierbaum as false, and the court found his testimony in large part as not credible,” Bellis wrote.
Slossberg has not yet applied for class-action status, but Bellis indicated such a request would be approved.
“Even at this early stage, the court finds probable cause that a class will be certified, and that the class is likely to prevail on the CUTPA and breach of contract claims,” the judge wrote. CUTPA is the Connecticut Unfair Trade Practices Act.
The plaintiffs all are women who enrolled at Stone Academy between 2019 and 2022 and are among what may be more than 1,000 students who were affected by the for-profit school’s closure. One paid $28,000 in tuition and expected to graduate with honors months ago; Another borrowed $40,000, according to the complaint.
In addition to the litigation filed by Slossberg, the office of Attorney General William Tong also has filed an unfair trade practices case against Stone Academy, Bierbaum and Paier College of Art. Bierbaum is president and an owner of Paier.