Litigating Nursing Home Injury Claims: Plaintiff and ...

Litigating Nursing Home Injury Claims: Plaintiff and Defense Perspectives Evaluating Common Claims, Reviewing Medical Records, and Assessing Damages

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TUESDAY, JUNE 4, 2013

Presenting a live 90-minute webinar with interactive Q&A

Joel E. Smith, Partner, Kosieradzki Smith Law Firm, Plymouth, Minn.

H. Lee Evans, Jr., Partner, Cranfill Sumner & Hartzog, Raleigh, N.C.

Anne Duvoisin, Henson Fuerst, Raleigh, N.C.

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© Kosieradzki • Smith Law Firm 2013

SERIOUS INJURY AND WRONGFUL DEATH LAW

K O S I E R A D Z K I S M I T H

Litigating Nursing Home Cases:

Transcending the Medical Malpractice Paradigm

Joel E. Smith

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RELEVANT LAWS AND REGULATIONS

Ordinary Negligence

“Torts 101”

Duty of care

Breach of that Duty

Proximate causation

Injury / Damages

6



Ordinary Negligence

Special Relationship

Restatement (Second) of Torts §§ 314A, 315, and 324A

Bjerke v. Johnson, 742 N.W.2d 660, 665 (Minn. 2007)

Duty of care

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Ordinary Negligence

Kujawski v. Arbor View Health Care Ctr., 407 N.W.2d 249 (Wis. 1987)

Ex parte HealthSouth Corp., 851 So.2d 33 (Ala.2002)

Estate of French v. Stratford House, 333 S.W.3d 546 (Tenn. 2011)

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Ordinary Negligence

Tousignant v. St. Louis County, 615 N.W.2d 53 (Minn. 2000)

Kastler v. Iowa Methodist Hospital, 193 N.W.2d 98 (Iowa 1971)

McGraw v. St. Joseph's Hosp., 488 S.E.2d 389 (W.Va. 1997)

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Omnibus Budget Reconciliation Act (“OBRA”) 42 C.F.R. § 483, subp. B

Direct Liability

Duty to comply with all laws, regulations, and standards 42 C.F.R. § 483.75(b)

Duty not to neglect or abuse 42 C.F.R. § 483.13(b)

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Sufficient staff 42 C.F.R. § 483.30

Direct Liability

Mulliner v. Evangelischer Diakonniessenverein, 175 N.W. 699 (Minn. 1920)

Negligent hiring, retention and supervision

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THE “WATERMELON BOOK”

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http://www.hpm.umn.edu/nhregsplus/ 13


http://www.hpm.umn.edu/nhregsplus/federal_regs.html 14


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http://www.hpm.umn.edu/nhregsplus/ 16


http://www.hpm.umn.edu/nhregsplus/NHRegs_by_State/By%20State%20Main.html 17


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COMMON TYPES OF INJURIES

Falls/Trauma

Pressure Sores

Malnutrition/Dehydration

Medication Errors

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42 C.F.R. § 483.25(h) – ACCIDENTS

The long-term care facility must ensure that it

provides (1) an environment that is free from

accident hazards over which the facility has

control; and (2) adequate supervision and

assistance devices to each resident.

F-Tag 323

Falls/Trauma

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42 C.F.R. § 483.25(c) – QUALITY CARE

(1) residents who enter the facility without pressure sores do

not develop unavoidable pressure sores;

(2) residents who have pressure sores receive necessary

treatment and services to promote healing, prevent infection

and prevent new sores from developing.

F-Tag 314

Pressure Sores

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42 C.F.R. § 483.25(i)

… ensure that each resident (1) maintains

acceptable parameters of nutritional status

(e.g., body weight and protein levels; and (2)

receives a therapeutic diet when there is a

nutritional problem.

F-Tag 325

Nutrition

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42 C.F.R. § 483.25(j)

To prevent dehydration and to maintain

health, long-term care facilities must provide

each resident with sufficient fluid intake.

F-Tag 327

Hydration

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42 C.F.R. § 483.25(m)(2)

Facility must ensure that … residents are free

of any significant medication errors.

F-Tag 332

Medication Errors

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Defense Perspective

H. Lee Evans, Jr. [email protected]

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Relevant Laws and Regulations Defense Perspective

Ordinary Negligence versus Medical Negligence

1. Ordinary Negligence – failure to comply with common law duty of reasonable care.

Usually arises in fall, administrative negligence, and failure to supervise cases.

