Miss. SC affirms reduction of $1.5M verdict in nursing home suit

Jessica M. Karmasek Apr. 20, 2012, 11:35am


JACKSON, Miss. (Legal Newsline) - The Mississippi Supreme Court last week upheld a trial court's reduction of a $1.5 million jury verdict in a wrongful death lawsuit.

Henry C. Gibson was a resident of Arnold Avenue Nursing Home, or AA, in Greenville from June 2001 to December 2002.

After being hospitalized in December 2002, Gibson was moved to another nursing home and died Jan. 26, 2003.

Gibson's estate filed a wrongful death lawsuit in August 2004, seeking compensatory and punitive damages.

The plaintiffs argued that Magnolia Healthcare Inc., the owner of AA, and Foundation Health Services Inc., an entity that had entered into a management and financial services agreement with Magnolia, were negligent in causing various injuries, some of which contributed to Gibson's death.

The jury awarded $1.5 million in compensatory damages, which the Washington County Circuit Court reduced to $500,000 for noneconomic damages and $75,000 for permanent disfigurement.

The trial court refused to allow the jury to consider punitive damages.

In their appeal to the state's high court, the plaintiffs argued that the lower court erred in refusing to allow the jury to consider punitive damages and that the statutory cap for noneconomic damages is unconstitutional.

In their cross-appeal, AA and Foundation argued that the trial court erred in denying Foundation's motion for judgment notwithstanding the verdict; it erred in denying the defendants' motion for JNOV on the issues of breach and causation; and it erred in denying their motion for mistrial based on improper witness testimony and counsel's inappropriate comments before the jury.

The Court, in its April 12 ruling, found no error in the lower court's refusal to allow the jury to consider punitive damages.

"The plaintiffs did not present any additional evidence at the punitive-damages phase but relied on the evidence submitted during the compensatory phase," Justice Ann Hannaford Lamar wrote for the Court. "In reviewing the totality of the record before the trial court, we find no abuse of discretion."

The trial court, Lamar explained, correctly ruled that the plaintiffs did not show by "clear and convincing evidence" that Magnolia acted with willful, wanton or reckless disregard for the safety of others, or committed actual fraud -- for which punitive damages are only appropriate.

The Court also found that the plaintiffs failed to raise the constitutionality of the statutory cap before the trial court; therefore, the issue is procedurally barred.

As to the defendants' cross-appeal, the Court ruled that the Foundation was an "improper party" and that the trial court should have granted its motion for JNOV.

"We agree that Foundation's contractual duties are similar to those imposed under Mississippi law for an administrator and licensee. We see no reason to extend individual liability to cover an entity that provided some of the same services at issue in Howard. And, like the administrator and licensee in Howard, Foundation provided no medical care and thus cannot be liable for medical malpractice," Lamar wrote.

"Furthermore, the management contract clearly lists Foundation as 'solely (an) agent and acting on behalf of Magnolia.' And in Mississippi, an 'agent for a disclosed principal is not liable for the torts of the principal.' To be liable, the agent must commit 'individual wrongdoing.' In other words, the agent incurs no personal liability absent fraud or equivalent misconduct."

The Court found no error in any of the remaining issues raised by the defendants.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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