By Rachel Scott Decker

I. The Client: It is easy enough to understand that the person for whom we are seeking justice is the resident in the nursing home or assisted living facility. However, many times, the resident has other players looking out for his or her interest. Often, the resident has passed away and the client will be the administrator of the estate. Other times, the resident does not have his mental faculties, and there may or may not be a guardian appointed to represent his or her interests.

A. The Resident: Usually, the resident is an elderly person. Sometimes these individuals have their mental faculties about them. When this is the case, there is no problem dealing with the client. The injured person himself or herself is able to enter into the attorney client relationship, execute appropriate authorizations, and generally make the decisions clients need to make. These individuals can participate in the prosecution of the claim. Often times, the resident is not able to make these decisions. Many times the resident’s family places him or her in a facility because the resident suffers from dementia or problems understanding. At the outset, the attorney must understand the type of client that he or she has, one who is mentally competent or one who may not be.

The North Carolina Rules of Professional Conduct address the representation of clients with disabilities. Specifically Rule 1.14 deals with clients under a disability. The rule provides:

a. When a client’s ability to make adequately considered decisions in connection with the representation is impaired, whether because of minority, mental disability or for some other reason, the lawyer shall, as far as reasonably possible, maintain a normal client-lawyer relationship with the client.

b. A lawyer may seek the appointment of a guardian or take other protective action with respect to the client only when the lawyer reasonably believes that the client cannot adequately act in the client’s own best interest. What the rule may require in practice is certainly not clear-cut. The comments to the rule try to address some of the ambiguity. If a guardian has already been appointed to represent the resident, Comment 3 to the rule allows an attorney to look to the guardian to make decisions for the resident. Many times, a guardian will have been appointed to represent the interests of a resident, before any claim has arisen. However, Comment 4 reminds the lawyer that if the lawyer is aware that the guardian is acting adversely to the resident’s interest, the lawyer may be required to rectify the guardian’s actions. In other instances, no guardian has been appointed when the lawyer is asked to pursue a nursing home or assisted living case. The comment to Rule 1.14 provides that a lawyer should seek appointment of a guardian when the client’s best interests would be served. In many types of nursing home and assisted living cases, this is often the best option. Whether a guardian is appointed, the attorney should make every effort to maintain a relationship with the resident. While the rules require it, certainly the preparation of a good case for trial will require it. Because the resident is in the home, the resident knows what goes on in the home. Aside from the issues associated with an attorney’s interaction with a living, but incompetent resident, the plaintiff’s attorney must make sure he or she brings the lawsuit or claim with the proper party named.

Rule 17 of the North Carolina Rules of Civil Procedure addresses this issue. The rule provides: (a)Real party in interest.–Every Claim shall be prosecuted in the name of the real party in interest …

(b)Infants, incompetents, etc.–In actions or special proceedings when any of the parties plaintiff are infants or incompetent persons, whether residents or nonresidents of this State, the must appear by general or testamentary guardian, if they have any within the State or by guardian ad litem appointed as hereinafter provided; but if the action or proceeding is against such guardian, or if there is no such guardian, then such persons may appear by guardian ad litem.

N.C.R. Civ. P. 17. Further, the North Carolina courts have addressed the meaning of “incompetent” within the context of this rule. In Culton v. Culton, 96 N.C. App. 620, 386 S.E.2d 592 (1989), the North Carolina Court of Appeals held that a person was incompetent within the meaning of the rule only after he or she had been declared incompetent pursuant to the proceedings outlined in Section 35A-1101 et seq. of the North Carolina General Statutes. In that divorce proceeding, the defendant’s attorney moved the trial court for an appointment of a guardian ad litem for the defendant wife. The trial court held a hearing, found the wife incompetent, and appointed a guardian ad litem. Reversing that appointment, the court of appeals held that the enactment of N.C.G.S. § 35A-1101 et seq. changed the former practice that allowed trial courts to appoint guardians ad litem for incompetent individuals. Now, the court held, guardians ad litem can be appointed under Rule 17 only after incompetence has been determined under the statute. If a general guardian has been appointed, the attorney has no problem with respect to the proper party. In many instances no such guardian has been appointed; rather, many families choose to deal with issues of declining mental status by executing a power of attorney. In an unpublished opinion, the Fourth Circuit has discussed the impropriety of having an action proceed in this manner. In Matchem v. Frank, 998 F.2d 1009 (4th Cir. 1993) (per curiam), the plaintiff appealed dismissal of his civil rights complaint, alleging that the statute of limitations had been tolled by his mental disability. The Fourth Circuit remanded the case for further proceedings on this issue. In a note however, the court referred to Colton, and indicated that the district court should consider whether a collateral inquiry into the plaintiff’s capacity should be undertaken. The court specifically rejected allowing the suit to proceed by plaintiff’s wife who had a power of attorney executed in her favor. Attorneys are having difficulty pursuing these actions through a power of attorney, even when the power of attorney specifically grants the right to sue. The safest course may be to go ahead and get a general guardian appointed before the action is brought. Because this takes time, the plaintiff’s attorney should handle this as soon as practicable.

