How to Uncover Nursing Home Assets
Parent corporations of nursing home facilities can be held both directly liable for their own actions in operating the facility and indirectly liable, through piercing the corporate veil, for the acts of their subsidiaries. The facts supporting both theories may overlap, and the determination of liability in each instance depends on the degree of control the parent exerts over the facility. Indirect liability follows the general principles of veil-piercing law, which require the plaintiff to analyze the parent subsidiary relationship to determine whether the parent controls the subsidiary to such a degree that the subsidiary is not a separate entity but merely an agent, instrumentality or alter ego of the parent. 1 Under an indirect liability theory, the parent corporation’s control of the facility does not have to relate specifically to the violation complained of; however, the corporate veil will not be pierced absent a “large-scale disregard of the separate existence of a subsidiary corporation.”2 In contrast, direct liability, which is considered an exception to veil-piercing law,3 requires a specific link between the parent corporation and the ultimate harm to the nursing home patient, yet does not require the parent corporation’s large-scale disregard of the subsidiary’s separate existence. Direct liability is an important basis of liability in nursing home litigation because the abuse and neglect of nursing home patients are often the result of systematic problems throughout the subsidiary corporations, directly linked to conscious corporate decision-making.
The U. S. Supreme Court in U.S. v. Bestfoods,4 explained that “a parent corporation is itself responsible for the wrongs committed by its agents in the course of its business.”5 Quoting a 1929 article written by Justice (then Professor) Douglas, the Court distinguished derivative liability cases “from those in which the alleged wrong can seemingly be traced to the parent through the conduit of its own personnel and management, and the parent is directly a participant in the wrong complained of.”6 In such instances, explained the Court, “the parent is directly liable for its own actions.”7 The parent does not have to have “acted on its own;”8 the parent is directly liable for the subsidiary’s actions where it has “forced the subsidiary to take the complained-of action, in disregard of the subsidiary’s distinct legal personality,”9 or “interfered with the subsidiary’s operations in a way that surpasses the control exercised by a parent as an incident of ownership.”10 Thus, the Bestfoods Court distinguished between subsidiary corporate officers who “set the day-to-day operating policies for the company without any need to obtain formal approval from [the parent company],” and those subsidiary officers who “[act] on specific orders” and receive “instructions” from the parent.11
In U.S. v. Days Inn of America, Inc.,12 in which the United States brought an ADA action against a hotel franchiser, the Eighth Circuit applied the Supreme Court’s Bestfoods rule that a parent corporation is accountable where it “manage[s], direct[s], or conduct[s] operations specifically related to the violation.”13 The Days Inn court held that to bear responsibility for an inaccessible facility, “a party must possess a significant degree of control” over the final design and construction of a facility. The Days Inn decision clarifies the applicability of Bestfoodsbeyond the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).
In the nursing home context, under the Bestfoods Court’s analysis of direct liability, the parent’s control of the day-to-day operation of thefacility, as opposed to operation of thesubsidiary, will create direct liability. “Operation” of the facility is “evidenced by participation in the activities of the facility.”14 The parent’s operation of the facility need not be entire; it can be “transaction specific.”15 That is, direct liability will be imposed when the parent “manages, directs, or conducts operations specifically related to the violation” that caused the harm to the nursing home resident.16 Thus, for example, if the parent corporation of a nursing home controls the staffing levels in the facility and the harm done to the plaintiff is the result of under-staffing, the parent can be found directly liable for that harm. Multiple breaches of state and national standards owed to the plaintiff will often be attributable to the defendants’ failure to provide sufficient staff to meet the care needs of its residents, which, in turn, may be attributable to a deficient budget or inadequate guidelines for determining the appropriate number of staff.
Where the parent controls the budget of the facility or sets the guidelines and policies, the parent is responsible for the under-staffing, and, consequently, directly responsible for all violations of the standard of care related to the under-staffing.
The parent corporation can also be held directly liable where it controls the budget and the nursing home resident’s harm is related to budgetary decisions other than staffing, for example, pressure sores caused by lack of adequate and proper supplies, such as diapers, wipes, and mattresses; or injuries resulting from inadequate or poorly maintained equipment, such as Hoyer lifts. Similarly, if the parent has control over the choice of vendors, for example, food vendors, and the food quality is poor and a resident suffers from malnutrition, the parent can be held directly liable. The parent would also be directly liable where the parent controls the facility’s admissions policies and the resident is harmed as a result of his admission to a facility not equipped, nor properly staffed to care for him. Other examples of parental control of a facility, creating direct liability, might be the training of staff and employment of qualified staff.
