Federal magistrate judge recommends $10M in damages in Arkansas nursing home neglect case

A New York man who operated a failed national nursing home chain, including 21 facilities in Arkansas, owes more than $10 million in damages to the family of a woman who died in one of his nursing homes in 2018, a federal judge recommended Monday, according to court documents.

Joseph Schwartz, who operated Skyline Health Care, and his wife, Rosie, face a wrongful-death lawsuit from the family of Lois Marie Rack, who died at the age of 52 after nine weeks in the Hillview Post-Acute and Rehabilitation Center.

Marie, as her family called her, entered the facility in stable condition and was supposed to stay for less than three weeks. She developed bedsores despite her care plan requiring staff to reposition her frequently in order to avoid this, according to testimony at an October bench trial U.S. Magistrate Judge Jerome T. Kearney held in order to determine damages.

The patient soon developed ulcers and gangrene, and she died of sepsis and renal failure on Feb. 12, 2018, according to court documents. Her family filed suit in the U.S. District Court of Eastern Arkansas two years later.

"Ms. Rack was not timely turned and repositioned, her wound dressings were not adequately changed, and the limited documentation of her injuries was shocking," Kearney wrote in Monday's court filing.

At the October trial in Little Rock's federal courthouse, attorneys from Tampa, Fla., argued that Joseph Schwartz siphoned profits away from his nursing homes, leaving facilities understaffed to care for its recovering or frail residents.

During a video deposition played during the hearing, Schwartz confirmed he had no medical training before he started Skyline.

Kearney recommended that the Schwartzes pay the Rack family a total of $10,017,792.86 in compensatory and punitive damages in the following amounts:

• $3.5 million in pain and suffering damages.

• $1 million in loss-of-life damages.

• $110,975.06 in medical expenses.

• $6,817.80 in funeral expenses.

• $5,000,000 in punitive damages.

• $100,000 in wrongful death damages to each of Rack's four siblings.

Schwartz's Little Rock attorney, Bill James, could not be reached for comment Thursday. James has until Jan. 10 to issue an objection to Kearney's recommendation if he sees fit.

Skyline Health Care held licenses for one in every 10 Arkansas nursing home beds before Schwartz was forced in 2018 to relinquish most of his nursing homes, including his Arkansas holdings, as a result of financial insolvency.

Reports of resident neglect and abuse, including cases tied to lack of money or staffing in Skyline nursing homes, have publicly surfaced in the years since Schwartz's exit.

Richard Dupee, chief of geriatrics at Tufts Medical Center in Boston, reviewed Rack's health records and testified in October that her care was "incredibly egregious" and "absolutely outrageous."

Kearney's recommendation cited Dupee's testimony as evidence that Rack's family deserves financial compensation for her death. Dupee said the gangrene in Rack's legs had left her family with the options of either amputating both legs, which Rack was not likely to survive, or administering palliative care.

Surveys of the nursing home, both before and after Rack's admission and death, found several instances of improper and negligent medical care and financial management, according to court documents.

Because Schwartz has not defended himself in the Rack lawsuit, a default judgment was entered against him last year.

Schwartz also faces two counts of state tax violations, according to a statement Dec. 20 by Arkansas Attorney General Leslie Rutledge's office, and faces arrest on eight state Medicaid fraud charges involving his former Arkansas facilities.

James previously told the Arkansas Democrat-Gazette that Schwartz will plead innocent to the Medicaid fraud charges and will surrender to Arkansas authorities in early January.

Rutledge's office has investigated Schwartz and Skyline for 44 months, according to the Dec. 20 statement.