Nursing Home • Direct Corporate Liability • Vicarious Liability • Management Contract

Scampone v. Grane Healthcare Co., PICS Case No. 17-1241 (Pa. Super. Aug. 8, 2017) Bowes, J. (66 pages).

Trial court erred in finding that health-care company had no duty to residents of nursing home that health-care company was contractually bound to manage and oversee, in executor's action over nursing home resident's death, and the fact that nursing home had a nondelegable duty under Thomson in direct corporate liability did not absolve health-care company from the duty it assumed and executor was entitled to a new trial on punitive damages. Judgment reversed, appeal dismissed, order affirmed and remanded.

Executor sued health-care company (parent company of nursing home) and nursing home for substandard care that led to decedent's death. Decedent was a resident of nursing home and executor asserted that health-care company and nursing home were liable under theories of vicarious liability and direct corporate liability. Nursing home's vicarious liability was based on its employees' failure to deliver food, water, medicine and proper medical care. Health-care company's vicarious liability was premised on its employees' direct involvement in overseeing the care delivered to patients in the nursing home. Executor premised his direct corporate liability claim on allegations that nursing home was chronically understaffed and that defendants knew and failed to correct the problem. He averred a breach of the duty imposed on a corporation by Thomson to formulate and enforce adequate rules and policies to ensure patient care. A 2007 trial ended in health-care company's being granted a compulsory nonsuit and a jury finding direct corporate and vicarious liability against nursing home and awarding damages. Trial court refused to submit the issue of punitive damages to the jury. After multiple appeals, including to the Supreme Court on the issue of direct corporate liability under Thomson, and remand, the executor appealed.