On the other hand, if the parent has not managed, directed, or conducted operations related to the violation that caused harm to the plaintiff, the parent would not be directly liable for such negligence, though it could be held indirectly liable if, in general, the parent so manipulates the subsidiary for its own advantage that the subsidiary is merely an agent or instrumentality of the parent. The same facts may create liability in one case under an indirect theory, while in another case, serve as a basis of direct liability. For example, inCanavan v. National Healthcare Corp.,17 the court imposed direct liability on the sole shareholder for ignoring problems of under-staffing in the nursing home while cutting the staffing budget. The court specifically stated, “This was not a case in which the plaintiffs were required to pierce the corporate veil in order to find individual liability.”18 In contrast, in Despain v. Avante Group, Inc.,19 the court held that inadequate staffing, linked to inadequate care, served as the basis for indirect (vicarious) liability for punitive damages:
As to the vicarious liability of the corporate entities, the record evidence and proffer shows that the facility was not adequately staffed, which contributed to the inability to provide the decedent with proper care, and that numerous records regarding the decedent’s care were incomplete, missing, or had been fabricated, which made assessment, treatment, and referrals of the decedent much more difficult. We believe that this showing established a reasonable basis to conclude that the corporate entities were negligent. Accordingly, Despain established a reasonable basis to plead a claim for punitive damages based on the theory of vicarious liability.20
The court chose direct liability rather than indirect liability, stating that there was “an insufficient showing of willful and wanton misconduct on the part of a managing agent or primary owner of Avante Group, Inc. and Avante at Leesburg, Inc.”21
In Heathcock v. Beverly,22 where the plaintiff alleged that the nursing home facility was understaffed and the parent corporation set the guidelines for determining the staffing and had ultimate approval of the facility’s operating budget, the court concluded that this evidence established both a direct and an indirect claim against the parent. The Heathcockcourt denied Beverly Enterprises, Inc.’s and Beverly Health and Rehabilitation Services, Inc.’s Rule 12 motion to dismiss. The court summarized the plaintiff’s allegations:
Beverly failed to hire, train, and supervise employees; failed to provide sufficient numbers of qualified personnel; failed to adequately assess, evaluate, and supervise nursing personnel; failed to provide a nursing staff that was properly staffed, qualified, and trained; failed to establish, publish, and adhere to policies for nursing personnel; and failed to adopt adequate guidelines, policies, and procedures. Furthermore, plaintiff specifically alleges that Beverly failed to assure that rules and regulations designed to protect the health and safety of the residents of the nursing home were complied with on an ongoing basis.
* * * * *
Plaintiff argues, by way of example only, the failure to adopt adequate guidelines for determining whether to [sic] facility had sufficient nursing personnel resulted in the failure to provide adequate turning and positioning, continent care, hygiene, and hydration for Ms. Smith. Plaintiff further states that this directly resulted in Ms. Smith’s developing pus infiltrated, foul smelling, and necrotic bedsores requiring surgical debridement, contractures, numerous urinary tract infections that went untreated for long periods, languishing in her own waste and excrement for extended periods of time, being malnourished and dehydrated, being hospitalized repeatedly for pressure ulcers, and eventually death.23
In ruling on the “sufficiency of the pleadings,” the court held that the plaintiff’s complaint pled facts that constituted “unmistakable evidence that Beverly’s functions include those [the plaintiff] has alleged were done (or not done) in a manner that resulted in harm to her grandmother . . . both as a direct claim against Beverly and an indirect claim against Beverly as the controlling parent corporation of the other defendants.”24 The specific allegations that the court looked to in reaching this conclusion were the Beverly parent corporations’ 1) “ultimate approval of the operating budgets prepared for its nursing home subsidiary;” 2) involvement in discussions of subsidiary operations related to budget evaluation – including information about supply costs, salaries, and other items the nursing homes needed to provide care; and 3) establishment of policies and procedures for the nursing home and its personnel.25 The court characterized these functions as “examples of theright of controlexerted by Beverly over its subsidiaries,”26 as opposed to the exercise of actual control,indicating that the right of control over a function performed ” in a manner that resulted in harm to [the resident]“27 is sufficient to find the parent corporation directly liable.