B. Estates and Heirs at Law:Many times the resident has passed away when it is time to bring the action. As in any wrongful death action, the attorney represents the estate. Many times, families come in to discuss the possible claim, and no estate has been opened. In these cases, the first order of business is to open the estate. The attorney should determine whether the resident had a will or whether he or she died intestate. Once the attorney determines this, the attorney can recommend how the family proceeds from there to properly open the estate. Although the client or another attorney may handle the estate matters, it is still a good idea to verify that all the heirs at law have been identified. This is important to insure that everyone is accounted for and is important in building a case of damages. The attorney may try to verify who the heirs are by reviewing official and unofficial records. The local newspaper’s obituary or the funeral program may identify additional heirs. Investigating the identity of all heirs early on is a good way to determine whether conflicts exist within the family about the issues the claim will raise. In addition to raising ethical questions, the conflicts will become apparent during the pendency of the suit, and the defense will become aware and use this information. Conflicts may be the result of pressure, jealousy, or any number of reasons. This can be especially problematic in nursing home cases, as heirs may blame one another for what has occurred to the resident in the facility.

C. What to Get: As with any client, it is important to gather necessary documentation to open your file and start your investigation. At the outset, you should obtain a written contract for your services, executed by the appropriate person in light of the discussion above. This person should also execute medical authorizations. At this time you should obtain any estate or guardian papers, if these matters have already been addressed. If these matters have not been addressed, the attorney and client should work together to begin this process right away. Next, appropriate records should be obtained with this information. Specifically, the attorney should obtain or have the client obtain (or both) the resident records from the facility as well as other providers. The EMS report or reports should not be forgotten.

Theories of Recovery II.

A. Negligence

1. Common Law Negligence: The root of the claims against the employees of nursing homes and assisted living facilities deals with basic failures in the quality of care rendered to residents. However, these claims are difficult because of the interplay of North Carolina laws governing malpractice actions and the heavy state and federal regulations governing the industry. The regulations themselves are discussed more specifically below as is the medical malpractice guidelines here in North Carolina. These facilities policy and procedure manuals also help define the standard of care.

What is interesting is how a violation of the regulation effects the standard of care, statutorily defined. In North Carolina, a violation of a safety statute may be negligence per se, if the person injured by the violation was within the class the statute was enacted to protect. Baldwin v. GTE South, Inc., 335 N.C. 544, 439 S.E.2d 108 (1994) (reversing the court of appeals and affirming the trial court’s ruling that a pedestrian using a telephone was within the class of persons protected by a Department of Transportation regulation that prohibited the placement of telephone booths in the public right of way). North Carolina appellate courts have recognized several instances where violations of regulations or statutes would constitute negligence per se. See Byers v. Standard Concrete Prods. Co., 268 N.C. 518, 151 S.E.2d 38 (1966) (violation of a bridge weight limit is negligence per se); Lutz Indus., Inc. v. Dixie Home Stores, 242 N.C. 332, 88 S.E.2d 333 (1955) (holding that a violation of the National Electric Code which had been statutorily adopted was negligence per se); Sellers v. CSX Trans., Inc., 102 N.C. App. 563, 402 S.E.2d 872 (1991) (holding that violation of statute requiring maintenance of safe railroad crossings is a negligence per se statute); Swaney v. Shaw, 27 N.C. App. 631, 219 S.E.2d 803 (1975) (holding that violation of statute requiring confinement of vicious animals was negligence per se). No North Carolina case has addressed whether violations of federal and state statutes and regulations governing nursing homes rise to the level of negligence per se. One federal court in North Carolina has addressed this issue. Specifically, the United States District Court for the Middle District of North Carolina has held that a violation of the Nursing Home Bill of Rights does not constitute negligence per se. In Makas v. Hillhaven, Inc., 589 F. Supp. 736 (M.D.N.C. 1984), plaintiff offered no expert testimony on the standard of care, instead basing the entire case on violations of the North Carolina Nursing Home Patients’ Bill of Rights. The court directed a verdict in defendant’s favor. The court acknowledged that the Bill of Rights was enacted to regulate nursing homes to protect and benefit the residents within them. However, the court wrote that recognizing a violation of the Bill of Rights as negligence per se would ignore the medical malpractice statute that defines the standard of care. Further, the court indicated that the Bill of Rights was too general to provide guidance to the jury. Other jurisdictions have held to the contrary. See Beverly Enters.–Florida, Inc. v. Knowles, 1999 WL 641805 (Fla. App. 4 Dist. August 25, 1999) (holding that the Florida Nursing Home Patients Bill of Rights is a negligence per se statute).

