Superior Court of Pennsylvania Holds Management Companies of Long-Term Care Facilities May Be Vicariously Liable for Corporate Negligence

by Buchanan Ingersoll & Rooney PC
Contact

Buchanan Ingersoll & Rooney PC

On August 8, 2017, nearly twelve years after Plaintiff Robert Scampone initiated suit against skilled nursing facility Highland Park Care Center (Highland Park) and its management company Grane Healthcare Company (Grane) following the death of his mother, Madeline Scampone, the Superior Court of Pennsylvania held that Grane, as Highland Park’s management company, could be held vicariously liable for corporate negligence.

By way of background, in January 2004, Highland Park Care Center resident Madeline Scampone sustained a urinary tract infection, dehydration, malnutrition and bedsores. The following month, Ms. Scampone suffered a heart attack and died. In September 2005, her son and executor Richard Scampone commenced suit against Highland Park, Grane and several other entities, claiming Grane was vicariously liable because some of its employees oversaw patient care at Highland Park.

In 2007, Grane was granted a compulsory nonsuit at trial after the close of Mr. Scampone’s evidence, leaving Highland Park as the sole defendant. The jury determined that Highland Park was vicariously and directly liable, and awarded Mr. Scampone compensatory damages. Mr. Scampone appealed, claiming the trial court erred in granting a nonsuit in favor of Grane and refusing to submit punitive damages to the jury. The Superior Court ruled that Grane was subject to (1) vicarious liability for the actions of its employees; and (2) direct corporate liability due to the control it exercised over management of the facility. The Court further held that there was sufficient evidence to permit the question of punitive damages to be submitted to the jury.

Grane and Highland Park appealed to the Supreme Court, which held that both defendants could not be held liable for a breach of the same non-delegable duty. The High Court affirmed the Superior Court’s reversal of nonsuit in favor of Grane and left it for the trial court to determine whether the defendants had a duty to Ms. Sampone. On remand, the trial court re-entered a compulsory nonsuit in favor of Grane, noting that its duty was to provide management services to Highland Park rather than to care and treat for Madeline Scampone. Further, the trial court conducted a new jury trial as to punitive damages solely against Highland Park. In April 2015, the jury returned a verdict in favor of Highland Park. After his post-trial motion was denied, Mr. Scampone appealed, contending the trial court erred, inter alia, by granting a compulsory nonsuit in favor of Grane and by denying him a new punitive damages trial against Highland Park.

In its August 8, 2017 opinion, the Superior Court overturned the nonsuit. In doing so, the Court cited to the Restatement (Second) of Torts § 324A, which states that one who undertakes to render services to another which are necessary for the protection of a third person is subject to liability to the third person for failure to exercise reasonable care in performing the undertaking. As such, the Court found that Grane had a duty to Madeline Scampone for the foregoing reasons:

  1. The Court interpreted the evidence of record, including the management services contract between Grane and Highland Park, to mean it was Grane’s duty to create and enforce policies and procedures to ensure quality patient care.
  2. Even though Highland Park set the staffing levels, Grane ultimately approved the budget. Employees of Highland Park testified that, despite their complaints to management, the facility was understaffed, making it difficult to provide patients with the state-mandated number of care hours.
  3. Grane hired and trained Highland Park’s registered nurses and appointed its Director of Nursing. Additionally, Grane employed nurse consultants, supervisory personnel who visited Highland Park weekly to oversee patient care. During their visits, the nurse consultants reviewed medical charts and provided hands-on patient care to residents, including Ms. Scampone.
  4. Grane’s employee supervised Highland Park’s administrator.
  5. Grane established and administered a quality assurance program.

Based on the above, the Court held that Grane should have recognized that its contractual undertaking to manage and oversee Madeline Scampone’s care was necessary for her protection. Because Highland Park employees testified they were too short-handed to administer food and water or monitor and test Ms. Scampone for infection, the Court noted that a jury could find that lack of sufficient staffing contributed to the patient’s death. However, the Superior Court, echoing the Supreme Court in this same case, held that only Highland Park, the licensed operator, may be directly liable for corporate negligence. Grane, as the management company, may be subject to vicarious liability for the actions of its nurse consultants, who oversaw Highland Park staff and failed to ensure that patients received appropriate care. Simply put, because “vicarious liability and direct corporate liability [are] distinct theories of recovery,” both Grane and Highland Park cannot be liable for direct negligence.

Notably, Plaintiff presented evidence at trial that the defendants engaged in various falsifications. Highland Park, which had notice of upcoming state surveys, temporarily increased staffing levels during those periods. The facility’s administrator directed an aide to “fill in the holes” in patient ADL sheets and falsify medication administration records. Grane’s nurse consultants were observed falsifying treatment records.

The Supreme Court ordered a new damages trial against Grane. Given the evidence that Highland Park employees colluded with Grane employees to falsify records, the Court also ordered a new trial against Highland Park to determine whether it could be held liable for punitive damages.

The Superior Court’s opinion is accessible on the Unified Judicial System of Pennsylvania’s website, Case Nos. 716 WDA 2015, 717 WDA 2015, and 1354 WDA 2015.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Buchanan Ingersoll & Rooney PC | Attorney Advertising

Written by:

Buchanan Ingersoll & Rooney PC
Contact
more
less

Buchanan Ingersoll & Rooney PC on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.