Morgan v. Galilean Health Enterprises, Inc.

• Decision Date: 22 December 1998
• Docket Number: No. 88,957,88,957
• Citation: 977 P.2d 357,1998 OK 130
• Parties: Marilyn MORGAN, as Guardian of Donald Wayne Quinton, Plaintiff-Appellee, v. GALILEAN HEALTH ENTERPRISES, INC., d/b/a Beggs Living Center and John Doe, Defendant-Appellant.
• Court: Oklahoma Supreme Court

Page 357

977 P.2d 357

1998 OK 130

Marilyn MORGAN, as Guardian of Donald Wayne Quinton Plaintiff-Appellee, v. GALILEAN HEALTH ENTERPRISES, INC., d/b/a Beggs Living Center and John Doe, Defendant-Appellant.

No. 88,957.

Supreme Court of Oklahoma.

Dec. 22, 1998.

Rehearing Denied May 11, 1999.

On Appeal from the District Court, Okmulgee County; John Maley, Trial Judge.

¶0 Marilyn Morgan brought suit against Galilean Health Enterprises, Inc., d/b/a Beggs Living Center, a nursing home, and John Doe, for abuse and neglect of her ward, Donald Quinton. Trial culminated in a general jury verdict for the plaintiff, awarding

her both compensatory and punitive damages. In a postjudgment proceeding, the trial court granted plaintiff a counsel-fee award, prejudgment interest, and costs. By stipulation of the parties, this appeal, retained for disposition by this court, stands confined to assigned errors in granting the counsel-fee award and in basing the amount of that award solely on a contingent-fee contract between the plaintiff and her counsel.

THE TRIAL COURT'S JUDGMENT ON JURY VERDICT IS AFFIRMED PURSUANT TO THE PARTIES' STIPULATION; THE POSTJUDGMENT COUNSEL-FEE AWARD IS REVERSED AND THE PLEA FOR THAT ANCILLARY RELIEF REMANDED FOR FURTHER PROCEEDINGS TO BE CONSISTENT WITH TODAY'S PRONOUNCEMENT.

Ray H. Wilburn, Scott R. Taylor, Wilburn, Masterson & Smiling, Tulsa, Oklahoma, for appellant.

Stratton Taylor, Vani Singhal, Taylor, Burrage, Foster & Singhal, Claremore, Oklahoma, for appellee.

Karen M. Grundy, Best, Sharp, Holden, Best, Sullivan & Kempfert, Tulsa, Oklahoma, for Amici Curiae, Eufala Manor Nursing Home, Oklahoma Nursing Homes, Ltd., and Ranch Terrace Nursing Homes, Inc.

OPALA, J.

¶1 The issues presented on appeal are: (1) Is the plaintiff entitled to a prevailing-party counsel-fee award authorized by the provisions of the Nursing Home Care Act (the "Act") ¹? and (2) if so, was there error in basing the amount of that award upon the terms of a contingent-fee contract between the plaintiff and her counsel? We answer both questions in the affirmative.

I THE ANATOMY OF LITIGATION

¶2 Marilyn Morgan ("Morgan"), guardian of Donald Wayne Quinton ("Quinton"), brought this action against Galilean Health Enterprises, Inc., d/b/a Beggs Living Center, and John Doe, ("Galilean"), alleging that Galilean had been negligent in caring for Quinton, a mentally impaired individual, who was a resident of the Beggs Living Center. In August of 1993, Quinton suffered serious personal injuries as a result of an apparent beating. Morgan claimed that Galilean failed to prevent the abuse and neglected to secure prompt medical attention for Quinton's injuries.

¶3 The court instructed the jury that, with respect to Quinton's care, Galilean was subject to certain statutory duties imposed by the Act. ² The jury returned a general verdict for Morgan, awarding her $500,000 in compensatory and $250,000 in punitive damages. Galilean timely appealed from the judgment on jury verdict.

¶4 Morgan moved for a postjudgment award of an attorney's fee. The trial court ruled that because "violations of the Act" were in issue at trial, Morgan was entitled to a prevailing-party counsel-fee award. ³ The award was set at $437,370.50 with interest. The record as well as the text of the entered memorial of the postjudgment proceedings (on Morgan's application for an attorney's fee) irrefutably demonstrate that the court used the contingent-fee contract between Morgan and her attorney as the basis for computing the amount of the counsel-fee ¶5 Before this court reached Galilean's appeal for decision, the parties settled the obligation imposed by the underlying judgment. By their stipulation, appellate review is now confined to whether plaintiff is entitled to a counsel-fee award, and if so, whether its quantum is legally correct. ⁵ Galilean urges that the award must be reversed for the following four reasons: (1) this was a common-law negligence action in which a counsel-fee award is not authorized, (2) the trial court's jury instruction--incorporating provisions of the Act--was given in error and cannot hence serve as a predicate for a counsel-fee award, (3) the trial court incorrectly read the Act as authorizing a counsel-fee award, and (4) if a counsel-fee award was indeed the plaintiff's due, the trial court erred in computing the award solely upon the terms of the contingent-fee contract between Morgan and her attorney.

                award. 4  Galilean argues that a counsel-fee award was not authorized by law;  alternatively Galilean urges that, if a fee allowance was proper, the method used to calculate the amount awarded was erroneous
                

¶6 We hold that (a) this action was submitted to the triers not solely as a common-law tort, but also as a breach of duties imposed by the Act, and (b) the trial court, in granting a prevailing-party counsel-fee award, erred in allowing the contingent-fee contract (between the plaintiff and her counsel) to serve as the sole basis for calculating the amount of the attorney's fee.

