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On December 20, 2023, in Newlin v. Vita Healthcare Group, et. al, Judge Kelly Eckel of the Delaware County, PA Court of Common Pleas entered an order with a 41-page opinion which reduced a $19 million verdict against four defendants, two operators of a skilled nursing facility and two companies that provided management services to the facility, by more than half.    

Case Summary

The lawsuit was initiated by the Estate of Patricia O’Donnell. Ms. O’Donnell resided at skilled nursing facility Brinton Manor Nursing and Rehabilitation Center in Glen Mills, PA for approximately a year and a half. Plaintiffs alleged that Ms. O’Donnell experienced a fall with a hip fracture and subsequently developed pressure ulcers, leading to her death.

The jury entered a verdict against all four defendants, awarding $4 million in compensatory damage and $15 million in punitive damages, including $5 million against the first licensed operator, $6.5 million against the first management company, $2 million against the second licensed operator, and $1.5 million against the second management company. The jury apportioned a majority of liability (60%) to the first management company. Defendants filed post-trial motions requesting 1) judgment notwithstanding the verdict; 2) an Order directing a new trial based on various issues at trial; and 3) a remittitur of the jury’s verdict.

Judge Eckel granted judgment notwithstanding the verdict to the two management companies based on the Scampone line of cases, Scampone v. Highland Park Care Ctr., LLC, 57 A.3d 582 (Pa. 2012) (Scampone II) and Scampone v. Grane Healthcare Co., 169 A.3d 600 (Pa. Super. 2017) (Scampone III). Under Scampone, because the non-delegable duty of care lies with the licensed operator only, a plaintiff cannot recover against both the licensed operator of a skilled nursing facility and a management company under a theory of direct corporate negligence. Although the plaintiff may recover against both entities under a theory of vicarious liability, Judge Eckel determined that the claims against the management companies failed as a matter of law because the only claims against those entities were “corporate negligence or direct negligence claims.” Accordingly, the court vacated the punitive damages awards against the management companies. Judge Eckel also reduced the punitive damages award against the second licensed operator from $2 million to $385,000, because the company only operated the facility for the last 21 days of Ms. O’Donnell’s residency. Defendants other post-trial motions were denied. The case is likely to be appealed to the Superior Court.

Key Takeaway

Pennsylvania courts will apply the principles established in Scampone and ensure that the licensed operator and a management company are not both held liable for the licensed operator’s non-delegable duties. This decision underscores the importance of drawing distinctions between these entities during pleadings, discovery, and trial. These issues of corporate negligence, agency, and the distinction between direct and vicarious claims continue to be on the forefront of professional liability suits.