The South Carolina Court of Appeals ruled that a circuit court had erred in setting aside the statutory cap on punitive damages in a nursing home neglect case because
the evidence did not show an intent to harm, but it upheld an increase in the statutory cap, finding that the facility’s conduct satisfied the statutory grounds. Watkins v. Sterling Healthcare, Inc., No. 2023-000556 (S.C. Ct. App. Sept. 23, 2026) (unpublished opinion).
Mildred Watkins was admitted to Country Wood Nursing Center in March 2011 for rehabilitation after a fall. Despite a physician’s evaluation indicating that she had high rehabilitative potential, while residing at the center during the following nine months she was hospitalized eight times and suffered recurrent urinary tract infections, a dislocated thumb, pressure ulcers, bruises, open wounds, significant weight loss, and a leg laceration requiring 10 staples. The laceration was caused by a jagged metal projection left on her bed frame after the bed frame where the bed rail appeared to have been sawed off; an internal audit found 15 other beds with the same exposed metal piece. Nine months after her admission, Mildred died of complications from urosepsis at age 73.
As personal representative of Mildred’s estate, her daughter, Jean Watkins, filed wrongful death and survival actions against Sterling Healthcare, Inc.; Country Wood Nursing Center, LLC; and Guardian Resources, LLC (the defendants). After the defendants repeatedly failed to comply with discovery for nearly a year, the circuit court granted Jean’s motion for sanctions. The court struck the defendants’ answers and held a damages hearing. Finding proof that the defendants had intentionally harmed Mildred, the court set aside the statutory punitive damages cap. Finding gross negligence and recklessness, it also set aside the noneconomic damages cap (not appealed), and it awarded Jean a total of $29,515,245.68. The court also ordered the defendants and their owners to produce insurance and financial records. The defendants appealed.
The Court of Appeals found that the defendants’ hearsay challenges were largely unpreserved because they had not objected at the hearing. It agreed, however, that the circuit court had improperly admitted Jean’s testimony, to which the defendants had objected, that her mother’s condition must have resulted from intentional abuse, finding that her testimony was speculative and required medical expertise that she did not possess. The court concluded that the remaining evidence overwhelmingly supported the circuit court’s finding of gross negligence and reckless, willful, and wanton misconduct.
Generally, under section 15-32-530 of the South Carolina Code, punitive damages may not exceed the greater of three times compensatory damages or $500,000. However, the cap increases to the greater of four times compensatory damages or $2 million if the conduct was motivated primarily by unreasonable financial gain and its unreasonably dangerous nature, with a high likelihood of injury, was known or approved by management or if it could subject the defendant to a felony conviction. In addition, the statute provides that there is no cap if the defendant intended to harm and did harm the claimant.
The court reversed the circuit court’s decision to eliminate the statutory cap on punitive damages; it determined that no evidence showed that the nursing home staff had acted to intentionally harm Mildred and that each incident could instead be attributed to gross negligence or accident, that no direct or expert medical testimony showed intentional harm, and that the legislature meant to distinguish between the two types of conduct. The court held that the evidence overwhelmingly supported a determination that the cap should be increased to four times the amount of compensatory damages. The exposed metal edges on 16 beds supported an inference that nursing home management had chosen to save money by cutting off the bed rails rather than replacing them, and the staff’s extreme neglect of a vulnerable adult could subject them to a felony conviction under South Carolina law. The court therefore reduced the survival action punitive award to $11,151,568.96, four times the $2,787,892.24 compensatory award. The $2.5 million punitive award on the wrongful death claim was unaffected.
The court held that the modified punitive damages award did not violate due process, citing the reprehensibility of the defendants’ conduct, which the circuit court had stated was the most egregious case of elder abuse and neglect it had ever encountered. Further, the court found that the modified amount of punitive damages was both reasonable and proportionate to the amount of harm suffered by Jean and the general damages recovered: For the survival action, the punitive damages were four times the compensatory damages, and for the wrongful death action, the punitive damages were one-third of the compensatory damages. Both ratios were in line with other punitive damage awards previously imposed and upheld in comparable cases.
The court also held that the production order did not improperly compel postjudgment discovery but, instead, merely reiterated earlier discovery orders that the defendants had not yet complied with. However, the court ruled that the circuit court had abused its discretion in requiring the disclosure of personal financial information from individual members of the defendant limited liability companies (LLCs) who were not parties to the action because Jean had not sought to pierce the corporate veil.
Therefore, the court affirmed the punitive damages award, as modified, and the production order except as to the nonparty LLC members.
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