Salley et al v. Heartland-Charleston of Hanahan SC LLC et al
ORDER granting in part and denying in part 59 Motion for Summary Judgment Signed by Chief Judge David C Norton on 7/12/2011.(jsch, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
NATHANIEL SALLEY AND JOSEPH
SALLEY, AS PERSONAL
REPRESENTATIVES OF THE ESTATE
OF ANNIE SALLEY,
HANAHAN, SC, LLC, D/B/A CENTER CHARLESTON; HCR MANORCARE,
INC.; MANOR CARE, INC.; MANOR
CARE OF AMERICA, INC.; HCR
MANORCARE MEDICAL SERVICES OF
FLORIDA, LLC; THE CARYLE GROUP,
Civil No. 2:10-cv-00791
This matter is before the court on defendants’ motion for summary judgment.
For the reasons set forth below, the court grants defendants’ motion for summary
judgment for all claims against Manor Care, Inc. and HCR ManorCare, Inc.. The
court also grants summary judgment to Heartland-Charleston of Hanahan, SC, LLC
(“Heartland”) on plaintiffs’ professional malpractice and negligence per se claims and
their request for punitive damages but denies summary judgment on plaintiffs’ breach
of contract and alternative negligence claims. Plaintiffs have agreed to dismiss their
breach of fiduciary duty claim and all claims against HCR ManorCare Medical
Services of Florida, LLC.
I. PROCEDURAL BACKGROUND
On February 19, 2010, plaintiffs, Nathaniel Salley and Joseph Salley, as the
personal representatives of the estate of Annie Salley (“Mrs. Salley”), sued
defendants in state court as a result of defendants’ care for and the subsequent death
of Mrs. Salley. Plaintiffs asserted the following causes of action: (1) negligence and
negligence per se; (2) wrongful death; (3) survival right of action; (4) breach of
fiduciary duty and misrepresentation; and (5) breach of contract. Defendants
removed this case to federal court on March 29, 2010, based on diversity jurisdiction.
This court dismissed all claims against The Carlyle Group for lack of personal
jurisdiction on December 10, 2010.
II. FACTUAL ALLEGATIONS
Mrs. Salley was a resident of Heartland nursing home from December 2, 2008
until January 1, 2009. Plaintiffs contend that upon admission, Heartland was
informed that Mrs. Salley was a fall risk and that her physical condition required
assistance in toileting. Heartland nurses’ records also indicate that Mrs. Salley
required “extensive assistance” in toileting. On December 11, 2008, she fell while
alone in her restroom at Heartland. Defendants were supposed to assist Mrs. Salley
with toileting, feeding, transferring, and with her mobility. On days both before and
after Mrs. Salley’s fall, Heartland Assisted Daily Living (“ADL”) records fail to
indicate that assistance was given to Mrs. Salley in some of these areas.
On January 25, 2009, Mrs. Salley was hospitalized at the Medical University
of South Carolina (“MUSC”). She died of a subdural hematoma on February 1, 2009.
MUSC neurologist Dr. Ian Johnson treated Mrs. Salley and believes that the subdural
hematoma resulted from her fall at Heartland.
III. STANDARD OF REVIEW
Summary judgment is proper “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a). When the party moving for summary judgment does not
bear the ultimate burden of persuasion at trial, the burden for summary judgment may
be discharged by pointing out that there is an absence of evidence to support the
nonmoving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). The
nonmovant must then “make a showing sufficient to establish the existence of an
element essential to that party's case, and on which that party will bear the burden of
proof at trial.” Id. at 322. The nonmovant “may not rest upon the mere allegations or
denials of his pleading, but . . . must set forth specific facts showing that there is a
genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
Evidence should be viewed in the light most favorable to the nonmoving party and all
inferences drawn in its favor. Id. at 255. However, a mere “scintilla” of evidence
will not preclude summary judgment. Id. at 252. Finally, under the recently
promulgated amendments to Rule 56, the court need not consider any evidence that is
not cited to by the parties.
