Tennessee Chiropractor Denied Direct Claim Against Tortfeasor's Liability Insurer

A Tennessee appellate court has ruled that a chiropractic clinic’s assignment agreement unenforceable in lawsuit against former patient injured in car wreck and liability insurance company who settled injury claim with patient. 

In Action Chiropractic, LLC v. Prentice Delon Hyler,, No. M2013-01468-COA-R3-CV (Tenn. Ct. App. Feb. 12, 2014), the defendant (patient) was injured in a car crash and was subsequently treated at plaintiff’s chiropractic center (clinic), incurring approximately $5,010 in charges for medical care. In an attempt to secure payment for any treatment provided, the clinic initially required the patient to execute an assignment contract for “medical expense benefits allowable, and otherwise payable” to patient by his “health insurance, auto insurance, or any other party involved.”

The clinic sent a copy of the assignment contract to Erie Insurance Exchange (Erie), which was the auto insurance carrier of the person responsible for causing the patient’s car crash. The clinic demanded that Erie honor the assignment contract by paying the clinic directly the amounts due for patient’s treatment.

Patient eventually settled his personal injury claim with Erie for $8,510, and Erie sent patient a check for the full settlement amount with a letter stating that Erie would not pay medical providers or reimburse health insurance carriers directly and that patient would be responsible for handling any outstanding balances out of the settlement check. In other words, Erie ignored the clinic’s demand that Erie pay the clinic directly. Patient then failed to pay the clinic for the treatment he received.

The clinic sued the patient and Erie based on the assignment contract. The case was dismissed on summary judgment and affirmed on appeal on multiple bases. The appellate court ruled that the clinic’s assignment contract was invalid under Tennessee’s statute governing assignment of rights under insurance policies. Contrary to the clinic’s stretched interpretation of Tenn. Code Ann. § 56-7-120, the statute was inapplicable because the patient was not an insured under the Erie policy and thus was not a “person entitled to benefits under the policy” within the meaning of the statute. Further, under Tennessee common law, even though the patient could have assigned his settlement proceeds to the clinic, the court ruled that Erie still had no obligation to honor the assignment contract. The patient had no rights against Erie that he could assign to the clinic and there otherwise was no contractual privity between Erie and the clinic. Finally, because the clinic was seeking to enforce a duty purportedly arising under the Erie insurance policy, the lawsuit was in essence a “direct action against a liability insurance carrier of a defendant who allegedly caused harm,” and Tennessee does not permit direct actions against insurance carriers. 

I wonder if the chiropractor also brought a claim against the patient's lawyer.  My guess is the patient did not have a lawyer, because a lawyer probably would have insisted that the chiropractor's interest be resolved at the time of settlement.

Those of you who regularly do personal injury work in Tennessee will recognize that the language in the chiropractor's agreement with his patient is similar to the language many hospitals have in their admission contracts.

You can be sure that the Tennessee Supreme Court will be asked to review this case.

Tennessee Law and the Pre-Existing Injury Instrution


For more than a century, Tennessee courts have recognized that a tortfeasor “must accept the person as he finds him” and have allowed injured parties to recover all damages proximately caused by tortfeasors. This means that injured victims of negligence are allowed to recover damages for aggravation of pre-existing injuries as long as there is expert medical proof linking the additional harm suffered by the injured person to the acts of the wrongdoer. 

In the case of Pyle v. Mullins, No. E2012-02502-COA-R3-CV (Tenn. Ct. App. Nov. 25, 2013), the plaintiff was injured in a car crash and at trial received a jury verdict for $15,000 (an amount less than his claimed medical expenses).  Plaintiff believed the verdict was too low and appealed the judgment. One reason for the low damage award, according to the plaintiff’s appeal, was that the judge refused to instruct the jury regarding the defendant’s liability for aggravation of the plaintiff’s pre-existing neck condition. (Note: while it is the jury who determines the amount of compensation to award an injured plaintiff, it is the judge who makes the legal determination on the types of damages that can be awarded.  Exactly why the plaintiff thought the award would have been larger if the jury had been charged on aggravation of a pre-existing condition is not clear.)  The plaintiff argued that the jury should have been allowed to award additional damages because, he claimed, proof at trial showed the crash caused his pre-existing degenerative disc disease to become a chronic condition requiring extended treatment.

After reviewing the evidence at trial with a focus on the testimony of plaintiff’s medical expert, the court of appeals disagreed with the plaintiff and affirmed the trial court’s decision to not instruct the jury on plaintiff’s pre-existing neck condition. While the plaintiff’s medical expert testified that a person with degenerative changes like the plaintiff’s is more susceptible to injury and that car crashes commonly cause neck pain to manifest itself in a person with degenerative changes, the medical expert did not testify, as required by law, that the plaintiff’s car crash aggravated his degenerative disc disease or had any specific effect on it at all. In other words, the medical expert’s testimony about general observations and correlations between neck pain and car crashes was insufficient and not material because it did not specifically relate to the plaintiff’s injury.

This ruling does not mean that the plaintiff was faking his injury. Nor does it mean that the courts thought the plaintiff did not suffer additional pain after the crash. It simply means the plaintiff did have the appropriate expert proof relating his injury to the crash as required by Tennessee law. A jury cannot find a defendant liable and award damages to a plaintiff for the exacerbation of a neck injury unless a medical expert testifies that (1) there was a pre-existing injury at the time of the wreck (2) that was aggravated because of the wreck.

Lastly, in affirming the jury’s verdict, the Pyle court also ruled, contrary to the plaintiff’s arguments, that there was material evidence to support the damage award and found no reversible errors in several of the trial court’s evidentiary rulings.  

Read this opinion to see a laundry list of things that can go wrong in the trial of a soft tissue injury case.  I don't know what the plaintiff was offered in this case but given the summary of the evidence set forth in the Court of Appeals' opinion this case was, shall we say, weak.

Click on the link to see more Tennessee case law on aggravation of pre-existing condition.

Tennessee General Assembly Fixes One Small Problem With The Tort Reform Legislation

Well, it ain't much, but the Tennessee Legislature has fixed one small problem with the tort reform legislation that impacts all tort cases arising on or after October 1, 2011.

The original legislation included a provision that required all future damages to be broken down "on an annual basis"  for future medical bills, lost earning capacity, and non-economic damages. Tennessee Code Annotated, Section 29-39-103(a)(2),   This was a disaster waiting to happen.  Why?

Here is an example.  Assume a 20 year old unmarried woman is severely brain damaged as a result of an incident.  She will never work again and she has a significant future medical expenses over her lifetime.  Her life expectancy is disputed - the defense says she has a fifteen year life expectancy and the plaintiff's expert says she has a normal (sixty year) life expectancy.  There is also a dispute over the inflation rate and the discount rate.

Under the original version of the law, the jury would have up to 240 separate lines  to complete on future damages - 80 entries on lost earning capacity, 80 lines for future medical bills, 80 lines for non-economic damages.  This is not only an unnecessary hassle for the jury, but it also creates lots of opportunities for error.

If she had been married at the time of the incident, another 80 lines would be required for future loss of consortium.

The new legislation - State of Tennessee Public Chapter 379 -  eliminates the words "on an annual basis."  Thus, the jury still must still break out past and future damages by class, and if life expectancy is disputed it must still determine the plaintiff's life expectancy, but it need not determine each class of damages on a year-by-year basis.

The change in the law became effective on the date it was signed by the Governor.  (May 14, 2013)

The Tennessee Judicial Conference gets the credit for getting the General Assembly to make this important change in the law.  A crazy law just got a little less crazy. 

