Court Opinion

ID: 4237769
Source: CourtListenerOpinion
Date Created: 2018-01-19 15:31:46.46729+00
Date Added: 2024-06-11T14:42:46.369080
License: Public Domain

STATE OF WEST VIRGINIA

                           SUPREME COURT OF APPEALS

John R. Hooper,
                                                                     FILED
Plaintiff Below, Petitioner                                                      January 19, 2018

                                                                                 EDYTHE NASH GAISER, CLERK
                                                                                 SUPREME COURT OF APPEALS
vs) No. 16-1226 (Marion County 15-C-110)                                             OF WEST VIRGINIA

1543 Country Club Road Manor Operations LLC,
d/b/a Pierpont Center at Fairmont Campus and Genesis Healthcare LLC
Defendant Below, Respondent

                               MEMORANDUM DECISION
        Petitioner John R. Hooper, by counsel W. Jeffrey Volmer, Benjamin B. Ware, and Elise
N. McQuain, appeals the December 2, 2016, order of the Circuit Court of Marion County that
denied his motion for a new trial. Respondents 1543 Country Club Road Manor Operations LLC
d/b/a Pierpont Center at Fairmont Campus and Genesis Healthcare LLC, by counsel Mark A.
Robinson and Lindsey M. Saad, filed a response to which petitioner filed a reply brief.

        This Court has considered the parties’ briefs and the record on appeal. The facts and legal
arguments are adequately presented, and the decisional process would not be significantly aided
by oral argument. Upon consideration of the standard of review, the briefs, and the record
presented, the Court finds no substantial question of law and no prejudicial error. For these
reasons, a memorandum decision affirming the circuit court’s order is appropriate under Rule 21
of the Rules of Appellate Procedure.

        Petitioner’s mother, Joan D. Fluharty (“the decedent”), was a resident of Respondent
Pierpont Center (“the Center”), a nursing home in Fairmont, West Virginia, when on October 6,
2014, she went outside for a “smoke-break,” fell, hit her head on a concrete patio, and died from
her injuries. At the time of her fall, she was supervised by a housekeeper at the facility. Petitioner
filed suit on his mother’s behalf on May 14, 2015, asserting numerous claims against the Center,
and a “direct corporate negligence” claim against Respondent Genesis, Healthcare LLC
(“Genesis”). Genesis is a Delaware business that operates nursing homes, including the Center.
In his complaint petitioner alleged that Genesis owed and breached its duties of care to petitioner
by (1) failing to properly fund, budget, operate, oversee, staff, and manage the Center in the
manner of a reasonably prudent person or corporation; (2) failing to properly allocate resources
and staffing to the Center, and ensure the center was properly staffed, provided with adequate
resources, and that the staff was adequately trained and supervised; and (3) failing to provide
appropriate policies, procedures, and guidance to the Center.

        Following discovery, the matter went to trial on August 29, 2016. Regarding his claim
against Genesis, petitioner introduced evidence that the Center was required to follow Genesis’s
corporate polices, including a policy that permitted housekeeping staff to supervise residents

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during smoke-breaks. Petitioner also admitted into evidence an August 5, 2014, survey that
showed there were staffing problems at the Center. Petitioner also introduced evidence that the
use of a housekeeper to supervise residents was a result of staffing problems, including an
overall nursing staff turnover rate of 88%. The Center’s administrator testified that she did not
set the Center’s budget, and that she was not permitted to use any budget surplus to hire new
staff, in spite of the turnover rate. Petitioner presented testimony that Genesis established all
policies and procedures for the Center, including policies related to fall management and
prevention and policies concerning supervision of the resident’s smoke-breaks. Petitioner also
presented evidence that Genesis provided software to the Center that was malfunctioning. At the
time of her death, the decedent had six prior falls, documented by staff, but the software reflected
none. Petitioner also presented evidence that the Center received more than “twice the number of
health deficiency citations averaged by nursing homes in West Virginia, and four times the
number averaged in the United States.” In spite of this record, petitioner presented evidence that
the Center’s director was awarded a bonus for the year. Samantha Yowell, the housekeeper
supervising the decedent at the time of her fall, testified that she was “completely unqualified” to
supervise residents, hated being in that position, but did not complain for fear of being fired, and
that she felt responsible for the decedent’s death.

