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Jarman v. HCR Manorcare, Inc.

California Court of Appeals, Fourth District, Third Division

March 14, 2017

JANICE JARMAN, Plaintiff and Appellant,
v.
HCR MANORCARE, INC., et al., Defendants and Appellants.

         Appeals from a judgment of the Superior Court of Riverside County No. RIC10007764, Mac R. Fisher and Phrasel L. Shelton (retired judge of the Riverside Super.Ct. assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.), Judges. Reversed in part and remanded with directions.

          Lanzone Morgan, Anthony C. Lanzone, Steffi A. Jose, Anna H. Cronk and Travis K. Siegel for Plaintiff and Appellant.

          Petrullo, John Patrick Petrullo and Isaiah Costas; Manatt, Phelps and Phillips, Barry S. Landsburg and Joanna S. McCallum for Defendants and Appellants.

          OPINION

          MOORE, J.

         John Jarman (later represented by his daughter, Janice Jarman, as successor in interest), sued HCR ManorCare, Inc., and Manor Care of Hemet, CA, LLC, (we refer to these individually as HCR and Hemet, respectively, and collectively as Manor Care), which own and operate a nursing home facility in Hemet. Jarman, a patient at the facility for three months in 2008, alleged claims for violations of patient's rights pursuant to Health and Safety Code section 1430 (section 1430), elder abuse, and negligence, all arising out of the care he received at the nursing home.

         The jury returned a special verdict finding Manor Care committed 382 violations of Jarman's rights, and that its conduct was negligent. The jury awarded Jarman $95, 500 in statutory damages (calculated at a rate of $250 for each violation of his rights) plus $100, 000 in damages caused by the negligence. The jury also made a finding that Manor Care had acted with malice, oppression or fraud. However, the trial court granted Manor Care's oral motion to strike the punitive damage claim, agreeing with Manor Care that there was insufficient evidence to support the jury's finding of malice, oppression or fraud.

         After substantial postverdict wrangling, including an appeal to this court (Jarman v. HCR Manor Care Inc., et.al. (April 11, 2014, G049215) [nonpub. opn.] (Jarman I)), the trial court entered judgment against Manor Care in the amount of $195, 500. The court subsequently awarded Jarman $368, 755 in attorney fees.

         Jarman appeals from the portion of the judgment denying him punitive damages, arguing the trial court erred by striking the jury's finding Manor Care acted with malice, oppression or fraud. We agree the court erred. The sheer number of violations found by the jury, during the course of Jarman's three-month stay in the Manor Care facility, provides a sufficient basis to infer that Manor Care was acting with a conscious disregard of Jarman's rights and safety during that time. Further, there was evidence the problems were reported to the Director of Nursing, who qualified as a managing agent of the facility for purposes of imposing punitive damages against it.

         Manor Care appeals from the judgment as well, challenging it on several grounds. Manor Care first argues the court erred by allowing the jury to award Jarman a separate measure of statutory damages under section 1430 for each of the 382 violations of his rights found by the jury. According to Manor Care, only one award of statutory damages can be made per case under section 1430, in an amount not exceeding $500, no matter how many violations of a patient's rights are proven.

         Manor Care also argues the statutory damage award must be reversed in its entirety against HCR, because Jarman did not allege HCR engaged in conduct that violated his rights and because HCR is not a “licensee” subject to liability under section 1430. Manor Care also contends the statutory damage award must be reversed against both HCR and Hemet because the special verdict on the statutory claim made inconsistent references to each of them, and was thus insufficient to support a judgment against either. And Manor Care argues the negligence verdict cannot stand against HCR because the special verdict on negligence omitted any finding of causation against HCR specifically, and that it cannot stand against either HCR or Hemet because the damages awarded were inherently speculative. Finally, Manor Care argues that any reversal of the judgment which favors it will also necessitate a reversal and remand of the attorney fees award.

         We are unpersuaded by Manor Care's assertion that Jarman can recover only a single measure of statutory damages under section 1430, no matter how many violations he has proved. We conclude instead that a plaintiff would be entitled to a measure of damages for each cause of action asserted under the statute. And because Manor Care made no effort to demonstrate that violations found by the jury in this case added up to fewer causes of action under the statute, we cannot conclude the statutory damages awarded were excessive.

