Appeals court overturns lawsuit immunity for 'charitable' nursing home

A nursing home can't receive immunity from a wrongful death lawsuit because of its charitable status, the Arkansas Court of Appeals ruled Wednesday.

A wrongful death lawsuit was filed against Davis Life Care Center in Pine Bluff, AR, by the estate of a resident who died at the facility in 2011. The resident's family allege his death was due to medical malpractice and negligence.

Davis Life Care Center argued, and a circuit judge agreed, that the suit couldn't proceed due to the doctrine of charitable immunity, which protects charitable organizations from lawsuits based on its actions, even if those actions were negligent. While most states have abolished the doctrine, it still stands in Arkansas.

It's unclear whether Davis Life Care Center was truly operating as a charity at the time of the resident's death, the court found in its opinion. As proof of its charitable status, Davis pointed to the fact that the facility has operated at a loss since opening in 2001, and sometimes provides free care to patients.

The court found all Davis residents were initially charged for care, and debts were forgiven  only after a resident could not pay. The amount of bad debt forgiven by Davis amounted to less than 1% of its revenue in 2011.

“We hold that reasonable minds could view this minute amount of debt forgiveness as creating a facade of charity instead of a true charity,” the court stated in its opinion.

The case will return to circuit court for new proceedings.