Huge Nursing Home Verdict Tossed Out Because Parent Company Did Not Have Adequate Control Over The Facility

iStock_000003443960XSmallYesterday, we discussed the nursing-home-name-game, how large nursing home chains attempt to shield themselves from liability by creating a complex array of subsidiary companies and messy corporate structures.

Today, we are seeing the fall-out created by this complicated game of corporate re-organization– how despite that fact that a large corporation makes decisions with respect to operation of a facility, and even derives profits from the facility, it can evade responsibility by re-arranging its corporate structure.

In 2007, a New Mexico jury rendered a large verdict ($53 million) against ManorCare after they heard how Barbara Boxer, a patient at a ManorCare subsidiary was ignored by staff as she suffered from gastrointestinal bleeding.  The trial revealed that not only did employees at the nursing home fail to administer any treatment, but they attempted to cover up the situation by removing the bloody sheets– with the tell tale signs that they had watched a lady bleed to death– before notifying the ladies family.

Despite the fact that Boxer was a patient at a ManorCare subsidiary, a nursing home negligence lawsuit was brought against the parent company– ManorCare exclusively.

In overturning the trial court verdict, the Appellate Court reasoned that the court erred in finding that ManorCare was the ’employer’ of the nursing home’s staff.  The large damage award ($3.2 million compensatory damages and $50 million in punitive damages) was never even addressed by Appellate Court in its decision.

While we can simply say that the New Mexico Appellate Court made a bad ruling with respect to the rights of injured nursing home patients, this decision will only encourage nursing home giants to rearrange their companies into smaller subsidiaries– only to protect the parent company from liability.

The family of Mrs. Boxer intends on bringing this case before the New Mexico Supreme Court.

Read more about this important nursing home decision here.

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