         Respondent presented evidence from Mark Levine, a licensed nursing home
administrator, who testified that the Center’s fall mitigation practices met the standard of care
and that it is standard in the industry for one person to supervise smoke-breaks. Mr. Levine
testified further that there was no reason to believe that the decedent’s fall could have been
prevented by having more qualified staff present; and that the Center was staffed appropriately to
meet West Virginia regulations and the needs of residents.

        Prior to jury deliberations, petitioner proposed a negligence instruction, modeled after the
West Virginia Pattern Jury Instructions for Civil Cases. Respondent submitted instructions,
including an instruction for corporate negligence, and filed a motion for summary judgment. The
circuit court rejected petitioner’s proposed instruction, and respondent’s motion, and adopted the
following instruction, which was read to the jury:

       Plaintiff alleges that defendant Genesis Healthcare, LLC is liable for the alleged
       injuries of [the decedent]. Defendant Genesis Healthcare LLC denies that it is
       responsible for any alleged injuries as the control and operation of the care
       rendered is exclusively the responsibility of Pierpont Center, who is the
       responsible party under West Virginia law. The court instructs the jury that it is a
       general principle of corporate law that a “parent corporation” is not liable for the
       acts of its subsidiaries.

       A company is not liable for another company’s acts, unless it controls the day-to­
       day operations of that company. A company is not liable for activities that involve
       another company but are consistent with investor status, such as monitoring
       performance, supervision of finance and budget decisions and articulation of
       general policies and procedures.

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       To decide that Genesis Health Care, LLC may be held responsible for plaintiff’s
       claims, you must find that sufficient evidence was presented to show that
       defendant Genesis Healthcare, LLC actually controlled the conduct of Pierpont
       Center that injured [the decedent]. If you find that defendant Genesis Health Care
       LLC did not exercise actual control over conduct of a defendant that breached a
       duty to [the decedent], then your verdict must be in favor of Defendant Genesis
       Healthcare.

        On September 2, 2016, the jury returned a verdict in favor of the Center and Genesis on
all counts in the complaint, and the circuit court’s judgment order was entered on September 19,
2016. Petitioner filed a timely motion for new trial, which was denied after a hearing. At the
hearing, petitioner argued that the circuit court erroneously instructed the jury regarding
corporate negligence; that the instruction did not reflect petitioner’s theory of the case, and that
the instruction was prejudicial and binding in nature. The circuit court denied petitioner’s
motion. Petitioner now appeals the December 2, 2016, order denying his motion for new trial.

         In this appeal petitioner’s sole assignment of error alleges that the circuit court erred in
giving an erroneous binding jury instruction regarding petitioner’s negligence claim. Petitioner
asserts that the circuit court committed reversible error when it instructed the jury on a vicarious
liability theory, because petitioner’s claim was pled and litigated as a direct corporate negligence
claim against Genesis, pursuant to this Court’s decision in Manor Care, Inc., v. Douglas, 234 W.
Va. 57, 763 S.E.2d 73 (2014).

       We have held that,

       “[T]he ruling of a trial court in granting or denying a motion for a new trial is
       entitled to great respect and weight, [and] the trial court’s ruling will be reversed
       on appeal [only] when it is clear that the trial court has acted under some
       misapprehension of the law or the evidence.” Syl. pt. 4, in part, Sanders v.
       Georgia–Pacific Corp., 159 W.Va. 621, 225 S.E.2d 218 (1976).

Syl. Pt. 2, Estep v. Mike Ferrell Ford Lincoln-Mercury, Inc., 223 W. Va. 209, 672 S.E.2d 345
(2008). Further, “‘[a]s a general rule, the refusal to give a requested jury instruction is reviewed
[by this Court] for an abuse of discretion. By contrast, the question of whether a jury was
properly instructed is a question of law, and the review is de novo.’ Syl. pt. 1, State v. Hinkle,
200 W.Va. 280, 489 S.E.2d 257 (1996).” Syl. Pt. 9, Estep, 223 W. Va. at 213, 672 S.E.2d at 345.
With these standards in mind, we consider petitioner’s assignment of error.

