Analysis: The Tennessee Supreme Court recently decided a case pertaining to the liability of an assisted living facility's management company for failing to provide appropriate staff to the facility (Celebration Way facility). Wilson v. Americare Systems, Inc., No. M2011-00240-SC-R11-CV, 2013 WL 658078 (Tenn. 2013). At trial the jury found the management company (Americare Systems, Inc.) of an assisted living facility was negligent, causing the death of a resident, based on the fact it understaffed the facility. Wilson at 1. The resident of the facility, Mable Farrar, died from a perforated colon. The testimony at trial showed that the assisted living facility failed to follow Ms. Farrar’s physician’s order to administer medicine for constipation. Wilson at 1. As a result of this failure to provide the prescribed medicine, Ms. Farrar became significantly constipated and her doctor therefore ordered the assisted living facility to give her three to four enemas a day. Wilson at 1. The assisted living facility only gave Ms. Farrar one enema on the first day after the order, none on the second day and one on the third day. On the third day, after she received the enema, her colon perforated and she died. Wilson at 1, 2. The testimony at trial established she should not have been provided an enema by the facility nurse based on her physical status at that time.
Testimony at trial showed there were only two licensed nurses that worked at this facility. Wilson at 7. One of the nurses testified she was "always on call, twenty-four hours a day". Wilson at 7. The two licensed nurses had to cover a lot of shifts and were not paid overtime compensation because they were salaried employees. Wilson at 7. The nurses that worked at the facility as well as the regional operations director for the assisted living facility management company testified there were staffing problems at the facility. There were numerous complaints from the staff at the facility requesting additional staffing in order to be able to provide adequate care for the residents. Wilson at 6-8. Despite these complaints, no additional staffing was provided to the facility. Wilson at 7, 8.
The plaintiff filed a claim against the nurse who administered the enemas, the director of nursing, the owner of the facility, the operator of the assisted facility, as well as against the company that had contracted to provide management services for the Celebration Way facility (the management company was Americare Systems, Inc.). Ultimately, the jury awarded the plaintiffs compensatory damages totaling $300,000.00. The jury also found punitive damages were appropriate and awarded punitive damages totaling $10,000.00 and $5,000.00 against two of the nurses who were named defendants. They also awarded punitive damages against the management company totaling $5,000,000.00. The case was appealed and the Tennessee Court of Appeals reversed the jury verdict and found there was no material evidence that the staffing deficiencies proximately caused Ms. Farrar's death. Wilson at 1.
The Tennessee Supreme Court reversed the Tennessee Court of Appeals decision and found the plaintiffs presented material evidence supporting the conclusion that the lack of adequate staffing led to a deviation from the applicable standard of care. Wilson at 8. The trial court (Judge F. Lee Russell) ruled from the bench that as a matter of law there were 21 acts or omissions that constituted a breach of the standard of care. Wilson at 8. The next question therefore was whether the lack of adequate staffing caused the deviation in the standard of care. This would allow the claim against the assisted living facility to be successful. The court found "it is a matter of reason and common sense within the jury's fact-finding province to infer that, in an employment setting, if there is too much work required of too few employees, either the work will not get done or the quality of the work will be diminished." Wilson at 8. The court went on to cite several out-of-state opinions that held juries could decide that understaffing problems can provide a basis for a successful claim against an assisted living facility. Wilson at 8.
At the end of the day the Tennessee Supreme Court found the staffing inadequacies at the facility could be relied upon by the jury to make a determination that the wrongful death of Ms. Farrar was caused by the management company. Ultimately, the overwhelming evidence of understaffing at this facility combined with the trial court's finding on the violation of the standard of care supported the jury verdict. This case shows how important it is to properly staff assisted living facilities. If there are complaints about staffing, the facility or management company should investigate and address the complaints in a satisfactory manner as soon as possible.
Punitive Damages Issue:
There is one other interesting side note in this case that is worth addressing. The Tennessee Supreme Court did not address the punitive damage award of $5 million dollars against the management company. The Tennessee Supreme Court did not address this issue because the Court of Appeals did not consider it on appeal because they found no award was appropriate against the management company. As a result, the appeal was sent back to the Tennessee Court of Appeals "for review of the award of punitive damages against Americare".
It will be interesting to see how the Court of Appeals handles this issue because the punitive damages award of $5,000,000.00 is a multiplier of 16.67 times the compensatory damages awarded ($300,000.00) in this case. Under Tennessee Supreme Court and United States Supreme Court precedent, this punitive damages award will likely be significantly reduced.
The Tennessee Supreme Court decision of Flax v. Daimler Chrysler Corp., 272 S.W.3d 521 (Tenn. 2008) discussed the significant United States Supreme Court decision of State Farm v. Campbell, 123 S. Ct. 1513 (2003). In the Flax case, the jury awarded punitive damages that were in a 1 to 5.35 ratio when compared with the compensatory damages. The Tennessee Supreme Court discussed the various guideposts for punitive damage awards in the State Farm decision:
The ratio between these two awards is 1 to 5.35. This ratio is not clearly impermissible because it does not exceed a single digit ratio. See Campbell, 538 U.S. at 425, 123 S.Ct. 1513. There is, however, some doubt as to the propriety of a ratio of 1 to 5.35 because the United States Supreme Court has suggested that a ratio of more than 1 to 4 approaches the outer limits of constitutionality. Id.; Gore, 517 U.S. at 581, 116 S.Ct. 1589. The Court has also suggested that a ratio of 1 to 1 may be all that is permissible in cases where compensatory damages are “substantial.” See Campbell, 538 U.S. at 425, 123 S.Ct. 1513. None of these ratios, however, present “rigid benchmarks,” and the United States Supreme Court has thus far declined to adopt any fixed mathematical formula to determine the appropriateness of punitive damages. Id. Instead, the Court has held that “[t]he precise award in any case, of course, must be based upon the facts and circumstances of the defendant's conduct and the harm to the plaintiff.”
(emphasis added) Flax at p. 539. As a result, once the ratio reaches 4 to 1, a court should take a critical look at the appropriateness of the punitive damages award under the Due Process Clause. Under the State Farm case, ratios greater then 9 to 1 are almost always unconstitutional. See prior post on this issue for more information.
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