Fungal Meningitis, Tort Reform, and Damages in Tennessee Personal Injury and Wrongful Death Cases

The fungal meningitis outbreak discovered in Nashville and now spread to other states (Minnesota, Ohio,  Florida, North Carolina, Indiana, Michigan, Virginia and Maryland) will shed new light on compounding pharmacies and epidural steroid injections.  But it will also shed a light on the tort reform statutes that placed limitations on the amount of money that wrongdoers have to pay when their conduct kills or injures a human being.

Usually, the effects of tort reform remain hidden, known only to the those who get harmed and find out their rights are limited, the legal community, and of course  those members of the business and insurance communities who persuaded the General Assembly to pass the laws.  But now that we have a tragedy that is in the national spotlight, millions of people will come to know that the Tennessee General Assembly does not permit Tennesseans to put a value on human life or on suffering or pain.  Rather, the value of those losses has been arbitrarily capped by  lobbyists and business interests.

In other words, the public will soon find out that tort reform will provide yet another harm to the victims of fungal meningitis and their families.

So what damages are available to the victims of the fungal meningitis outbreak?  Under Tennessee law, the personal injury victims (those who contract fungal meningitis and survive) will be able to receive medical expenses and lost wages.  Those losses - called economic damages - are not limited under the law.  (Note,however, that to the extent that insurance ()government or private)) pays any of the medical bills the insuring entity probably will have to be repaid.)

 Likewise, those personal injury victims will be able to recover damages for pain, suffering, and loss of enjoyment of life.  These damages are called non-economic damages. 

in addition, the spouse of the person who got fungal meningitis can recover damages for loss of consortium.  All of these damages (economic, non-economic and loss of consortium damages are called "compensatory damages."

If the fungal meningitis is successfully treated and if there are no permanent effects, the only other damages that he or she might be able to  recover are punitive damages.  Punitive damages will be discussed below.

Economic damages are not limited under the law.  Non-economic damages are limited to $750,000 except under very limited circumstances.  The General Assembly lumped the victim and the spouse's damages together for purposes of the damage cap.   This means that fungal meningitis patient and his or her spouse can recover only $750,000 for non-economic damages, even if the total amount awarded by a jury for such losses exceeds that for either or both of them.

Thus, a person who survives fungal meningitis without any ongoing problem as a result will have been able to recover all of his or her economic damages, but both the patient and his or her spouse will be able to recover no more than $750,000 in non-economic damages.  (Note:  once again, there are a couple of exceptions to this damages cap.  Much more information is needed about the specific case and the conduct of the defendant to now whether an exception will apply.  Some exceptions raise the non-economic damages cap to $1,000,000.  Other exceptions lift the cap completely..  The statute that discusses this area of the law is T.C.A. Sec. 29-39-102.)    Under prior law there was no cap on non-economic damages.

If the person contracting fungal meningitis has a permanent injury as a result, he or she can recover damages for loss of future earning capacity and for future medical bills that are likely to be incurred as a result of having fungal meningitis.  There is no cap on the damages that may be awarded for these economic losses. 

In addition, damages may be awarded for the future pain, suffering, loss of enjoyment of life, and other non-economic damages.  And the patient's spouse can recover damages for future loss of consortium.  But the damage cap still applies - $750,000 for the combination of the patient's losses and the spouse's losses. T.C.A. Sec. 29-39-102.

In other words, past and future non-economic losses for both the spouse and the patient are capped at $750,000 unless one of the limited exceptions to the damage cap applies.  Under former law, there was no artificial cap on non-economic losses.

Continue Reading...

Plaintiff's Lawyer in Dog Bite Case Claims Injury is Worth $30,000,000

Eric Turkewitz, a plaintiff's personal injury lawyer in New York,  wrote about it first.  He told us about a plaintiff's lawyer in New York who sought $30,000,000 for damages to a child who lost part of his ear lobe after a dog bite.

Eric was upset because this "courtroom bulldog who won't be leashed" (according to her website) either didn't know or didn't care about a 9-year old law that prohibits mentioning the amount sought when filing a lawsuit.  These actions, in Eric's view, make the job of plaintiff's lawyers who choose to follow the law more difficult.  He is right.

Then, Max Kennerly, a plaintiff's personal injury lawyer in Philadelphia, weighed in.  He agreed with Eric, but went on to explain that the $30,000,000 request bore absolutely no relationship to amount of the damages in the case.  Once again, I agree.

I will add this thought:  how in heaven's name does the New York lawyer who filed this case ever expect to have a satisfied client at the end of this case?  Although we do not state an ad damnum in our complaints (except in products liability cases, where they are required by statute), trial judges will normally require us to state an amount  certain some number of months into a case.  Our view is that we will have a better feel for the case as time goes on and, when we state an ad damnum provision, it will have some basis in reality.

We take this course of action for several reasons, but mainly for our clients.  Stating an ad damnum too early will almost always result in it being higher than it should ultimately be.  Our experience is that regardless of what we say to our clients, whatever number we put in the ad damnum is a number that sticks in their heads.  And, when the number is way too high, it will often lead to dissatisfied clients.

In the New York dog bite case, the incident occurred on May 18, 2012.  The article is dated June 5, 2012, so the lawsuit was filed less than three weeks after the incident.  There is no way - no way - that any lawyer can truly evaluate that case in three weeks - before plastic surgery has been attempted to repair the damage (except for the initial surgery), before the results of any counseling have been known, and before the impact of the incident is truly known.

So, what has happened is that the plaintiff's lawyer has, in violation of state law, stated an ad damnum that at the end of day will bear little resemble to the ultimate recovery in the case and has likely set very unrealistic expectations for the clients.   

Of course, it did have one other effect:  it got the lawyer's name mentioned in the New York Post.  

Is There a Limit on Damages Recoverable in Tennessee Personal Injury and Wrongful Death Cases?

Tennesse law limits damages that may be recovered in personal injury and wrongful death cases.  The limits apply only to cases that arise from events that occur on or after October 1, 2011.

Medical expense and lost wages claims are not limited.  However, damages for pain, suffering, disfigurement, disability, loss of enjoyment of life and loss of consortium are limited to $750,000 unless one of the following apply to the case:

  • there injured person was rendered paraplegic or quadraplegic because of a spinal cord injury in the wreck;
  • the injured person had extensive three degree burns; 
  • the injured person had two hands, two feet or one of each amputed in the wreck; or
  • in wrongful death cases, the decedent is survived by a minor child and had custody of or visitation rights with the child.

If one of the exceptions apply, the damage limit is increased to $1,000,000.

Damage limits do not apply when the wrongdoer was drunk or in certain other limited circumstances.

For injuries and deaths in accidents before October 1, 2011 the jury is permitted to determine the damages and there are no artifical limits.  The Tennessee business community persuaded the Legislature to limit the power of juries during the 2011 legislative session.

The applicable statute is TCA Sec. 29-39-102.

Judgments Arising From Intentional Torts Are Not Dischargeable In Bankruptcy

You cannot try to murder your ex-wife and then avoid a judgment against you for compensatory or punitive damages by filing bankruptcy.

The Court of Appeals for the Seventh Circuit rejected the effort of David Larsen to use the bankruptcy system to avoid his financial obligation to his former wife.  Larsen tried to kill Teri Jendusa-Nicolai and, although his effort was unsuccessful, she suffered a miscarriage and the amputation of all of her toes.  The toes were amputated secondary to frostbite - the jerk beat her with a baseball bat and left her in a garbage can filed with snow, secreting the can in an unheated storage facility.

A civil suit was filed, resulting in a judgment of $3.4 million for her and $300,000 for her (then) husband and daughters for loss of consortium.  Larsen then filed a Chapter 7 proceeding seeking to discharge the judgment debts.

The 7th Circuit affirmed the decision of the lower courts, holding that the debts were not dischargeable because   they  were debts “for willful  and malicious injury  by  the debtor to another entity or  to  the property of another  entity”  within  the meaning of  11 U.S.C. § 523(a)(6).

