Graham v. ValueOptions, et al.

Cause Number CV 2006-010027

Verdict: $11 million in compensatory damages, $25 million in punitive damages (November 26, 2008)

Richard M. Gerry, Esq.

Phoenix, Arizona, personal injury attorney Richard Gerry focuses on serious personal injury claims. Over the past 27 years, juries have awarded Richard's clients multi-million-dollar verdicts to compensate for wrongful deaths and catastrophic injuries. His experience ranges from automobile cases to complex litigation involving freeway design. Appearing before the Arizona Supreme Court, the Arizona Court of Appeals and the Ninth Circuit Court of Appeals, Richard has tried and won cases that have established new legal precedents to protect the rights of injured clients.

Graham v. ValueOptions is an Arizona wrongful death case that ended, on November 26, 2008, in a $36 million jury verdict for the plaintiffs in Maricopa County Superior Court.

Shooting Incident

On August 23, 2005, a 34-year-old Wal-Mart employee, Patrick Graham, was gathering shopping carts in his store’s parking lot when Edward Liu drove into the parking lot and started shooting. Mr. Graham was killed in the shooting, as was Anthony Spangler, age 18. After Mr. Graham and Mr. Spangler were on the ground, Mr. Liu continued to fire shots into their bodies and then looked for others to shoot.

Witnesses followed Mr. Liu’s car and gave the police his license plate number, and he was arrested at his home within hours of the shooting. During questioning he denied leaving his house and owning a gun, and he could not recall the two hours surrounding the shooting. At the time of his incarceration his thoughts were dominated by delusions, including the belief the Chinese government was controlling his mind because he had magic powers to control the weather. He also believed he was the reincarnation of King Edward.

Background

In 1982, Mr. Liu was diagnosed a paranoid schizophrenic and had been under psychiatric supervision for the 20 years preceding the shooting. He was under the supervision of ValueOptions, Inc. a private, for-profit company that contracted with the State of Arizona to provide mental health care for indigents in Maricopa County. His mental health records noted that medication was necessary to control his symptoms and to prevent a mental breakdown and irrational behavior. In at least one instance during which he did not take his medication, Mr. Liu had attacked his parents and threatened to kill them.

In December 2004, a ValueOptions psychiatric evaluator documented that Mr. Liu was suffering auditory and visual hallucinations. Mr. Liu reported receiving messages from license plates, the televisions and magazines and further reported that his condition was getting worse and less controllable. Specifically, because of his bouts of anger, he worried about hurting someone in public.

ValueOptions’ psychiatric evaluator issued a written warning to the staff supervising Mr. Liu that his condition was deteriorating and that he was a danger to himself and others. She ordered the staff to monitor Mr. Liu to ensure monthly evaluation, home visits, and medication adherence. Despite her warning and instructions, later that month the staff canceled Mr. Liu’s evaluation appointment and, for six months, failed to schedule an appointment. During those six months Mr. Liu was without medication.

In May, Mr. Liu left a phone message that the staff described as full of rage, stating he needed to get back on his medication. Although the staff was not permitted to make mental health care decisions, they failed to consult with any psychiatric personnel. An evaluation appointment was set for June 2, 2005, but Mr. Liu failed to appear. No action was taken by the staff until August 5, when another home visit was attempted. In spite of their knowledge of Mr. Liu’s condition and the psychiatric orders, the staff still did not seek the advice of psychiatric personnel. After eight months of being without medication and psychiatric evaluation, Mr. Liu bought a gun and, on August 23, went to the Wal-Mart parking lot and initiated his shooting spree.

Trial

When a mentally ill patient meets the criteria of a danger to self or others, state law requires court-ordered evaluation if the person refuses treatment. At trial, a plaintiff witness, Dr. Mark Levy, a board-certified forensic psychiatrist, agreed with ValueOptions’ psychiatric evaluator that, pursuant to state law, ValueOptions was required to seek an involuntary court-ordered evaluation. He also testified that, pursuant to ValueOptions’ records, Mr. Liu would have been committed for treatment if the staff had followed state-mandated procedures. Dr. Levy also relied on expert testimony at Mr. Liu’s criminal trial that Mr. Liu was so delusional that, even with forced medication, he was not competent to stand trial for the murders. Dr. Levy testified that ValueOptions ignored the fact that paranoid schizophrenia is a diagnosis that carries a probability of violent behavior, and he noted that ValueOptions’ training manual warned of the need to be aware of safety issues with this diagnosis.

Another plaintiff witness, Bernadine Merker, a licensed social worker and clinical liaison regarding the standard of care for the ValueOptions’ staff, testified that the staff was required to follow the orders of the psychiatric evaluator and that the failure to consult with psychiatric personnel fell below the standard of care.

Alan Flory, the director of a mental health care clinic, testified for the plaintiffs regarding the standard of care for a licensed mental health care clinic. He testified that ValueOptions was responsible for compliance with state laws intended to protect the public from mentally ill persons who were a danger to others and refused treatment. During the trial, ValueOptions staff members admitted that Mr. Liu met the criterion of a danger to others and that ValueOptions had an obligation to seek a court order for evaluation and treatment. He further testified ValueOptions had been warned and fined by the State because similar conduct resulted in two prior deaths within the past year.

Evidence was presented that ValueOptions also knew from Mr. Liu’s records that he acted violently and threatened to kill when he was without medication. The staff knowingly and consciously ignored the warning from the psychiatric evaluator that Mr. Liu’s deteriorating condition made him a potential danger to others.

David Reese, of the State Controller’s Office, testified that ValueOptions was compensated by the State based on the number of persons enrolled, not by the services actually provided. ValueOptions employees testified that they were overworked and that there was a chronic shortage of personnel. Plaintiffs argued that ValueOptions consciously disregarded a substantial risk of serious bodily harm and acted to serve its own economic interests by failing to provide adequate staff.

For the defense, ValueOptions staff members testified that they did the best they could under the circumstances. They further testified that Mr. Liu had not directly threatened to harm anyone, was a voluntary patient who had the right to refuse services, and had never killed or seriously injured anyone prior to the shooting in the Wal-Mart parking lot.

Dr. Harold Bursztajn, a board-certified forensic psychiatrist, testified for the defense that ValueOptions’ psychiatric evaluator erred in her opinion that Mr. Liu was a danger to others. He opined that paranoid schizophrenics are not dangerous unless there are other risk factors. He also testified that ValueOptions’ manual and state laws that require court-ordered evaluation are goals, not mandatory procedures, and that there was nothing ValueOptions could do if Mr. Liu did not want treatment.

The plaintiff’s case included expert testimony that the present value Mr. Graham’s lifetime earnings and the value of lost services to the family was $1.2 million. During closing arguments, the plaintiffs asked the jury to be fair and reasonable in compensating the Graham family for their loss, noting that juries are the voice of the community and should send an appropriate message to the defendants to punish their conduct and deter others from similar conduct.

ValueOptions argued that Mr. Liu was entirely at fault.

Verdict

After two days of deliberation, the Maricopa County Superior Court jury found Mr. Liu (who was not a party to this action and had settled prior to trial for $1.2 million) at fault 10%; defendant ValueOptions, Inc., at fault 45%; and defendant VO of Arizona, Inc. (a related entity to ValueOptions, Inc.), at fault 45%.

Prior to trial, the plaintiffs had offered to settle for $6.5 million in compensatory damages, and the defendants had countered with $750,000.

By a vote of 7-1, the jury awarded compensatory damages of $11 million. In a unanimous verdict, jurors awarded punitive damages of $25 million.