A. Negligence Claims
Plaintiffs have failed to provide sufficient evidence regarding the standard of
care required to make out a professional negligence claim. See David v. McLeod
Reg. Med. Cntr., 626 S.E.2d 1, 3 (S.C. 2006); Jones v. Owings, 456 S.E.2d 371, 37475 (S.C. 1995); Pederson v. Gould, 341 S.E.2d 633, 634 (S.C. 1986). In South
Carolina, a professional commits malpractice by failing to “exercis[e] that degree of
skill and learning that is ordinarily possessed and exercised by members of the
profession in good standing acting in the same or similar circumstances.” David, 626
S.E.2d at 3. A plaintiff alleging malpractice must provide evidence showing “(1) the
generally recognized and accepted practices and procedures that would be followed
by average, competent practitioners in the defendants' field . . . under the same or
similar circumstances, . . . (2) that the defendants departed from the recognized and
generally accepted standards,” and (3) “that the defendants' departure from such
generally recognized practices and procedures was the proximate cause of the
plaintiff's alleged injuries and damages.” Id. at 4. The South Carolina Supreme
Court requires the establishment of both the first and second requirement by expert
testimony “unless the subject matter lies within the ambit of common knowledge so
that no special learning is required to evaluate the conduct of the defendants.” Id.
Plaintiffs have failed to provide evidence of the first requirement and instead
rest on an expert’s bald assertion that the standard of care was breached, see
Seignious Aff. ¶8, thus conflating the first and second requirement. Viewed in the
light most favorable to plaintiffs, they have failed to provide factual support for the
requirements of a professional negligence claim, however, plaintiffs have supported
their complaint with sufficient facts for their alternative negligence claims to survive.
In a negligence action, plaintiff must show: (1) defendant owed a duty of care
to plaintiff; (2) defendant breached the duty by negligence act or omission; (3)
defendant’s breach was the actual and proximate cause of plaintiff’s injury; and (4)
plaintiff suffered an injury or damages. Madison v. Babcock Cntr., Inc., 638 S.E.2d
650, 656 (S.C. 2006) (finding that a private residential center owed a duty of care to a
mentally retarded patient which included protecting her from harm). “Under South
Carolina common law, there is no general duty to control the conduct of another or to
warn a third person or potential victim of danger.” Id. There are, however, “five
exceptions to this rule: (1) where the defendant has a special relationship to the
victim; (2) where the defendant has a special relationship to the injurer; (3) where the
defendant voluntarily undertakes a duty; (4) where the defendant negligently or
intentionally creates the risk; and (5) where a statute imposes a duty on the
defendant.” Id. (citing Faile v. S.C. Dept. of Juvenile Justice, 566 S.E.2d 536, 546
(S.C. 2002)). In Madison, the South Carolina Supreme Court also found that the
Restatement Second of Torts §323-24 established an applicable duty of care. As in
Madison, Heartland’s relationship with Mrs. Salley potentially falls under the first,
third, fourth, and fifth exceptions to Faile.1 See id. at 657. Furthermore, in Flinn v.
Crittenden, the South Carolina Court of Appeals agreed with a Louisiana court
finding that while “[a] nursing home is not the insurer of the safety of its patients,”
“[t]he nursing home does have a duty to provide a reasonable standard of care, taking
into consideration the patient’s mental and physical condition.” 339 S.E.2d 138, 139
(S.C. Ct. App. 1985).
Babcock Center had a special relationship with Appellant because she was a client with
special needs and disabilities admitted for care and treatment at the center. Babcock Center
voluntarily undertook the duty of supervising and caring for Appellant as provided in its
contractual relationship with Department. Babcock Center allegedly acted negligently in
creating the risk of injury to Appellant by not properly supervising her…. Furthermore, the
center had a statutory duty to exercise reasonable care in supervising Appellant.
Madison, 638 S.E.2d at 657.
Plaintiffs have sufficiently demonstrated that there is a genuine issue of
material fact regarding whether there was a relationship sufficient to establish a
general duty of care. At this stage of litigation, plaintiffs’ evidence, viewed in the
light most favorable to them, demonstrates that there is a genuine issue of material
fact regarding whether defendants owed a duty of care to Mrs. Salley and whether
they breached that duty. There are also genuine issues of material fact concerning
causation based on defendants’ records and the testimony of both doctors and nurses.