For a debt to be nondischargeable under this provision, a deliberate or intentional injury is required, not merely a deliberate or intentional act that leads to injury.  Kawaauhau v. Geiger, 523  U.S. 57, 61-62  (1998).

Larsen attempted to argue that he did not intend to cause the specific injuries suffered by his ex-wife - such as the loss of her toes.  The Court quickly rejected this argument, holding that "obviously he  intended to injure  her—he was convicted of attempted murder, after all—and the  destruction of her  toes and the miscarriage were foreseeable consequences of the intent ional torts that gave rise to  the debt he seeks to discharge."

Likewise, the debt arising from the judgment for $1.5 million in punitive damages was not dischargeable because it was " a debt consequent upon a willful and malicious injury."

Finally, Larsen argued that he should not be liable for the loss of consortium damages because he did not intend to injury his ex-wife's husband or her children.   That argument too was rejected, the Court holding that these losses arose from his malicious conduct.  The Court explained that the Bankruptcy Code exists in part to help the "honest but unfortunate debtor," and that Larsen did not fall within that category.

This opinion serves as a good reminder of the law on this subject and, in fact, it is now the only opinion in our jurisprudence that addresses the dischargeability of loss of consortium judgments in such circumstances.

The case is Jendus-Nicolai v. Larsen, No. 11-1256 (7th Cir. April 18, 2012).

Sixth Circuit Court of Appeals Discusses the Law of Lost Earning Capacity

"Lost earning capacity is not a difficult concept to understand, but our friends in the defense bar sometimes are able to confuse judges and juries about what it means.  The United States Court of Appeals for the Sixth Circuit confronted in issue recently in a case involving Ohio tort law, and got it right.

Andler received broken bones in her feet at an event in 2004 and brought a premises liability claim. Prior to her injury, Andler worked part-time at a childcare center and earned between $9,000 and $10,000 a year.  According to Andler, her injuries forced her to switch jobs and, in the years following the injury, she worked full-time as a manicurist and pedicurist; she earned approximately $10,000 in 2006 and $25,000 in 2008.

At the first trial, Andler offered expert testimony of accountant Daniel Selby, who testified, using Bureau of Labor Statistics (“BLS”) figures, as to Andler’s lost earning capacity due to the injury. Selby testified that, but for her injury, Andler could have earned approximately $17,600 a year as a full-time childcare worker; post-injury, her annual earning capacity as a full-time manicurist and pedicurist was approximately the same.  When factoring in the effects  of her work disability, such as increased likelihood of missed work or longer-term exit from the workforce, Selby concluded that Andler’s damages for lost earning capacity totaled $232,346. 

In the first trial, the jury awarded $148,000 for lost future damages- the jury did not break down whether the money was for loss of earning capacity or future medical expenses.

The jury verdict was reversed on a substantive law issue and remanded.  On remand, the district court excluded expert proof on the issue of lost earning capacity, claiming that it was speculative.

This time, the jury awarded only $10,000 in future economic losses.

In Andler v. Clear Channel Broadcasting, Nos. 10-3264/3266 (6th Cir. Feb. 29, 2012), the district judge was reversed.  The 6th Circuit determined that the expert testimony should have been admitted into evidence.  (Defendant sought reversal on liability grounds - those efforts were rejected.)

Andler argued that she should have been permitted to introduce expert testimony on loss of earning capacity.  Here is Ohio law on the issue:

A tort plaintiff can recover future economic damages for any loss of earning
capacity caused by her injury.  A plaintiff claiming lost earning capacity must offer sufficient proof of (1) “‘future impairment’” and (2) “‘the extent of prospective damages flowing from the impairment.’”    The measure of damages in the second step is “‘the difference between the amount which the plaintiff was capable of earning before his injury and that which he is capable of earning thereafter.’”    Because predictions about future earning potential are necessarily somewhat speculative, an exact calculation of what the plaintiff could have earned but for the injury is not required; a plaintiff must prove damages with “reasonable certainty.
The damages are awarded for loss of earning power, not simply loss of earnings.
The proper focus is thus what the injured plaintiff could have earned over the course of her working life without the injury versus what she will now earn, not what she earned or will earn in any given year.  See id. (plaintiff must show that “the amount of wages [he] will be capable of earning over his working life after his injury is less than the amount of wages he was capable of earning over his working life before his injury”). Accordingly, the fact that a plaintiff earns a higher annual salary after an injury than she did prior to the injury does not bar her from recovering for loss of earning capacity. ... '[T[he jury may consider the earnings of the plaintiff at the time of the injury, but the jury is not bound to accept such earnings as conclusive of his future earning power.'

[Citations omitted.]

Tennessee law is very similar to Ohio law on this subject.

The accountant expert on loss of earning capacity was excluded because he testified that Andler's pre-injury earning capacity was higher than her actual earning capacity.  This testimony was based on BLS statistics for people of Andler's age, education and experience.  The district judge found the expert's testimony to be unreliable.

The appeals court rejected this basis for exclusion of the testimony:

The concern with the use of BLS averages rather than Andler’s actual historical
earnings suggests a confusion of the concepts of lost earnings and lost earning capacity. As explained above, lost earning capacity does not necessarily rely on a plaintiff’s historical earnings.  What matters is what Andler would have earned over the course of her working life, not what she earned in any given year.  Andler’s historical earnings are relevant, but the fact that she did not meet her earning capacity in the two years prior to her injury does not necessarily render Selby’s projections inaccurate or even unreasonable.  Although Andler did not work full-time before her injury, Selby’s projection that she would work full-time is not “clearly contradicted by the evidence.”  Andler testified that she took the childcare job after her divorce because it was located in the district where her children attended school and she 'wanted things to pretty much stay the same for my kids until they got out of elementary school.'  Working at the childcare center, she was able to 'be[] there for them before and after school.'   This testimony suggests she may have changed jobs once her children were older. Moreover, Andler had attended massage school and had worked for a chiropractor before working at the childcare center, training that could position her for a switch in career.  Finally, Andler explained that her post-injury switch to cosmetology work was “what I was already wanting to do.”
[Citations omitted.]  
The above language included this footnote:
Andler’s situation is thus somewhat akin to the case of the injured homemaker, who can recover for lost earning capacity even if he or she had never worked outside of the home prior to the injury.  Cf. 29 Am. Jur. Proof of Facts 3d 259, § 8 (2005) (“The homemaker who has never worked outside the home a day in her married life . . . is entitled to damages for lost earning capacity, if she is injured by a tortfeasor and thereby becomes unable to seek or perform work outside the home.”); William Danne, Jr., Annotation, Admissibility and Sufficiency, in Personal Injury or Wrongful Death Action, of Evidence as to Earnings or Earning Capacity from Position or Field for Which Person Has Not Fulfilled Education, Training, or Like Eligibility Requirement, 7 A.L.R. 6th 1, § 2 (2005) (“[D]amages for loss or impairment of earning capacity may be awarded to . . . an injured housewife, even if she had left employment with the intention of confining her future activities to homemaking.”

Thus, concluded the 6th Circuit, a new trial was necessary on the issue of damages.

The 6th Circuit got this one right.  Loss of earning capacity is an important element of damages in personal injury litigation.  Expert testimony about such losses in the future always includes some degree of speculation (it is the future, after all) but the jury should be permitted to weigh the testimony and determine whether the evidence supports an award of these damages.  

Damages for Death or Serious Injury of a Homemaker

We all know that the services provided by homemakers have a substantial value, but this article from Vestopedia puts some numbers on it.

The author notes that "

The life of a homemaker is one that includes an endless amount of demands and to-dos. Depending on the size of the home and family, the position of homemaker can go well beyond the usual nine to five. We examined some of the tasks that a homemaker might do to find out how much his or her services would net as individual professional careers. We only take into consideration tasks which have monetary values and use the lowest value for each calculation.

