Psychiatric hospitals can be held responsible for employees' sexual abuse of patients, court rules

A California appeals court has affirmed a trial jury’s decision that a psychiatric hospital can be held responsible for sexual abuse committed by an employed caregiver should their actions be enabled by the facility’s “reckless neglect.”

Filed Tuesday, the court’s 3-0 decision upheld an award of $6.75 million in noneconomic damages to two elderly former patients who were abused by Juan Valencia, an unlicensed behavioral health caregiver who had been hired in 2011 by psychiatric hospital Aurora Vista del Mar and later fired in 2013.

Employees of the hospital testified that policies were in place allowing a male employee to be alone and unseen with a female employee for up to 20 minutes and that the hospital did not investigate Valencia’s reputation among staff as a known sexual abuser.

Further, the hospital’s CEO said she was aware of sexual misconduct between Valencia and one of the patients but only reported the incident to authorities one year later when it became public knowledge.

Valencia had previously been arrested on suspicion of a sexual crime that requires registration as a sex offender but had the charge dismissed. The arrest did not show up during the hospital’s initial background check, although the court wrote that hiring a certified nursing assistant rather than an unlicensed worker would have surfaced such a conviction.  

A jury found Aurora and its parent organization Signature Healthcare Services were negligent in their employment of Valencia and that Signature and Valencia had “committed acts constituting dependent adult abuse and that they acted with recklessness,” according to Tuesday’s filing.

The jury allocated 30% fault to Signature, 35% to Aurora and 35% to Valencia, according to the document.

The organizations appealed the jury’s allocation of fault, arguing that there was no precedent for doing so.

The appeals court disagreed, with Justice Arthur Gilbert writing in the opinion that previous cases have supported placing greater blame on a negligent party that failed to protect a victim.

“Here Aurora and Signature are sophisticated parties who should know how to operate a psychiatric hospital to assure the safety of their patients,” Gilbert wrote in the opinion. “Instead, they operated the hospital recklessly and maliciously to make what happened almost inevitable.

“If the perpetrator had not been Valencia, it would have been someone else. The jury correctly attributed 70% of the fault to Aurora and Signature,” he wrote.

Further, Gilbert said that while courts “have generally held” that employers are not liable for sexual assaults committed by an employee, the current case differed in that Valencia was acting within the scope of his employment as a behavioral health caregiver when he assaulted the former patients.

“The patients are vulnerable; they may suffer from impaired judgment or other cognitive impairments,” he wrote. “Sexual exploitation of the patients by employees is a foreseeable hazard arising from the circumstances of the job.”

The defendants also argued that the damages awarded by the jury were excessive, citing California law limiting noneconomic damages in medical malpractice cases involving seniors to $250,000. The court said the argument does not apply as the law specifies that the limit only applies to action brought on behalf of deceased patients’ descendants and that the case’s plaintiffs are currently alive.

The appeals court affirmed the jury’s decision but ruled that the trial court erred in its judgment of nonsuit on the question of whether Valencia was acting within the scope of his employment. As such, the court ordered a retrial to determine how much of the damage award should be paid by the hospital.  

The courts have not set a date for the retrial.