Sacramento jury slams assisted living firm with $23 million in punitive damages
03/09/2013 12:00 AM
06/11/2013 12:23 PM
The offer came in late last year – $3.5 million, Eric Boice said, if he, his brother and sister would drop the wrongful death and elder abuse lawsuit they had filed on behalf of their 82-year-old mother, Joan.
"Then," Boice said in an interview Friday, "nobody would have ever known."
Instead of making a deal with the Emeritus Corp., the Boice family pushed ahead to trial in its fight against the assisted-living giant.
Friday, a Sacramento Superior Court jury came back with a $23 million punitive damage award against Emeritus, which the jury three days earlier had already found guilty of malice, oppression and fraud in the death of Joan Boice.
"We think the jury got it right with the verdicts, and we're hoping that the punitive damage serves as a wake-up call to this company that it needs to change," Eric Boice said in the hallway outside the courtroom. "We've seen places that do it right, that are making a profit, but not at the expense of the people they are trying to serve."
Emeritus vowed to appeal the verdict.
"We are extremely disappointed in the outcome of the trial," company spokeswoman Karen Lucas said. "We feel it was not a fair reflection of how we handled the care for Mrs. Boice."
Already suffering from Alzheimer's disease, Joan Boice arrived at Emeritus at Emerald Hills in Auburn in September 2008. By the time she left in December, she had developed bedsores. She died three months after moving out, with the sores listed as a significant condition leading to her death.
In a two-month trial, plaintiffs put on evidence that the Emerald Hills resident nurse told a caregiver at Emerald Hills who first found the sores to "just don't let anybody know," because the disclosure would have resulted in Mrs. Boice's removal from the facility.
Along with systemic understaffing and a lack of training, Emeritus' retention policies designed to keep "heads in the beds" resulted from a corporate drive for profits that put the bottom line above residents' care, according to the plaintiffs.
"It was an eye-opener," juror Mark Jackson, a mechanic, said of the nine-week trial. "And the world needs to know what's going on – California needs to know what's going on with elder abuse in these homes. We need to open our eyes to what's going on around us."
Juror Alice Bauer, a retired teacher, said members of the panel were stunned to learn in the punitive phase of the two-stage trial that Emeritus Corp. hasn't paid any federal income taxes in three years, despite balance sheets that last year showed annual revenues climbing to $1.57 billion, profits reaching $116 million and a stock market valuation soaring to $1.34 billion.
"They just couldn't stomach that," Bauer said.
Big numbers, corporate mergers, debt, acquisition – "This is how the world works a little bit," Bauer said.
She put Emeritus right in the middle of it, trying to improve its bottom line at a time of massive growth, as it pushed to become the No. 1 assisted living facility company that it now is.
Bauer said Emeritus needs to know about another bottom line: "Harm was done. And they were just very careless in ignoring the harm that could occur by pushing so hard. That's what they should not have been doing."
Juror Brian Higgins said, "I believe they really tried to hide and cover up some things they shouldn't have." He said Emeritus' focus "should have been on care – No. 1 – instead of the marketing, instead of the sales. If that had been in place from the beginning, this never would have happened."
Although the Emeritus spokeswoman defended the care Boice received at Emerald Hills, defense lawyer Bryan R. Reid, in his closing argument to the jury in the punitive-damages phase of the trial, appeared to confirm some of the key allegations the plaintiffs put on through their witness testimony.
The Emerald Hills executive director in late 2008 "didn't seem like she had really good guidance," Reid said. He confirmed "deficits in the documentation" on whether Emerald Hills conformed to the company's internal policies. Reid acknowledged "training deficits" and "holes in the staffing."
"Clearly, we could not prove that all the shifts were filled as intended, or maybe even as required," Reid told the jury. Regulatory compliance "was very much a challenge."
Reid told the jury Emeritus has since acted to fix the shortcomings at Emerald Hills in 2008, but plaintiffs' attorney Lesley Ann Clement disputed the suggestion "that Emeritus has made any strides about anything other than more acquisitions, more growth, more money-making."
"What it really is is a powerful and corrupt corporation," Clement said of Emeritus. "What Emeritus does and is still doing is making financial decisions that put its residents at great risk, decisions to profit at the expense of the very people who we love, who deserve the greatest care and dignity that can be afforded them."
Clement suggested that the jury give Emeritus a 12-day "timeout" at a cost of its 2012 average daily revenue of $4.3 million. The $23 million verdict amounted to less than half her suggestion, but she said afterward that it was enough to send a message – and that she expects another long fight with Emeritus to see that it sticks through the appeal.
"They've fought us every step of the way," Clement said. "I seriously doubt they'll even make a settlement offer. If you're (Emeritus chief executive officer) Mr. Dan Baty, you have the funds and the wherewithal to go the distance. But you know what? My clients and I have the perseverance to go the distance, too."
In the liability phase of the trial, the jury awarded the Boice family $3.875 million for Joan Boice's pain and suffering and another $250,000 for the loss of her companionship. Judge Judy Holzer Hersher, however, had already placed a $250,000 cap on the pain and suffering verdict under a state law that limits medical malpractice awards.
Call The Bee's Andy Furillo, (916) 321-1141. Follow him on Twitter @andyfurillo.
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