         We reject Manor Care's other challenges to the judgment as well. We agree with the trial court that Manor Care waived any challenge to the inconsistencies in the special verdict form. Jarman made it clear his theory was that HCR and Hemet were intertwined for purposes of their potential liability to Jarman, and the record demonstrates that for purposes of trial, they acquiesced in that view. The jury instructions at all times referred to HCR and Hemet as though they were one entity, and their joint counsel made no effort to distinguish between them in his closing argument. Moreover, the two defendants apparently failed to even notice the special verdict form (which their joint counsel drafted) made inconsistent references to them until several months after trial. If this issue was of significance to them during the trial, they should have raised it before the jury was discharged.

         And we reject Manor Care's assertion that the damages awarded on Jarman's negligence claim were inherently speculative. Assessing the appropriate amount of damages that would compensate a person who was subjected to the poor treatment and numerous violations of rights the jury found in this case is exactly the type of judgment we rely on juries to exercise.

         And having rejected all of Manor Care's challenges to the judgment, we also reject its related claim that the attorney fees and costs award in favor of Jarman must be reversed and remanded for reconsideration. Instead, we remand the case to the trial court with directions to conduct further proceedings to establish the amount of punitive damages Jarman is entitled to recover as a result of Manor Care's 382 violations of his rights.[1]

         I

         FACTS

         Jarman's complaint alleges that when he was admitted to Manor Care's facility, after suffering a broken leg, Manor Care was aware he “required physical assistance with his activities of daily living, including bed mobility, transferring, locomotion, dressing, eating, toilet use, hygiene, and bathing.” However, Manor Care allegedly failed to provide him with that required assistance. Instead, he was frequently left lying in soiled diapers, call lights were ignored, and he suffered other abuse and neglect. Moreover, Manor Care knew he was “a high risk for skin breakdown, ” yet failed to take measures to prevent it, causing him develop “significant skin excoriation and breakdown on his buttocks.”

         The complaint's first cause of action is based on section 1430, which allows any current or former patient of a skilled nursing facility to pursue a private right of action against a facility that “violates any rights of the resident or patient as set forth in the Patients Bill of Rights in Section 72527 of Title 22 of the California Code of Regulations, or any other right provided for by federal or state law or regulation.” (§ 1430, subd. (b).) The complaint alleged state and federal regulations require facilities to: (1) have sufficient nursing staff to provide for “the highest practicable physical, mental, and psychological well being of each resident”; (2) ensure residents “remain free from physical and mental abuse”; and (3) treat residents “with consideration, respect, and full recognition of dignity in care of personal needs.”

         The complaint's second and third causes of action incorporated the same factual allegations of regulatory violations and neglect, and alleged they amounted to both elder abuse and negligence. As to the former, the complaint alleged Manor Care engaged in a pattern of willful rules violations, with conscious disregard of the health, safety and welfare of its patients, and that such mistreatment constituted “abuse of an elder or dependent adult” as defined in Welfare and Institutions Code section 15610.07. As to the latter, the complaint alleged that violation of the statutory and regulatory duties imposed by federal and state law constituted negligence, per se, and that “[a]s a result of this neglect of [Jarman's] needs, [he] sustained severe physical and mental injury including multiple decubitus ulcers and skin excoriations that took approximately one year to heal after being discharged from Manor Care.

         The complaint sought both compensatory and punitive damages, as well as relief pursuant to the Patient's Bill of Rights.

         Trial commenced in June, 2011. By that time, Jarman was deceased and his daughter, Janice, was substituted as plaintiff in her capacity as his successor in interest. Jarman called several witnesses, including both employees and other former patients of Manor Care, to establish the level of care provided a the Hemet facility, and Jarman's family members testified about the care he received. Jarman also called expert witnesses to opine on nursing standards of care and the types of skin breakdowns that can be suffered by patients in skilled nursing facilities.

         Manor Care submitted a proposed special verdict form, and Jarman objected to it on several bases, including its omission of specific findings relating to violations of the Patient's Bill of Rights, and its improper attempt to separate the Manor Care defendants for purposes of liability. Jarman claimed that all of the evidence presented in the case indicated there was no meaningful basis to distinguish between the actions and potential liability of Hemet and HCR.

