Latest Alabama Supreme Court Ruling on Nursing Home Care

On Friday, October 19, 2012, the Alabama Supreme Court issued Hill v. Fairfield Nursing & Rehabilitation Center, LLC.  Hill suffered a broken leg while being helped out of bed by a nursing assistant at the Fairfield Nursing Home.  Hill was 85 at the time of the fall and had been a Fairfield patient since 1992.

In addition to suing Fairfield, Hill sued a number of other entities seeking to “pierce the corporate veil.”  Prior to trial, the trial court granted summary judgments to these other entities.  At the close of Hill’s case-in-chief, the trial court granted Fairfield’s JML motion.  The Supreme Court reversed both the JML and the summary judgment.

Hill’s designated standard-of-care expert was Nelson, “a registered nurse since 1997, who had worked in skilled-nursing facilities and who had supervised both certified nursing assistants and licensed practical nurses.”  Fairfield contended that its physical-therapy department assessed or determined the measures to take when getting Hill out of bed and that because Nelson was not licensed, trained, or experienced in the field of physical therapy, she was not a similarly situated health-care provider.  The Supreme Court declared that Fairfield could not rely on its delegating “to its physical-therapy department responsibility for making patient-transfer assessments” because, “[u]ltimately, [Fairfield’s] position would allow any institutional medical provider to control the standard of care for which it will be held responsible simply by having some department within its corporate structure, rather than the law, select the standard of care applicable to various activities undertaken by its individual medical-provider employees.”   (Emphasis in original.)   Thus, Nelson could testify as to the standard of care applicable to the “certified nursing assistant in effecting a transfer of a patient such as Hill and as to whether [the assistant] met that standard in this case.”

Hill’s designated causation expert was Dr. Volgas, a board-certified orthopedic surgeon who treated Hill following the fall.  Fairfield contended that the broken leg could have been caused by her osteoporosis.  In responding to a question, Dr. Volgas acknowledged that “this fracture [could] have occurred prior to … falling at the nursing home” but proceeded to declare that this was not likely “because of the fracture pattern and because of where the fracture is.”  The Supreme Court held that Dr. Volgas’s testimony was sufficient to create a jury question as to whether the fall was the probable cause of this broken leg.

The opinion extensively discusses Alabama law regarding piercing the corporate veil and details the extensive evidence proffered by Hill.  Among other things, Fairfield owned no real property or significant personal property and carried only $25,000 in liability insurance.   The Supreme Court held that genuine questions were created as to whether Fairfield was the “alter ego” of the other entities.   

 

New York Times Article on Latest Taishan Ruling

The New York Times published an article last week on the latest jurisdictional rulings over Taishan. It points out the difficulties in ever recovering from Taishan, a Chinese manufacturer. It also touches on a recent post I wrote regarding Federal legislation and the importation of Chinese-manufactured drywall. Click on the link below to get the entire story:

http://www.nytimes.com/2012/10/13/business/chinese-drywall-lawsuits-at-a-turning-point.html?pagewanted=all&_r=0

Legislation Passes House to Ban Sale of Toxic Chinese Drywall

The Bradenton (FL) Times reported, "US Rep. Vern Buchanan, (R-FL), co-sponsored legislation that passed the US House, which would ban the sale of toxic Chinese drywall and offer relief to thousands of Florida homeowners who've been victims of its use." The Times noted that "the Contaminated Drywall Safety Act makes Chinese-manufactured drywall a banned hazardous material under the Consumer Product Safety Act, meaning it cannot be imported into the US, and requires the Consumer Product Safety Commission to issue guidelines to ensure that existing drywall is properly disposed of." Also, the bill "calls on the Secretary of State to demand that Chinese manufacturers comply with any legal decisions and remedies for affected American homeowners." The legislation has passed the House and now moves to the Senate for consideration.

The Daily Press (VA) reported, "The toxic drywall has affected thousands across the United States, including hundreds in Hampton Roads, such as the Hollymeade neighborhood in Newport News. The defective drywall was used during the mid-2000s building boom when there was a shortage of American-made drywall." The story added that "many homeowners have complained of health problems resulting from a strong 'rotten eggs' smell, including headaches and respiratory problems."

I am not sure what this legislation will accomplish. The information that is out there shows toxic drywall was imported into our country between 2005 and 2008. I have seen no information indicating that toxic Chinese drywall is still being imported for use in the U.S. This legislation appears to be more of a way for politicians to say they are doing something in an election year, when the problem is already out of the bag. I do think that the part of the bill calling for the Chinese manufacturers to comply with any verdicts against them is interesting, but do not see how it could be enforceable.

