Bad acts or policies of managing agents can lead to punitive damage awards, even if committed without the knowledge" of the employer.

If a plaintiff can prove that malice, fraud or oppression is present in the acts of an employer's managing agents, or is the product of policies or practices established by corporate management, the corporation may be found liable for punitive damages even if it did not "ratify" or "approve of" the conduct of an employee who commits elder abuse.

A "managing agent" includes only those corporate employees who exercise substantial independent authority and judgment in their corporate decision-making so that their decisions ultimately determine corporate policy.

In a case involving a nursing home, plaintiffs will take the position that the administrator and director of nursing fit the above definition for managing agent. Companies that own many nursing homes will argue that, for punitive damage purposes, only an officer at corporate headquarters can be considered a managing agent.

The owner or director's decision to sacrifice care to increase profits may lead to punitive damages.

Generally speaking, plaintiffs should take the approach that the administrator of a nursing home, whether individually owned or part of a chain, is a managing agent because the administrator is responsible for budget formation which, in elder abuse cases, will involve spending less money on patient care to increase profit. The administrator by statute is responsible for this part of the operation of a nursing home (22 Cal.Code Regs. §72513).

The director of a nursing home has administrative authority, responsibility and open accountability for nursing services within the facility (see 22 Cal.Code Regs. §72327(c)). Thus, if a plaintiff can establish malice, oppression or fraud against one of these individuals, they should fit the definition of "managing agents" and the corporation will be responsible for punitive damages.

Establishing malice against directors in nursing home cases.

"Malice" is described by statute as "conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others."

In nursing home cases, the key element of the above definition is "willful and conscious disregard of the rights or safety of others." Almost by definition, elder abuse fits under this definition and if a plaintiff can prove that a director or administrator of the nursing home was acting in "willful and conscious disregard" of the residents at the home, plaintiff should prevail on punitive damages.

Establishing oppression against directors in nursing home cases.

"Oppression" for punitive damages purposes is described as "despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights."

There are an extraordinary number of rights that residents of nursing homes are given by statute. If the director or administrator of a corporation knows that these rights, described later, are being disregarded, plaintiff will be able to establish a punitive damage claim.

Establishing fraud against directors in nursing home cases.

"Fraud" for punitive damage purposes means "an intentional misrepresentation, deceit or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury."

Typically, fraud can be established by misrepresentations made to the family when an elder is placed in a nursing home. In fact, plaintiff can usually establish that it is the "policy" of the facility to make such misrepresentations which will lead to a punitive damage award.

Plaintiff can establish fraud if the nursing home fails to disclose significant deficiencies such as lack of appropriate staffing and training of employees.

Most nursing homes will represent to the family of potential residents that they comply with all regulations. Generally, plaintiff will be able to establish that any number of regulations have not been followed. If plaintiff can prove that there was elder abuse and injury as a result of the violation of one of these regulations, it should lead to a finding of fraud and punitive damages.

Important aspects of discovery and investigation to prove punitive damages against nursing homes.

In punitive damage cases, plaintiff should obtain the nursing home's operating budget and study it carefully.

The law requires that the nursing home must be "administered in a manner that enables it to use its resources effectively and efficiently to attain or maintain the highest practicable physical, mental and psychosocial well being of each resident." By carefully studying the budget to discover hidden profit or huge salaries paid to administrators and directors at the expense of care of the patients may lead to evidence justifying a punitive damage award.

Pleading of punitive damages is limited by MICRA in nursing home cases.

In cases against skilled nursing facilities, a plaintiff cannot plead punitive damages without first establishing a prima facie case for recovery of punitive damages. At that point he or she can bring a special motion to the court to plead punitive damages.

If you are a concerned relative or friend of an elderly person that you believe is suffering from elder abuse in the Los Angeles area, we’d like to hear from you. Contact us online or call us at 818-756-2029 to set up a FREE consultation to discuss your legal options.