Usually does not require expert witness to establish breach of care.

Statutory caps may not apply to ordinary negligence claims.

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2. Medical Negligence – violation of applicable standard of care.

Usually applies in cases that involve professional services which require specialized knowledge or skill that is predominantly mental or intellectual.

Usually requires a qualified expert witness to testify regarding the standard of care and whether a violation has taken place.

May involve statutory caps on damages.

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3. Generally, medical negligence cases are more difficult from plaintiff’s perspective and, therefore, defendants will take the position that case is a medical negligence case which requires plaintiff to establish a breach in the standard of care as opposed to proving ordinary negligence.

4. Many times a “gray area” in long term care cases.

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“OBRA” – Does it even belong in these cases?

1. Does not establish standard of care. See Makas v. Hillhaven, 589 F.Supp. 736 (1984).

2. Standard of care established by qualified experts, not OBRA regulations.

3. Skilled facility must comply with OBRA regulations for reimbursement in Medicare/Medicaid programs.

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4. No private right of action for violation of OBRA.

5. Compliance survey reports are inadmissible – hearsay, irrelevant, unqualified and anonymous witnesses, application of improper standards, and no burden of proof. See Hutton v. Willowbrook Care Center, 338 S.E.2d 801(1986).

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DISCOVERY ISSUES

Boilerplate Objections

Fed.R.Civ.P. 30(b)(6) Depositions

Confidentiality / Protective Orders

30(b)(6) + 30(b)(5) & 34

Discovery re: Affirmative Defenses

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DISCOVERY ISSUES

Job descriptions

Personnel files

Policies & Procedures

Staffing schedules

Punch detail report

Organization chart

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Discovery Issues – Defense Perspective

Discovery Requests from Plaintiff

1. Objections/Protective orders – personnel files,

policies, proprietary information, financial

information, and records pertaining to other

residents.

2. Client record keeping/retention issues.

3. Communication with non-managerial and ex-

employees – protected or not?

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4. Discovery of routine incident reports versus investigations in anticipation of litigation.

5. Defending depositions of facility employees.

6. Defending depositions of ownership/management.

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Discovery Requests to Plaintiff

1. Past medical records.

2. Medical records from other providers and hospitalizations.

3. Medical bills alleged to have been caused by negligence.

4. Medicare lien information.

5. Estate file.

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6. Family information/depositions of key family members.

7. Depositions of key treating doctors and other providers.

8. Hospice/home health records.

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REVIEWING MEDICAL RECORDS

Facility must maintain clinical records on each

resident in accordance with accepted professional

standards of care

F-Tag 514

• Complete, accurate, readily accessible and

systematically organized

• Accurate and functional representation of the actual

experience of the resident in the facility

• Sufficient evidence of the effects of the care provided

CLINICAL RECORDS – 42 C.F.R. § 483.75(1)

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REVIEWING MEDICAL RECORDS

ASSESSMENTS – 42 C.F.R. § 483.20(b) and (c)

CARE PLANS – 42 C.F.R. § 483.20(k)

MDS FORMS

CLINICAL RECORDS – 42 C.F.R. § 483.75(1)

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ASSESSING DAMAGES

Survival of claim

Wrongful death

Personal injury

Medical expenses

Subrogation / Reimbursement

Future care and expenses

Punitive damages 40

Case Evaluation – Defense Perspective

1. Venue.

2. Plaintiff’s counsel.

3. Type case – fall, pressure ulcers, medication error,

elopement, general care, choking, and abuse.

4. Survivorship claim versus wrongful death.

5. Causation issues.

6. Family involvement/issues.

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7. Condition/prognosis of resident.

8. Aggravating circumstances of incident.

9. Evidence of pain and suffering.

10. Medical expenses/lien issues.

11. Facility history/reputation.

12. Photographic/video evidence.

13. Punitive damage claim.

14. Appearance and presentation of facility witnesses.

15. Disgruntled ex-employees.

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CORPORATE NEGLECT, PIERCE THE VEIL AND PUNITIVE DAMAGES

CLAIMS THREE ON ONE MATCH

Anne Duvoisin Henson Fuerst, PA

Raleigh, NC

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Mary Lou Barthazon as a child

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Mary Lou Barthazon as a patient at Britthaven of Chapel Hill, a special focus facility now closed.