Even when the statute is not negligence per se, the statute is still admissible to show evidence of negligence. See Lutz (holding that the trial court correctly refused to strike plaintiff’s allegations that defendant violated certain provisions of the National Electric Code which had been adopted by the General Assembly because the provisions of the code would be admissible to show negligence); Sloan v. Miller Building Corp., 119 N.C. App. 162, 458 S.E.2d 30, disc. rev. denied, 341 N.C. 652 (1995) (holding that the trial court erred in granting summary judgment to defendant because plaintiff’s evidence of defendant’s repeated O.S.H.A. violations raised an issue of whether the defendant was grossly negligent); Cowan v. Laughridge Constr. Co., 57 N.C. App. 321, 291 S.E.2d 287 (1982) (holding that while violation of an OSHA standard that does not give rise to criminal penalty is not negligence per se, it is evidence of negligence). Another important place to check to define the standard of care is the policies and procedures of the facility itself. Many of these policies and procedures manuals incorporate the federal and state regulations. Even more surprising, the manuals often contain standards of conduct that exceed federal and state requirements. The facilities set the standards high, and staff often has difficulty complying. In North Carolina, a defendant’s failure to comply with its own policies and procedures is evidence of negligence. See Stone v. Proctor, 259 N.C. 633, 131 S.E.2d 297 (1963) (holding that the defendant psychiatrist’s acknowledgement of the authority of the American Psychiatric Association’s standards was sufficient to allow their admittance on the issue of negligence); Peal v. Smith, 115 N.C. App. 225, 444 S.E.2d 673 (1994), aff’d per curiam, 340 N.C. 352, 457 S.E.2d 599 (1995) (holding that the defendant’s adoption and violation of a drug safety policy is some evidence of defendant’s negligence); Slade v. New Hanover County Bd. of Ed., 10 N.C. App. 287, 178 S.E.2d 316, disc. rev. denied, 278 N.C. 104, 179 S.E.2d 453 (1971) (holding that the Industrial Commission properly received into evidence defendant’s bus drivers’ handbook).

b. The Facility: The facility may be liable to the resident under a number of theories. These theories include derivative liability, direct liability for providing inadequate care, as well as liability for negligent hiring and retention. In North Carolina, the facility is held liable for the acts and omissions of its agents and employees acting within the course and scope of their employment or agency. Smith v. M oore, 220 N.C. 165, 16 S.E.2d 701 (1941); Barrow v. Keel, 213 N.C. 373, 196 S.E.2d 366 (1938). However, as discussed below, vicarious liability will support an award of compensatory, not punitive damages, against the facility. Although generally the facility cannot be held liable for the actions of its employees that occur outside the course and scope of employment, the facility may be liable for that behavior if the facility ratifies the employee’s conduct. In Watson v. Dixon, 130 N.C. App. 47, 502 S.E.2d 15 (1998), temp. stay allowed, 350 N.C. 314, ___ S.E.2d ___ (1999), the court of appeals held that Duke University could be liable for its ratification of the inappropriate conduct of its employee Dixon. There, Dixon was sexually harassing the plaintiff, another employee. The plaintiff made numerous complaints to Duke about the conduct, but the university did nothing. holding that the trial court properly denied Duke’s motion for judgment notwithstanding the verdict, the court of appeals held that Duke had ratified Dixon’s conduct by failing to investigate the plaintiff’s allegations when a person of ordinary prudence would have done so. Because Duke failed to take any action after notice of the inappropriate conduct, Duke ratified the conduct. Accordingly, Duke was liable for the sexual harassment, even though this conduct is clearly outside the course and scope of employment.

