Mercy San Juan Lawsuit: Body Backlog and Harvey Class Action

The Mercy San Juan lawsuit landscape centers on a series of civil actions against Dignity Health and its parent, CommonSpirit Health, over the Carmichael, California hospital’s failure to notify families of patient deaths and its use of an off-site morgue where dozens of bodies accumulated for months or years. At least four lawsuits have been filed. One, brought by the family of Michael Gray, settled in January 2026 for an undisclosed amount. Two individual suits and a proposed class action remain active as of mid-2026.¹

What the Lawsuits Allege

The complaints share a common factual core. Dignity Health contracted with Mortuary Support Services of Northern California, also known as Cremations Only and owned by Michael Robert Lofton, to store remains from Mercy San Juan and three other Sacramento-area hospitals. The contract charged Dignity Health $15 per day for the first 60 days of storage; after that, storage was free.²

When California Department of Public Health investigators surveyed the off-site facility in October 2024 on behalf of the Centers for Medicare and Medicaid Services, they found 61 sets of patient remains. Eleven had died in 2022, fifteen in 2023, and nineteen in the first half of 2024. The hospital kept no logs or documents tracking the morgue’s contents until April 2024.³

Attorney Marc Greenberg, who represents the Peterson family, told KCRA the problem was “so much more pervasive” than any single case, claiming hundreds of patients’ remains had been sent to the off-site morgue and that in dozens of instances bodies sat in cold storage for months or years without a death certificate being filed.²

The Jessie Peterson Case

Jessie Marie Peterson, 31, was admitted to Mercy San Juan on April 6, 2023, for a diabetic episode and died two days later. Her body was moved to the off-site facility on April 9. When her mother, Ginger Congi, called the hospital on April 11, staff told her Peterson had been “discharged against medical advice,” and when pressed said there was no patient by that name.⁴

The family spent a year searching. They filed a missing person’s report, posted flyers, contacted the county coroner, and listed her on a Department of Justice missing persons site. A sheriff’s detective told them on April 12, 2024, that her body had been found in the storage facility. According to the lawsuit, she had been “placed on Shelf Number Red 22 A and forgotten.” Her death certificate was not completed until April 4, 2024, 361 days after her death and far outside the 15-hour window required by the California Health and Safety Code.⁵ Decomposition ruled out an open-casket funeral and prevented fingerprint identification.⁶

The Peterson family filed suit in Sacramento County Superior Court on August 7, 2024, alleging negligence, negligent handling of a corpse, negligent infliction of emotional distress, and violation of the California Health and Safety Code. The complaint seeks $5 million in actual damages and $10 million in punitive damages.⁷

The Michael Gray Case

Michael Gray died of an accidental overdose at Mercy San Juan on July 10, 2021. He was carrying his wallet, cell phone, and identification with his home address, but the hospital treated him as a “John Doe.” The hospital later said an unidentified chaplain tried to call his mother, Valerie Gray, dialed a wrong number, and never followed up. His body was sent to the off-site facility, where it was neither autopsied nor preserved. By the time the family recovered his remains, an open-casket funeral was not possible.⁸

Valerie Gray, represented by attorney CT Turney-Lewis, filed suit in February 2022. The case settled in January 2026 for an undisclosed amount.¹

The Harvey Class Action

The fourth suit, filed as a proposed class action in January 2026, broadened the challenge. Charles Wesley Harvey, a 67-year-old Navy veteran, died at Mercy San Juan on June 2, 2022. His family was not informed until November 28, 2025, when the Sacramento County coroner finally contacted them. His unembalmed body had been released to Mortuary Support Services on the day of death and stored, the complaint alleges, at a facility that failed to maintain the state-required temperature at or below 45°F. By the time Harvey was identified, his remains were described as “unrecognizable,” and cremation was the only option. The suit also alleges that neither Dignity Health nor the mortuary obtained the storage permit required by state regulations for remains held beyond eight calendar days.⁹¹⁰

Filed by Harvey’s sister Nancy Louks and his son Jacob Harvey in Sacramento County Superior Court, the complaint names CommonSpirit Health, Dignity Health, Mortuary Support Services of Northern California, and Michael Robert Lofton. It alleges breach of contract, intentional infliction of emotional distress, negligence, and negligent hiring and supervision. The filing identifies more than a dozen patients by name and claims potentially hundreds were affected. Attorneys for Lofton and the mortuary have said their client “disputes that it has any liability in this matter” and intends to “vigorously defend” against the claims.¹¹⁰

The case was removed to the U.S. District Court for the Eastern District of California as case number 2:26-cv-00637. The plaintiffs have moved to remand the case to state court, and the federal court is holding off on a scheduling order until that motion is resolved.¹¹

A separate suit involving Tonya Walker, who died at Mercy General Hospital in November 2023, is also active. Mercy General was covered by the same off-site morgue contract.¹

Regulatory Findings Behind the Claims

The California Department of Public Health issued statements of deficiencies against Mercy San Juan in 2022, 2023, and 2024, each involving handling of deceased patients. The 2022 finding cited a six-week delay in notifying a family of a death. The 2023 finding described a body picked up from the hospital morgue by an unknown entity, with no signature, no documentation, and no location tracking. The October 2024 CMS-level survey found the 61-body backlog and cited four federal deficiencies related to governing body oversight, contracted services, quality assessment, and quality improvement.⁸

No fines were imposed. CDPH Director Erica Pan said the violations “did not reach the level of immediate jeopardy.” Investigators concluded the hospital had “known about [the issue] for years and failed to fix” it, noting that plans of correction from April 2022 and July 2023 had not been effectively implemented.³⁸

Dignity Health’s Response

Dignity Health has denied wrongdoing in court filings and at one point attributed the backlog to “staffing issues.” In the Peterson case, the hospital has claimed it called Ginger Congi ten times within eight hours of Peterson’s death but received no answer, and suggested in court filings that Congi may have “intentionally not responded” to twelve calls over two days because of a deteriorated relationship stemming from her daughter’s substance abuse. The family’s amended complaint responded that Dignity Health “takes no accountability for failing its duties to complete death certificates and notify families of deaths, but instead blames Jessie’s family.”²

Then-CEO Michael Korpiel told CDPH investigators he had been aware of storage failures for over a year, saying, “We assumed the remains being stored did not have families,” and citing the hospital’s large population of homeless patients.³

Where the Cases Stand

As of mid-2026, the Gray case is closed by settlement. The Peterson and Walker suits are in active litigation in state court. The Harvey class action is in federal court in the Eastern District of California, awaiting a ruling on the plaintiffs’ motion to remand it to state court. CDPH has accepted Mercy San Juan’s most recent plan of correction and said corrections have been implemented, though the specific measures have not been publicly detailed.¹¹¹⁸

1
MedPage Today. Dignity Health Body Mishandling Lawsuits
2
KCRA. Lawsuit: Dignity Health Off-Site Morgue Contract
3
KCRA. Mercy San Juan Hospital Patient Remains Backlog
4
KCRA. Sacramento Lawsuit: Dignity Health Mercy San Juan Medical Center Jessie Marie Peterson
5
CNN. Sacramento Woman Died, Hospital, Family Not Notified
6
USA Today. Jesse Peterson San Juan Medical Hospital Death Lawsuit
7
Fox 40. Missing Woman Hospital Sacramento Lawsuit
8
MedPage Today. Off-Site Morgue and Transport Practices at Mercy San Juan Medical Center
9
SFGate. Veteran Death Hospital Lawsuit
10
KCRA. Lawsuit: Dignity Health Donated Organs Without Consent
11
PACER Monitor. Harvey et al v. CommonSpirit Health et al