Total number?  $96, 261 per year if one includes cooking, house cleaning, child care, driving, laundry service, and lawn maintenance expenses.

I don't know that this article can be reasonably relied upon by an expert in a Tennessee personal injury or wrongful death case, but the article does provide a nice list of the many services performed by those who choose to stay home and support the family through work in the home.



California Supreme Court Limits Medical Expense Recovery to Amount Paid By Insurer

The California Supreme Court has ruled that a tortiously injured person who receives medical care for his or her injuries may recover medical expenses only in the amount that the plaintiff's health insurer paid, not the amount charged by the health care provider but later reduced by a contract between the provider and the insurer.

Whether a plaintiff can recover the amount paid or the medical "charges" is a hot issue in tort law.  The California opinion falls on the pro-defendant side of that issue.

Plaintiffs have sought the right to claim the higher amount by invoking the collateral source rule. 
The California Court said the collateral source rule did not protect the plaintiff, because a negotiated discount - whether negotiated by the plaintiff or the plaintiff's health insurer - means that the plaintiff has not suffered a pecuniary loss in the greater amount.

Here is the new rule in California:

[W]hen a medical care provider has, by agreement with the plaintiff‘s private health insurer, accepted as full payment for the plaintiff‘s care an amount less than the provider‘s full bill, evidence of that amount is relevant to prove the plaintiff‘s damages for past medical expenses and, assuming it satisfies other rules of evidence, is admissible at trial.  Evidence that such payments were made in whole or in part by an insurer remains, however, generally inadmissible under the evidentiary aspect of the collateral source rule.  (Hrnjak v. Graymar, Inc., supra, 4 Cal.3d at p. 732.)  Where the provider has, by prior agreement, accepted less than a billed amount as full payment, evidence of the full billed amount is not itself relevant on the issue of past medical expenses.

The 30-page majority opinion was accompanied by a 15-page dissent. 

The opinions in Howell v. Hamilton Meat & Provisions, Inc.,  No. S179115 (Cal. S. Ct. 8/18/11) do a fine job setting out the arguments pro and con on this important issue.

Reasonable and Necessary Diagnostic Tests Must Be Awarded By Jury in Personal Injury Case

The Tennessee Court of Appeals has ruled that if it is undisputed that the defendant caused circumstances requiring diagnostic tests to rule out injuries, and the undisputed evidence shows that those tests were reasonable and necessary, a trial court cannot affirm a jury verdict of $0 damages.  The trial court either must order a new trial or an additur.

Plaintiff was receiving treatment for chronic lower back pain before the accident.  The physician who treated her before and after the accident testified that he “believed” Plaintiff suffered a back strain or whiplash that caused chronic headaches and aggravated her existing lower back condition.  In addition, the physician testified that medical tests, including MRI and CT scans, were necessary to rule out hemorrhaging or fractures.  Defendant’s medical expert testified that the medical tests were reasonable and necessary, but that Plaintiff’s pain was ultimately due to her preexisting condition.

The Court of Appeals agreed with Plaintiff that there was no material evidence to support the jury’s finding of $0 in damages, as the undisputed evidence established that Plaintiff was at least entitled to the costs of the diagnostic tests.  The Court of Appeals noted that appellate courts lack the authority to award an additur, and therefore remanded for the trial court to order either a new trial or an additur.

The case is  Watson v. Payne, No. M2010-01599-COA-R3-CV (Tenn. Ct. App. April 1, 2011).

Value of Knee Injury Cases

Ronald Miller has a fascinating post on his The Maryland Injury Lawyer Blog about the value of knee injury cases  

Here is an excerpt:

According to a recent Jury Verdict Research study over the last ten years, the average verdict in a serious knee injury case is 359,149. The median knee injury verdict is $114,299. Eight percent of verdicts were over $1,000,000.

How do you define serious? JVR defines it as knee dislocation, fractures, replacements, and aggravation of a preexisting knee injury. I certainly understand the first three categories; aggravation of a preexisting knee injury more subjective and a little harder to define.

Arizona Court Holds That Medical Expense Claims Belong to Child and Parents

The Arizona Supreme Court has reversed prior law and held  that a claim for medical expenses arising out of a personal injury to a child may be asserted by the child or the parents, but not both.

The case is Estate of Madison Alexis Desela v. Prescott Unified School District,  No. CV-10-0172-PR  (AZ  1/18/11).

Historically, Arizona law provided that the medical expense claim belonged to the injured child's parents, who had the obligation to assert that claim within the statute of limitations applicable to adults.

The Court ruled that the "common law should adapt when circumstances make it no longer just or consistent with sound policy."   It went on to say that 

[t[he disadvantages of the  Pearson  rule outweigh the arguments for its retention.   Cf. Villareal, 160 Ariz. at 478-79, 774 P.2d at 217-18 (weighing arguments for and against recognizing child’s cause of action for loss of consortium).  The benefits that PUSD attributes to the  Pearson  rule are  tenuous.  Injured children are entitled, independent of any assignment from their parents, to recover various damages, such  as long-term disability, pain and suffering, and post-majority medical expenses.  Thus,  Pearson  does not generally afford  defendants certainty as to the amount of their liability or the timing of claims resulting from injuries to minors.


Although the  Pearson  rule may encourage the bringing of claims for medical expenses within the parents’ limitation period, it does so at the cost of promoting piecemeal litigation, at least in the absence of an effective assignment.  Cf. State ex rel. Packard v. Perry, 655 S.E.2d 548, 560 (W. Va. 2007) (“It is, frankly, absurd that two separate actions for a child's medical expenses (pre-and post-majority) now arise from the same allegedly tortious conduct.”).  It also poses a potential trap for the unwary that can insulate defendants from liability for the child’s medical expenses for reasons unrelated  to the defendant’s fault.   Cf. Lopez v. Cole, 214 Ariz. 536, 539-40 ¶ 20, 155 P.3d 1060, 1063-64 (App. 2007) (barring minor’s recovery of medical expenses when parents had not consented to assignment).  And insofar as the  Pearson  rule prompts minors to file actions for other damages earlier and concurrently with a 10 parent’s claim for pre-majority medical expenses, this result is in tension with the legislative policy expressed in A.R.S. § 12-502 (generally providing that the limitations period for actions by minors does not begin to run until they turn eighteen), and A.R.S. § 12-821.01(D) (allowing minors to file notices of claims within 180 days after turning eighteen).
There continues to be a dispute in Tennessee about whether the medical expense claim belongs to the child, the parents or both.  I believe that Tennessee has adopted a rule similar to that of Arizona, and that either the child, or the parents, can assert the claim but that a double-recovery should not be permitted.  Palanki v. Vanderbilt University, 215 S.W.3d 380, 394 (Tenn. Ct. App. 2006).  However, the Tennessee Supreme Court has not directly ruled on the issue, and this has caused some uncertainty in the Bar.  Hopefully, the issue will be presented to the Tennessee court in the near future and it will follow the lead of the Arizona court.


Ohio Permits Evidence of Write-offs Of Medical Bills

The Ohio Supreme Court has ruled that a defendant in a personal injury action may introduce evidence that plaintiff's health care provider "wrote off" certain medical charges for care given to the plaintiff.

The plaintiff was billed $21,874.80 for care received in the accident.  His health insurer paid $7.483.91 of those bills and the provider wrote off the balance pursuant to an agreement with the health insurer.  The trial judge did not permit the defendant to introduce evidence of the write-offs.

The Ohio Supreme Court reversed, saying that "'the reasonable value of medical services is a matter for the jury to determine from all relevant evidence.  Both the original medical bill rendered and the amount accepted as full payment are admissible to prove the reasonableness and necessity of charges rendered for medical and hospital care.'"  [Citation omitted.]