The Heathcock court also concluded that the parent corporation was indirectly liable for the subsidiary’s action:
Undoubtedly, in addition to the direct allegations against Beverly enunciated in Ms. Heathcock’s Second Amended Complaint, there is a factual issue as to the validity of the claimed corporate structure of these intertwined companies.28
The facts the court looked to in reaching its holding were:
a) in parent’s SEC filing: Parent referred to business of nursing home as its own;
Parent referred to itself as “operator” of nursing home facilities;
Parent acknowledged liability to federal government for unlawful actions of subsidiaries.
b) the subsidiary corporation had no offices;
c) the subsidiary corporation held no board meetings for board members of subsidiary;
d) the board members of the subsidiary received no compensation;
e) a board member of the subsidiary was also an officer in other state subsidiaries of the parent;
f) the parent had final budget approval for each facility budget;
g) sweep accounts – money paid to subsidiary swept from local facility account to consolidated account with parent.29
The court in Montgomery Health Care v. Ballard,30 like the Heathcock court, applied a test for liability based upon the parent corporation having retained a right of control:
[T]he defendants claim that First American, as the parent corporation of Montgomery Health Care, was not liable for the torts of its subsidiary. The test for liability enunciated in Larrimore v. Hospital corp. of America, 514 So.2d 840 (Ala. 1987), is whether First American was the employer of the alleged tort-feasors or whether it controlled or retained the right to control the day-to-day operations of Montgomery Health Care Facility. . . Sufficient evidence of such control was presented for the jury to find First American liable. . . Based upon these facts, there was sufficient evidence for the jury to conclude that First American controlled, or retained the right to control, the day-to-day operations of the home and was liable for the neglect suffered by Mrs. Stovall.31
Though the Ballard court did not specify whether the parent corporation was liable under a direct or an indirect theory, the court’s conclusion that the parent company “controlled, or retained the right to control, the day-to-day operations of the home” and was therefore liable for the neglect suffered by Mrs. Stovall, closely tracks the direct liability theory ofBestfoodsbased upon the parent’s “operation of,” and “participation in the activities of the facility.”32Moreover, the Ballard court’s discussion of the facts in the case, detailing the parent corporation president’s personal close involvement with the facility operations, answers the “critical question” in the Bestfoods direct liability analysis, which is: “whether, in degree and detail, actions directed to the facility by an agent of the parent alone are eccentric under accepted norms of parental oversight of a subsidiary’s facility.”33 In contrast to a normal parent-subsidiary relationship, the actions of the parent corporation president in the Ballardcase, which included spending an extensive amount of time in patients’ rooms and at the nurses’ desk, pushing nurses’ call buttons in rooms, checking patients and watching employees, crossed the line between oversight and control of the facility:
First American was a small family-owned corporation, and it held 100% of the stock of Montgomery Health Care. When First American first bought Montgomery Health Care, Joni Hill, the president of First American, acted as the administrator of the nursing home until a permanent administrator was found one month to six weeks later. Ms. Hill testified that after the new administrator took over she (Mrs. Hill) visited the facility several times a month to check on office administration and to tour the entire facility, including patients’ rooms and the nurses’ desk. She even testified that she would sometimes push the nurses’ call button in patients’ rooms to see how long it would take the nurses to respond. She testified that she went through the home as a surveyor would, checking patients and watching employees. She further testified that when she was unable to visit the facility her father, also an officer of First American, was in the facility almost every day. She testified that First American received copies of the Alabama Department of Public Health reports and thus knew of the deficiencies found in the nursing home. A “committee of the whole,” composed of the facility’s administrator, assistant administrator, director of nursing , and medical director, established the policy for the home. The administrator of the nursing home reported directly to Joni Hill and was directly responsible to her.34
In reaching its holding that the parent corporation was liable based on the corporation’s control of the day-to-day operations of the nursing home, the Ballard court relied on the case ofLarrimore v. Hospital Corporation of America.35 In Larrimore, the court held that the parent corporation of Stabler Hospital, Hospital Corporation of America (“HCA”), was liable for the medical malpractice committed at the hospital because HCA controlled the day-to-day operations of the hospital by virtue of HCA’s installation of its own employee as the hospital’s administrator, and appointment of its own officers to the positions of president, secretary, and assistant secretary of the Hospital:
As alluded to earlier, upon acquiring ownership of Stabler, HCA installed its own employee as the hospital’s administrator. Stabler’s president, secretary, and assistant secretary were officers of HCA. The record contains ample evidence from which the factfinder could reasonably infer that those supervisory employees directly responsible for the day-to-day operation of Stabler were officers or employees of HCA.36
While the Ballard court found the parent corporation, First American, liable based on the corporation’s retention of the right to control the day-to-day operations of the home, the court also articulated a separate theory of parent corporate liability based on whether the parent was the “employer of the alleged tort-feasors.”37 Though these two theories were merged inLarrimore, creating liability of the parent corporation where supervisory employees of the parent were directly responsible for the day-to-day operation of the subsidiary, the Ballardcourt’s separation of the theories establishes liability where: 1) the parent corporation retains the right to control the day-to-day operation of the facility; and 2)an employee of the parent corporation, while not responsible for the day-to-day operation, nevertheless, engages in tortious conduct that harms a resident of the subsidiary facility.
Similar to the Ballard court’s theories of parent corporate liability, the plaintiff in Canavan v. National Healthcare Corp.,38 also argued two related, separate theories: 1)direct liability of the “governing body” of the facility for ignoring under-staffing where plaintiff’s harm was direct result of under-staffing; and 2)direct liability of person or entity responsible for approving the budget for the nursing home:
The Estate argues that the concept of piercing the corporate veil does not apply in the case of a tort, and that it presented sufficient evidence of Friedbauer’s negligence, by act or omission, for the jury to reasonably conclude that Friedbauer caused harm to Canavan. It argues that Friedbauer had the responsibility of approving the budget for the nursing home. He also functioned as the sole member of the “governing body” of the nursing home, and pursuant to federal regulation, 42 C.F.R. § 483.75(d) (2002), the governing body is legally responsible for establishing and implementing policies regarding the management and operation of the facility and for appointing the administrator who is responsible for the management of the facility. Friedbauer was thus required by federal mandate to create, approve, and implement the facility’s policies and procedures. Because he ignored complaints of inadequate staffing while cutting the operating expenses, and because the problems Canavan suffered, pressure sores, infections, poor hygiene, malnutrition and dehydration, were the direct result of understaffing, the Estate argues that a reasonable jury could have found that Friedbauer’s elevation of profit over patient care was negligent.”39
The court agreed:
We conclude that the trial court erred in granting the directed verdict because there was evidence by which the jury could have found that Friedbauer’s negligence in ignoring the documented problems at the facility contributed to the harm suffered by Canavan. This was not a case in which the plaintiffs were required to pierce the corporate veil in order to establish individual liability because Friedbauer’s alleged negligence constituted tortious conduct, which is not shielded from individual liability.40
Finally, a federal district court in Pennsylvania, in Young Estate of Middlekauff v. Manor Care Health Services, Inc.,41 extended the theory of “corporate negligence” to nursing home corporations, and included in the reach of its holding the nursing home corporation’s related entities, Manor Care of America, Inc., Manor Care Properties, Inc., Manor Care of Delaware County, Inc., and Health Care and Retirement Corporation of America, Inc.42 The complaint, brought on behalf of the estate of Evelyn Ruth Middlekauff, charged Manor Care Health Services, Inc. and the related corporations with placing a desire to maximize profits over the responsibility to care for the needs of elderly and vulnerable residents.43 The court explained that the doctrine of corporate negligence, developed by the Pennsylvania Supreme Court in the case of Thompson v. Nason Hospital,44 is based on the corporation’s “role in the total health care of its patients,” which “justifie[s] the imposition of a non-delegable duty of care that the [nursing home] owes directly to its patients.”45 In the context of a corporate hospital, the duty has four elements:
(1) a duty to use reasonable care in the maintenance of safe and adequate facilities and equipment; (2) a duty to select and retain only competent physicians; (3) a duty to oversee all persons who practice medicine within its walls as to patient care; and (4) a duty to formulate, adopt, and enforce adequate rules and policies to ensure quality care for patients.46
The Young court held that it was “conceivable” that the nursing home “took responsibility for Mrs. Middlekauff’s ‘total health care’ and thus would come within the ambit of the corporate negligence doctrine.”47
