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Ayuluk v. Red Oaks Assisted Living, Inc.

Supreme Court of Alaska

February 20, 2009

James AYULUK, as Conservator for Ruth Ayuluk, Appellant/Cross-Appellee,
RED OAKS ASSISTED LIVING, INC.; Susan R. Reeves; Richard L. Reeves; Leslee K. Orebaugh; Parkside Assisted Living, Inc., d/b/a Rosewood Assisted Living; and Gary W. Austin, Sr., Appellees/Cross-Appellants.

Rehearing Denied March 16, 2009.

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Richard E. Vollertsen, Christopher J. Slottee, Atkinson, Conway & Gagnon, Anchorage, for Appellant/Cross-Appellee.

Peter J. Maassen, Ingaldson, Maassen & Fitzgerald, P.C., Anchorage, for Appellees/Cross-Appellants Red Oaks Assisted Living, Inc., Susan Reeves, and Richard Reeves.

John C. Pharr, Anchorage, for Appellees/Cross-Appellants Leslee Orebaugh and Parkside Assisted Living, Inc., d/b/a Rosewood Assisted Living.

Before : FABE, Chief Justice, MATTHEWS, EASTAUGH, and CARPENETI, Justices.


MATTHEWS, Justice.


Ruth Ayuluk has impaired mental capacity as a result of a brain injury. While she was a resident of the Red Oaks Assisted Living Home, Gary Austin, an employee of the home and one of Ruth's caregivers, had sex with her on numerous occasions. When this was discovered Ruth's conservator sued Austin, Red Oaks, Red Oaks's owners Susan and Richard Reeves, Leslee Orebaugh, Red Oaks's designated administrator, and Orebaugh's company Parkside Assisted Living, Inc. Red Oaks and Orebaugh later joined Jill Friedman, Ruth's care coordinator, as a third-party defendant. A jury trial was conducted.

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The jury found that while Ruth often consented to sex with Austin, she did not consent on ten occasions. For these occasions, Austin was found liable for sexual battery. The jury awarded Ruth compensatory damages against Austin of $1,000 and punitive damages of $6,500. The other defendants were exonerated. On appeal, numerous evidentiary and instructional errors are argued. We conclude that some of them have merit and remand for a new trial against Red Oaks and the Reeveses. The appellees cross-appeal on a discovery issue and an order requiring that they pay fees and costs as a condition of granting their motion to join Friedman, which required that the trial date be continued. They were required to pay $74,416 under the order. We conclude that this award must be recalculated on remand.


On May 7, 1995, Ruth Ayuluk suffered a disabling brain injury while riding an ATV. Her parents, Andrew and Theresa Ayuluk, were appointed to be her conservators.[1] The settlement of a personal injury case left Ruth with substantial funds that are managed by a trust committee. The committee appointed Jill Friedman to be Ruth's case manager. Friedman placed Ruth in Red Oaks Assisted Living Home. She selected Red Oaks because its care was aimed at a younger population than most assisted living homes in Anchorage. Ruth entered Red Oaks on June 4, 1999, and Friedman provided a care plan detailing Ruth's limitations and needs.

Susan and Richard Reeves are the owners of Red Oaks and are licensed as operators of assisted living homes.[2] Leslee Orebaugh is Susan Reeves's mother and owns another assisted living home company, Parkside Assisted Living, Inc.[3] Orebaugh was an administrator designee for Red Oaks, a position required by state regulations. Under 7 Alaska Administrative Code (AAC) 75.210(a)(2) an assisted living home must appoint both an administrator to manage the daily operations of the home and an administrator designee who is to act for the administrator when the administrator is not available for more than twenty-four hours. Beyond her designation as an administrator designee, the extent of Orebaugh's involvement with Red Oaks was disputed at trial.

Gary Austin was hired by Red Oaks as a caregiver. He was a certified nurse's aide (CNA), but the parties disputed whether he was employed by Red Oaks in that capacity. Orebaugh became acquainted with Austin when she was appointed by the state to administer an assisted living home that the state was in the process of closing. Austin was employed by this home until it was closed. During Orebaugh's three-week tenure at the home, she learned of allegations that Austin had previously brought a pornographic tape to work and that he had come to work under the influence of alcohol. Orebaugh discussed appropriate boundaries with Austin, but did not attempt to ascertain the truth of the allegations.

Orebaugh told Susan Reeves about Austin when Reeves mentioned that Red Oaks was looking for an employee. At trial, the parties disputed whether Orebaugh recommended Austin or simply informed Reeves he was available. Orebaugh told Reeves of the allegations regarding pornography Before Red Oaks hired Austin. Reeves also learned of the allegations regarding alcohol prior to hiring Austin.[4]

While at Red Oaks, Austin acted in a sexually inappropriate manner towards co-worker Cynthia York and Sarah Shine, a caregiver employed by Friedman to work with Ruth. Austin's behavior was reported to both Susan Reeves and Orebaugh. York and

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Shine also informed Susan Reeves of concerns that Austin was acting inappropriately towards Ruth, including rubbing her shoulders and stroking her hair. In addition, York informed Susan Reeves that a crying resident was found to have bruises on her thighs shortly after Austin's shift ended. The extent of Red Oaks's responses to these incidents and the relevance of these incidents were disputed by the parties.

On October 24, 1999, Friedman removed Ruth from Red Oaks because her behavior had become emotionally unstable. Shortly thereafter, Ruth disclosed that she had sexual relations with Austin. Austin admitted to having sexual relations with Ruth, including vaginal, oral, and anal sex, but maintained that the sexual relationship was consensual. Ruth stated that some of the sex was consensual, but also that she sometimes engaged in sexual activity that she did not feel comfortable doing. Ruth's conservator maintains that Ruth does not have the mental capacity to consent to sexual relations with an authority figure such as a caregiver.

