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June 15, 2015

Group Homes Serving Individuals With Developmental Disabilities Score Huge Appellate Victory While Assisted Living and Other Facilities May Be Exposed to Greater Liability

Operators of group homes serving individuals with developmental disabilities won big in the first appellate decision of its kind in New York State. Assisted living and other facilities, which were not part of the lawsuit, did not fare so well. In a widely watched case entitled Burkhart v. People Inc., the Fourth Department Appellate Division limited the type of liability that can be imposed on group home operators in personal injury lawsuits. The court, however, opened the door to possible greater liability for assisted living and other facilities for their negligence in suits brought by residents and their families.

In the Burkhart case, the sister of a developmentally disabled man residing in a group home sued the group home operator to recover damages for injuries he allegedly suffered that arose from alleged violations of Public Health Law §2801-d. This law allows a patient of a "residential health care facility" to maintain an action against the facility when the facility deprives him or her of any right or benefit created or established for the well-being of the patient by the terms of any contract or by any federal or state statute or regulation. A "residential health care facility" is defined as a "nursing home or a facility providing health-related service" as licensed by the state Department of Health (DOH). Mr. Burkhart resided in a group home licensed by the state Office for People With Developmental Disabilities (OPWDD).

The Public Health Law has been used by nursing home residents and their families in lawsuits seeking recovery for alleged injuries. Successful residents and their families are entitled to statutory damages, punitive damages (which are not covered by insurance) and attorneys' fees. This cause of action is separate, distinct and can be asserted in addition to the standard negligence or medical malpractice cause of action, thereby potentially permitting a patient to recover two distinct awards of damages based on the same set of facts or circumstances.

Mr. Burkhart's sister alleged that the group home violated Public Health Law and negligently cared for her brother. The group home operator, People Inc., sought to have the Public Health Law cause of action dismissed from the lawsuit arguing that the law does not apply to OPWDD licensed group homes. The trial court denied People Inc.'s motion for summary judgment and People Inc. appealed the decision.

In a huge victory for group homes, the Appellate Division unanimously reversed the trial court decision holding that a group home does not qualify as a "residential health care facility". The Appellate Division found that the statute applies to institutions, such as nursing homes, serving "principally" as facilities for the "rendering of health-related service" as reinforced by the legislative history of Public Health Law §2801-d. While plaintiffs are still entitled to file lawsuits against group homes based on negligence, the court foreclosed claims based on violations of the Public Health Law.

The Appellate Division unexpectedly went on to conclude that the cause of action provided by Public Health Law §2801-d applies to nursing homes and other facilities such as assisted living facilities operated by entities in the nursing home industry. Because this legal issue was not actually before the Court, the value of the decision as a binding precedent remains to be seen. Nonetheless, the practical implication of this holding is a likely increase in lawsuits asserting violations of Public Health Law §2801-d against assisted living facilities and other types of facilities not usually subject to these claims and the significant jury verdicts associated with them. Assisted living and other facilities will have the opportunity to contest the expansion of these claims beyond nursing homes at the trial court and appellate court level in the future.

If you have questions about this decision, contact the authors Jessica DeMichiel, Eric Naegely or Susan Benz, Practice Area Co-Chair Melissa Zambri, or any member of Barclay Damon's Health Care & Human Services Practice Area. The firm's 25 Health Care & Human Services attorneys provide regulatory, litigation and compliance services to group home, assisted living and nursing home operators, as well as hospitals, clinics, physician groups, behavioral health and substance abuse providers, pharmacies, home health agencies, hospices and medical transportation companies.


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