The facility also has duties directly to the resident as a health care provider. Specifically, the facility has a nondelegable duty of care to the resident to provide appropriate care. North Carolina courts have long recognized that institutions providing health care owe specific duties to the patient. See Blanton v. Moses H. Cone Mem. Hosp., Inc., 319 N.C. 372, 354 S.E.2d 455

(1987) (holding that a hospital owes direct duties to a patient including to exercise care in selection of its agents, to exercise care in the inspection and maintenance of equipment, to comply with industry standards, to abstain from following dangerous physician orders, and to monitor the performance of its physicians); Muse v. Charter Hosp. of Winston-Salem, Inc., 117

N.C. App. 468, 452 S.E.2d 589, aff’d, 342 N.C. 403, 464 S.E.2d 44 (1995) (recognizing that a hospital has a duty to the patient to refrain from instituting policies and procedures that interfere with a doctor’s medical judgment); Campbell v. Pitt County mem. Hosp., Inc., 84 N.C. App. 314, 352 S.E.2d 902 (1987), overruled on other grounds, Johnson v. Ruark Obstetrics & Gynecology, P.A., 327 N.C. 283, 395 S.E.2d 85 (1990) (holding that hospital had a duty to insure plaintiff’s informed consent and to establish an effective mechanism for the prompt reporting of situations threatening the life of a patient); Burns v. Forsyth County Hosp. Auth., Inc., 81 N.C. App. 556, 344 S.E.2d 839 (1986) (holding a hospital has a duty to obey instructions of a doctor as long as they are not dangerous and to make a reasonable effort to oversee and monitor the physician’s treatment of the patient); Bost v. Riley, 44 N.C. App. 638, 262 S.E.2d 391, rev. denied, 300 N.C. 194, 269 S.E.2d 621 (1980) (first recognizing the doctrine of corporate negligence when it held that a hospital’s duties include the duty to adequately monitor the patient’s treatment); cf. Makas v. Hillhaven, Inc., 589 F. Supp. 736 (M.D.N.C. 1984) (recognizing that a nursing home is a health care provider under the statute and has duties to its residents).

In addition to inappropriate care rendered at the corporate level, negligent hiring and retention are additional common law claims that can be raised against the facility. In North Carolina, an employer is liable for negligent hiring or retention if (1) the incompetent employee commits a tortious act that injures the plaintiff and (2) prior to the act, the employer knew or in the exercise of reasonable care should have known of the employee’s incompetence. Leftwich v. Gaines, 1999 WL 669361 (N.C. App. August 17, 1999).

c. The Medical M alpractice Twist: North Carolina law provides special hoops through which people who want to bring malpractice actions must jump. The laws define the standard of care with which the providers must comply as well as a presuit certification by an expert that the facility/providers failed to meet the applicable standard of care. The first question addresses who is a health care provider. North Carolina General Statute Section 90-21.11 provides defines a health care provider as: any person who pursuant to the provisions of Chapter 90 of the General Statutes is licensed, or is otherwise registered or certified to engage in the practice of or otherwise performs duties associated with any of the following:medicine, surgery, dentistry, pharmacy, optometry, midwifery, osteopathy, podiatry, chiropractic, radiology, nursing, physiotherapy, pathology, anesthesiology, anesthesia, laboratory analysis, rendering assistance to a physician, dental hygiene, psychiatry, psychology; or a hospital or a nursing home; or any other person who is legally responsible for the negligence of such person, hospital or nursing home; or any other person acting at the direction or under the supervision of any of the foregoing persons, hospital or nursing home.

N.C.G.S. § 90-21.11.

