Continued expansion of corporate liability and punitive damages against managing entities of nursing homes.

A jury awarded compensatory damages for injuries the deceased suffered as a result of neglect while a resident at the Philadelphia Nursing Home, which was operated by Episcopal Long Term Care.

During the trial, but at the close of Episcopal's case, Episcopal moved for a directed verdict on the issue of punitive damages, and the trial court granted the motion. The trial court concluded that it was not reasonable for a jury to consider malicious, outrageous or intentional disregard based on the evidence presented by the plaintiff.

On appeal, the Superior Court of Pennsylvania affirmed the judgment as it related to the jury's award of compensatory damages, but reversed the trial court and remanded for further proceedings as to punitive damages. The Superior Court concluded that the trial court erred in granting Episcopal's motion for a directed verdict and in failing to submit the issue of punitive damages to the jury because the “Estate set forth sufficient evidence, which, if believed by the jury, would rise to the level of reckless disregard.”

Episcopal was subject to vicarious liability for the acts and omissions of the RNs and CNAs working at the Philadelphia Nursing Home since Episcopal was responsible for the operation and management of the facility. Accordingly, to hold the managing entity liable, the plaintiff must show the managing entity had actual or constructive knowledge of the allegedly malicious conduct and that the conduct was a substantial factor in bringing about harm.

Case Law Alert - 1st Quarter 2013