B. Negligence Per Se
“Negligence per se is negligence arising from a defendant’s violation of a
statute.” Wogan v. Kunze, 623 S.E.2d 107, 117-18 (S.C. Ct. App. 2005). A statute
must permit a private cause of action in order for plaintiffs to maintain a civil suit.
“In determining whether a statute creates a private cause of action [in South
Carolina], the main factor is legislative intent.” Doe v. Marion, 645 S.E.2d 245, 248
(S.C. 2007) (finding that the statute for reporting child abuse does not support a
private cause of action for negligence per se against a doctor).
The legislative intent to grant or withhold a private right of action for
violation of a statute or the failure to perform a statutory duty is
determined primarily from the language of the statute . . . . In this
respect, the general rule is that a statute which does not purport to
establish a civil liability, but merely makes provision to secure the
safety or welfare of the public as an entity is not subject to a
construction establishing a civil liability. When a statute does not
specifically create a private cause of action, one can be implied only if
the legislation was enacted for the special benefit of a private party.
Id. (internal citations omitted).
“The search for the legislative intent [in South Carolina] comports with the
standards used for testing federal rights of action as expressed by the Supreme Court
in Cort v. Ash, 422 U.S. 66 (1975).” Williams-Garrett v. Murphy, 106 F.Supp. 2d
834, 842 (D.S.C. 2000). Courts determining whether federal statutes grant a private
cause of action “begin with the presumption that if a statute does not expressly create
a private cause of action, one does not exist.” Ormet Corp. v. Oh. Power Co., 98 F.3d
799, 805 (4th Cir. 1996). “By now, Congress is well aware of this presumption and
how to provide private remedies.” Id.
Nonetheless, we may infer the existence of a private cause of action by
applying the well settled test which requires that we determine (1)
whether the plaintiff is “one of the class for whose especial benefit the
statute was enacted”; (2) whether there is “any indication of legislative
intent, explicit or implicit, either to create such a remedy or to deny
one”; (3) whether implication of a private remedy is consistent with
the underlying purposes of the legislative scheme; and (4) whether the
cause of action sought is “one traditionally relegated to state law.”
Id. (quoting Cort, 422 U.S. at 78) (emphasis in original).
Most courts have found that the Federal Nursing Home Reform Act
(“FNHRA”), 42 C.F.R. § 483.10, does not confer a private cause of action. See, e.g.,
James v. Bd. of Curators of the Univ. of Mo., No. 09-2066, 2011 WL 147910, at *3
(E.D. Mo. Jan. 18, 2011); Duncan v. Johnson-Mathers Health Care, Inc., No. 090417, 2010 WL 3000718, at *3 (E.D. Ky. July 28, 2010); Brogdon v. Nat’l
Healthcare Corp., 103 F.Supp. 2d 1322, 1330 (N.D. Ga. 2000); Tinder v. Lewis Cnty.
Nursing Home Dist., 207 F.Supp. 2d 951, 957 (E.D. Mo. 2001); Grammer v. John J.
Kane Reg. Cntrs., 570 F.3d 520, 531-32 (3d Cir. 2009) (finding civil liability for 42
C.F.R. § 483 available through § 1983 suits but not independently). Other courts
have found that the Medicare and Medicaid Act, of which the FNHRA is a part, does
not authorize private causes of action against nursing homes. See, e.g., Stewart v.
Bernstein, 769 F.2d 1088, 1092 (5th Cir. 1985). This court joins the vast majority of
the courts in finding that the language of the FNHRA fails to demonstrate an express
or implicit legislative intent to create a private cause of action.
South Carolina courts have yet to find that either South Carolina code of law §
44-81-10 or § 40-33-5 permits a private cause of action. This court need not reach
this question, however, as that even if a private cause of action were permitted,
plaintiffs failed to allege any specific section of either statute that was breached, how
the breaches occurred, or how the breaches proximately caused Mrs. Salley’s death.