While the courts holding parent corporations of nursing home facilities liable for their subsidiaries’ actions do not always differentiate between direct and indirect liability or offer a detailed analysis under parent-subsidiary liability law, the results the courts reach are generally consistent with the Bestfoods test for parent liability based on the parent’s “direct participation in the facility’s activities,” and with the Bestfoods premise of direct liability, borrowed from Justice Douglas, that the parent is liable where “the alleged wrong can seemingly be traced to the parent through the conduit of its own personnel and management.” Thus, whether the facts evidence the parent corporation’s conscious decision to cut staff while ignoring documented complaints of inadequate staff (Canavan); the parent’s approval of a deficient budget and establishment of inadequate policies, with knowledge of the needs of the nursing home, relative to the budget (Heathcock); or the parent’s failure to take corrective action in response to problems the parent either knows of, or should know of, given the parent’s involvement in the facility activities (Ballard), courts are tracing the “wrongs” committed against nursing home residents to the parent corporations. Parent corporations will be held directly liable, not only where the parent actually commits the wrong, but also where the parent retains the right to control the facility and then fails to fulfill that responsibility. As expressed by the court in Beverly Enterprises-Florida, Inc. v. Spilman,48 661 So.2d 867 (Fla. Ct. App. 1995), though only addressing liability at the facility level, a corporation cannot evade responsibility for the abuse and neglect of nursing home residents by disclaiming knowledge of, or immediate involvement in the neglect, especially where the neglect is not an isolated occurrence, but a systemic problem in the facility:
[The corporation], Eastbrooke, says that its managing officers did nothing to inflict the abuses, did not know of them, and were not negligent in any manner. Therefore it argues that it cannot be held responsible under either theory of corporate liability for punitive damages. But Eastbrooke cannot escape responsibility by managing its facility with managers who close their eyes, refuse to hear, and dull their sense of smell. Certainly, Eastbrooke’s managing agents should not be charged with knowing every isolated event that occurs, but the events surrounding Walter Spilman were not isolated. . . . It is difficult to imagine that an employee with managerial responsibilities either knew of Walter Spilman’s plight and failed to take any action to assist this totally dependent human being or so totally ignored the operation of the nursing facility that Walter Spilman’s plight went unnoticed. Either situation exhibits a reckless disregard of human life or of the safety of persons exposed to its dangerous effects, or reckless indifference to the rights of Walter Spilman for whom the nursing home was being compensated for every detail of sustaining his life in the most dignified and comfortable way possible.
In the context of corporate operation of nursing home facilities, courts that have addressed the issue of parental corporate liability recognize the correlation between negligent management, control and direction of the facility, and the ultimate harm to nursing home residents. Therefore, an analysis of the role of the parent or companion corporation in the operation of the facility is important in determining the underlying causes of the resident’s harm. Where the wrongs committed against a resident can be traced to the parent corporation, the parent will be held responsible.
1The Third Circuit in Pearson v. Component Technology Corp., 247 F.3d 471, 484-485 (C.A.3 (Pa.) 2001) provides an overview of the law of piercing the corporate veil:
[U]nder both state and federal common law, abuse of the corporate form will allow courts to employ the “tool of equity” known as veil-piercing, i.e., disregard of the corporate entity to impose liability on the corporation’s shareholders. Courts have held veil-piercing to be appropriate “when the court must prevent fraud, illegality, or injustice, or when recognition of the corporate entity would defeat public policy or shield someone from liability for a crime,” or when “the parent so dominated the subsidiary that it had no separate existence.” The Third Circuit alter ego test is fairly typical of the genre. FN2 It requires that the court look to the following factors: gross undercapitalization, failure to observe corporate formalities, nonpayment of dividends, insolvency of debtor corporation, siphoning of funds from the debtor corporation by the dominant stockholder, nonfunctioning of officers and directors, absence of corporate records, and whether the corporation is merely a facade for the operations of the dominant stockholder. Other (similar) formulations are set forth in the margin.FN3
FN2. Although the tests employed to determine when circumstances justifying “veil-piercing” exist are variously referred to as the “alter ego,” “instrumentality,” or “identity” doctrines, the formulations are generally similar, and courts rarely distinguish them. See Phillip I. Blumberg, The Law of Corporate Groups: Substantive Law § 6.01, at 111 (1987). The most important differences across jurisdictions seem to reside largely in two aspects of these different formulations: first, whether an element of “fraudulent intent,” inequitable conduct, or injustice is explicitly required, see id. § 6.02, at 115, and second, a general sense that federal courts are more likely to pierce the veil in order to effectuate federal policy, lest state corporate laws be permitted to frustrate federal objectives.
