THE RESIDENT ADVOCATE - ISSUE #2
September 2008

Davidson Law Firm
Scott Davidson, Lawyer
551 Boswell Street
P.O. Box 4046
Batesville, AR 72503
Phone: (870)612-5574
Fax: (870)612-5370
Toll Free (866)315-7758

Professional Memberships

Arkansas Trial Lawyers Association
American Association for Justice - Nursing Home Litigation Group
Christian Trial Lawyers Association
NCCNHR (National Citizens= Coalition for Nursing Home Reform)
AANHR (Arkansas Advocates for Nursing Home Reform)
Board Certified as a Civil Trial Advocate by National Board of Trial Advocacy

Other websites of interest:

Arkansas Advocates for Nursing Home Reform - www.aanhr.org
National Citizens' Coalition for Nursing Home Reform - www.nccnhr.org
Christian Trial Lawyers Association – www.christiantriallawyers.org

LET US INTRODUCE OURSELVES.....
We continue to represent victims of nursing home abuse. We welcome associations with other lawyers, and stand ready to assist you and your clients in reaching the best result for victims of nursing home abuse. Please call us toll free at 1-866-315-7758 or visit our contact page.

FROM OUR OFFICE.....
We have been blessed and privileged to assist families across the state of Arkansas in the prosecution of nursing home cases for the last several years. Of note, we recently represented more than 400 residents of a former nursing home in Batesville in a class action lawsuit which alleged that the residents of the home had been denied their statutorily guaranteed “residents’ rights” to a dignified existence. With the help of the good Lord and several bright lawyers, we were able to secure a decision from the Arkansas Supreme Court upholding the trial court=s decision that a class action was proper for the trial of this case. A more detailed discussion of this case is contained in the “From the Court” section of this issue.

I spoke to the Arkansas Advocates for Nursing Home Reform at their July 2008 meeting in Little Rock. I have deep respect and admiration for this organization, and considered it an honor to address them on legal issues regarding nursing home abuse. Also, I gave a presentation at the quarterly training meeting for Certified Volunteer Ombudsmen at Harding University in Searcy on August 21, 2008. These folks provide an absolutely indispensable and invaluable service by being a voice for the elderly on a daily basis.

Lastly, I attended a seminar sponsored by the American Association of Justice Nursing Home Litigation Group on October 3-4, 2008 in Austin, Texas. The seminar provided nationally-known speakers who spoke on various topics of interest to lawyers who represent victims of nursing home abuse.

FROM THE COURT

Both the Arkansas Supreme Court and the Arkansas Court of Appeals have recently handed down decisions of note in the context of nursing home abuse. As mentioned earlier in this issue, the Arkansas Supreme Court, in a case styled Beverly Enterprises - Arkansas, Inc. v. Annette Thomas, as Permanent Guardian of the Estate of Helen Cook, S. Ct. #06-877 (Delivered on June 21, 2007), upheld a trial court's certification of a class action on behalf of hundreds of former residents of a nursing home. The legal basis for the certification was that the nursing home had violated the Residents' Rights Act codified at Ark. Code Ann. '20-10-1201, et. seq., by failing to take care of the residents' basic daily needs. On behalf of the nursing home residents, we argued that the facility's chronic understaffing so permeated the operation of the home so as to affect the residents' statutory guarantees afforded under the Residents' Rights Act, including the right to be treated with dignity.

In unanimously upholding the Trial Court's certification of the class, the Supreme Court stated:

"We conclude that one main and preliminary overarching issue does exist in this case, which is whether the Batesville nursing facility was chronically understaffed so as to violate the residents' statutory and contractual rights. In its Order, the Circuit Court found 13 questions of fact and law and five issues that must be resolved, which are common to all class members. The five issues all involved understaffing. The Court then found that the common factual and legal issues predominated over the individual issues because all residents relied upon the same Resident Admission Agreement and statutory law to assert that systemic understaffing resulted in undignified living conditions for the residents, which breached their agreement and violates state law.

A class action is clearly the more efficient way of handling a case where there is a predominating, common issue to be resolved for all 489 class members. A class action is also fair to both sides in this case, as it is a vehicle for all class members to have their claims heard, and Beverly will not have to defend against the same assertion of liability in a multitude of different lawsuits."

