The corporate structure of many for-profit nursing homes is specifically designed to make it difficult to impose liability when there is a dispute over the quality of care. Our nursing home abuse lawyers in Florida know it’s not unusual for a single nursing home to be tied to nearly half a dozen different businesses connected by a tangle of contract agreements. It takes a skilled litigator to sort through that kind of mess in order to attain accountability for poor care.
The recent case of Griffith v. SSC Pueblo Belmont Operating Co. is a prime example of how these corporate structures can complicate court cases.
According to court records, this matter out of Colorado involved a handful of separate corporations with varying levels of involvement in day-to-day operations of the facility. Some of those entities existed out-of-state, and technically did not operate in Colorado or have any of their own business contacts in that state. That made the issue of jurisdiction for Colorado state courts a very tricky matter.
It started with plaintiff filing a complaint against nine separate entities and two individuals. (Originally, it was 11 entities, but then two of those entities later merged with a third, leaving 9.) Her claim outlined the poor care received by her elderly father when he lived there as a patient, ultimately resulting in his death.
This particular nursing home, Belmont Lodge Health Care Center, is no stranger to these allegations. Back in May, a jury awarded the son of a 77-year-old female nursing home patient a record $5.5 million judgment against the facility, finding the center was liable for repeated instances of nursing home abuse and neglect ultimately leading to her death. Those instances included multiple infections, bed sores, dehydration, malnutrition and unexplained bruising. That damage award involved $500,000 in damages related to her wrongful death, $57,000 for economic damages resulting from negligence and another $5 million in punitive damages. In 2014, a jury awarded $3.3 million against the facility for “recurrent negligence” resulting in bed sores, urinary tract infections, skin tears and substantial weight loss of an 82-year-old resident, ultimately resulting in his death.
The Griffith case is one of at least two lawsuits still pending against the company.
The parties agree Belmont is part of a complex organizational structure. Belmont Lodge is the operating firm of a nursing home in Colorado. It is a limited LLC whose sole member is SSC Special Holdings. That company is a wholly owned subsidiary of Special Holdings Parent Holdco LLC. That company is a wholly owned subsidiary of SavaSenior Care LLC. The sole member of that company is Proto Equity Holdings. The parent corporation of all these entities is Terpax Inc.
Three of those companies situated at the top of this chain operate in Georgia and/ or Tennessee. They don’t do business in Colorado, don’t have any registered agents in Colorado and don’t transact business in Colorado. None even have a bank account or solicit business there. The court conceded these were separate legal entities from Belmont.
The question was whether the state court in Colorado actually had jurisdiction over these firms. Although the trial court ruled that it did, the state supreme court concluded the trial court hadn’t properly considered two factors: Whether the corporate veil could be pierced to impute the residence of the contracted subsidiaries to the parent companies and secondly, whether imputing this jurisdiction violates the due process of the parent company. The matter was remanded back to the lower court for consideration of these points.
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Griffith v. SSC Pueblo Belmont Operating Co. , Sept. 26, 2016, Colorado Supreme Court
More Blog Entries:
Report: Nursing Home Abuse Plaintiffs Fight to Overcome Injustice Behind Closed Doors, Sept. 29, 2016, Fort Lauderdale Nursing Home Abuse Lawyer Blog