The case is Jaques v. Manton, Slip Op. No. 2010-Ohio-1838 (Ohio May 4, 2010).  Read the opinion here.  The Illinois Supreme Court has reached the opposite result as has Arizona.   The Arizona opinion has a survey of the law of several states on the issue.

Georgia Supreme Court Considers Constitutionality of Damages Cap in Medical Malpractice Cases

The Georgia Legislature imposed a cap on noneconomic damages in meritorious medical malpractice cases in 2005.   The cap is $350,000.   In a case tried in Fulton County several years ago, the jury's verdict exceeded the cap, and the Georgia Supreme Court is now considering whether the cap is constitutional.

According to a press release from the Georgia Trial Lawyers Association and re-printed on the Atlanta Injury Lawyer Blog

“Betty Nestlehutt was the face of her real estate business,” said Malone. “Her face was so horrifically disfigured that she was no longer able to even leave her house. Photographs of her disfigurement are even too gruesome for public distribution. The damage is permanent. Years later she has to wear layers of special makeup to try to give the appearance of normalcy.”

The damage award?  $115,000 for past and future medical expenses and $1.15 million in noneconomic damages, including $900,000 for her pain and suffering.   The damage cap would have the effect of reducing the award by over 50%, down  to $465,000.

The press release has an extended summary of the trial judge's ruling that struck down the caps as unconstitutional on three different grounds.  Click on "Continue reading" to see the summary of Judge Diane Bressen's order as set out in the press release.




Continue Reading...

Dog Bite Case Website

I admire people who have the foresight and courage to pick a practice area and learn it, inside out.  I greatly admire those who share the knowledge they have to help other lawyers and the public.

Here is a fine example: Dog Bite Law by Kenneth Phillips.  He limits his cases to representing people who have been bitten by dogs and "accept [s] only cases where a person has been bitten in the face, or has become disabled -- or where a person has been killed."

Kenneth shares lots of information for victims of dog bites, down owners, parents, journalists and other lawyers.  He also sells what appears to be a very comprehensive form book.  He also sells videos and books for lawyers.  For those who have relatively minor cases, Kenneth sells forms to aid the injured party in resolving his own case.  

And, of course, he has a blog.

For those of you who have a dog bite case in Tennessee, remember that we had a major statutory change in the area in 2007.  The new statute is codified at T.C.A. Sec. 44-8-413:

(a)(1) The owner of a dog has a duty to keep that dog under reasonable control at all times, and to keep that dog from running at large. A person who breaches that duty is subject to civil liability for any damages suffered by a person who is injured by the dog while in a public place or lawfully in or on the private property of another.

(2) Such a person may be held liable regardless of whether the dog has shown any dangerous propensities or whether the dog's owner knew or should have known of the dog's dangerous propensities.

(b) The provisions of subsection (a) shall not be construed to impose liability upon the owner of the dog if:

(1) The dog is a police or military dog, the injury occurred during the course of the dog's official duties and the person injured was a party to, a participant in or suspected of being a party to or participant in the act or conduct that prompted the police or military to utilize the services of the dog;

(2) The injured person was trespassing upon the private, nonresidential property of the dog's owner;

(3) The injury occurred while the dog was protecting the dog's owner or other innocent party from attack by the injured person or a dog owned by the injured person;

(4) The injury occurred while the dog was securely confined in a kennel, crate or other enclosure; or

(5) The injury occurred as a result of the injured person enticing, disturbing, alarming, harassing, or otherwise provoking the dog.

(c)(1) If a dog causes damage to a person while the person is on residential, farm or other noncommercial property, and the dog's owner is the owner of the property, or is on such property by permission of the owner or as a lawful tenant or lessee, in any civil action based upon such damages brought against the owner of the dog, the claimant shall be required to establish that the dog's owner knew or should have known of the dog's dangerous propensities.

(2) The element of proof required by subsection (1) shall be in addition to any other elements the claimant may be required to prove in order to establish a claim under the prevailing Tennessee law of premises liability or comparative fault.

(d) The statute of limitations for an action brought pursuant to this section shall be the same as provided in § 28-3-104, for personal injury actions.

(e) As used in this section: (1) "Owner" means a person who, at the time of the damage caused to another, regularly harbors, keeps or exercises control over the dog, but does not include a person who, at the time of the damage, is temporarily harboring, keeping or exercising control over the dog.

(2) "Running at large" means a dog goes uncontrolled by the dog's owner upon the premises of another without the consent of the owner of such premises, or other person authorized to give consent, or goes uncontrolled by the owner upon a highway, public road, street or any other place open to the public generally.




Can A Podiatrist Give Causation Testimony?

A Virginia trial judge refused to allow a podiatrist to give causation testimony in a FELA case where a railroad worker alleged his foot problems were caused by conditions in the workplace.  The Virginia Supreme Court has agreed to hear the case.

Here is the wording of the assignment of error that  the court has agreed to review:

The trial court erred in granting Norfolk’s motions in limine to exclude the testimony of Drs. Zelen and Steffan based upon its finding that they were not qualified, as podiatrists or otherwise, to render expert opinions as to the causation of plaintiff’s physical injuries, and in subsequently granting Norfolk’s summary judgment motion based upon plaintiff’s lack of causation testimony.

In Tennessee, a podiatrist

means one who examines, diagnoses, or treats medically, mechanically, or surgically, the ailments of the human foot, ankle and soft tissue structures extending no higher than the distal tibial metaphyseal flair, including the use and prescribing of drugs and medications, but excluding the direct applications of general anesthesia by a podiatrist and the amputation of the foot. A podiatrist may perform Achilles tendon repair, subject to the provisions of subsection (b), but may not perform surgery on Pilon fractures or tibial fractures that do not enter the ankle joint. T.C.A. Sec. 63-3-101.

Here are the statutory qualifications for  podiatrists in Tennessee:

 No person shall be entitled to take any examination for a license unless that person furnishes the board with satisfactory proof that that person is eighteen (18) years of age or over, and of good moral character, and that that person has received a license or certificate of graduation from a legally incorporated regularly established and recognized college of podiatry conferring the degree of D.P.M. (Doctor of Podiatric Medicine) and accredited by the Council of Education and the American Podiatry Association.  ...
T.C.A. Sec. 63-3-110.

Podatrists can prescribe drugs.   T.C.A. Sec. 63-3-127.   They are eligible for privileges in hospitals and ambulatory surgery centers and can operate in those facilities.  T.C.A. Sec. 63-1-101 (b).

A podiatrist was permitted to testify on the issue of impairment in several worker's compensation cases, including Simpson v. Calsonic Kansei North America, 2007 WL 439032 (Tenn. Work. Comp. Panel. Feb. 12, 2007), Trasher v. Carrier Corp.,  2002 WL 31558109 (Tenn. Work. Comp. Panel. Nov. 22, 2002), and Chapman v. E-Z Serve Petroleum Marketing Co., 2000 WL 527860 (Tenn. Work Comp. Panel May 02, 2000), although the opinions do not indicate that the defendant challenged the podiatrist's ability to testify.  A podiatrist was also permitted to testify on causation in the FELA case of  Biddle v. Norfolk Southern Railway Co.  1997 WL 716879 (Tenn. Ct. App. Nov. 19, 1997), although once again it does not appear that the defendant challenged the ability of the podiatrist to testify

If a podiatrist is testifying about what he or she  is licensed to do and actually does, why shouldn't he or she permitted to testify?  Shouldn't the fact that podiatry requires less overall schooling (as compared with a medical doctor) go to weight and not admissibility?

Thanks to the Torts Prof Blog  and  The VLW Blog for informing me about this case.

Work Life Expectancy Tables

Economists in personal injury cases and wrongful death cases often consider work life expectancy tables in calculating future economic losses.

As explained on this website, "[m]any laypersons (and some experts) assume that [worklife expectancy] is the number of years until the person turns 65, the historic age for full social security retirement. This assumption is incorrect for two basic reasons: many people retire at different ages (usually earlier) and the average person has some breaks in employment (perhaps involuntary) before retirement."