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Case study

• See brief in Blanchard v. Britthaven, Inc., and Hillco, Ltd. • Negligent hiring • Negligent training • Negligent supervision • Inadequate staffing despite notice of harm • Inadequate supplies despite notice of harm • Hiring the unhireable for WOTC tax credits, and turning

them over every three months to maximize tax credit • Profit-siphoning , self-dealing, and triple dipping by owners • Discovery deceit and sanctions

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Elements of Corporate Neglect

• Corporate neglect is ordinary negligence at the managerial level and involves such claims as negligent hiring, training, supervision, staffing, resource allocation, and retention. (In NC, tort reform legislation

converted this ordinary negligence to medical malpractice by statute effective 10.1.12.)

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ORDINARY CORPORATE NEGLIGENCE CLAIMS

1. Negligent hiring and retention of CNA with 20 year felony history including numerous prison terms,drug and alcohol addiction, and related violence and job terminations.

2. Negligent hiring and retention of other staff. Pattern evidence. 3. Failed to adequately staff nursing homes. 4.1 NHPPD required,

they average 3.0 NHPPD 4. Overworked CNA and other staff. 5. Negligent supplying. Lifts, beds, supplies.

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Negligent Hiring and Retention Elements

• 1. A specific negligent act on which the action is founded;

• 2. Incompetency by inherent unfitness or previous specific acts of negligence ;

• 3. Actual or constructive notice to employer, showing that, had he or she used ordinary care “in oversight and supervision, incompetence would have been noticed;

• 4.Causal relation of injury to alleged incompetency .

Medlin v. Bass, 327 N.C. 591, 398 S.E.2d 460 (1990)

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Negligent hiring and retention in our case

• 1. A specific negligent act on which the action is founded (here, transfer without lift, in knowing violation of care plan and facility policy);

• 2. Incompetency by inherent unfitness or previous specific acts of negligence (lengthy criminal record, history of drug and alcohol abuse and violence, prior termination at health care facilities for patient care problems, demonstrated inability to follow policies and rules over decades);

• 3. Actual or constructive notice to employer, showing that he or she used ordinary care “in oversight and supervision” (failure to comply with statutory duty to check criminal record and, upon discovery of relevant convictions to further vet applicant, failure to check references from prior employers in violation of policies, failure to train on lift use despite policy mandating lift use, scheduling employee to provide patient care for back to back 16 hour double shifts, despite acknowledged difficulty working under stress and fatigue;

• 4.Causal relation of injury to alleged incompetency (overworked prone to violence and prone to violate rules, violates lift policy and roughly handles patient leading to bilateral femur fractures, excruciating pain, and death of patient)

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Negligent Resource Allocation

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Negligent Resource Allocation cont’d.

2. Provide Sufficient supplies

Facilities must provide certain supplies at no cost to residents on Medicare or Medicaid, because the expense of these supplies are covered by Medicare and Medicaid reimbursement rates. These include Routine personal hygiene items and services as required to meet the needs of residents, including, but not limited to, hair hygiene supplies, comb, brush, bath soap, disinfecting soaps or specialized cleansing agents when indicated to treat special skin problems or to fight infection, razor, shaving cream, toothbrush, toothpaste, denture adhesive, denture cleaner, dental floss, moisturizing lotion, tissues, cotton balls, cotton swabs, deodorant, incontinence care and supplies, sanitary napkins and related supplies, towels, washcloths, hospital gowns, over the counter drugs, hair and nail hygiene services, bathing, and basic personal laundry.

42 CFR 483.10(c) (8) (i)(E) 52

Negligent Resource Allocation cont’d

3. Sufficient equipment (“The facility must—(1) Provide sufficient space and equipment in

dining, health services, recreation, and program areas to enable staff to provide residents with needed services as required by these standards and as identified in each resident's plan of care; and (2) Maintain all essential mechanical, electrical, and patient care equipment in safe operating condition.” 42 CFR 483.70(c));

To meet the needs of the patients. “Each resident must receive

and the facility must provide the necessary care and services to attain or maintain the highest practicable physical, mental, and psychosocial wellbeing,” 42 CFR 483.25;

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Negligent Resource Allocation Cont’d Resource allocation and staffing functions are administrative, and are the responsibility of the Administrator and corporate management (the Governing Board).

