Jury hits private equity, REIT owners with $110M verdict in assisted living death

A Sacramento County jury on Tuesday awarded $110 million in compensatory and punitive damages to the family of a 100-year-old Alzheimer's patient who died after wandering outside her assisted living facility in near-freezing temperatures, finding that the private equity and real estate firms overseeing the facility put profit over resident safety.

Jurors found Formation Capital, the facility's asset manager, and Colony Capital, its beneficial owner, liable for neglect and wrongful death. Mildred Hernandez died Feb. 12, 2019, after she was found unresponsive outside Greenhaven Estates in Sacramento in approximately 38-degree weather. Teresa A Ludlow, individually and as Successor-in-Interest of Mildred Hernandez, deceased v. FC Ranger Ops Greenhaven Estates (CA) LLC et al., 34-2020-00275166 (Sac. Co. Super. Ct., filed Feb. 10, 2020).

Hernandez had lived at the facility for more than five years and was a known elopement risk, according to the complaint. Staff observed her wandering at night but did not report it to her physician or family, document it in her care plan, or implement additional safety measures. She was later found outside a self-locking exit door in the early morning hours and transported by ambulance to Kaiser Hospital, where she was pronounced dead at about 7:30 a.m.

Edward Dudensing of Dudensing Law, who represented the Hernandez family, said the verdict underscores the consequences of corporate neglect by facility owners.

"This $110 million verdict confirms what we knew from day one: Mildred Hernandez died alone in the cold because the large public REIT and private equity companies that were responsible for overseeing Greenhaven Estates turned a blind eye to operations at the facility that had been dangerous to residents for several years before Mildred's death," Dudensing said.

Dudensing went on to say that following Hernandez's death, the state had moved to revoke the facility's licenses over systemic care failures -- deficiencies that Colony Capital and Formation Capital knew about, had the resources to fix and chose to ignore.

"Corporations that reap the profits of operations of facilities like Greenhaven Estates must be held to account when they fail to do their jobs," Dudensing said. "We are proud to have secured this outcome for the Hernandez family and remain steadfast in advocating for the rights and protections of vulnerable individuals."

Traci Owens of Burger, Meyer & D'Angelo represents defendant DigitalBridge Group Inc. David Elkins, Petrina A. McDaniel and Dara Mann of Squire Patton Boggs represent defendants Formation Capital LLC and Formation Capital Asset Management III LLC. None were available for comment.

Plaintiff's alleged the corporate defendants knowingly understaffed and underfunded Greenhaven Estates, admitted high-acuity residents they could not adequately serve, and concealed known deficiencies from prospective residents and their families. They further alleged the defendants operated as alter egos and co-conspirators in a profit-maximizing scheme at the expense of resident care, a theory the jury appeared to accept in returning the nine-figure award.

The Hernandez family also issued a statement following the verdict.

"Our mother deserved to live out her final years with dignity, safety, and compassion. Instead, she died alone in the cold because Greenhaven Estates and its corporate overseers failed to provide the most basic protection they promised," the family said. "While no verdict can bring our mother back, we hope this outcome will prevent other families from suffering the same heartbreak and force these companies to prioritize the well-being of the vulnerable seniors entrusted to their care. We are grateful to our attorneys for their tireless dedication and to the jury for recognizing that what happened to our mother was wrong and preventable."