FN3. For comparison, the Massachusetts version requires consideration of common ownership, pervasive control, intermingling of activity and assets, undercapitalization, lack of corporate formalities, absence of records, nonpayment of dividends, insolvency at the time of the relevant transaction, siphoning of corporate assets by shareholders, nonfunctioning officers and directors, use of the corporation for the transactions of dominant shareholders, and use of the corporation for fraud. The Illinois version considers the failure to maintain records and formalities, commingling of funds, undercapitalization, and one corporation treating the assets of the other as its own.
The test, whether or not a particular version requires an element of fraudulent intent, see supra note 2, is demonstrably an inquiry into whether the debtor corporation is little more than a legal fiction. Such a burden is notoriously difficult for plaintiffs to meet. For instance, courts have refused to pierce the veil even when subsidiary corporations use the trade name of the parent, accept administrative support from the parent, and have a significant economic relationship with the parent. Thus, in order to succeed on an alter ego theory of liability, plaintiffs must essentially demonstrate that in all aspects of the business, the two corporations actually functioned as a single entity and should be treated as such. (Case citations omitted).
2See Esmark, Inc. v. N.L.R.B., 887 F.2d 739, 755 (C.A.7,1989)
4United States v. Bestfoods, 524 U.S. 51 (1998).
5Id, at 64-65.
6Id, citing William O. Douglas & Carrol M. Shanks, Insulation from Liability Through Subsidiary Corporations, 39 Yale L.J. 193, 207 (1929).
8Pearson v. Component Technology Corp., at 487, discussing United States v. BestfoodsCourt’s reliance on Justice Douglas for the proposition that parent corporations may be directly liable for their subsidiaries’ actions when the “alleged wrong can seemingly be traced to the parent through the conduit of its own personnel and management:”
In such situations, the parent has not acted on its own (in which case there would be no need even to consider the subsidiary’s actions), nor has it acted in its capacity as owner of the subsidiary; rather, it has forced the subsidiary to take the complained-of action, in disregard of the subsidiary’s distinct legal personality.
11Id, at 73, n. 14.
12United States v. Days Inns of America, Inc., 151 F.3d 822 (8th Cir.1998)
13Id, at 826.
14Bestfoods, at 53.
15SeeEsmark, Inc. v. NLRB, 887 F.2d 739, 756 (7th Cir.1989):
The observations made by Justice Douglas and Judge Hand sixty years ago are still valid today-a parent corporation may be held liable for the wrongdoing of a subsidiary where the parent directly participated in the subsidiary’s unlawful actions.FN27 Under this “transaction-specific” theory of direct participation, parent companies have been held liable for a wide variety of misconduct by subsidiaries: patent or copyright infringement, FN28 false advertising,FN29 fraud,FN30 conversion,FN31 and the creation of a nuisance.FN32 See also P. Blumberg, The Law of Corporate Groups: Problems of Parent & Subsidiary Corporations under Statutory Law of General Application 273-74, 298-99, 321-22, 338-42 (1989).
See also, Pearson v. Component Technology Corp., at 487, citing Esmark:
[I]n the labor context, “direct” liability may attach if the parent has overridden the subsidiary’s ordinary decision-making process and ordered it to institute an unfair labor practice, or to create discriminatory hiring policies. See id. at 757. In this way, direct liability functions essentially as a kind of “transaction-specific” alter ego theory.