Clearly, a nursing home facility meets the definition of a health care provider. What is less clear is whether an assisted living facility meets this definition. Obviously, homes for the aged are not specifically listed in the statute, which by its terms is specific in its definitions. However, if the claim against the facility involving “nursing” care, such as the administration of medicine, the statute would seem to apply to the assisted living facilities as well. Because these entities are health care providers, these providers are subject to a defined standard of care. Section 90-21.12 provides:

In any action for damages for personal injury or death arising out of the furnishing or failure to furnish professional services in the performance of medical, dental, or healthcare, the defendant shall not be liable for the payment of damages unless the trier of the facts is satisfied by the greater weight of the evidence that the care of such health care provider was in accordance with the standards of practice among the members of the same health care profession with similar training and experience situated in the same or similar communities at the time of the alleged act giving rise to the cause of action. N.C.G.S.§ 90-21.12. This standard has interesting implications with respect to the alleged violations of state and federal regulation as discussed above.Also, because these are statutorily defined malpractice actions, for the most part, certain presuit requirements must be met, as outlined in Rule 9 of the North Carolina Rules of Civil Procedure. Rule 9(j) provides:

(j) Medical malpractice.–Any complaint alleging medical malpractice by a health care provider as defined by G.S. 90-21.11 in failing to comply with the applicable standard of care under G.S. 90-21.12 shall be dismissed unless:

(1) The pleading specifically asserts that the medical care has been reviewed by a person who is reasonably expected to qualify as an expert witness under Rule 702 of the Rules of Evidence and who is willing to testify that the medical care did not comply with the applicable standard of care;

(2) The pleading specifically asserts that the medical care has been reviewed by a person that the complaintant will seek to have qualified as an expert witness by motion under Rule 702(e) of the Rules of Evidence and who is willing to testify that the medical care did not comply with the applicable standard of care, and the motion is filed with the complaint; or

(3) The pleading alleges facts establishing negligence under the existing common-law doctrine of res ipsa loquitor.

N.C.R. Civ. P. 9(j).

The rule specifically indicates that a medical malpractice action is defined by statute. As used in this Article, the term “medical malpractice action” means a civil action for damages for personal injry or death arising out of the furnishing or failure to furnish professional services in the performance of medical, dental, or other health care by a health care provider.

N.C.G.S. § 90-21.11.

While this statute strictly sets out the definition of malpractice, the courts have recognized exceptions to the statutory scheme. For example, in Lewis v. Setty, 130 N.C. App. 606, 503 S.E.2d 673 (1998), the court of appeals held that the trial court erred in dismissing plaintiff’s complaint for failing to comply with Rule 9(j)’s certification requirements. There, the quadriplegic plaintiff was injured when the defendant and his nurse where moving him from an examination table to his wheelchair following his examination. Here, the court of appeals indicated that the matter was not a malpractice action, and therefore was not subject to Rule 9(j)’s requirements. The court noted that Section 90-21.11 dealt with the failure to provide professional services. The court further defined professional services as:

An act or service arising out of a vocation, calling, occupation, or employment involving specialized knowledge, labor, or skill, and the labor or skill involved is predominantly mental or intellectual, rather than physical or manual. Id. at 608 (citations omitted). Because the transfer of the plaintiff was manual, the services provided by defendant were not professional services. Thus, the act did not meet the statutory definition of a malpractice action, and the Rule 9(j) certification was unnecessary. See also McGill v. French, 333 N.C. 209, 424 S.E.2d 108 (1993) (rejecting plaintiff’s argument that defendant must establish contributory negligence through an expert and recognizing that a jury can determine negligence without expert testimony based on its common knowledge and experience in certain circumstances); Chapman v. Pollock, 69 N.C. App. 588, 317 S.E.2d 726 (1984) (holding that the treatment of illnesses and conditions are matters of common knowledge). Importantly, the cases cited above were decided by the court of appeals. No decision on this point has reached the North Carolina Supreme Court. What is more problematic has been the quagmire that Rule 9 has created. The appellate courts continue to sort out these problems. The court of appeals has made a number of rulings on some issues that have arisen. Where a plaintiff has failed to make a Rule 9(j) certification, the complaint is subject to dismissal. Keith v. Northern Hosp. District of Surry County, 129 N.C. App. 402, 499 S.E.2d 200, rev. denied, 348 N.C. 693, 511 S.E.2d 646 (1998). However, if a plaintiff amends his or her complaint, the Rule 9(j) certification will relate back to the original filing. Brisson v. Santoriello, ___ N.C. App. ___, 516 S.E.2d 911 (1999) (where the court of appeals held that because defendants had not answered the complaint, plaintiff was entitled to amend the complaint without leave of court to include the Rule 9(j) certification and the amended complaint related back to the initial filing); cf. Robinson v. Entwistle, ___ N.C. App. ___, 512 S.E.2d 438 (1999), rev. denied, 1999 WL 601433 (June 28, 1999) (holding that plaintiff’s amendment adding the Rule 9(j) certification was ineffective to toll the statute of limitations because plaintiff later admitted that the physician who reviewed the records would not qualify as an expert under Rule 702). After leave of court is required to amend a complaint, justice does not demand that the court allow the amendment. Keith v. Northern Hosp. District of Surry County, 129 N.C. App. 402, 499 S.E.2d 200, rev. denied, 348 N.C. 693, 511 S.E.2d 646 (1998). In Webb v. Nash Hosps., Inc., ___ N.C. ___, 516 S.E.2d 191 (1999), the court of appeals held that the plaintiff has no obligation to serve upon the defendant any motion to extend the statute of limitations pursuant to Rule 9(j). See also Timour v. Pitt County Mem. Hosp., 131 N.C. App. 548, 508 S.E.2d 329 (1998), aff’d, ___ N.C. ___, 519 S.E.2d 316 (1999).

