The family of an elderly woman who died at a nursing home after falling down a stairwell has secured a $150,000 settlement, according to sources close to the negotiation.

But just a small fraction of that – less than $10,000 – will be paid by the company that operated Garden Terrace Nursing Home until state regulators intervened in 2003, according to attorneys in the case. The bulk of the settlement will be footed by taxpayers because Washington state regulators seized control of the troubled home in January 2003.

The company, Cleveland Care Inc., repeatedly told attorneys and state officials that it has few assets and little money, and that it carried no insurance on the home where dozens of elderly residents lived. An attorney for the company did not return phone calls seeking comment.

“If you’re looking out for the best interest of the patients, you need insurance,” said James Sweetser, an attorney for the family of Una Thornton, who died Feb. 12, 2003. “Maybe it’s a strategy for these nursing homes not to have insurance. If there’s a lawsuit, they can just claim indigency.”

The case garnered statewide attention because few families or health care experts realized that a handful of nursing homes in Washington state were operating without insurance. Several legislators urged reforms but no laws requiring insurance have been passed.

But last summer, the state’s Department of Social and Health Services quietly wrote a new policy requiring at least $1 million worth of liability insurance for thousands of state contractors – including nursing homes and other long-term care facilities.

The change was enacted to protect “clients from the adverse economic impact of injuries and losses,” according to a copy of the Aug. 1 administrative policy, as well as to protect the agency from litigation.

“It was not in the old contracts,” said DSHS spokesman Steve Williams. “It wasn’t required. It is now.”

In 2003, an estimated 30 of the state’s 270 nursing homes operated without insurance, according to the Washington Health Care Association, a statewide nonprofit representing 330 assisted living and skilled nursing facilities. Several of the homes complained that rapidly rising insurance premiums threatened to close their doors.

Nationwide, liability costs increased from $310 a bed in 1992 to nearly $2,300 a bed in 2003, according to the American Health Care Association, a nonprofit representing long-term care facilities. In Florida and Texas, liability costs topped more than $5,000 per bed in recent years, though they appear to have peaked and are dropping, the national association said.

“We’ve seen liability insurance skyrocket,” said Jonathan Eames, executive director of the state association. “You have these nationwide insurance carriers that are trying to deflect their costs in these terribly litigious states onto us.”

As a result, some homes decided to go without insurance, but no one has a precise count because the state did not require the homes to disclose their status. Last year, 40 Washington nursing homes voluntarily responded to a survey conducted by the state association, and only one said it did not carry insurance, Eames said.

Plaintiffs’ attorneys and patient advocates say the lack of insurance puts limits on what a family can recover if an accidental injury or death occurs at the home.

“We’re advising people to check whether the homes have insurance and with whom,” said Kary Hyre, Washington’s long-term care ombudsman. “If they won’t disclose it, we tell people to go elsewhere.”

Thornton’s family said Garden Terrace did not notify them that the home carried no insurance. They only learned that fact after her death in February 2003.

On Friday, the nursing home’s operators agreed to a second settlement: this one with the family of 81-year-old Marjorie Behrens. Admitted into the nursing home while recovering from surgery, Behrens slipped into a coma after being given a narcotic. Behrens lay unconscious in her bed for 10 hours before the nursing home’s staff alerted a doctor.

Details of the settlement, which did not include the state of Washington, remain confidential. Behrens died before the state intervened and assigned a temporary manager.

Owner Edgar M. Cleveland of Washougal, Wash., told investigators that his company had no funds, despite billing $1.8 million a year while the home was operating, according to an attorney who has reviewed the company’s financial records. The company, attorney Stephen Haskell learned, did not even own the building that housed the nursing home at 424 W. Seventh Ave.

“Basically, Cleveland Care Inc. was nothing more than an empty corporate shell,” said Haskell, who represented Behrens’ family. “It is clear that they didn’t believe they needed to be accountable.”

Attorneys in the Thornton case declined to release the exact details of the settlement until it has been finalized.

Sweetser said the state should have intervened at the home prior to Thornton’s death.

In an investigation, state regulators found more than 30 violations of state and federal rules at the home and investigated three unnatural deaths during a four-month period, including Thornton’s. State reports said the home’s staff failed to properly give medications, neglected wounds and shoved elderly patients. One resident told the state, “We were less than human.”

Workers described Thornton, a tiny, blind woman, as pleasant and friendly. Nearly two years after her death, it remains unclear how the 100-pound woman managed to breach the heavy, steel fire door before falling down the stairwell in her wheelchair.

“She had a right to die with dignity,” Sweetser said. “Every life is important.”