The factors taken into account in determining work life expectancy are age, gender, education and level of work disability.

To learn more visit the Vocational Econometrics website.

Race and Damages

Here is a fascinating article from the New York Law Journal about an opinion by Judge Jack B. Weinstein objecting to a defendant's use of race-based statistics on life expectancy to reduce a damage award in a quadriplegia case.

Ohio Supreme Court Addresses Value of Services

I am Columbus, OH today speaking an Ohio Association for Justice seminar program.  The hotel where I am staying is right down the street from the Ohio Supreme Court building.  It is appropriate, then, that I write about a new opinion handed down by that court on the issue of damages that may be recovered by a spouse who took off time from work to care for a spouse injured by the negligence of another.

The plaintiff was a financial planner who took off work to care for his injured wife.  He sought over $1,000,000 in loss of income.   A 5-2 majority of the court rejected his claim for this element of loss, holding instead that he could only recover the economic value of the care as if it had been provided by a non-family member.

To be more precise:  "part of the injured spouse’s damages against a defendant can include the fair market value of the home health care provided by the uninjured spouse. Damages are measured not by the lost income of the supporting spouse but by the market value of the services he or she renders."

Because the plaintiffs did not introduce any evidence of the market value of the wages the claim was dismissed.

This decision hurts this plaintiff and other high-income spouses who decide to care for a loved one rather than bring a stranger into the home.  However, the decision permits low income people to seek damages at the market rate, and home health care workers hired through an agency are very expensive.  If the "market value of the services" is the test, evidence that the spouse would have only made a fraction of the dollars he or she seeks for providing the care if he or she had been at her regular job should not be admissible. 

The case is Hutchings v. Childress, Slip Opinion No.  2008-Ohio-4568 (Ohio Sept. 17, 2008).  Read the opinion here.                           

"Defending the Damages Only Case"

Smart defense lawyers know that sometimes the best defense is to admit liabilitiy and talk about damages.  This article  - "Defending the Damages Only Case" - is written by Mercer Clark of Miami.  It appeared in the Winter 2008 edition of the Federation of Defense & Corporate Counsel Quarterly.

Defense lawyers:  read it and learn.  Plaintiff's lawyers: read it and learn even more.

Note:  this is post number 1250 in the 43 month life of this blog.   

I need some other hobby.

Your PI Cases - The Government Has Its Hand Out

We all know that Medicare and Tenncare has a subrogation right in PI and wrongful death cases, but new information being sought by Medicare has lead some lawyers to believe that Medicare will now be looking at case proceeds for payment of future medical bills.

 The Medicare, Medicaid and SCHIP Extension Act of 2007, §111, which requires liability (including self-insured), no-fault and workers' comp insurers to report certain information about injured parties who are entitled to Medicare.  New rules have been proposed on the subject and will go into effect on July 1, 2009.  You can review and comment on the new rules here.   The data required by the new rules will give the government a significant amount of information about PI and WD claimants and the concern is that the data will be used to insist that case proceeds be used to pay future bills.

I will follow the developments in this area and keep you advised.


Controversial Malingering Test

One of my favorite publications, Lawyers USA, has an interesing article about a new test which allegedly determines whether a personal injury plaintiff is malingering.  It is called the "Fake Bad Scale."

The article says that "[a] leading critic of the test, Dr. James Butcher, PhD, a senior author of the MMPI-2 and a professor at University of Minnesota, said that the fake bad scale does not meet the standards set by other MMPI-2 scales and "greatly overestimates" malingering."

Read the article here.

Tough Jury Climate

The jury found that the defendant was negligent and that the negligence caused an herniated disk.  The disk problem was surgically repaired.  The plaintiff used a walker for nine months and now uses a cane. Amount of damages for pain and suffering?  Zero.

Motion for new trial?  Denied.

The California Court of Appeals reversed, holding that the failure to award damages for pain and suffering meant that the verdict was inadequate as a matter of law.

The case is Dodson v. J. Pacific, Inc., B186416 ( Cal. Ct. App. Div. 8  Aug. 28, 2007).  Read it here.

Collateral Source Rule Bars Evidence Of Amount Paid By Health Insurer

The Wisconsin Supreme Court has ruled that a plaintiff is entitled to prove the full amount of medical charges, despite the fact that plaintiff's insurer actually paid a less amount.  The lesser amount cannot be used to prove that it is the "reasonable" value of the services.

This is how the Court expressed its holding:  " the collateral source rule prohibits parties in a personal injury action from introducing evidence of the amount actually paid by the injured person's health insurance company, a collateral source, for medical treatment rendered to prove the reasonable value of the medical treatment."

The majority opinion is 37-pages long, but here is a brief statement of the reason for the Court's holding:  "Although an injured person may experience double recovery when the collateral source rule is applied, one recovery from the collateral source and a second recovery from the tortfeasor, the purpose of the collateral source rule is not to provide the injured person with a windfall, but rather to prevent the tortfeasor from escaping liability because a collateral source has compensated the injured person. The injured person, not the tortfeasor, benefits from the collateral source."  [Footnotes omitted.]

If you want to read that opinion and the 15-page dissent in Leitinger v. DBart, Inc., 2005AP2030 (WI. S. Ct. Jul 3, 2007)  click here.

Loss of Services of a Homemaker

This report published by Rueters says that if "the typical stay-at-home mother in the United States were paid for her work as a housekeeper, cook and psychologist among other roles, she would earn $138,095 a year."

Is this data that can be reasonably relied upon by an economist in a death or personal injury case?

Kentucky Opens Door to Loss of Earning Capacity Claims

The Kentucky Supreme Court has ruled that a "plaintiff need only prove with reasonable probability  that the injury is permanent in order to obtain an instruction on permanent impairment of earning power."

In Reece v. Nationwide Mutual Insurance Company,  2005-SC-000079-DG (Ken. S. C. March 22, 2007) Reece was hurt in an automobile accident.  Two doctors testified that she suffered a permanent injury in the incident.  The issue before the court was

"whether the evidence submitted by Reece in this case was sufficient to warrant an instruction on permanent impairment of earning power, or whether Reece was required to present specific evidence, presumably in the form of an expert, of how her earning power was permanently impaired by the injury. Reece argues that no specific evidence of permanent impairment of earning power is required, only proof that the injury is permanent which she presented through the testimony of Dr. Thurman and Dr. Raque. Nationwide contends that the Court of Appeals correctly set out the standard which would require specific evidence of permanent impairment of earning power in the present case . We hold that evidence of permanent injury alone is sufficient for an instruction on permanent impairment of earning power, and that the jury can through their common knowledge and experience make the determination if there has been a permanent impairment of earning power, the extent of such impairment, and the amount of damages for such impairment."

Read the decision here.

Amount Paid - Not Just Amount Charged - for Medical Care is Admissible

The Ohio Supreme Court has ruled that  "both an original medical bill rendered and the amount accepted as full payment are admissible to prove the reasonableness and necessity of  charges rendered for medical and hospital care."

The Court went on to say that "[t]he jury may decide that the reasonable value of medical care is  the amount originally billed, the amount the medical provider accepted as payment, or some amount in between. Any difference between the original amount of a medical bill and the amount accepted as the bill’s full payment is not a “benefit” under the collateral-source rule because it is not a payment, but both the original bill and the amount accepted are evidence relevant to the reasonable value of medical expenses."

It should be noted that Ohio has a statute that modifies the traditional collateral source rule.

The case is Robinson v. Bates, 112 Ohio St.3d 17, 2006-Ohio-6362 (Dec. 20, 2006).  Read the opinion here.

I have written posts on this subject before.  For example, see this post and this post.