Plaintiffs insufficiently allege that defendants were negligent by “failing to perform
the standards required by the Federal Nursing Home Reform Act and other federal
and state statutes and regulations.” Comp. ¶84(t). Plaintiffs did not further
substantiate this allegation in their response to defendants’ motion for summary
judgment. Plaintiffs “may not rest upon the mere allegations or denials of his
pleading, but . . . must set forth specific facts showing that there is a genuine issue for
trial.” Anderson, 477 U.S. at 248. Rule 56 instructs that “[t]he court need consider
only the cited materials.” This court should not be required to guess which provisions
plaintiffs allege defendants breached or how the elements of the cause of action might
be made out. In the light most favorable to them, plaintiffs have failed to demonstrate
that there is a genuine issue of material fact regarding any putative cause of action
under §§ 44-81-10 and 40-33-5.
Plaintiffs’ negligence per se claim under S.C. Reg. 61-7 also fails because the
regulation does not provide for a private cause of action. No court has addressed
whether this statute creates a private right of action. The regulation lacks any
language indicating the legislature intended to authorize a private right of action. The
statute was not “enacted for the special benefit of a private party,” as Doe requires,
rather, Reg. 61-7 is a licensing statute created to benefit the public in general. The
regulation states its “Scope and Purpose” are for the “establishment of EMS
program;” “general licensing, certification, inspection and training procedures;”
“establishment of an Emergency Medical Service Council and duties of the Council;”
and “Establishment of the Department of Health and Environmental Control authority
for enforcement of these rules and regulations.” Reg. 61-7 §100.
Section 1302(H) of the regulation states that
[p]ursuant to section 44-61-160 of the S.C. Code, a person who
intentionally fails to comply with reporting, confidentiality, or
disclosure of requirements in this section is subject to civil penalty of
not more than one hundred dollars for a violation the first time a
person fails to comply and not more than five thousand dollars for a
The statute also provides administrative remedies for other breaches of the statute.
See, e.g., Reg. 61-17(401)(A). The South Carolina Supreme Court recognizes the
“frequently stated principle of statutory construction . . . that when legislation
expressly provides a particular remedy or remedies, courts should not expand the
coverage of the statute to subsume other remedies.” Wogan, 623 S.E.2d at 117
(citing Northwest Airlines, Inc. v. Transp. Workers, 451 U.S. 77, 94 n.30 (1981)).
Based on the foregoing, S.C. Reg. 61-7 does not create a private right of action.
The Omnibus Adult Protection Act, S.C. Code Ann. § 43-35-5, however, does
permit a private cause of action. See Williams-Garrett, 106 F.Supp. 2d at 842.3
Plaintiffs do not appear to allege that defendants violated Reg. 61-7 by failing to comply with the
regulation’s requirements regarding reporting, confidentiality or disclosure.
The South Carolina District Court in Williams-Garrett found that the preamble and additional
provisions to the statute demonstrated that the legislature intended to permit private rights of action.
The preamble states that one of the purposes of the act was “to provide civil and criminal penalties for
abuse, neglect, and exploitation,” and the statute permits the Attorney General to bring a suit on behalf
Again, plaintiffs do not cite which portion of the statute defendants breached, but the
only portion apparently relevant to plaintiffs’ complaint governs knowing and willful
neglect of a vulnerable adult. § 43-35-85. Defendants moved for summary judgment
on the negligence per se claims both on the grounds that private actions were not
permitted by the statutes and that there were no genuine issue of material fact
regarding breach of the statutes after the conclusion of discovery. Plaintiffs failed to
cite to any specific claim under the Omnibus Adult Protection Act. Under Rule 56,
the court is only required to consider cited evidence. The court also has found no
evidence in the entire record which, viewed in the light most favorable to plaintiffs,
demonstrates that Heartland employees knowingly and willfully neglected Mrs.
C. Breach of Contract
Having thoroughly considered the parties’ written and oral submissions on the
breach of contract claim, the court holds that genuine issues of material fact exist
regarding whether defendants breached their contract to provide “comprehensive
health care around the clock by experienced professionals.” Pl.s’ Ex. 21. Plaintiffs’
evidence could demonstrate that defendants failed to provide around the clock
medical assistance based on the ADL record. Since defendants only argued that the
breach of contract claim should be dismissed for lack of a contract for a specific
result, defendants’ motion for summary judgment as to the breach of contract claim is
of the state “in addition to any private cause of action for violation of the statute.” See S.C. Code Ann.
