When people think of a business owner, they imagine one person or perhaps a small group of people. This is often not the case with nursing homes. Many homes have restructured in a way to best avoid liability for their adverse actions. While running from the consequences of injuring elders may seem repugnant, this is the reality of the nursing home industry today. Homes are often owned by a number of SPEs (Single Purpose Enterprises). These SPEs are the formed for deceptive purposes.
An SPE is an entity which is formed for one specific purpose. The purpose is typically to protect the corporate owner or management companies. For example, a company which would like a loan but does not want to take on more debt may instead use the SPE as a vehicle to acquire the debt. This give the company the benefits, while also allowing them to appear more financially sound than they actually. In some areas, the ability to form SPEs has been limited due to their somewhat devious nature. In nursing-homes limited-liability SPEs give protection to managing companies by allowing them to escape personal liability for the nursing home’s adverse actions. They effectively attempt to shield corporate owners and management companies.
Fortunately for families of injured elders, there are ways to crack the shield put up by corporate owners and management companies of nursing homes. Several theories of liability exist for plaintiffs to prevail. Corporate owners can be held liable if they were immediately involved overseeing the management of the home. This is especially true of they ordered the action which injured the nursing home resident. Joint venture liability may exist if the ownership shared in management responsibilities. Similarly, torts ordered or committed by corporate officers may allow the corporate owner to be held liable (i.e. implementing a policy which they knew to be unsafe for residents in order to cut costs). Vicarious liability is also a possible cause of action if provided the ownership foreseeably could have realized their actions might cause injury. Finally, agency liability is possible if the corporate owners or management group exercised some degree of control over the nursing home.
These causes of action are not exclusive. In many cases, they overlap one another in that if one occurred another is likely to have occurred as well. These liability theories give home to plaintiffs that they may prevail, despite the attempts of nursing home ownership to escape responsibility.