Minor Can Recover Medical Expenses

The Tennessee Court of Appeals has ruled that a minor can sue to recover medical expenses paid to treat injuries received by the minor as a result of the negligence of another.  Although most of us (at least those of us who represent plaintiffs) have thought this was probably the law, it is nice to see an opinion from this century addressing the issue directly.

Here is the entire section of the opinion on the subject that addresses this important issue:

"As a final matter, Defendant contends that the trial court erred in admitting evidence of
Plaintiff’s pre-majority medical expenses since a minor does not having standing to assert a claim for expenses incurred on his behalf and Mrs. Craig was not a party to the suit. Tennessee Code Annotated section 20-1-105 provides that a claim for medical expenses incurred by a minor during his or her minority does not belong to the minor, but rather to the minor’s parents. See also Burke v. Ellis, 58 S.W. 855, 857 (Tenn.1900). However, in Smith v. King, No. Civ.A. 958, 1984 WL  586817, at *2 (Tenn.Ct.App. Sept. 21, 1984), the court addressed a substantially similar issue and determined that a minor plaintiff may maintain his or her own cause of action for medical expenses and include the amount of medical expenses incurred on behalf of the minor as an element of his or her damages.

In Smith, Barbara Ellen Smith, a minor, by and through her parents as next friends, sued
defendant for personal injuries received when the school bus in which she was a passenger was
struck by defendant’s vehicle. Smith, 1984 WL 586817, at *1. Because the suit was filed more than a year after the accident, the parent’s cause of action for pre-majority medical expenses was barred by the statute of limitations. Smith, 1984 WL 586817, at *1. Instead of precluding any recovery for the minor’s pre-majority medical expenses, the court adopted the waiver rule and held that “a child under circumstances where the parent has acted as next friend may maintain an action for his medical expenses provided that [the parent] has paid for them...or is legally obligated to pay them.” Smith, 1984 WL 586817, at *2. The court reasoned that pursuant to the waiver rule, “the parent by bringing the suit on behalf of the minor has waived any claim that he might have” thereby eliminating the concern of double recoveries for pre-majority medical expenses. Smith, 1984 WL 586817, at *2.

Applying the holding in Smith, we find that Plaintiff could properly maintain his own action for pre-majority medical expenses incurred or likely to be incurred by Mrs. Craig on his behalf and
thus the trial court did not err in admitting evidence of Plaintiff’s pre-majority medical expenses. Since the jury awarded Plaintiff $300,000.00 in pre-majority economic damages, Mrs. Craig i precluded from any further individual recovery under the waiver rule enunciated in Smith."

The case is Palanki v. Vanderbilt University , No. M2005-02220-COA-R3-CV (Tenn. Ct. App. Nov 13, 2006).  Read it here.

New Tennessee Subrogation Case

The Tennessee Supreme Court issued an opinion yesterday in the Abbott v. Blount County, Tennessee case.

In an opinion by now retired Justice Al Birch, the Court made it crystal clear that an insurance company could not require a plaintiff to get approval of plaintiff's health insurance company before settling a personal injury suit.  The Court said that it is  "clear that the made-whole doctrine applies regardless of the language found in the insurance contract. Contract terms that require the consent of the insurer would allow the insurer to withhold consent from any settlement that does not make the insured whole and thereby compel the insured to seek a larger award at trial. We disapproved of allowing insurers to contract away the right to be made whole in York, and we do so again today. Finally, we note that the lack of an insurer’s consent does not make an insured more likely to receive a double recovery."

The Court said that there was a genuine issue of material fact about whether the plaintiffs were made whole.

The Court also said that "if Blount County had knowledge of the Abbotts’ lawsuit and settlement negotiations but did not intervene or warn the insured that Blount County’s subrogation rights could affect the Abbotts’ recovery, then Blount County will be deemed to have waived those rights. However, the facts concerning whether Blount County had notice of the lawsuit and settlement negotiations are disputed, and, thus, we affirm the Court of Appeals’ holding that summary judgment as to this issue is inappropriate."

The cite to the Abbott case is No. E2004-00637-SC-R11-CV ; it was filed on November 7, 2006.  Read the opinion here.

Two points.  First, note that this case is governed by state law, not ERISA.  ERISA is a much different breed of cat.

Second, this opinion points out the need for the plaintiff to prove that he or she was not made whole.  It is not enough to say "look how bad I am hurt" or "See how much my medical bills are."  The plaintiff must introduce evidence from which the value of the case can be determined.  Evidence.  Real evidence.  Just like you use in court.  Oh, that's right, we are talking about court. 

For example, in our recent hearing on this subject, the insurer stipulated to the medical bills and records.  The insurer also stipulated that the judge could draw reasonable conclusions from the records about the permanency of the injuries (to avoid the cost of taking medical depositions).  We had a nurse testify about the medical treatment of each client.  We used illustrations - no reason a nurse cannot testify as to the accuracy of those.  We had our clients testify.  The total testimony was under 90 minutes.

Taxability of Damages

Damage paid for personal injury claims are not taxable, right?  Wrong.  Damages paid for personal injury claims "“on account of personal physical  injuries or physical sickness” are not taxable.  26 U.S.C. § 104(a)(2).   Damages paid for purely emotional injuries are taxable, at least in the opinion of the IRS. 

Now, along comes Murphy v. Internal Revenue Service,  No. 05-5139 (D.C. Cir.  August 22, 2006).  Murphy received "damages for emotional distress and loss of reputation she was awarded in  an adminstrative action she brought against her former employer."  She was asked to, and did, pay taxes on the award, and then sued to get her tax payments back.  She tried to argue that the payments fell within the exclusion of § 104(a)(2), but that failed.  However, the Court held that  "§ 104(a)(2) is unconstitutional as  applied to her award because compensation for a non-physical  personal injury is not income under the Sixteenth Amendment  if, as here, it is unrelated to lost wages or earnings."

The Court said "it is clear from the record that the damages were awarded to make Murphy emotionally and  reputationally “whole” and not to compensate her for lost wages  or taxable earnings of any kind. The emotional well-being and  good reputation she enjoyed before they were diminished by her  former employer were not taxable as income. Under this  analysis, therefore, the compensation she received in lieu of  what she lost cannot be considered income and, hence, it would  appear the Sixteenth Amendment does not empower the  Congress to tax her award."  It went on to say that "every indication is that damages received solely in  compensation for a personal injury are not income within the  meaning of that term in the Sixteenth Amendment. First, as  compensation for the loss of a personal attribute, such as wellbeing  or a good reputation, the damages are not received in lieu  of income. Second, the framers of the Sixteenth Amendment  would not have understood compensation for a personal injury --  including a nonphysical injury -- to be income. Therefore, we  hold § 104(a)(2) unconstitutional insofar as it permits the  taxation of an award of damages for mental distress and loss of  reputation."



Loss of Consortium Claimed for Same-Sex Couple

You knew it would happen sooner or later.  A same-sex couple in Connecticut has filed a loss of consortium claim in a medical malpractice lawsuit. 

Connecticut has a civil union statute that gives same-sex couples the same rights as heterosexual married couples.  Given the state of the law in Tennessee it is my opinion that such a claim could not be filed here.

Read more here.

USSC Decide ERISA Subrogation Case

The SCOTUS has decided the Sereboff v. Mid Atlantic Medical Services, Inc. case - the long awaited case that was to tell us about an ERISA plan's right to seek reimbursement of medical payments from a tort recovery.

The Court held that the payments were recoverable.

The case was decided on May 15, 2006. The case number is 05-260.

Read the opinion here.

USSC Rules on Medicaid Subrogation Case

The USSC has ruled that a state may not enforce its Medicaid lien out of money paid to the plaintiff for losses other than medical expenses. The case is Arkansas Department of Health and Human Services v. Ahlborn, No. 04-1506 (decided May 1, 2006).