More importantly are the issues that have arisen regarding the type of expert required to make the Rule 9(j) certification. In Trapp v. Maccioli, 129 N.C. App. 237, 497 S.E.2d 708 (1998), the court of appeals held that plaintiff’s complaint was not subject to dismissal when the court refused to qualify the expert who performed the presuit certification. The court of appeals focused on the language of 9(j) that the expert be “reasonably expected” to qualify under Rule 702. Because the plaintiff in this case reasonably expected qualification, although the trial court ultimately found the expert unqualified, dismissal of the complaint was improper. The plaintiff had complied with Rule 9(j).

With the presuit certification looming in the background, it is imperative that necessary documentation be gathered as soon as possible for expert review. As indicated above, EMS reports, medical records and facility records should be obtained at the outset. Additionally, in evaluating the negligence aspect of the claim, annual survey reports should be obtained from the Division of Facility Services. Also, check the local police department to determine whether it has made reports about abuse at the facility involving your resident. Lastly, if 911 calls were made regarding your resident, you should move immediately to obtain these. These tapes are kept for only a short period and can provide valuable evidence regarding the nursing home or assisted living facility staff’s attitude to the desperate situation of your client.

2. Federal Regulation: Federal regulation of the nursing home industry is quite extensive. What is important to note at the outset is that these regulations apply to the nursing home industry, and not to the assisted living facility industry. Fortunately, North Carolina is one state that does attempt to regulate neglect and abuse in the assisted living facility. With respect to the nursing home industry, federal regulations take several avenues. The heart of the regulations is contained in 42 C.F.R. § 483 et seq. These regulations apply where the facility participates in the Medicare skilled nursing program and the Medicaid program. The federal regulations are quite comprehensive. Below is a brief discussion of some of the regulations that address patients’ rights. Section 483.10 guarantees a resident’s right to a dignified existence, self-determination, and communication with persons inside and outside of the facility. The regulation goes on to designate certain rights protected under this umbrella. These include the right to be free from discrimination for exercising rights, the right to be notified of federal and state regulations of nursing homes and to be notified of the resident’s rights, the right to receive copies of medical records within two working days of a request, the right to be informed of the resident’s health condition, the right to refuse treatment, the right to be notified of medicaid eligibility, and other numerous rights. Also, the section lays out what the facility must do when the resident is involved in an accident or there is a significant change in the resident’s condition. Specifically, the facility must inform the resident and the resident’s interested family member and consult with the resident’s physician.

Section 483.12 deals with admission and transfer issues. This section describes the documentation and notice requirements dealing with transfers and discharges. Section 483.13 deals with restraints and abuse. The section indicates that a “resident has the right to be free from any physical or chemical restraints imposed for the purpose of discipline or convenience.” The regulation also indicates that the resident shall be free from abuse. The regulation also directs the steps a facility must undergo when an abuse occurs and as well as preventing a facility from hiring individuals with a past history of abuse. Quality of life issues are discussed in section 483.15. This regulation requires facilities to care for residents in a way that maintains or enhances the resident’s life. The regulation touches issues such as self-determination and participation in groups and activities. The assessment and care plan requirements are set forth in section 483.20. No later than 14 days after admission, a comprehensive assessment of the resident’s needs must be performed by the facility. These assessments must be reviewed quarterly. Seven days after assessment, the facility must develop a comprehensive care plan for each resident.

