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$30M Nursing Home Negligence Award Reversed for Punitive Damages Reconsideration

In nursing home negligence cases, an increasing number of these for-profit facilities have complicated corporate structures. The primary company that benefits financially is not necessarily the one that actually manages the day-to-day operations. The reason for this is very intentional, and it has to do with how whether and to what degree those companies can be held responsible when nursing home abuse or neglect takes place. 

When a nursing home staffer commits abuse or neglect, the employer can be held responsible in one of two ways: Direct negligence or vicarious liability. In a situation of direct negligence, it may be established the employer nursing home failed to properly vet the employee or didn’t have the right systems in place to supervise its workers or the patients. Vicarious liability, meanwhile, stems from the common law principle of repondeat superior, which is Latin for, “let the master answer.” While plaintiff must prove negligence by the employer in the first case, one need not prove negligence by the employer for a finding of vicarious liability. Instead, they need only show the employee was negligent or committed an intentional tort while acting in the course and scope of employment. This difference may also be important when it comes to the question of damages (which is how much money is paid).

Recently, the Tennessee Court of Appeals¬†partially reversed a nearly $30 million damage award to a plaintiff in a nursing home wrongful death case alleging negligence and medical malpractice (technically in that state referred to as “health care liability”). The court vacated the damage award and remanded for a new hearing as to the amount of punitive damages to be awarded. (Punitive damages in Florida, F.S. 768.72, as in Tennessee, are awarded not to compensate for actual losses by plaintiff, but to penalize the defendant for gross negligence or intentional misconduct.)

This exact case was chronicled by The Washington Post to explain how convoluted nursing home corporate structure can be, and the impact that have when victims seek damages for negligence, medical malpractice and intentional tort. Two of the defendants in this case raked in a revenue profit margin of 28 percent over eight years (totaling $40 million), compared to typical nursing home profits, which are somewhere in the margin of 3 and 4 percent.

According to court records, the nursing home resident died in 2010 after being a resident of the facility for two years, initially admitted after a stroke left her with a significant loss of mobility. She shared a room with her husband at the facility, and developed pressure sores on her right foot that became so infected, her leg had necrotized (died) she had to undergo an above-the-knee leg amputation and died two months later.

Her estate filed a nursing home wrongful death lawsuit. At trial, there was testimony that the leg wound smelled like “death” and an expert testified staff did not properly care for the wound and neither did they prescribe proper pain medications. Certified nursing assistants, a licensed practical nurse and a staff development coordinator all testified there was understaffing at the nursing home, which resulted in residents not properly being turned, a problem the nursing home was made aware, but allegedly attempted to conceal during state surveys.

After a five-week trial, jurors awarded a total of $2 million in compensatory damages to plaintiff and, after a separate trial, found punitive damages against each defendant (there were four companies), ultimately totaling $28 million.

Defendants appealed on several grounds, including jurisdiction, juror issues, evidentiary issues, wrongful admission of testimony and more. However, the court ultimately decided to affirm on the issue of liability, but reversed solely on the issue of damages against the non-nursing home defendants (i.e., the limited liability companies that were raking in the bulk of the profits). Plaintiff had alleged these defendants not only profited financially from the nursing home, but were also directly involved in the decision to create a quality bonus system that appears to have incentivized cost-cutting and understaffing, leading directly to the patient’s injuries. However, the court considered that the bonus system wasn’t mandatory and because these other defendants weren’t involved in the day-to-day operations of the facility, they couldn’t be held directly liable.

For this reason, the question of damages is called into question, and will go back to a jury.

Call Freeman Injury Law — 1-800-561-7777 for a free appointment to discuss your rights. Now serving Orlando, West Palm Beach, Port St. Lucie and Fort Lauderdale.

Additional Resources:

Hatfield v. Allenbrooke et al, Aug. 6, 2018, Tennessee Court of Appeals

More Blog Entries:

Palm Beach Assisted Living Home Abuse Alleged, Patients Left Restrained Overnight, July 23, 2018, Orlando Nursing Home Neglect Attorney Blog

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