Joseph Schwartz, the New York state owner of the failed Arkansas nursing home chain, Skyline Health Care, who is facing tax and Medicaid fraud charges in Arkansas, has been ordered to pay the family of a Little Rock woman who died in one of his facilities $15.7 million for neglect and wrongful death.
Zelma Grissom, the mother of six, died at 81 in May 2018 after a stay of almost 15 months between March 2016 and June 2017 at the Hillview Post Acute and Rehabilitation Center in Little Rock. A bedsore became infected, leading to her death from sepsis, her lawyers said.
Grissom's survivors filed suit in Pulaski County Circuit Court about three months later.
Grissom moved into the Hillview facility after a debilitating stroke that required her to be fed by tube, said attorney John Landis, who represented the family with co-counsel Adam Freyaldenhoven.
"She's completely dependent on staff ... for daily living, things like putting her clothes on, going to the bathroom," Landis said. "What's so important for her is turning or repositioning, which is the main way to prevent a bed sore. They didn't do that as often as they should. You're supposed to do that every two hours and there's no documentation ... that it actually was done. According to her son ... our client, he would find her dirty, unkempt, not turned. He would come in and she would be moaning in pain. She was just left in that bed to die."
The $15,706,166 judgment imposed this month by Pulaski County Circuit Judge Cara Connors is the second the Reddick Firm has won involving the same facility, following an award of almost $19 million in May 2020 to the family of Doris Faye Coulson, a North Little Rock woman who died in October 2016.
Connors' award breaks down to $10 million in punitive damages with the remaining $4,706,166 representing a compensatory award for $206,167 in medical expenses, $1.5 million for Grissom's pain and suffering, $1.5 million for her mental anguish and $1.5 million for loss of life.
Another $1 million will be divided between her son Levester Ivy Jr. and the estate of her daughter, Mary Ivy Vines, who died in October 2020 during the course of the litigation.
LIABILITY FINDING
Schwartz and the nursing home defendants, Highlands of Little Rock Riley Holdings LLC doing business as the Hillview Rehabilitation Center, Skyline Highland Holdings LLC and JS Highland Holdings LLC, were found liable on summary judgment in April 2020 after none of the defendants challenged the family's accusations.
Schwartz personally petitioned the court in August to reverse the liability finding.
He described himself as "a 60-year-old man in extremely poor health. I am morbidly obese, diabetic and have heart problems. A man in my condition has an extremely high chance of dying from COVID-19, and as a direct result I have spent the last four months in isolation at my home."
He denied any responsibility for Grissom's injuries, stating that he had only been an investor in the nursing home. He complained that he had never been notified of the summary judgment motion, he couldn't defend himself against it and the judge should vacate the ruling against him.
He further stated that he had sold his interest in the Skyline chain in mid-2018, although the divestiture was not completed until 2019. He said the company's successor owner should have been the one to be called to account in the suit.
"I never visited Arkansas, and I had no personal connection with the day-to-day operation of any of the nursing homes in Arkansas. The tragedy that had befallen Zelma Grissom was not my fault," he wrote. "I had no control or [oversight] at the premises and I was simply an investor and had no management role in the nursing home at all."
An appeal to the judge's liability finding was rejected by the Arkansas Court of Appeals, and a motion by the defendants to stay proceedings until the criminal charges against Schwartz were resolved was denied last July.
His lawyers had asked for the stay so that Schwartz's criminal cases could be resolved because, in the civil litigation, he would have to invoke his Fifth Amendment right against self-incrimination to keep the civil proceedings from being used against him in the criminal prosecutions.
Lawyers for the company defendants, Wallace, Martin, Duke and Russell of Little Rock, quit the case last July, stating that those defendants weren't following their advice and stopped paying them, court filings show.
The judgment to the Coulson family in 2020 -- $18,951,247 -- in compensatory and punitive damages came after Schwartz similarly did not challenge her family's suit in Pulaski County Circuit Court.
A 70-year-old mother of three, the retired nurse was suffering from chronic obstructive pulmonary disease, Parkinson's disease and dysphagia. She was a resident for 5½ months at the Highlands facility at 8701 Riley Drive -- from April 2016, when Skyline defendants acquired it, through September 2016 -- dying 12 days after she was moved to another facility.
Unable to speak, she had to be fed and medicated by tube with nothing by mouth but she was wrongly fed breakfast one morning, which caused severe choking, family attorney Rob Francis said. With food in her lungs, Coulson fell into a coma during efforts to revive her and died of aspiration pneumonia "from a clearly preventable event," Francis said.
That judgment included $15 million in punitive damages with each of her survivors, Michael Cole, Amanda Coulson and Melissa Coulson, receiving $250,000 for wrongful death.
In other litigation involving the Highlands facility, U.S. District Judge Billy Roy Wilson ordered Schwartz and his wife, Rosie, in January 2022 to pay the family of 52-year-old Lois Marie Rack $10,017,792 in damages, including $5 million in punitive damages and $400,000 to be shared between Rack's four siblings. Rack was scheduled for a three-week stay but developed bedsores from lack of appropriate care, which led to sepsis and renal failure that caused her death in February 2018.
The Schwartzes did not challenge the lawsuit.
Last month, the Rack family's lawyers petitioned the judge to hold the Schwartzes in contempt, stating the couple had refused to obey subpoenas that required them to testify and provide documentation about their assets to begin the damages-collection process.
FEDERAL INDICTMENT
Schwartz is under federal indictment in New Jersey, charged with failing to pay $29.5 million in payroll and unemployment taxes in addition to benefit plan fraud, according to a federal indictment.
Schwartz's Skyline Health Care LLC and Skyline Management Group LLC owned and operated as many as 114 nursing homes in 11 states, including 21 facilities in Arkansas, until the operation failed financially in 2018.
At one point, Skyline owned one out of every 10 nursing home beds in Arkansas.
Now Schwartz is charged in Pulaski County with eight counts of Medicaid fraud, with each charge representing a facility he operated here and each a Class A felony with a 30-year maximum sentence. Further, the 63-year-old Schwartz is facing tax-evasion counts -- attempting to evade tax and willful failure to pay -- that together carry up to 16 years.
At a Monday court appearance before Circuit Judge Karen Whatley, Schwartz's attorney Kevin Marino of New Jersey said Schwartz was close to reaching a plea agreement with federal prosecutors that would allow Schwartz to resolve the Arkansas charges once he's been sentenced in federal court. Deputy Attorney General Lloyd Warford, director of the state Medicaid Fraud Control Unit, confirmed Marino's account, stating that prosecutors were seeking a "global settlement" that would resolve all of the criminal charges against Schwartz.
Allegations against Schwartz include submitting false cost reports and other documents to the Arkansas Medicaid program, resulting in federal and state Medicaid overpayment to his company in 2018 of more than $3.6 million, according to authorities.
Court records show the Medicaid fraud allegations involve eight Arkansas nursing homes: Batesville Health and Rehab, Broadway Health and Rehab in West Memphis, Creekside Health and Rehab in Yellville, Jonesboro Health and Rehab, Magnolia Health and Rehab, Mine Creek Health and Rehab in Nashville, Searcy Health and Rehab and White Hall Health and Rehab.
Schwartz is further facing two tax-evasion counts -- attempting to evade tax and willful failure to pay -- that together carry up to 16 years.