        Petitioner argues that a parent company of a nursing home may be held directly liable for
its own corporate negligence that contributes to the death or injury of a resident of the home.
Petitioner next argues that he asserted a “non-vicarious, direct corporate negligence claim”
against Genesis, modeled after the claim in Manor Care. See Manor Care, 234 W.Va. at 66, 763
S.E.2d at 82. In response, respondent asserts that petitioner failed to establish that Genesis should
be held directly liable for its wrongful conduct. In its order, the circuit court found that its
instruction as to corporate negligence was based on the decision of United States v. Bestfoods,
524 U.S. 51, 61 (1998), and was consistent with state law. We agree, and find no error.

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        In Bestfoods, which determined a parent company’s liability under a federal statute for
operating a polluting chemical facility, the United States Supreme Court articulated that
“[a]ctivities that involve the facility but which are consistent with the parent’s investor status,
such as monitoring of the subsidiary’s performance, supervision of the subsidiary’s finance and
capital budget decisions, and articulation of general policies and procedures, should not give rise
to direct liability.” Id. at 72. The “critical question,” as it applies to direct liability of a parent
corporation, “is whether, in degree and detail, actions directed to the facility by an agent of the
parent alone are eccentric under accepted norms of parental oversight of a subsidiary’s facility.”
Id.

        Petitioner argues that they were not required, under Manor Care, to present evidence that
Genesis exercised actual control over the operations of the Center, but that Genesis committed its
own wrongs and that the jury could find Genesis directly liable for Genesis’s conduct. However,
we note that in Manor Care, the plaintiff presented evidence that was sufficient for a jury to
determine that the conduct of the parent company, Manor Care, was “reprehensible,” and
included testimony from a staff member that described the conditions as “horrible” and
“unbearable.” 234 W. Va. at 99, 763 S.E.2d at 83. Another employee complained that when they
reported the systemic resident neglect to a Manor Care administrator, the administrator “yelled at
her for documenting patient neglect and removed the report from the books . . . She accused the
HCR Manor Care administrator of covering up the incident.” Id. Importantly, the plaintiff in
Manor Care presented evidence that the defendants “actively concealed and covered-up their
misconduct,” by “falsifying staffing schedules,” “intentionally miscalculating nursing hours,”
“destruction of written complaints of neglect,” “reprimanding employees for documenting
neglect,” and “increasing the number of staff during State inspections.” Id. That is not the nature
of the evidence presented by petitioner in this matter.

         Here, petitioner presented evidence that Genesis set policies, procedures, and budgets for
the Center. In addition, he introduced evidence showing that the Center received more citations
than is average for the State. Petitioner did not present evidence that Genesis engaged in
fraudulent or intentionally misleading behavior. In order to prove that Genesis was “directly
liable” for the negligence of the Center, petitioner was required to present evidence that Genesis
exercised actual control over the operations of the Center. See Bestfoods, 524 U.S. at 67 (citing
Jacksonville Elec. Auth. V. Bernuth Corp., 996 F.2d 1107, 1110 (11th Cir. 1993) (parent is liable
if it “actually exercised control over, or was otherwise intimately involved in the operations of,
the [subsidiary] corporation immediately responsible for the operation of the facility[.]”)
Petitioner did not present evidence that Genesis was directly involved in the day-to-day
operations of the facility. While Petitioner complains that Genesis provided software, and that
the software failed to document the decedent’s previous falls, petitioner did not present any
evidence, as presented in Manor Care, that showed Genesis actively concealed or covered up the
incident in question or any other instances of injury or misconduct. Consequently we find that
based upon the evidence presented, the circuit court was not operating under a misapprehension
of the law by instructing the jury as stated, and did not abuse its discretion by denying
petitioner’s instruction regarding direct negligence.

       For the foregoing reasons, we affirm.

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                                         Affirmed.

ISSUED: January 19, 2018

CONCURRED IN BY:

Chief Justice Allen H. Loughry II
Justice Menis E. Ketchum
Justice Elizabeth D. Walker

DISSENTING:

Justice Robin Jean Davis
Justice Margaret L. Workman

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