II

MORGAN'S LAWSUIT WENT TO THE JURY NOT SOLELY AS A COMMON-LAW

TORT, BUT ALSO AS A BREACH OF DUTIES IMPOSED BY THE ACT

¶7 Galilean argues that Morgan's suit was tried as a common-law negligence action, not as a claim for breached duties imposed by the Act. It contends that the Act's provisions that relate to an attorney's fee award are hence unavailable to Morgan. We must disagree. In its Instruction No. 11, the court clearly charged the jury that it could consider whether Galilean had breached duties owed to Quinton under the Act. ⁶ Whatever the theory of Morgan's lawsuit may have been at its inception or at trial, the jury's verdict rests upon an instruction which incorporated provisions of the Act. ⁷ The verdict is hence to be viewed as the triers' response to the theory submitted in that

                instruction. 8  By the parties' settlement of the underlying judgment, 9 we now stand barred from probing into whether the evidence adduced on behalf of the plaintiff's cause warranted the giving of that instruction. 10  In short, Morgan's lawsuit must now be regarded as having been submitted as a claim within the purview of the Act
                

III

THE ACT EXPLICITLY CREATES A STATUTORY TORT WITH A PRIVATE

RIGHT OF ACTION

¶8 We turn now to whether the inclusion of Instruction No. 11 may in this case serve as authority for an attorney's-fee award. In that instruction, the court charged that, apart from the common-law duties owed to Quinton, Galilean was also bound by certain statutory obligations. The instruction then quoted portions of three of the eighteen "rights" conferred by the Act on nursing home residents (the "Nursing Home Patients' Bill of Rights"). ¹¹ Although it is conceded that violation of any of these rights can bring about the imposition of criminal penalties or trigger the process for administrative remedies, Galilean urges that the Act recognizes only those private actions that are prosecuted for injunctive or preventative relief. We disagree. The terms of 63 O.S.Supp.1992, § 1-1918(F) create what we have previously referred to as a "statutory tort," i.e. a legislatively-crafted, non-contractual duty, unknown to the common law, for the breach of which an action ex delicto will lie. ¹² While the language of the Act is not a model of clarity and precision, its terms are clear enough to divine a legislative intent to fashion a private right of action ¹³ for nursing home residents (or their guardians) to redress a violation of rights conferred by the Act. ¹⁴ Liability for a statutory tort is incurred when it can be shown that the plaintiff's injury resulted from a statutory violation ¶9 WRG Construction v. Hoebel ¹⁷ provides some guidance for gauging legislative language that creates a statutory tort. An intent to create a cause of action is shown where there are explicit references in the enactment's text to one's right to vindicate a breached duty. ¹⁸ Subsection F of § 1-1918 of the Act is replete with references to remedies for a "violation." ¹⁹ In the context of the statute the word "violation" is unmistakably used as a synonym for the concept of "breached duty." The so-called rights enumerated in the Act shape the standard of care to govern in the nursing home setting. An operator's breach of any enumerated duty gives rise to a private right of action under the Act.

                and that the plaintiff falls into a class of persons whom the legislature intended to protect. 15  By giving Instruction No. 11, the trial court recognized that Quinton's proof was sufficient to invoke his statutory right. 16
                

¶10 The episode that formed the basis for Morgan's claim is one of the scenarios for which the Act plainly intends to provide a remedy. By stipulation of the parties, no corrective relief may now be sought from the judgment (on jury verdict), the terms of which imposed liability on Galilean for the breach of statutory duties owed to Quinton.

IV THE ACT AUTHORIZES THE PREVAILING PARTY IN A PRIVATE SUIT FOR BREACH OF A DUTY PRESCRIBED BY THE ACT TO RECOVER AN ATTORNEY'S FEE FROM THE VANQUISHED OPPONENT

¶11 When called upon to assess litigation expenses, we continue to stand firmly committed to the American Rule. ²⁰ Except where a statute or contract provides otherwise, every litigant is responsible for its own litigation expenses, including the attorney's fee. ²¹ No contractual obligation for the payment of an attorney's fee in this case was ever created between Morgan and Galilean.

Hence, Morgan may secure an attorney's fee only if that award is authorized by statute.

Subsection F of § 1-1918 ²² of the Act provides in part:

"... If a violation or threatened violation of this section shall be established in any action, the court shall enjoin and restrain or otherwise prohibit the violation or threatened violation and assess in favor of the plaintiff and against the defendant the cost of the suit, and the reasonable attorney fees incurred by the plaintiff...