“A facility must be administered in a manner that enables it to use its resources effectively and efficiently to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident. . . . (d) Governing body. (1) The facility must have a governing body, or designated persons functioning as a governing body, that is legally responsible for establishing and implementing policies regarding the management and operation of the facility; and (2) The governing body appoints the administrator who is—(i) Licensed by the State where licensing is required; and (ii) Responsible for management of the facility.” 42 CFR 483.70.

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Negligent Resource Allocation -- our case

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Negligent Resource Allocation cont’d.

2. Sufficient supplies: multiple witnesses testified to inadequate numbers of linens, incontinence pads, diapers, syringes, catheters, lift pads, wash cloths, tube feedings, etc.

3. Sufficient equipment: multiple witnesses testified to inadequate equipment: arcane hand cranked beds; insufficient numbers of lifts and broken lifts; broken call bells, no chairs for staff to sit in, etc.

• Staff to facility administration to corporate management communication about all of these problems but no changes. i.e. evidence of NOTICE, HABIT, and RECKLESS INDIFFERENCE TO THE PLIGHT OF PATIENTS.

As a result the needs of patients were routinely not met.

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Corporate Neglect, Pierce the Corporate Veil, and

Punitive Damages – Defense Perspective

Corporate Negligence

1. Ordinary Negligence – common law violation of duty owed directly by corporate defendant to resident (administrative, hiring, retention, supervision, training, equipment).

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2. Medical negligence – violation of applicable

standard of care as established by qualified

expert witness (NC has recently defined a

“breach of administrative or corporate

duties…including, but not limited to , allegations

of negligent credentialing or negligent

monitoring and supervision” as a medical

malpractice action requiring expert testimony to

establish a breach of the standard of care.)

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3. Potential defenses

Lack of proximate cause or relationship between administrative acts and events giving rise to injury or death of resident.

Corporate negligence and vicarious liability may be mutually exclusive in some cases where employment relationship and scope of employment of individual tortfeasor is not at issue. See Frugard v. Pritchard, 434 S.E.2d. 620 (1993).

Lack of qualified expert witness to support claim.

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PIERCE THE VEIL LIABILITY

Where a corporation is so operated that it is a mere instrumentality or alter ego of the sole or dominant shareholder and a shield for his activities, the corporate entity will be disregarded and the corporation and the shareholders treated as one and the same person. Glenn v. Wagner, 313 N.C. 450, 453, 329 S.E.2d 326, 329 (1985).

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Liability may be imposed on an owner controlling a corporation as an instrumentality" when the owner has: 1) Control, ... complete domination, not only of finances, but of policy and business practice in respect to the transaction attacked so that the corporate entity ... had at that time no separate mind, will or existence of its own; and 2) Such control must have been used by the defendant to commit fraud or wrong, to perpetrate the violation of a statutory or other positive legal duty, or a dishonest and unjust act in contravention of the plaintiff's legal rights; and [28] 3) The control and breach of duty must proximately cause the injury complained of. Glenn at 313 N.C. at 454-55,329.

co

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Glenn v. Wagner • Focus is upon reality, not form, upon the

operation of the corporation, and upon the defendant’s relationship to that operation. It is not the presence or absence of any one factor that is determinative. Rather, it is a combination of factors which, when taken together with an element of injustice or abuse of corporate privilege, suggest that the corporate entity attacked had “no separate mind, will or existence of its own” and was therefore the “mere instrumentality or tool” of the dominant corporation.

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The why of corporate neglect is the reason for piercing the corporate veil

• Profit-siphoning of Medicare and Medicaid Moneys through various related entities in order to enrich the owners at the expense of patient care. Medicare and Medicaid reimbursement rates do not contemplate profit-siphoning so that when it occurs, patients suffer.

• Our case:

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Consolidated financial statements

• Showed that the defendants operated their many enterprises as one, and that they siphoned money needed for patient care out to owners (the Hills) through salaries, managerial fees, dividends, deferred compensation agreements, and profits from self-dealing rent, construction, and pharmaceutical and other supplies to themselves through a series of sham entities.

• Were claimed to be confidential until we obtained them from VA FOIA authorities through public records request. Sanctions resulted for misleading court and counsel.

