Case, which includes a hefty penalty, involves an incident at The Pearl in Lake Oswego

A Multnomah County jury levied a landmark penalty against eldercare giant Avamere Monday, deciding the company should pay for an incident in which an 86-year-old woman was handcuffed and restrained on the floor of a Lake Oswego facility.

The $904,200 verdict is believed to be the most damages an Oregon jury has ever levied against a care facility for endangering an elderly person and compromising their dignity.

The sum was awarded to the family of Elvera Stephan, who was injured at The Pearl at Kruse Way, an Avamere facility, on April 20, 2006.

The Pearl, located at 4550 Carman Drive, was built in 2005 with an emphasis on providing care for Alzheimer's and dementia patients. It also provides short-term rehabilitation services.

The late Elvera Stephan, then 86, became a client of The Pearl after showing signs of dementia. She moved in on April 8, 2006.

But 12 days later, when Stephan became confused and accused a caregiver of taking her car keys, a nurse called 9-1-1 from another wing of the facility and told dispatchers the staff at The Pearl needed help.

Without examining Stephan, the nurse reported Stephan was 'extremely agitated' and 'aggressive' and 'threatening.'

Lake Oswego Police responded to the call, ultimately laying Stephan on the floor, where she was handcuffed and restrained for several minutes before paramedics took her to a hospital.

Stephan suffered bruising to her forehead and wrists and twisted her knee, according to a subsequent state investigation. The Oregon Department of Human Services fined The Pearl $300 for failing to appropriately intervene.

Surveillance video from The Pearl was reviewed as part of the investigation and also introduced at trial. It showed nurses at The Pearl did not examine Stephan before calling police, stepped aside as officers took charge, failed to monitor Stephan's vital signs while she was restrained and looked on as one employee held her ankles to the floor.

Stephan's family learned of the incident through the family of another client at The Pearl. They filed suit against Avamere in November 2006.

They sought $500,000 in punitive damages and $500,000 to compensate Stephan for her loss of dignity. The family also sought compensation for fees paid to The Pearl for her care.

Avamere attorneys fought the claim all the way to a jury trial after failing to reach a settlement through negotiation. In the trial, which began April 29 in Multnomah County Circuit Court, they told jurors the family was at fault for the incident because they failed to provide key information about Stephan's medical care, including information about a prescription that could have calmed her.

They also argued Stephan could not have suffered a loss of dignity since her dementia was so advanced she did not remember being handcuffed.

But after a day's deliberation, the jury found otherwise. Jurors awarded the Stephan family $400,000 for her loss of dignity and another $500,000 - the maximum allowed in the case - in punitive damages. Another $4,200, equal to one month of care at The Pearl, was also awarded for breach of contract.

About $300,000 of the money will go to the state fund for crime victims' assistance. Sixty percent of punitive damages are directed to the fund through an Oregon law.

Scott Kocher, attorney for the Stephan family, said he was pleased that justice had been served.

'Avamere's conduct showed malice or reckless indifference,' Kocher said. 'Very few cases involving elders' rights or injuries in facilities make it to trial. This verdict is the strongest message from an Oregon jury about the safety and dignity of elders in our community that I am aware of.'

In a statement released Tuesday by The Pearl, officials there said they were disappointed by the verdict and are reviewing their rights of appeal.

'The Pearl trusts the jury system, although it is unsure how it may have concluded that issuing this verdict was a fair result,' the statement read.

'Patient welfare is at the core of The Pearl's philosophy of care and this care demands individualized attention to the medical, physical and emotional needs of each resident … Our staff takes pride in an excellent record of care with the state of Oregon Department of Human Service.'

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