The meat of the regulations is contained in section 483.25, which describes the quality of care that a facility is to provide to a resident. The regulation addresses the decline in activities of daily living, the development of bed sores, the development and maintenance of incontinence, the reduction in range of motion, the treatment of mental and psychological disorders, the reporting of accidents, the use of antipsychotic drugs, and the maintenance of good nutrition and hydration.

Other regulations describe staffing and facility issues. These regulations set minimum staffing requirements, dietary requirements, physician services, rehabilitative services, dental services, pharmacy services, administration, infection control, and building requirements. In July 1999, the Prospective Payment System became effective for facilities receiving medicare funds. The Prospective Payment System is driven by the resident assessments, and the timing of assessments after July 1, 1999, has changed in light of the new law. The system is radically different than the former system above described. Further, the procedures are under heavy scrutiny and continue to be reviewed by the House Subcommittee on Aging. If your case involves injury after July 1, 1999, please bear in mind that the new requirements will apply.

3. State Regulation: State law addresses the care rendered by both nursing facilities and homes for the aged or assisted living facilities. There are separate statutes and regulations directed to both. Section 131E-115 of the North Carolina General Statutes defines the Nursing Home Patients Bill of Rights. The Division of Facility Services has enacted regulations that govern nursing homes. The state has also enacted a Declaration of Residents’ Rights that applies to people living in assisted living facilities. N.C.G.S. § 131D-21. As with nursing homes, there are regulations governing care rendered in an assisted living facility. These regulations are set forth for the most part in Title 10 of the North Carolina Administrative Code. A copy of the state regulations can be obtained from the Division of Facility Services.

The bills of rights are important. The nursing home bill lists various housekeeping rights like receiving a listing of services providing by the facility, managing his or her own financial affairs, enjoying private visits from family, etc. The bill also provides that the resident receive treatment and care in accordance with federal and state law and regulation, that the resident be free from abuse and chemical or mental restraints.

State regulation of nursing homes flowing from the statute is comprehensive, like the federal regulations. These regulations describe issues dealing with management, personnel, construction of the building, as well as quality of care. North Carolina is one of few states that address the needs of residents in assisted living facilities. This bill of rights is similar, although not identical, to the nursing home bill of rights. It directs that the resident receive appropriate care and services which are in compliance with federal and state regulation. The resident has a right to be free from abuse and neglect and from chemical and physical restraints unless authorized by a physician for a clear need. The section also contains housekeeping provisions similar to the nursing home bill of rights. Importantly, there are extensive regulations at the state level governing assisted living care and services. This is important because there is no federal counterpart directed at assisted living facilities. These regulations direct themselves to staffing and construction issues, as well as management issues. Even more important, the regulations do direct themselves to services and care. The regulations require staff to assist in bathing, dressing, walking, and other activities of daily living, when needed. The administrator is responsible for ensuring that the residents receive occasional or incidental medical care, therapeutic diets, and that the residents are turned, if necessary. The regulations also set forth the limited circumstances under which restraints are permitted—when there is a physician’s order for a limited time period recognizing a specific need. The regulations also set forth assessment requirements upon admission.

In addition to addressing quality of care issues, both state and federal regulation require surveys and cost reports. These are required both for nursing homes and assisted living facilities. This information can be obtained from the Division of Facility Services. Further, for nursing homes, the OSCAR reports can be obtained presuit. In light of the new Medicare requirements under the Prospective Payment System, there is some issue as to the privacy rights of comprehensive reports comparing facilities to facilities. This may not be obtained prior to suit.

B. Breach of Contract: When a resident enters a facility, typically, a contract is executed between the parties. The contracts vary from facility to facility, but typically, these contracts make broad statements about the quality of care that the resident can expect to receive in defendant’s facility. These contracts often incorporate the federal regulations, and a breach of contract claim may help the introduction into evidence of survey reports, deficiencies, plan of corrections, and other governmental investigative reports that may be more difficult to enter into evidence in a straight negligence theory. More and more cases incorporate the breach of contract theory as a theory of recovery.

In North Carolina, a breach of contract claim is clearly contemplated in the medical malpractice action. Section 90-21.13 provides:

No action may be maintained against any health care provider upon any guarantee, warranty, or assurance as to the result of any medical, surgical or diagnostic procedure or treatment unless the guarantee, warranty or assurance, or some note or memorandum thereof, shall be in writing and signed by the provider or by some other person authorized to act for or on behalf of such provider. N.C.G.S. § 90-21.12(d). The court of appeals has recognized this section as specifically allowing such breach of contract actions to go forward in North Carolina. See Preston v. Thompson, 53 N.C. App. 290, 280 S.E.2d 780, disc. rev. denied, 304 N.C. 392, 285 S.E.2d 833 (1981).