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Consolidated Financial Statements cont’d

• obtained from Va through FOIA request and Depositions showed the following:

• 1. The Hills received salaries from Hillco but no one could say what they did for their salaries – or would say how much they were paid;

• 2. The Hills also took dividends each year

regardless of bottom line of Britthaven and Hillco– in 2008, they took 25.3 million; in 2009, 22.2 million; in 2010, 30.7 million;

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Consolidated Financial Statements, cont’d

• 3. In addition to salaries and dividends, the Hills also have a deferred compensation plan in place for themselve funded from ltc revenues.

• 4. The Hills bought resort property in Montana with money from ltc revenues

• 5. Hillco, the parent, is a subchapter S corporation, so income, tax credits and tax deductions pass directly to the Hills. One such credit is the WOTC tax credit for hiring convicted felons to work in ltc facilities.

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BRITTHAVEN, INC.*

Britthaven of Chapel Hill and 55+ other nursing

homes

Common Directors

and/or Officers of Hillco

subsidiaries:

Robert Hill, Jr. Stephen Hill

Gregg Hill Randy Uzzell

* Britthaven is just 1 of many Hillco subsidiaries

HILLCO LTD.

Owners

Robert Hill, Jr. Stephen Hill

Gregg Hill Trust of

Robert Hill, Sr.

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Nursing home

revenues

Management fees

85% IN from Medicare & Medicaid

Britthaven payroll

Vendor and subsidiaries’ bills

For whatever purpose Hillco deems necessary

OUT

HILLCO

CONCENTRATION

ACCOUNT

(commingled funds)

Hillco payroll

Britthaven of Chapel

Hill

Other Hillco subsidiaries

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RANDY UZZELL President and CEO of Britthaven, Inc.

• Director and COO of Hillco, Ltd.

• Salary paid by Kare Medical, Inc.

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RANDY UZZELL RESPONSIBILITIES

• Approves budget

• Controls hiring and firing (all administrators)

• Approves staffing increases

• Controls vendors used at facilities (along with Hill brothers)

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RANDY UZZELL RESPONSIBILITIES • Approves purchases and maintenance requests

in excess of $500—including requests for lifts

• Approved WOTC program

• Runs home office

• Approves home office salaries, raises and bonuses for home office and other employees

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ROBERT HILL, JR.

• Co-Owner of Hillco, Ltd.

• Vice President and a director of Hillco, Ltd.

• Officer and/or director of Britthaven, Inc. (and all other Hillco subsidiaries)

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ROBERT HILL, JR. --Control • Provides operations services for the nursing

homes • Together with the other Hill brothers:

– Gives Uzzell instructions on running the company

– Make decisions about the operation of Britthaven and crafts broad policy decisions

– Takes financial report from Uzzell and makes decisions which bind Uzzell’s conduct as President of Britthaven

– Makes decisions about acquisitions 73

ROBERT HILL, JR. --Control

• Managerial employees’ personnel files kept in his assistant’s office

• He built the company “the way he wanted it”

• WOTC tax credits pass through directly to him

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STEPHEN HILL-- Control • Co-Owner of Hillco, Ltd.

• President and a director of Hillco, Ltd.

• Vice President and director of Britthaven and other related entities that Hillco owns and controls

• Officer and/or director of Britthaven, Inc. (and all other Hillco subsidiaries)

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STEPHEN HILL -- Control

• Performs “standard executive duties”

• Signatory on all checks from the Concentration Account

• Head of payroll accounts reports to him

• Directed the information technology department

• Income and tax credits for WOTC pass directly to him as shareholder of Hillco

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Profit-siphoning 77

Profit-siphoning

• Inadequate patient care because dividends, deferred compensation, rents, salaries, flow to Hills needed for supplies, staffing and training.

• Proximate cause link between siphoning and patient harm established.

• In Torts, pierce the veil test less stringently applied (no caveat emptor effect)

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Fragmentation

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FRAGMENTATION and PROFIT SIPHONING • 1 CONCENTRATION ACCOUNT

DEPOSITS

• Revenue from all Britthaven facilities, and virtually all Hillco subsidiaries, is deposited into this 1 ACCOUNT

• Britthaven pays Hillco $2.8 million management fee, annually—but do not know for what services

PAYMENTS OUT OF THIS ACCOUNT

• All payroll for Hillco and all of its subsidiaries

• All vendor and subsidiary’s bills

• All salaries and dividends for Hill brothers

• All deferred compensation to Hills and others

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FRAGMENTATION, cont’d

• FARRAR, CFO of Hillco, oversees the movement and management of all cash in this concentration account

