This article originally appeared in the Daily Journal on April 10, 2017.
A recent decision from the 4th District Court of Appeal tackles some tough procedural complexities that arose during a lengthy and expensive trial involving a deficient nursing home — and offers cautionary lessons for practitioners involved in cases that hinge on procedural defenses, formalistic interpretation of statutes, special verdict jury forms and punitive damages. Jarman v. HCR ManorCare, Inc., 2017 DJDAR 2395 (Cal. Ct. App. March 14, 2017).
Joseph Jarman spent three months in 2008 recovering from a broken leg at nursing home in Hemet, California, called Manor Care. Nine years and two appeals later, the case has outlived poor Mr. Jarman.
Jarman had sued the nursing home and a related entity, alleging that while he was a patient, the nursing home failed to provide him with necessary basic assistance with daily living activities. He alleged Manor Care frequently left him in soiled diapers, ignored his call lights, failed to take measures to prevent bedsores and otherwise failed to provide him with adequate care.
Jarman brought claims for elder abuse, negligence and violation of Health and Safety Code Section 1430(b). That statute creates a cause of action in favor of nursing home patients for violations of California’s Patients’ Bill of Rights or other federal and state laws and regulations.
Following trial, a jury returned a special verdict finding Manor Care negligently violated Jarman’s rights 382 separate times. The jury awarded Mr. Jarman $95,500 in statutory damages — a rate of $250 per violation — plus $100,000 in negligence damages. In its special verdict, the jury also made a finding that Manor Care had acted with malice, oppression or fraud, as necessary to award punitive damages, but the trial court granted a defense motion to strike Jarman’s punitive damage claim prior to calculation of damages. Both sides appealed.
Manor Care argued that the award of $95,500 in statutory damages had to be reversed, because statutory language saying that “[t]he licensee shall be liable for up to five hundred dollars” meant that a maximum of $500 in statutory damages was available per lawsuit, rather than per violation as the jury apparently assumed, without regard to how many violations of a patient’s rights are proven in that lawsuit. This argument was not farfetched — two 2nd District Court of Appeal cases decided between the time of the trial and the appeal had agreed with that theory.
The Jarman court, however, rejected the “per lawsuit” approach. The court agreed with Jarman that capping statutory damages to $500 per lawsuit was contrary to the legislative intent and “would be a remedy suitable only for those who like litigating far more than they like money.” The court concluded that the statute should be construed as allowing $500 damages “per cause of action.” Because the jury found 382 violations of Jarman’s rights, and Manor Care never argued at trial that those violations arose from a lesser number of independent causes of action, the court affirmed the statutory damages award.
Manor Care also appealed on the basis of alleged defects in the special verdict form. Jarman had named two separate but related defendants in his complaint — HCR ManorCare, Inc., and Manor Care of Hemet, CA, LLC — but the special verdict form inconsistently referred to the defendants at various points as “Manor Care of Hemet,” “HCR Manor Care,” and “defendant.” No one apparently thought much about the distinction at trial. The defendants mounted a joint defense, defense counsel frequently referred to the two defendants collectively as “Manor Care,” the defendants did not dispute at trial plaintiff’s contention that the two companies operated as one, and Manor Care’s post-trial motions attacking the verdict failed to raise the issue of distinguishing between the two defendants. On this record, the Jarman court concluded that use of different names for the defendant entities in the special verdict form was not intended by the parties to distinguish between the two defendants for purposes of liability, and thus there was no error or material inconsistency in the verdict form.
Moreover — and critical for practitioners seeking to learn lessons from the Jarman decision — the court of appeal held the long delay in raising the issue suggested the discrepancy was not viewed by either defendant as significant during the trial. (Manor Care didn’t even mention the issue until some four months after the verdict.) That, the court concluded, indicated that the late-raised argument was gamesmanship more than anything else, and thus found Manor Care had waived any defect in the special verdict form.
The final major ruling in Jarman reversed the trial court’s granting of defendants’ motion to strike the punitive damage claim. The trial court had found the evidence insufficient to support the jury’s finding of malice, oppression or fraud. The appellate court, however,rejected defendants’ argument that the jury’s decision to award only $250 per statutory violation, rather than the $500 maximum, indicated that Manor Care’s conduct didn’t justify punitive damages. To the contrary, however, the court concluded that a “finding of 382 violations, in a period of three months, would seem to imply egregious conduct, even if the individual violations were not the worst the jury could contemplate — just as the issuance of 382 citations to a single motorist for moving violations within a three month period would suggest that motorist was a menace to other drivers on the road, even if none of those individual citations had been issued for the most serious violations, such as drunk driving.”
In the end, given Jarman’s split from the 2nd District approach to statutory damages under Health and Safety Code Section 1430(b), the next chapter of this case could well unfold on the California Supreme Court’s docket. But perhaps the biggest lesson from Jarman for practitioners to immediately consider is the importance of carefully preparing a special verdict form and raising timely objections to errors in that form. Otherwise, appellate courts may view later complaints as mere gamesmanship, and gamesmanship never goes very far with the court of appeal.
Robert A. Roth is of counsel with the California Appellate Law Group LLP*, an appellate boutique based in San Francisco. With over 30 years’ experience as an appellate practitioner, he is widely regarded as one of the leading family law appellate specialists in California. Find out more about Robert and the California Appellate Law Group LLP at www.calapplaw.com. Appellate Zealots is a bi-monthly column on recent appellate decisions written by the attorneys of the California Appellate Law Group LLP.
*In July 2022, the California Appellate Law Group was renamed the Complex Appellate Litigation Group.
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