C. Breach of Fiduciary Duty: Another claim plaintiff’s raise is breach of fiduciary duty. North Carolina law recognizes that a special fiduciary relationship exists between patient and physician. Black v. Littlejohn, 312 N.C. 626, 325 S.E.2d 469 (1985). A cause of action for breach of fiduciary duty lies where the special relationship leads to a breach of trust that injures the plaintiff. Id.; Lackey v. Bressler, 86 N.C. App. 486, 358 S.E.2d 560 (1987); Bowlin v. Duke University, 108 N.C. App. 145, 423 S.E.2d 320 (1992), rev. denied, 333 N.C. 461, 427 S.E.2d 618 (1993).

D. False Claims: The federal False Claims Act permits private individuals to sue on behalf of the federal government to collect monies that were fraudulently obtained. The Act provides for a recovery of penalties to the government between $5,000.00 and $10,000.00 per fraudulent claim, plus treble the government’s damages. The Act is designed to promote whistleblowers and allows private citizens to prosecute with the government. If a private citizen makes a recovery on behalf of the government, the private citizen will share in the government’s recovery, collecting between 15 percent to 30 percent of the recovery. The Act has restrictions that limit a person’s ability to bring such a claim. The person bringing the claim, the relator, must be an original source. The court’s interpretations of original source are restrictive and should be investigated. If the relator has a claim, he or she must give the government a chance to investigate the claim. The government will then decide whether it wishes to assume prosecution of the case.

This claim has special significance in the nursing home setting. The nursing homes submit medicare and medicaid bills, which assert that certain services were provided to a resident. Often these services have not been provided. Each submission of a bill when no services in fact were provided is fraud. Obviously, given the level of billing that goes on at a nursing home, the nursing home is open to huge liability if in fact the billing is fraudulent. A more difficult question is whether the person with the improper billing information will qualify as a relator. In any event, in the investigation of cases, a plaintiff’s attorney should request the itemized billing statement of the facility. These are not usually provided to the resident, but the resident is entitled to this information.

III. Damages

A. Wrongful Death: Damages available for wrongful death are designated by statute. They include medical expenses, pain and suffering of the decedent, funeral expenses, services, protection, care, society, companionship and comfort of the decedent to the statutory heirs. Usually income of the decedent is not an issue, although this is normally recoverable. See N.C.G.S. § 28A-18-2.

The majority of recoverable damages in these cases usually stems from the pain and suffering of the decedent and the society and companionship of the decedent to the statutory heirs. Therefore, it is important to closely examine who was visiting the resident before death, who had the bond with the resident. If the caretakers are not the statutory heirs, think carefully before taking the case.

B. Personal Injury: As in any other personal injury action, residents can recover a wide range of damages. These damages include past and future medical care, pain and suffering, and permanent injury. Due to the extensive level of care these residents are already receiving for nonincident related reasons, a careful assessment of damages is necessary. Often an economist can be helpful in creating a plan of damages that takes into account what type of medical and other expenses the resident may have had to incur, absent the incident involving the nursing home or assisted living facility.

C. Punitive Damages: Punitive damages are recoverable in limited instances in North Carolina after tort reform. Punitive damages are now available only upon a showing of fraud, malice or willful or wanton conduct by clear and convincing evidence. The assessment must be against the actor because there is no longer vicarious liability for punitive damages. Further, when a claim for punitive damages is asserted against a corporation, the officers, directors, or managers of the corporation must have participated in or condoned the conduct at issue. Aside from the substantive issues related to punitive damages, other issues cloud recovery. Defendants are entitled to a bifurcated trial upon motion. Further, punitive damages are capped at $250,000.00 or three times compensatory damages, whichever is greater. N.C.G.S. § 1D-5 et seq.

The goal for plaintiffs is to assess any punitive damage award against the deep pocket corporation, since most insurance policies do not provide coverage for punitive damages. The statute still permits recovery against the corporation where the corporation condones the conduct.

This is usually the case in nursing home and assisted living facilities as the egregious conduct usually arises from some staffing deficiency, which by its nature must come from corporate. Further, the corporation has duties directly to the resident as discussed above under the corporate negligence doctrine.