§§ 43-35-5(9), 43-35-80. No South Carolina state court has addressed the statute.
D. Punitive Damages
“Punitive damages can only be awarded where the plaintiff proves by clear
and convincing evidence the defendant's misconduct was willful, wanton, or in
reckless disregard of the plaintiff's rights.” Keane v. Lowcountry Pediatrics, P.A.,
641 S.E.2d 53, 60 (S.C. Ct. App. 2007); Austin v. Specialty Transp. Serv., 594 S.E.2d
867, 875 (S.C. Ct. App. 2004). Viewed in the light most favorable to plaintiffs, the
evidence fails to support plaintiffs’ contention that defendants’ alleged misconduct
was willful, wanton, or reckless of the plaintiffs’ rights.
E. Parent Companies
Plaintiffs have failed to point to any act or omission Heartland’s parent
companies committed, except through the normal practice of corporate governance of
a subsidiary. See, e.g., Johnson v. Ross, No. 10-1046, 2011 WL 1042246, at *6 (4th
Cir. Mar. 23, 2011). Piercing the corporate veil is only reluctantly allowed under
South Carolina law. Baker v. Equitable Leasing Corp., 271 S.E.2d 596, 600 (S.C.
South Carolina courts analyzing piercing claims examine the following
factors: (1) whether the corporation was grossly undercapitalized for the purposes of
the corporate undertaking; (2) failure to observe corporate formalities; (3) nonpayment of dividends; (4) insolvency of the debtor corporation; (5) siphoning of
funds of the corporation by the dominate shareholder; (6) non-functioning of other
officers or directors; (7) absence of corporate records; and (8) the corporation serving
as a façade for the operations of the dominant shareholder. Hunting v. Elders, 579
S.E.2d 803, 807 (S.C. Ct. App. 2004). None of these factors are present in this case.
Plaintiffs allege that Heartland did not pay rent because its parent companies own the
property. Using a parent’s property as if it were the subsidiary’s may weigh in favor
of piercing the corporate veil, however, as there is no evidence of undercapitalization
or flaunting corporate formalities, this fact alone is insufficient to allow piercing.
See, e.g., Gateway I Grp., Inc. v. Park Ave. Physicians, P.C., 877 N.Y.S. 2d 95 (N.Y.
App. Div. 2009); Taber Partners, I v. Merit Builders, Inc., 987 F.2d 57 (1st Cir.
Demonstrating a subsidiary is merely the “alter ego” of the parent corporation
by showing that the parent company controls the business decisions and actions of its
subsidiary is one method of piercing the corporate veil. Jones v. Enter. Leasing Co.Se., 678 S.E.2d 819 (S.C. Ct. App. 2009). While the evidence shows that Heartland’s
parent companies provided a starting point for plaintiffs’ financial decisions,
characterized as a skeleton or a floor plan, this alone fails to meet the standard for
controlling business decisions or actions of a subsidiary required for piercing the
corporate veil on an alter ego theory. Finally, plaintiffs have agreed to dismiss HCR
ManorCare Medical Services of Florida, LLC as a defendant.
For the foregoing reasons, the court GRANTS defendants’ motion for
summary judgment regarding plaintiffs’ negligence per se claims and request for
punitive damages and all claims against Manor Care, Inc. and HCR ManorCare, Inc.
and DENIES defendants’ motion for summary judgment regarding the negligence
and breach of contract claims. Furthermore, the court FINDS AS MOOT
defendants’ motion for summary judgment regarding HCR ManorCare Medical
Services of Florida, LLC and the breach of fiduciary duty claim as that the parties
have agreed to the dismissal of both.
AND IT IS SO ORDERED.
DAVID C. NORTON
CHIEF UNITED STATES DISTRICT JUDGE
July 12, 2011
Charleston, South Carolina
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