State Supreme Court should affirm statutory damages ruling

The California Supreme Court recently granted review of Jarman v. HCR ManorCare, Inc., 9 Cal. App. 5th 807 (2017), wherein the 4th District Court of Appeal held that (1) the statutory award of up to $500 authorized by Health and Safety Code Section 1430(b) is available per cause of action rather than per lawsuit and (2) upon appropriate proof of malice, oppression, or fraud, punitive damages can be recovered in an action for violation of skilled nursing facility resident rights brought pursuant to Section 1430(b).

The high court should affirm the 4th District's decision for several reasons.

Amici Curiae

In support of the review petition, amici curiae list a parade of horribles that would result from making damages available per cause of action. But their concerns ignore the express language of the opinion in Jarman as well as applicable law.

For example, they warn that under Jarman, a resident may recover "hundreds of $500 penalties" for a continuing violation of the same resident right. They ask, "if a plaintiff alleged that a facility violated a privacy regulation by opening his mail or e-mail each day without permission ..., could he recover hundreds of $500 penalties for each piece of mail or e-mail improperly opened? Under existing law the answer would clearly be 'no,' but trial courts attempting to follow Jarman may conclude otherwise."

But Jarman resolved the question of continuing violations of the same resident right: "[A]warding damages on a 'per cause of action' basis eliminates at least some of those concerns because under a primary rights analysis, the defendant's continuing violation of the same right ... would presumably qualify as a single cause of action." The court did not suggest that continuing violations amount to separate causes of action. It simply upheld the jury's findings because the defendant failed to meet its burden to demonstrate that the jury's verdict was erroneous.

Second, amici curiae argue that allowing punitive damages under Section 1430(b) upon appropriate proof supplies plaintiffs an end-run around the heightened proof requirements of the Elder Abuse Act for enhanced damages: The act "requires plaintiffs to satisfy a heightened burden of proof -- a plaintiff must prove by clear and convincing evidence that a defendant is liable for physical abuse ... Jarman dispenses with these requirements and ignores the Legislature's calibrated statutory scheme governing skilled nursing facilities."

If that's the case, then the Supreme Court would have to overlook that punitive damages awards under Civil Code Section 3294 require essentially the same burden of proof: "[W]here it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff ... may recover damages for the sake of example and by way of punishing the defendant." See In re Conservatorship of Kayle, 134 Cal. App. 4th 1, 6 (2005) ("Because relief under the heightened remedies of the Elder Abuse Act requires proof of conduct equivalent to conduct that would support recovery of punitive damages, with necessary proof, plaintiffs may also recover punitive damages."); Country Villa Claremont Healthcare Center, Inc. v. Superior Court, 120 Cal. App. 4th 426, 432 (2004) (same). And of course, the opinion in Jarman makes clear that it is not dispensing with the proof requirements for punitive damages.

Manor Care

Manor Care argues that "[w]here a statute creates new rights and obligations not previously existing in the common law, the express statutory remedy is deemed to be the exclusive remedy available for statutory violations, unless it is inadequate." De Anza Santa Cruz Mobile Estates Homeowners' Ass'n v. De Anza Santa Cruz Mobile Estates, 94 Cal. App. 4th 890, 912 (2001). However, many of the rights actionable under Section 1430(b) did exist in the common law.

For instance, a resident has the right "[t]o consent to or to refuse any treatment or procedure or participation in experimental research" (22 CCR Section 72527(a)(4)). And medical treatment performed without consent constitutes common law battery. See, e.g., Estrada v. Orwitz, 75 Cal. App. 2d 54, 57 (1946); Perry v. Shaw, 88 Cal. App. 4th 658, 661 (2001). Similarly, a resident has the right "[t]o be free from discrimination based on sex, race, color, religion, ancestry, national origin, sexual orientation, disability, medical condition, marital status, or registered domestic partner status" (Section 72527(a)(8)). This statutory right has a common law analogue -- "the common law doctrine that a business affected with a public interest must serve all customers on reasonable terms without discrimination" Gay Law Students Assn. v. Pacific Tel. Tel. Co., 24 Cal. 3d 458, 489-90 (1979). This is the same analogue relied on in Commodore Home Systems, Inc. v. Superior Court, 32 Cal. 3d 211 (1982), which Manor Care cites.

Manor Care also ignores that Section 72527 protects a number of privacy rights: Section 72527(a)(11), confidential treatment of financial and health records; (a)(12), privacy in treatment and in care of personal needs; (a)(14), to associate and communicate privately; (a)(21), privacy for visits with family, friends, and others. Of course, it is indisputable that there is a common law tort for invasion of privacy. See Hernandez v. Hillsides, Inc., 47 Cal. 4th 272, 286 (2009).

Manor Care next contends that punitive damages are not available because underlying compensatory damages are not available under Section 1430(b). It cites Kizer v. County of San Mateo, 53 Cal. 3d 139 (1991), for the notion that "Civil penalties under the Act, unlike damages, require no showing of actual harm per se. Unlike damages, the civil penalties are imposed according to a range set by statute irrespective of actual damage suffered."

But Kizer had nothing to do with Section 1430(b). Kizer involved statutory civil penalties imposed by the state under Health and Safety Code Section 1417 et seq. or by the attorney general or a person pursuant to Section 1430 subdivision (a). Yet Kizer notes that "Section 1430 does not foreclose civil actions for damages by patients who have been injured by a violation; the remedies specified in that section are 'in addition to any other remedy provided by law.'" (Emphasis added.) In short, the civil penalties available under Section 1417 et seq. and Section 1430(a) are distinct from Section 1430(b).

Manor Care also argues that "a resident's suit for violation of resident's rights arises from contract" and that under Civil Code Section 3294, punitive damages are allowed only in an action for breach of an obligation not arising from contract. However, an action for a violation of resident rights arises from a skilled nursing facility's breach of duties it owes its residents under the law irrespective of any contract it may have with a resident.

According to Manor Care, it would owe no duty to provide care to or protect the rights of a resident of one of its facilities unless it had a written admission agreement with that resident. Such a contention is absurd; a skilled nursing facility owes nondelegable duties under the law to comply with regulations and protect the rights of its residents. This duty cannot be delegated. See Evard v. Southern California Edison, 153 Cal. App. 4th 137, 147 (2007). "A nondelegable duty may arise when a statute or regulation requires specific safeguards or precautions to ensure others' safety. See Felmlee v. Falcon Cable TV, 36 Cal. App. 4th 1032, 1038 (1995). "One who by statute or by administrative regulation is under a duty to provide specified safeguards or precautions for the safety of others is subject to liability to the others for whose protection the duty is imposed for harm caused by the failure of a contractor employed by him to provide such safeguards or precautions." Evard, 153 Cal. App. 4th at 146 (quoting Restatement Second of Torts, Section 424). To be so responsible, skilled nursing facilities must comply with applicable statutes and Title 22 regulations, which the Legislature has explicitly mandated prescribe standards of care relating to safety, basic care and supervision, and services to be provided.

For these reasons and many others which the Supreme Court will likely explain, Jarman should be affirmed.