16See U.S. v. Days Inn, at 826, citing Bestfoods:
Although relating to a different federal statute, the Supreme Court’s opinion inBestfoodsprovides this court with helpful direction. In Bestfoods, the Supreme Court opined that in order for a parent corporation to be liable for a violation of CERCLA, the parent corporation “must manage, direct, or conduct operations specifically related to” the violation or compliance with CERCLA.In the present case, to give effect to the plain language of section 303, as well as deference to the DOJ’s interpretation of the statute, we conclude that to bear responsibility for an inaccessible facility under section 303, a party must possess a significant degree of control over the final design and construction of a facility.
17Canavan v. National Healthcare Corp., 889 So.2d 825 (Fla. App. 2004)
18Id, at 827.
19Despain v. Avante Group, Inc., 900 So.2d 637 (Fla. App. 2005)
20Id. at 645.
21Id. at 640.
22Circuit Court of Ashley County, Arkansas, No. Civ. 2001-179-4.
23Id. at *3.
24Id. at *5.
28Id. at 8.
29Id. at *5-8. See also Autrey v. 22 Texas Services Inc., 79 F.Supp.2d 735 (S.D.Tex. 2000) for case basing liability of nursing home partner corporations on theory of piercing the corporate veil. Court submitted to jury question whether corporate veil of the partner corporations should be pierced, where partner corporations owned 1% of partnership profits but assumed one hundred percent of partnerships liabilities. Court based holding largely on evidence that the partner corporations were undercapitalized, though also noted that partner corporations had no employees, office space, or expenses, and consequently paid no rent and spent no money on advertising.
30Montgomery Health Care v. Ballard, 565 So.2d 221 (Ala. 1990)
31Id. at 225-226.
32See Bestfoods, at 53:
Because direct liability for the parent’s operation of the facility must be kept distinct from derivative liability for the subsidiary’s operation of the facility, the analysis should instead have focused on the relationship between CPC and the facility itself, i.e., on whether CPC “operated” the facility, as evidenced by its direct participation in the facility’s activities.
33See Bestfoods, at 71-72. According to the Supreme Court, “activities that involve the facility but which are consistent with the parent’s investor status, such as monitoring of the subsidiary’s performance, supervision of the subsidiary’s finance and capital budget decisions, and articulation of general policies and procedures, should not give rise to direct liability:”
the acts of direct operation that give rise to parental liability must necessarily be distinguished from the interference that stems from the normal relationship between parent and subsidiary. Again norms of corporate behavior (undisturbed by any CERCLA provision) are crucial reference points. Just as we may look to such norms in identifying the limits of the presumption that a dual officeholder acts in his ostensible capacity, so here we may refer to them in distinguishing a parental officer’s oversight of a subsidiary from such an officer’s control over the operation of the subsidiary’s facility. “[A]ctivities that involve the facility but which are consistent with the parent’s investor status, such as monitoring the subsidiary’s performance, supervision of the subsidiary’s finance and capital budget decisions, and articulation of general policies and procedures, should not give rise to direct liability.” Oswald 282. The critical question is whether, in degree and detail, actions directed to the facility by an agent of the parent alone are eccentric under accepted norms of parental oversight of a subsidiary’s facility.
34Ballard, at 225-226.
35Larrimore v. Hospital Corporation of America, 514 So.2d 840 (Ala. 1987)
36Id. at 845.
37Id. at 225.
38Canavan v. National Healthcare Corp., 889 So.2d 825 (Fla. App. 2004)
39Id. at 826.
40Id. at 827.
41Young Estate of Middlekauff v. Manor Care Health Services, Inc., 2004 WL 953869 (E.D.Pa.)
42Id. at *1.
43See, Young Estate of Middlekauff, Plaintiff’s Reply to Defendant’s Motion to Dismiss Pursuant, 2004 WL 1145015 (E.D.Pa.); Young Estate of Middlekauff, Plaintiff’s Complaint 2003 WL 23305525 (E.D.Pa.); 6 Andrews Nursing Home Litigation Reporter 2 (2004)
44Thompson v. Nason Hospital, 527 Pa. 330, 591 A.2d 703, 707-08 (Pa.1991)
45Young, 2004 WL 953869, at *1 (E.D.Pa.)
46Id., citing Thompson, at 707.
47Young, 2004 WL 953869, at *1 (E.D.Pa.)
48Beverly Enterprises-Florida, Inc. v. Spilman, 661 So.2d 867, 873-874 (Fla. Ct. App. 1995)