Second trial raises punitive award against Sunrise to $30m.

If at first you don't succeed, you might really get burned the next time.

That's the case with Sunrise Senior Living Inc., which was hit with a $30 million judgment for punitive damages in a recent lawsuit by an occupational therapy service, which claimed Sunrise unfairly hired away several of the company's employees, causing it to lose business.

CGB Occupational Therapy Inc., a Bryn Mar, Pa.-based provider of therapeutic services to area nursing homes, sued RHA/Pennsylvania Nursing Homes Inc., Symphony Health Services Inc., and Sunrise in 2000. According to court records, the defendants in 1998 allegedly violated a "non-raiding" agreement that prevented anyone from hiring any of CGB's therapists for at least a year following termination ot a contract CGB had to provide services to RHA.

In November 2002, a court awarded CGB nearly $2 million--$685,000 in compensatory damages and $1.3 million in punitive damages. The jury found that Sunrise, the case's only remaining defendant, had "tortiously interfered" by encouraging RHA to break its contract with CGB, according to court records. Sunrise then recruited five of its therapists to work for RHA through Symphony Health Services.

Sunrise appealed the verdict and received a partial victory in late 2003 when then-Third Circuit Court Judge Michael Chertoff (now Sec. Of Homeland Security) overturned $576,000 of the compensatory damages. He also found that the punitive verdict wasn't valid because it had not been properly allocated. He ordered a retrial.

During the second trial, which concluded in January, jurors sympathized with CGB owner Cindy Brillman's claims that it took her business six months to recover from Sunrise's "raid" of her employees, according to plaintiff attorney David Concannon in Wayne, Pa.

They upped the punitive damages to $30 million--a total derived by determining Sunrise's profits during the half-year Brillman's business was basically non-functional, according to Concannon.

He said an example needed to be made of Sunrise, to prevent other major corporations "from trying to crush the little guy simply because they can."

Still, Concannon doesn't expect the $30 million judgment to hold. Legal precedent makes it likely that Judge Clarence Newcomer, who oversaw both trials, will reduce the total to about $8.5 million to $10 million, he said.

Whatever Sunrise pays will be far more than a proposed $436,000 settlement offered by the McClean, Va. company prior to a Feb. 17 mediation hearing, Concannon said. "It's going to come down, no question about it," he said. "But it ain't gonna be $436,000, and it's not going to be $1.3 million. I'd be stunned if it was less than in the $3 million to $6 million range."

No progress was made at the mediation hearing, Concannon said. Judge Newcomer will now take several weeks to decide what the judgment should be reduced to, he said.

Sarah Evers, vice president of communications at Sunrise Senior Living in McLean, Va., said the company "is very disappointed with the jury's decision and we do not believe the decision will stand."

As a general rule, Sunrise does not comment on pending litigation, "and this is still very much pending," Evers said.

"The important point to note is that this case in no way involves resident care or services," Evers added. "The case deals only with a business dispute arising in 1998 involving the owner of a property managed by Sunrise several years ago and a third-party vendor to that owner."

Efforts to appeal the judgment are underway, meaning the case could be dragged into the Court of Appeals and then possibly the State Supreme Court, according to Concannon. "Depending on what happens, we might not see a final decision until July or October of next year," he said.