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Plaintiffs: Healthcare group sought profits over patients

Amount:

$1,110,000,000

Type:

Verdict-Plaintiff

State:

Florida

Venue:

Polk County

Court:

Polk County Circuit Court, 10th

Injury Type(s):

arm hip-fracture; femoral neck leg leg-fracture(fracture, femur); leg(fracture, femur) head-ear elbow other-death other-infection other-dehydration other-malnutrition other-loss of parental guidance wrist epidermis epidermis-cellulitis face/nose-facial laceration

Case Type:

Nursing Homes - Abuse or Neglect, Negligent Supervision

Case Name:

The Estate of Arlene Anne Townsend, by and through Brenda S. Shattuck, personal representative v. Trans Healthcare, Inc., No. 53-0009CA001025000000

Date:

July 22, 2013

Parties

Plaintiff(s):

Gary Townsend

Brenda S. Shattuck , 

Estate of Arlene Townsend (Female, 69 Years)

Plaintiff Attorney(s):

Joseph H. Ficarrotta; Wilkes & McHugh, P.A.; Tampa, FL, for Gary Townsend, Brenda S. Shattuck, Estate of Arlene Townsend ■ Bennie Lazzara; Wilkes & McHugh, P.A.; Tampa, FL, for Gary Townsend, Brenda S. Shattuck, Estate of Arlene Townsend ■ Isaac R. Ruiz-Carus; Wilkes & McHugh, P.A.; Tampa, FL, for Gary Townsend, Brenda S. Shattuck, Estate of Arlene Townsend

Defendant(s):

Trans Healthcare Inc.

Defense Attorney(s):

Eric F. Ochotorena; Rissman, Barrett, Hurt, Donahue & McLain, P.A.; Tampa, FL, for Trans Healthcare Inc. ■ Bryan R. Snyder; Rissman, Barrett, Hurt, Donahue & McLain, P.A.; Tampa, FL, for Trans Healthcare Inc. ■ Carl Hagwood; Hagwood Adelman Tipton, P.C.; Greensville, MS, for Trans Healthcare Inc. ■ Hunter C. Carroll; Hagwood Adelman Tipton, P.C.; Birmingham, AL, for Trans Healthcare Inc.

Facts:

From 2001 until her death in 2007 at age 69, plaintiff's decedent Arlene Townsend, a retired nurse, lived at Auburndale Oaks Healthcare Center in Auburndale, which was managed, operated and controlled by Trans Healthcare Inc. Townsend's estate claimed that she suffered several injuries and more than a dozen falls while living at the center. Acting on behalf of the estate, Brenda S. Shattuck sued Trans Healthcare, alleging that the treatment and supervision of Townsend were negligent, and were the cause of her death. The estate's counsel noted that the medical records indicated that Townsend fell 18 times and suffered from multiple skin tears and infections. They contended that the facilities did not have enough employees or supplies to properly care for all of the residents. They further contended that the facility failed to provide adequate treatment for Townsend and many other patients there and at other Trans Healthcare facilities. The defendant stopped participating in the case in 2010 after a year of litigation. Townsend's estate was awarded a default judgment on liability and causation in 2011.

Injury:

Between August 2004 and August 2007, Townsend fell 18 times; sustained skin tears to her elbows, wrists, legs and right forearm; and suffered from infections -- including Clostridium difficile -- cellulitis, chronic stomach pains with fecal impaction, malnutrition, and dehydration. Among other incidents, Townsend was found lying in a pool of blood with a laceration over her right eye on June 27, 2005. Townsend fell for the last time on Aug. 31, 2007. She was initially diagnosed with a skin tear to the right ear and right forearm, and pain to right leg. On Sept. 7, 2007, an X-ray revealed that she suffered a right subcapital femur neck fracture. On Sept. 8, 2007, Townsend was transferred to Winter Haven Hospital, where she was considered a poor candidate for surgery. On Sept. 13, 2007, she was admitted to a hospice. She died on Sept. 18, 2007, at the age of 69. She was survived by her son, Gary Townsend. The estate sought recovery for Gary Townsend's loss of parental guidance and companionship, as well as punitive damages. The estate asked the jury to award $200 million in compensatory damages and $1 billion in punitive damages. Regarding the loss of companionship and parental guidance, Gary Townsend testified about his relationship with his mother. Regarding the award for punitive damages, the estate's counsel argued that real estate investors and financiers, including General Electric Capital Corp., Ventas, Inc., and GTCR Golder Rauner, LLC (which founded Trans Healthcare Inc. in 1998) schemed to run the healthcare facilities operated by Trans Healthcare and its management company, Trans Health Management, into insolvency with reckless disregard for the safety of the patients. They contended that the company cared more about making money than caring for the patients, and noted that the Trans Healthcare Inc.'s board of directors was composed solely of bankers and investors, with no healthcare officials. The estate's counsel noted that from 1999 to 2003, GTCR and Trans Healthcare Inc. acquired nursing homes with funding from GECC, Ventas and other lenders, and grew tenfold in size, with more than 220 facilities and more than a billion dollars in revenue. Trans Healthcare Inc. later defaulted on loans provided by GECC and Ventas. In July 2004, GECC and Ventas seized Trans Healthcare Inc.'s bank accounts. The estate's counsel contended that former employees, inside operators and nursing home patients then began filing suits, alleging that there was poor management and care. In 2006, Trans Healthcare Management was sold for $100,000 to Fundamental Long Term Care Inc., which the estate's counsel argued was a shell company that had no employees. In 2007, Trans Healthcare Management forfeited its registered agent, which caused it to cease to have a corporate existence. It also stopped filing annual status reports, and its corporate status was voided. In 2009, after being stripped of its assets, Trans Healthcare Inc. was put into a receivership, with only one nursing home remaining in operation. The estate's counsel alleged that this was a coordinated effort to allow the company responsible for all the liabilities to go defunct and disappear without paying its creditors or making the wronged parties whole. The estate's counsel contended that when GECC and Ventas seized Trans Healthcare Inc.'s bank accounts, GECC and Ventas took their share of company money following the default without ensuring that there was money available to cover payroll, supplies and utilities for hundreds of nursing homes. They further argued that the assets stripped from Trans Healthcare Inc. were used to operate the Fundamental chain of nursing homes. The estate's counsel also argued that Trans Healthcare Inc. diverted taxpayer dollars from patient care to buy political favors. It was undisputed at trial that the defense of Trans Healthcare Inc. was being funded by the same real estate investors and financiers that Townsend's estate alleged stripped the company of its assets. A special agent from the Internal Revenue Service testified that Trans Healthcare Inc. used false and misleading financial statements to obtain loans for GECC and Ventas, and that, in July 2004, Ventas and GECC took action to default on the loans and seize the company cash, but that neither company notified banking or healthcare regulators of the company's financial distress and the risk to residents. The agent further testified that Trans Healthcare Inc.'s former company leaders had engaged in illegal political contributions, and then had been reimbursed with tax dollars by charging the contributions to the government through Medicare reports. The plaintiff's forensic accounting expert opined that GTCR founded Trans Healthcare Inc. with the intent to create the largest privately owned nursing home company in the country through a series of mergers and acquisitions, with the ultimate goal of taking the company public and then cashing out. The accounting expert opined that the same investor that owned a significant portion of the facilities that Trans Healthcare Inc. managed owned Fundamental Long Term Care. He further testified that more than $800 million in assets were stripped away from Trans Healthcare Inc. by the real estate investors and financiers. Defense counsel denied the estate's claim that the parties had engaged in coordinated efforts to gain profits over the care of the patients. They also argued that the receivership of Trans Healthcare Inc. only had $6 million in assets and $18 million in liabilities, and was insolvent. They asked the jury to award $3 million - half of the assets they alleged the receivership had available.

Result:

The jury determined that the estate's damages totaled $1.11 billion, which included $1 billion in punitive damages. Post-trial: Defense counsel planned to appeal the decision, arguing that they were not permitted to call any witness to present evidence in rebuttal to the plaintiff's evidence, particularly on causation or the amounts of damages. They further contended that the court erred in denying motions to set aside the default, denying certain evidence into testimony, and denying questions as to whether the decedent's son knew of the conditions or attempted to transfer the decedent or questions on the decedent's prior medical condition. They further argued that the award was excessive and would bankrupt the defendants. Defense counsel also filed motions to disqualify the trial judge, and the court stayed the enforcement of the judgment.

Estate of Arlene $1,000,000,000 Personal Injury: Punitive Exemplary Damages$35,000,000 Personal Injury: negligence$50,000,000 Personal Injury: violation of rightsGary $25,000,000 Wrongful Death: loss of parental companionship, instruction and guidance

Actual Award:

$1110000000

Trial Information:

Judge:

J. Dale Durrance

Trial Length:

4  days

Trial Deliberations:

75  minutes

Jury Composition:

2 male/ 4 female

Post Trial:

The defendants planned to appeal the decision, arguing that they were not permitted to call any witness to present evidence in rebuttal to the plaintiff's evidence, particularly on causation or the amounts of damages. The defendants further contended that the court erred in denying motions to set aside the default, denying certain evidence into testimony, and denying questions as to whether the decedent's son knew of the conditions or attempted to transfer the decedent,

Editor's Comment:

This report is based on information that was provided by plaintiff's and defense counsel.