• No financial officer for any other Hillco subsidiary, including Britthaven’s CFO, oversees their part of the Concentration Account

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• Uzzell—President of Britthaven—not paid by and not an employee of Britthaven

– But approves the budget for all Britthaven facilities, and the salaries, raises and bonuses of all Britthaven administrative staff

– Supervises all home office employees, regardless of which company for whom they work

– Supervises CFO and other employees of Hillco, Britthaven’s parent company 82

• Hillco and all of it subsidiaries share offices and phone numbers in Kinston

• Hillco and subsidiaries share Erik Lindberg as General Counsel

• Pharm-Save and Kare Medical provide pharmacy services for all Britthaven facilities

• Robert Hill Construction Company—provides repair services for all Britthaven facilities


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FRAGMENTATION--REORGANIZATION

• January 1, 2011 corporate reorganization Principle Long Term Care, Inc. replaced

Britthaven, Inc. as the licensee for all Britthaven facilities

• Uzzell and the Hills determined the

organizational structure of the new company • Britthaven, Inc. no longer operates nursing

homes

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Pierce the Corporate Veil (issues to consider)

1. Collection action versus theory of direct liability against owners of corporation.

2. Is claim necessary/practical in most cases where liability is clear and adequate insurance and assets exist to satisfy and judgment?

3. Is claim premature in most cases? Should action be brought after judgment obtained?

4. Should claim be bifurcated from other theories of liability and damages?

5. Does plaintiff run risk of jury confusion/alienation and unnecessarily prolonging trial?

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Pierce the Corporate Veil (defenses and responses)

1. Plaintiff cannot establish elements required to PCV.

2. Lack of proximate cause between alleged actions of alter ego and incident at facility that led to specific injury to resident.

3. Motion to bifurcate corporate veil issues from underlying action related to incident at the facility; findings of jury may make corporate veil issues moot or unnecessary.

4. Motion to stay/bifurcate discovery of corporate veil issues pending outcome of underlying action.

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• Uzzell—no office change since the January 2011 reorganization

• All former Britthaven employees now work for Principle Long Term Care, Inc.

• Britthaven and Hillco own all nursing home real estate

• Successor liability?

FRAGMENTATION--REORGANIZATION

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Punitive Damages

• NC Gen. Stat. § 1D-1. Purpose of punitive damages.

• Punitive damages may be awarded . . . to punish a defendant for egregiously wrongful acts and to deter the defendant and others from committing similar wrongful acts. (1995, c. 514, s. 1.)

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Punishment and Deterrence

The purpose of punitive damages

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Elements

NC. Gen. Stat. 1D-15 Punitive damages may be awarded only if the claimant proves that the defendant is liable for compensatory damages and that one of the following aggravating factors was present and was related to the injury for which compensatory damages were awarded:

• (1) Fraud.

• (2) Malice.

• (3) Willful or wanton conduct

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Management Condonation required

• Where a corporation is the Defendant:

• 1d-15 (c) Punitive damages shall not be awarded against a person solely on the basis of vicarious liability for the acts or omissions of another. Punitive damages may be awarded against a person only if that person participated in the conduct constituting the aggravating factor giving rise to the punitive damages, or if, in the case of a corporation, the officers, directors, or managers of the corporation participated in or condoned the conduct constituting the aggravating factor giving rise to punitive damages.

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Does it not laugh, if you poison us does it not die?

New Yorker on Citizens’ United decision . March 14, 2011

Should management condonation be necessary?

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FACTORS FOR JURY TO CONSIDER

• § 1D-35. Punitive damages awards.

• In determining the amount of punitive damages, if any, to be awarded, the trier of fact:

• (1) Shall consider the purposes of punitive damages set forth in G.S. 1D-1; and

• (2) May consider only that evidence that relates to the following:

• a. The reprehensibility of the defendant's motives and conduct.

• b. The likelihood, at the relevant time, of serious harm.

• c. The degree of the defendant's awareness of the probable consequences of its conduct.

• d. The duration of the defendant's conduct.

• e. The actual damages suffered by the claimant.

• f. Any concealment by the defendant of the facts or consequences of its conduct.

• g. The existence and frequency of any similar past conduct by the defendant.

• h. Whether the defendant profited from the conduct.