In 2001 plaintiff sued Austin, Red Oaks, the Reeveses, Orebaugh, and Parkside for bodily injury and emotional distress arising out of Austin's sexual relations with Ruth.[5]Theories of negligent hire and failure to protect were presented as well as battery as to Austin, and vicarious liability for Austin's acts. After much discovery and motion practice a trial was set for November 1, 2004.

In August 2004 Orebaugh moved to add Friedman as a party to the case.[6] The superior court denied this motion on timeliness grounds, but later granted a renewed motion to amend. As a condition of granting this motion, the superior court ruled that Orebaugh and Red Oaks would be responsible for fifty percent of plaintiff's attorney's fees and costs until " three days Before the next scheduled trial date."

Before the start of trial, the superior court made a number of rulings regarding the evidence that would be used at trial. The court denied plaintiff's motion to exclude evidence of Ruth's sexual history. The court stated that

[t]his order is not intended to preclude the plaintiff from raising any appropriate evidentiary objection at trial with respect to specific questions. Plaintiff may request a hearing on this issue outside of the presence of the jury Before opening or Before a particular witness testifies, so that the scope of questioning on this topic can be clarified outside the presence of the jury.

The court also ruled on Red Oaks's global motion in limine as follows:

The following testimony, exhibits, and/or commentary in front of the jury is excluded:
1. That Gary Austin may have made sexual contact with Cindy York, irrespective of whether this contact is referred to as " sexual harassment." The evidence would have limited relevance apart from propensity, which is somewhat attenuated in any event, and should be excluded under [Evidence Rule] 403.
2. That Mr. Austin may have had sexual contact or inappropriate sexual conduct towards other residents. Evidence Rule 404(b). However, the court may permit evidence of such allegations to the extent that such allegations were communicated to Red Oaks or Parkside Before Mr. Austin left the facility, but no reference shall be made to any such allegations until such proposed evidence is first presented outside of the presence of the jury.
3. That Gary Austin did or was rumored to have brought a pornographic video to a previous place of employment. Evidence Rules 404(b), 403.
4. That Gary Austin was or was rumored to have been at a previous place of employment under the influence of alcohol. Evidence Rules 404(b), 403.
5. That Ms. York believed that Gary Austin did not complete his assigned

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duties while employed at Red Oaks' assisted living home or a prior assisted living home. Evidence Rules 404(b), 403.

In response to plaintiff's motion to reconsider, the superior court reversed in part its decision to exclude evidence of Austin's sexual or sexualized conduct toward other residents and employees. The court stated:

The court grants the motion to reconsider with respect to Gary Austin's sexual or sexualized conduct toward other residents and fellow employees to the extent that there is evidence that such conduct was made known to the Reeves and Red Oaks Assisted Living. It is relevant to show notice of such behavior. It is not admissible to establish that Mr. Austin engaged in sexual behavior with Ms. Ayuluk.

The superior court also limited the testimony from two of plaintiff's proposed expert witnesses-Tina DeLapp and Suzan Armstrong. DeLapp was a former member of the Alaska Board of Nursing, the board that regulates CNAs. Armstrong was a former deputy ombudsman for the Office of the Long Term Care Ombudsman. With respect to DeLapp, the superior court ordered in part that " DeLapp shall not be allowed to testify on the standards of care applicable to assisted living homes and its employees as she is not qualified or experienced in this area." With respect to Armstrong, the superior court ordered that:

1. Suzan Armstrong is not qualified to offer expert opinions on assisted living homes or what DHSS or prosecutors should have done, nor should her former role as ombudsman be employed to qualify her to give opinions in active litigation;
2. Defendants do not have access to the basis for Suzan Armstrong's opinions because of confidentiality issues and therefore are denied meaningful cross-examination of Armstrong, rendering her opinions, which in any way rely upon such foundation, inadmissible;
3. Suzan Armstrong is not qualified to make expert opinions on hiring practices, sexual relationship damages, the ability of a person to consent to sexual relations and/or indicators of " sexual predators; "
4. Suzan Armstrong's assumptions of a duty to keep Ruth " safe" misstate Alaska law and are excluded as improper testimony;
5. Suzan Armstrong's opinions on the under-regulation of assisted living homes, her opinions on what the Reeves' " knew or should have known," or what risks were " foreseeable" will not assist the jury and are inadmissible under Alaska Evid. R. 403.
6. Suzan Armstrong's assumptions that " professional" standards apply misstates Alaska law. All testimony that a professional standard of care applies is excluded as contrary to Alaska law and improper, misleading testimony.

Trial began on September 11, 2006. At the close of the plaintiff's case, the court granted Orebaugh's motion for directed verdict as to the claims against her. The jury found that Ruth was mentally capable of consenting to sexual contact, but that there had been ten acts of nonconsensual sexual contact. Based on those ten acts, the jury found Austin liable for sexual battery. Red Oaks was found not negligent and not legally responsible for Austin's actions. Jill Friedman was found to have been negligent, but not to have caused Ruth's injuries. The jury awarded a total of $1,000 in compensatory damages and $6,500 in punitive damages. Both awards ran exclusively against Austin.

On appeal, plaintiff challenges a number of the superior court's rulings excluding evidence, the grant of Orebaugh's motion for directed verdict, and several jury instructions. Red Oaks challenges a discovery order and together ...

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