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Arbitrator awards $8.8 million to man, blames Sovereign Health for overdose that led to seizure, brain injury

Orange County Register - 4/12/2019

April 12-- Apr. 12--A man was awarded nearly $9 million Thursday by an arbitrator who ruled that former San Clemente-based drug treatment facility Sovereign Health negligently allowed him to overdose on medication, resulting in a seizure and significant brain injury.

A provision in the arbitration requires Sovereign to pay attorneys' fees and legal costs borne by Zachary Peterson, 26, of Maryland, boosting the $8.8 million award by roughly another $3.3 million, said his attorney, Karen Gold.

Zachary Peterson suffered a seizure and fall, resulting in a significant brain injury.(Courtesy of Trauma Law Center)

Gold and co-counsel Travis Corby argued Sovereign failed to follow its own procedures for obtaining medications and did not provide Peterson's medical information to its staff physician.

"When someone checks into a rehab center, they are making public that they have a serious addiction problem they cannot manage on their own," Corby said in a prepared statement. "For a rehab center to behave in such a negligent, uncaring manner is shameful, and the injuries Zach will have to live with for the rest of his life are the result of a total failure by the center and its staff.

"Our goal was justice for Zachary and we got it," Gold said.

In September 2014, after his discharge from a psychiatric hospital following a suicide attempt, Peterson checked into a Sovereign Health facility in San Juan Capistrano to receive treatment for his lingering drug addiction and mental health problems.

Peterson suffered a foot fracture on Oct. 26, 2014, while playing basketball, but the Sovereign staff did not notify a doctor until nine days later, when he was prescribed 60 Tramadol pain pills, according to court filings.

Peterson was allowed to pick up his own prescription, according to evidence presented during the arbitration hearing.

Attorneys for Peterson argued that due to Sovereign's staff negligence, Peterson took 30 Tramadol pills on the night of Nov. 9 and then another 30 pills the next morning.

As a result, he suffered a seizure and fell to the ground, resulting in a brain injury and skull fracture that required surgery and extensive rehabilitation.

Sovereign Chief Executive Tonmoy Sharma said Thursday he had not talked to his lawyers handling the case yet, but expects any award to be covered by insurance.

Sharma said it is his understanding that Peterson was in outpatient treatment and apparently stored up his medication. "If he stores his medication at home, there is very little anyone can do," he said.

In July 2018, Sovereign closed its operations in San Clemente, Culver City, Palm Desert and El Cajon.

Sovereign Health, which operated centers for recovering drug addicts and the mentally ill, is among many in the addiction industry accused of abusing insurance rules while churning addicts through rehab programs with little regard for their long-term sobriety.

A 2017 investigation by the Southern California News Group described Sovereign as one of many players in a region described by industry insiders as Rehab Riviera for its high concentration of addiction treatment operators.

Sovereign's closure comes after a long battle with regulators and creditors.

In June 2017, FBI agents along with federal and state officials served search warrants at Sovereign's headquarters and other locations.

Though officials haven't said why they are investigating the company, the raids came on the heels of civil lawsuits involving Sovereign and Health Net over allegations that the health company overcharged the insurance carrier.

Staff Writer Teri Sforza contributed to this report.

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