Adcare Takes Attorneys to Court Over Confidentiality Breach

A publicly traded nursing home operator recently filed a civil lawsuit accusing its former law firm, Mitchell Williams Selig Gates & Woodyard of Little Rock, of starting a chain of events that led to more litigation.

The dispute between the law firm and Adcare Health Systems Inc. (ADK) of Suwanee, Georgia, can be traced to a messy complaint over treatment of Adcare patients filed in Pulaski County Circuit Court in 2014. Adcare owned several nursing homes in Arkansas, including Bentonville Manor Nursing Home and Stone County Nursing & Rehabilitation Center.

That case was settled at the end of 2015, by which time Adcare had announced plans to distance itself from operating nursing homes and to focus on holding and leasing health care properties.

But during the discovery phase of that case, according to Adcare, the Mitchell firm handed over patient information to the plaintiffs’ attorneys but failed to specify that the information was confidential.

Using that information, the plaintiffs’ lawyers sent letters to current and former patients “to solicit new and additional plaintiffs to pursue claims against Adcare,” according to the lawsuit filed by Little Rock attorney Danny Crabtree. The lawsuit, filed last month in Pulaski County Circuit Court, names more than 20 plaintiffs, including several nursing homes.

The lawsuit alleges that Mitchell Williams and its managing partner, R.T. “Rick” Beard III, were negligent. Beard was the lead counsel in the 2014 case and is named as a defendant in the current case.

More than 10 lawsuits have been filed as a result of that breach of confidentiality, Crabtree told Whispers last week. “It would have been virtually impossible for anyone to know those patients existed but for the release of that information,” he said.

Adcare is seeking an unspecified amount of damages.

Robert “Skip” Henry III of the Barber Law Firm of Little Rock is representing the Mitchell firm. He told Whispers that his client didn’t voluntarily hand over the names to the plaintiffs’ attorneys. The release, he said, was ordered by the judge in the case.

Still, the distribution of the names, “the evidence is going to show, did not cause the lawsuits that are pending against Adcare and their nursing homes,” Henry said. “Those lawsuits were filed because the current and former residents and members of the families believe that they were injured by neglect and mistreatment in the Adcare facilities.

“The evidence in the case will show that Adcare’s management practices and its treatment of its residents are the real reason why Adcare now faces these separate lawsuits, which claim neglect and mistreatment,” Henry said.

In addition, Adcare’s general counsel was making decisions in the 2014 case, he said.

“So it’s very novel and unjustified that there would now be a lawsuit against the Mitchell law firm for doing what the judge ordered them to do, and it was a case supervised by the general counsel of Adcare,” Henry said.