Alabama Supreme Court Ruling on Common-Fund Doctrine

In Ex parte State Farm Mut. Auto. Ins. Co., 2012 WL 4238631, Mitchell, a State Farm insured, was injured in an accident caused by Kirk, a Cotton States insured.   Mitchell retained an attorney who investigated the accident and wrote Cotton States seeking to settle for policy limits.  State Farm paid Mitchell (a) $5,000 in medical payments and (b) $7,992.90 in non-medical payments.  State Farm contacted Cotton States seeking reimbursement of the full $12.992.20 paid Mitchell; Cotton States acceded as to $7,992.90 of the demand but, as to the $5,000, declared that “the balance of the subrogation remains outstanding pending the settlement of the Bodily Injury claim with the insured and her attorney.”  State Farm wrote Mitchell’s attorney that State Farm did not him to assist in protecting its subrogation rights as to the $5,000.  Mitchell sued Kirk and State Farm.  When Mitchell and Cotton States reached a tentative settlement for $35,000, State Farm consented to the settlement but requested full reimbursement of the $5,000 payment for medical expenses.  On behalf of Kirk, Cotton States paid $30,000 to Mitchell and interpleaded $5,000 into court.  The trial court ruled that, the common-fund doctrine did not apply and that State Farm was entitled to the entire $5,000.  The Alabama Court of Civil Appeals reversed the trial court and held that the common-fund doctrine fund did apply and that Mitchell was entitled to a deduction for attorney fees and expenses.  The Alabama Supreme Court affirmed the Court of Civil Appeals.

 

The Supreme Court noted that Cotton States declined to meet State Farm’s direct subrogation demand for repayment of the subject $5,000.  Thus, Mitchell’s filed lawsuit would create a common fund from which State Farm’s subrogation right would be satisfied.

 

The Supreme Court rejected State Farm’s contention of “active participation,” an exception to applying the common-fund doctrine.  This exception arises if the insurer “actively assist its insured in the creation, discovery, increase or preservation of the common fund.”  The Supreme Court declared that “an insurance company’s limited appearance to protect its subrogation interest and no more will not shield the insurance company from the application of the common-fund doctrine.”  In other words, the insurer must do more than inform the insured’s attorney that his assistance is not wanted; instead, the insurer must actually do something that helps create the common fund.

 

The Supreme Court further found that there was no policy language that abrogated the application of the common-fund doctrine.

Alabama Supreme Court Ruling on Wrongful Death

In Boudreaux v. Pettaway, No. 1100281, deceased’s medical records clearly showed that she had numerous risk factors placing her in the category of patients with a high risk of pulmonary aspiration during the administration of anesthesia via routine intubation.  Despite those risk factors, a board-certified anesthesiologist and certified registered nurse anesthetist failed to review the medical records or physically examine the patient for the presence of aspiration risks.  The pair failed to employ the rapid-sequence induction process required for patients at risk for aspiration.  Patient aspirated bile into her lungs and died as a result of aspiration pneumonitis.

 

The jury awarded $20,000,000 in damages.  The plaintiff accepted the trial court’s remittance of $16 million, leaving a $4 million judgment.

 

Defendants appealed the denial of their motion for new trial.

 

Defendants suggested that they were entitled to a new trial because prospective jurors failed to answer questions asked during voir dire.   The Supreme Court agreed with the trial court’s determination that the questions were unclear and confusing.  The Supreme Court noted that the information the defendants claim was not disclosed were matters of public record.  The Supreme Court observed that the defendants had allowed individuals to sit on the jury who had disclosed information similar to what the subject jurors allegedly failed to disclose.

 

Defendants also sought a further remittitur.  The opinion addresses how Alabama wrongful-death cases are different from non-death cases.  In assessing the impact of the judgment on the defendants’ net worth, the trial court considered the defendants’ “bad-faith” action against their insurer.  Only Justice Murdock dissented to the other justices’ finding that the trial court properly considered the “bad faith” action in assessing the impact.

 

From reading the opinion, it is evident that the justices concluded that the anesthesiologist and nurse anesthetist were medically negligent and acted reprehensibly.  The anesthesiologist arrived at the hospital only minutes before the surgery.  At trial, the nurse anesthetist repeatedly admitted that he breached the applicable standard of care.