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In Nursing Home Negligence Case, West Virginia’s Highest Court Relaxes the State’s Limits on Punitive Damages and Clarifies the Scope of West Virginia’s Medical Professionals Liability Act, Nursing Home Act, and Law of Fiduciary Duty

Manor Care, Inc. v. Douglas
No. 13–0470 (Supreme Court of Appeals of West Virginia, June 18, 2014)

by Richard J. Medoff, Summer Associate
Semmes, Bowen & Semmes (www.semmes.com)

Available at: http://www.courtswv.gov/supreme-court/docs/spring2014/13-0470-corrected.pdf

In Manor Care, Inc. v. Douglas, a case involving the appeal of a $91.5 million jury verdict in a nursing home negligence case, the Supreme Court of Appeals of West Virginia held that: (1) the verdict form did not allow the jury to award damages to non-parties; (2) the Medical Professionals Liability Act (“MPLA”) did not provide the exclusive remedy for the plaintiff’s negligence claims; (3) the Nursing Home Act (“NHA”) portion of the verdict form was fatally vague; (4) nursing homes do not owe a fiduciary duty to provide adequate healthcare; and (5) the punitive damages award was constitutional after being reduced by the Court. The Court affirmed, in part; reversed, in part; and remanded the case to the trial court for further proceedings consistent with its opinion. Chief Justice Davis wrote the majority opinion, in which Judge Moats joined; however, Justice Benjamin wrote an opinion concurring in part and dissenting in part, Justice Workman wrote a concurring opinion, and Justice Loughry wrote a lengthy dissenting opinion.

By way of factual background, on September 4, 2009, eighty-seven-year-old Dorothy Douglas was admitted to Heartland Nursing Home ("Heartland") in Charleston, West Virginia. Although Ms. Douglas had Alzheimer’s, she was able "to walk with the use of a walker, able to recognize and communicate with her family, well-nourished, and well-hydrated," when she entered Heartland. After nineteen (19) days in Heartland, "Ms. Douglas had become dehydrated, malnourished, bed ridden, and barely responsive ... she had fallen numerous times, sustained head trauma and bruises, and suffered from sores in her mouth and throat..." After those nineteen (19) days in Heartland, Ms. Douglas was transferred to a hospice care facility where she passed away eighteen (18) days later as a result of severe dehydration.

Mrs. Douglas' son sued the owner of Heartland as well as the companies responsible for Heartland's budgeting and staffing (collectively, the "defendants"). Mr. Douglas asserted claims including medical negligence, corporate negligence, violations of the NHA, and breach of fiduciary duty. After a ten-day trial, the jury returned a verdict in favor of Mr. Douglas in the amount of $11.5 million in compensatory damages and $80 million in punitive damages. The defendants filed a motion for judgment as a matter of law, which the trial court denied. The defendants appealed, claiming errors related to the language and format of the verdict form, to the legitimacy of Mr. Douglas' fiduciary duty and NHA claims, and to the jury's punitive damages award.

On appeal, the Supreme Court first addressed the verdict form. The defendants argued the inclusion of Mrs. Douglas' children on the verdict form improperly permitted the jury to award damages to "nonparties," claiming the only proper plaintiff was the estate’s personal representative under West Virginia's Wrongful Death Act, W.Va. Code 55-7-5 et seq. The Court was not persuaded, however, noting that the personal representative was merely a nominal plaintiff and any recovery would pass to her beneficiaries, the Douglas children, under the wrongful death statute, not to the estate.

Second, the Court addressed the plaintiff's corporate negligence claim against the nursing home for failing to properly manage the staff of Heartland. The defendant's argued this claim was subject to the MPLA's presuit procedural requirements and cap on noneconomic damages; however, the Court disagreed. The Court noted that the MPLA only applied to claims "based upon health care services rendered or which should have been rendered," and not to claims "related to business decisions, such as proper budgeting and staffing, by entities that do not qualify as healthcare providers under the MPLA."

Third, the Court considered the plaintiff’s statutory claim for violations of the NHA. The defendants argued that the plaintiff's claim that Ms. Douglas died as a result of NHA violations was also covered by the MPLA. The Court did not address this issue, however. Instead, the Court found that the verdict form's language with regard to the NHA claim was "fatally" vague as it simply asked if any NHA violations "substantially contributed to injury to Dorothy Douglas?" Consequently, the Court dismissed the plaintiff's NHA claim and vacated the accompanying $1.5 million award for compensatory damages.

Fourth, the Court considered the plaintiff's breach of fiduciary duty claim. The defendant's argued this claim lacked "legal or evidentiary support," and urged the Court not to expand the law of fiduciary duty to cover nursing homes. The Court sided with the defendants on this issue, concluding that nursing homes do not owe a fiduciary duty to provide adequate healthcare. Accordingly, the Court dismissed the plaintiff's fiduciary duty claim and vacated the $5 million of damages awarded under it.

Finally, the Court reviewed the jury's $80 million punitive damages award for compliance with federal due process. The Court, following the guidelines established in Garnes v. Fleming Landfill, Inc., 186 W.Va. 656 (1991), reduced the punitive damage award to "approximately $32 million." The Court reached that figure by applying the 7:1 ratio of punitive to compensatory damages the jury had originally awarded the plaintiff, to the $4,594,615 of compensatory damages which remained after the Court vacated the plaintiff's NHA and fiduciary duty causes of action. In making that decision, the Court noted that the “outer limit” on the allowable ratio of punitive to compensatory damages “of roughly 5 to 1” discussed in TXO Production Corp. v. Alliance Resource Corp., 187 W.Va. 457 (1992), was merely a "guide" rather than a "strict standard. The Court gave the plaintiff thirty (30) days to choose either to accept the reduced punitive damage award or to submit to a new trial. Accordingly, the Court affirmed, in part; reversed, in part; and remanded the case to the trial court for further proceedings consistent with its opinion.

Judge Workman issued a concurring opinion, agreeing with the majority's decision to set aside the plaintiff's NHA claim, but disagreeing with the majority's reasoning. Judge Workman chastised the majority for discarding the plaintiff's NHA claim and accompanying damages improperly "like so much garbage simply because it claims to be confused by it," and instead found that the claim was duplicative as it provided compensation for injuries for which the plaintiff's had already received compensation.

Justice Benjamin issued an opinion concurring in part and dissenting in part. Justice Benjamin stated the verdict form was "woefully inadequate" and did not provide a "proper[] legal basis" for an award of punitive damages, as the verdict formed contained "a punitive damages multiplier on a verdict in which the jury only made findings of simple negligence."

Justice Loughry issued a dissenting opinion, complaining that the verdict form was an "inscrutable mess." Overall, Justice Loughry would have reversed the entire judgment and remanded the case for a new trial.


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