         After the close of evidence, Manor Care moved to strike Jarman's punitive damage allegation, arguing the evidence had been insufficient as a matter of law to support a finding in Jarman's favor on the issue. The court initially granted that motion, but the next day it granted Jarman's motion to reconsider, and reversed that decision. Consequently, the court directed that Manor Care's proposed special verdict form be quickly revised to allow the jury to also answer the question “Did the defendant engage in conduct that caused harm to the plaintiff with malice, oppression or fraud?” Jarman pointed out that Manor Care's proposed verdict form was also deficient in that it did not “provide for a spot for the jury to issue an amount of damages related to the violation of patient's bill of rights claims.” The court agreed, and over Manor Care's objection, directed that “defendant's special verdict form” be modified to include it.

         However, the special verdict form submitted to the jury was inconsistently worded. It asked the jury to decide if “Manor Care of Hemet” violated Jarman's rights, and if the jury found it had, to state how many times “Manor Care of Hemet” had done so. But it then asked the jury to state the amount it found “HCR Manor Care” to be liable for those violations. With respect to the negligence issue, it asked the jury to separately assess whether “Manor Care of Hemet” and “HCR Manor Care” had been negligent but then simply asked, as to each defendant, whether “Manor Care of Hemet's negligence” was “a substantial factor in causing injury to... Jarman.” There was no parallel question regarding the negligence of “HCR Manor Care.” And although the special verdict form otherwise referred to the parties by name (albeit inconsistently in the case of Manor Care), the final question posed to the jury was simply phased as whether “the defendant engage[d] in conduct that caused harm to the plaintiff with malice, oppression or fraud[.]”

         Neither Jarman nor Manor Care drew any formal distinctions between Hemet and HCR in closing argument. Instead, Jarman's counsel referred to the nursing home as the “facility” and to those in charge of running it as “HCR ManorCare” - e.g., “HCR ManorCare was aware that Mr. Jarman needed assistance with his activities of daily living, ” and “you've also heard an explanation from HCR ManorCare....” And Manor Care's counsel consistently referred to the two defendants, collectively, as “ManorCare” - e.g., “You've heard from the ManorCare nursing and rehabilitation staff over the last couple of days that during the time Mr. Jarman was at ManorCare..., ” and “this case has never been about whether anyone at ManorCare ever neglected, abused or in any way harmed Mr. Jarman.”

         The jury found in favor of Jarman and against Manor Care on all issues submitted to it. The jury concluded Manor Care had committed 382 violations of Jarman's rights during his three months as a patient in its facility. The jury was instructed it could award up to $500 for each violation of Jarman's rights, and it awarded $250 per violation for a total of $95, 500. The jury also found Jarman had suffered injury as a result of Manor Care's negligence, and awarded him an additional $100, 000 in damages for that injury. Finally, the jury found that Manor Care had acted with malice, oppression or fraud in the conduct causing harm to Jarman, a prerequisite to awarding punitive damages, but it was not asked to render a decision specifying an amount of punitive damages at that time.

         Immediately following the jury's verdict, Manor Care moved orally for (1) an order striking Janice's claim for punitive damages on the ground there was insufficient evidence to support the jury's determination that Manor Care had acted with malice oppression or fraud, and (2) for a partial judgment notwithstanding the verdict (JNOV) on the ground the jury's determination that Jarman's rights were violated was likewise unsupported by sufficient evidence. The trial court immediately granted the motion to strike Janice's punitive damage claim, but stated it would listen to arguments on the other issue the following day.

         After various continuances, as detailed in Jarman I, the trial court denied Manor Care's motion for partial JNOV for lack of jurisdiction, and then subsequently concluded the special verdict returned by the jury had been “incomplete and misleading” and announced it was granting Manor Care a new trial “on all issues, ” on its own motion. (Jarman I, supra, G049215.) Following an appeal from Manor Care as to the first ruling, and an appeal from Jarman as to the second ruling, we affirmed the denial of the JNOV, reversed the order granting a new trial, and remanded the case to the trial court with directions to enter a judgment on the verdict. (Ibid.)

         The judgment was entered in September of 2014. It reflected a judgment in favor of Jarman, and against both Hemet and HCR, in the amount of $195, 500. It also reflected Jarman was entitled to recover attorney fees and costs, in amounts “to be determined by motion.” The court subsequently awarded Jarman $368, 775 in attorney fees.

         Manor Care filed various challenges to the judgment in the trial court, without success. The trial court concluded Manor Care had waived its objections to the special verdict form.

         II

         DISCUSSION

         1. Order Striking Jury's Finding of Malice, ...


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