• i. The defendant's ability to pay punitive damages, as evidenced by its revenues or net worth. (1995, c. 514, s. 1.)

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FACTORS FOR JURY TO CONSIDER

• a. The reprehensibility of the defendant's motives and conduct.


• c. The degree of the defendant's awareness of the probable consequences of its conduct.

• d. The duration of the defendant's conduct.

• e. The actual damages suffered by the claimant.

• f. Any concealment by the defendant of the facts or consequences of its conduct.

• g. The existence and frequency of any similar past conduct by the defendant.

• h. Whether the defendant profited from the conduct.

• i. The defendant's ability to pay punitive damages, as evidenced by its revenues or net worth. (1995, c. 514, s. 1.)

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FACTORS FOR JURY TO CONSIDER CONT’D

a. The reprehensibility of the defendant's motives and conduct.

Using felons to care for frail elderly;

Understaffing and undersupplying;

Despite years of horrible outcomes, poor surveys, hefty fines, and designation as a special focus facility

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Violent man with extensive history of poor conduct under stress, overworked, undertrained, lacking necessary transfer equipment, taking care of elderly osteoporotic woman who wants only female caregiver

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c. The degree of the defendant's awareness of the probable consequences of its conduct

Pattern of conduct over time;

History of facility;

Repeated notice of problems from facility level staff and administration -- coverup

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d. The duration of the defendant's conduct.

Decades. And continuing.

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e. The actual damages suffered by the claimant.

Death preceded by weeks of documented extreme pain

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f. Any concealment by the defendant of the facts or consequences of its conduct.

Cover up to surveyors; cover up to opposing and own counsel – sanctioned by court

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g. The existence and frequency of any similar past conduct by the defendant.

Pattern evidence over time

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h. Whether the defendant profited from the conduct.

Dividends, salaries, deferred compensation –no known work

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i. The defendant's ability to pay punitive damages, as evidenced by its revenues or net worth.

Profit siphoning evidence and financial statement evidence – can pay 8 figures easily

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Punitive Damages (NC law)

1. Awarded “only if the claimant proves that the defendant is liable for compensatory damages and that one of the following aggravating factors was present and related to the injury for which compensatory damages were awarded.” emphasis added NCGS §1D-15(a).

2. Plaintiff must prove aggravating factor by “clear and convincing evidence.” NCGS §1D-15(b).

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3. Punitive damages not awarded solely on basis of vicarious liability. Corporate defendant officers, directors, or managers must participate in or condone conduct giving rise to punitive damages.

4. Willful or wanton conduct “means the conscious and intentional disregard and indifference to the rights and safety of others, which the defendant knows or should know is reasonably likely to result in injury.” NCGS §1D-5(7)

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Punitive Damages (defenses and responses)

1. Move to bifurcate punitive damage issue and evidence from compensatory trial.

2. Try to limit discovery related to punitive damage issue until after motion for summary judgment.

3. Proximate cause – alleged egregious conduct must have causative link to incident that led to injury or death, which can be difficult to establish.

4. High burden of proof and extreme level of conduct required. Rare remedy that should be limited to most extreme situations.

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5. No vicarious liability for egregious acts of employee.

6. Unrelated conduct before and after incident in question cannot give rise to punitive damages.

7. Mere fact of bad outcome involving nursing home does not give rise to punitive damages.

8. Challenge for defendant is to keep case simple and focused on facility incident at issue and not on issues of high level corporate conduct, extraneous and unrelated events, and conspiracy theories.

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Three on a match

The same evidence shows all three causes of action. Evidence admitted in punitive phase (bifurcated) admissible on corporate negligence and pierce the veil at first phase of trial.

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Anne Duvoisin

Henson Fuerst, PA

Raleigh, NC

[email protected]

(919) 781-1107

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SERIOUS INJURY AND WRONGFUL DEATH LAW

K O S I E R A D Z K I S M I T H

Joel E. Smith

Minneapolis, MN

(763) 746-7803

[email protected]

www.KosLawFirm.com

www.MN-NursingHomeAbuse.com

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http://www.koslawfirm.com/profile.html

http://www.koslawfirm.com/practice.html

http://www.koslawfirm.com/resources.html

http://www.koslawfirm.com/contact.html

Lee Evans

Cranfill Sumner & Hartzog

Raleigh NC

(919) 863-8710

[email protected]

www.cshlaw.com

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