Prior to trial, the case settled. To the knowledge of Plaintiff's counsel, this is the first class action in the context of a nursing home abuse case which has been upheld by a state Supreme Court.

The potential ramifications of Cook may be monumental from the standpoint of protecting nursing home residents. Cook stands for the proposition that when a nursing home chooses to understaff and underfund a facility to the detriment of its residents, the home can be required to answer to charges against it in one proceeding, on behalf of all of the residents of the facility, instead of in one lawsuit at a time. Since claims for personal injury and medical malpractice were specifically excluded from the definition of the class in Cook, it also supports the entitlement of aggrieved residents to be heard in cases where they simply were exposed to inhumane and undignified surroundings, thereby stripping them of what is often the last vestiges of their pride and humanity.

In another recent case of note, Wanda Scott, Administratrix of the Estate of Ethel Mince v. Central Arkansas Nursing Centers, Inc., et. al., Case No. CA06-1252 (Opinion Delivered March 5, 2008), the Arkansas Court of Appeals considered whether the trial court erred in directing verdicts against CANC, which provided administrative services to a nursing home under a written agreement, NCI which provided consulting services to the nursing home, and Morton, who was the sole shareholder of CANC and NCI, and a 51% shareholder in the nursing home.

The Court of Appeals upheld the directed verdicts in favor of the provider of administrative services to Robinson (CANC), and on behalf of the shareholder Morton. However, the Court reversed on the directed verdict in favor of the nursing consulting business (NCI). The Court reasoned that the proof was that CANC provided only billing and accounting services to the nursing home, and there was no substantial evidence that its negligence contributed to the Plaintiff's injuries or death. However, in regard to the nurse consulting business, NCI, the Court found a jury question did exist since it was Aplain from the proof that NCI was directly involved in the provision of care at Robinson during the time that Ms. Mince's condition began to deteriorate." - Pg. 16.

The Court's discussion of the directed verdict in favor of Shareholder Morton is enlightening. The Plaintiff had argued, rightfully so, that as the "governing body" of the nursing home, he was "responsible for the management of the facility" under applicable federal regulations. The Plaintiff argued, in effect, that Morton's business practices put profits above patient care. In responding, the Court noted:

The Court went on to distinguish an earlier Florida case, Canavan v. National Healthcare Corp., 889 S.2d 825 (Fla. Ct. App. 2004) which reversed a directed verdict for a shareholder who ignored complaints of inadequate staffing while cutting operating expenses, where the evidence indicated that the plaintiff's injuries were the direct result of understaffing, noting that there was "no substantial evidence that Mortion cut expenses or that his monetary decisions adversely affected the level of care of Robinson." -Pg. 16.

Similarly, this appellate decision recognizes the potential liability of shareholders if certain factual predicates are met. In light of the extensive efforts made by many nursing home companies to protect themselves from liability through their creation of seemingly never-ending limited liability companies and the like , Scott will hopefully help provide additional protection to maltreated residents.

In another case from the Court of Appeals which, unfortunately, was not designated for publication, Waverly Arkansas Inc., et. al. v. Keener, Case No. CA07-524 (Opinion Delivered February 6, 2008), the Court heard an appeal of a trial court's denial of a motion to compel arbitration. As many of you may know, it has become standard practice for nursing homes to insert mandatory arbitration clauses into admission documents that would-be residents or their family members are called upon to sign before admission to the facility. After suit was filed on behalf of the plaintiff in this case, the defendant moved to compel arbitration, and the trial court denied the motion leading to an interlocutory appeal.

In upholding the decision of the trial court, the Court of Appeals found that "a valid contract to arbitrate did not exist" since there was "no evidence that Ms. Davis intended to give her power of attorney to appellee (her daughter) or that she was capable of doing so." -Pg. 7. In so holding, the Court of Appeals rejected the arguments from the nursing home waiving the "strong national policy favoring the enforcement of arbitration agreements." -Pg. 6.

FINAL THOUGHTS

During my involvement in the Cook class action case over the last few years, I have drawn great solace from the many promises God provided to us in His Word on the subject of his provision for the elderly. Speaking through David, God tells us that He is a "defender of widows . . . in His holy habitation". Psalm 168:5. It is my prayer that my involvement in these cases serves to uphold and support this principle.