Arkansas had a statute that permitted it to have its Medicaid subrogation interest paid out of a tort recovery by the plaintiff. Arkansas took the position that it was paid "off the top," without regard to whether the money was paid for medical bills or some other compensable loss. That statute was held to be in violation of federal law.

The USSC addressed the issue of the parties potentially setting up an artifical allocation of settlement monies for medical expenses fopr the purposes of defeating Medicaid subrogation. The Court said "[e]ven in the absence of such a post-settlement agreement [about what portion of the settlement proceeds should be allocated to medical expenses], though, the risk that parties to a tort suit will allocate away the State's interest can be avoided either by obtaining the State's advance agreement to an allocation or, if necessary, by submitting the matter to a court for decision. For just as there are risks in underestimating the value of readily calculable damages in settlement negotiations, so also is there a countervailing concern that a rule of absolute priority might preclude settlement in a large number of cases, and be unfair to the recipient in others."

What does this mean? It means that the Tennessee statute which is often interpretated to give "first dollar" rights to Tennessee is also overbroad. From a practical matter, these matters are often worked out and should continue to be. This case gives the plaintiff a strong tool to help resolve the issue in the event he or she confronts a "subrogation specialist" with a bad attitude.

Read the decision here.

House Moves to Strengthen Subrogation Rights

The House of Representatives is trying to limit the right of tort victims again.

This time, the effort is to give even greater power to holders of ERISA subrogation interests.

The House has passed a pension bill (H.R. 2830) that included this language:

"(a) In General- Section 502(a) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1132(a)) is amended by adding, after and below paragraph (9), the following new sentence:
`Actions described under paragraph (3) include an action by a fiduciary for recovery of amounts on behalf of the plan enforcing terms of the plan that provide a right of recovery by reimbursement or subrogation with respect to benefits provided to or for a participant or beneficiary.'"

The Senate-version of a pension reform bill, S.B. 1763, has no such provision.

The intent of the language in the House bill is to increase the power of an ERISA-qualified plan to seek subrogation or reimbursement under the plan. Several federal circuit appellate courts have limited the rights of plans under current law, and the United States Supreme Court is considering the issue right now.

A conference committee will be appointed to address the differences in the two bills. I will let you know who is on that committee when it is appointed.

ATLA is compiling compelling stories about how your clients' rights would have been affected if the proposed provision is adopted in the conference. Please include your client's name, state, a short summary of the facts, the amount of damages awarded, and whether the case was appealed or is pending on appeal. Please send a write-up of your case to Kathryn Clark at kathryn.clark@atlahq.org.

Medical Monitoring - West Virginia

This is not a new opinion, but I came across it recently and thought it was worthy of mentioning here. It sets forth the elements that must be proved in a medical monitoring case under West Virginia law. The plaintiff must prove that:

"(1) he or she has been significantly exposed; (2) to a proven hazardous substance; (3) through the tortious conduct of the defendant; (4) as a proximate result of the exposure, plaintiff has suffered an increased risk of contracting a serious latent disease relative to the general population; (5) the increased risk of disease makes it reasonably necessary for the plaintiff to undergo periodic diagnostic medical examinations different from what would be prescribed in the absence of the exposure; and (6) monitoring procedures exist that make the early detection of a disease possible."

Remember that the Sixth Circuit Court of Appeals recently held that Tennessee would recognize a cause of action of medical monitoring. Read my post about the case here.

New Decision Puzzles This Reader

A new opinion by the Western Section Court of Appeals in a personal injury case has me scratching my head.

The male plaintiff King was hurt in a car wreck. He claimed damages for loss of earning capacity. He was self-employed in the limestone business and his earnings history in the business was a real issue. The jury awarded $1,050,000 in damages on this element. The trial judge approved the award. The Court of Appeals reversed, saying that the amount was speculative.

Specifically, the Court said "King had no contracts for the sale of limestone. Additionally, King's main customer bought from other sellers of limestone. Given the track record of King's business and the uncertainty of sales of limestone, any showing of lost business profits would be speculative and not admissible to show lost earning capacity." (Footnote omitted.)

Ok. This may be the correct result. But clearly the man had some earning capacity. There was also evidence that he had carpentry skills. The jury believed the plaintiff. So did the trial judge. The issue is whether there is any material evidence to support the verdict.

It does not surprise me that there was no specific proof on future sales of limestone or that the plaintiff had no contracts on the sale of limestone. Are long-term contracts common in the limestone business?

Long-term contracts don't exist in the professional world. I do not know if I will ever get another client. But the fact that I have managed to make a living for over 24 years and now have enough work to keep three other lawyers and seven other people busy should mean something. If I am injured will my loss of future earnings be speculative? Why not? How can I prove that I will ever get another client? How can I prove that my existing clients won't fire me tomorrow? How can I prove that the Legislature is not going to eliminate the rights of my future clients and therefore run me out of my practice?

This man apparently had some earnings problems in his business. He had no long-term contracts. His customers used other suppliers. Can't a jury weigh that all out and determine whether or not the man probably suffered a loss of earning capacity because of his injuries and if so in what amount?

The Court of Appeals threw out the testimony of the plaintiff's loss of earnings expert, saying it was speculative. I can't tell from the opinion what the man said so it is a difficult to know whether his testimony was appropriate or not. I do know this: the future is always uncertain. It is entirely possible that you will die before getting to the end of this post. Not likely, but possible.

You cannot take "uncertainity" out of calculations of future damages. Period. It will always be there. Joe Six-Pack working in a factory has no way of knowing that his job won't be shipped to China next month. In an employment at will state no one knows whether he or she will have a job tomorrow. And while I agree that proving damages for a self-employed person is more difficult than it is for a salaried or hourly worker the law should not erect unrealistic barriers to proof of damages for the self-employed. Uncertainity of future events is part of life, and it is unfair for courts to require unreasonable certainity in an uncertain world.

Twelve citizens of Maury County listened to the evidence and found enough certainity. An experienced trial judge affirmed the verdict. Apparently the 13 of them did not think the testimony on this issue was speculative and you can be assured that the defendant attempted to prove and argued that it was.

By the way, how old was the plaintiff? What were his prior earnings? Wasn't it possible to remit the verdict rather than order a new trial on this element? The Court of Appeals said "no - to remit the verdict would destroy it." Perhaps, but since the opinion does not give any information about the man's earnings or his age future litigants and judges have no guidance from this opinion on how to evaluate motions to remit in the future.

The Court also reversed the trial court-approved future medical expense award. Why? Read this: "In each of their testimonies, each doctor stated to a reasonable degree of medical certainty that King would require medical treatment for the rest of his life because of the injuries he incurred from the accident. Further, each doctor stated that the previous year's medical expenses would be a reasonable estimate of the costs King would incur per year as a result of the accident. In addition, Appellees presented all of King's medical bills incurred as a result of the accident. The parties have also stipulated as to the amount of medication expense King will incur per year in addition to his medical treatment expenses. Taking this evidence as true and as a whole, we cannot say that this evidence can support the full extent of the jury's award for future medical expenses."

What? The award for future medical expenses was $225,000. The past medical expenses were $75,000+. The opinion does not tell us what amount was spent in the previous year; maybe that number multiplied by plaintiff's life expectancy (also not stated) does not approximate $225,000. But what else is a plaintiff supposed to do? Assuming the numbers work out (and remember that the jury is charged about inflation and present value) hasn't the plaintiff met his burden of proof on this issue? And it the numbers don't add up why not just state what they are?

The biggest problem I have with this opinion is that it will be used by lawyers across the State to attempt to exclude loss of earnings experts and future medical expense experts and the lack of facts in the opinion make it difficult to understand why the Court did what it did. Maybe this decision is correct. Maybe the plaintiff's loss of earnings expert framed his opinion in such a way as to render it inadmissible. Maybe the plaintiff is fifty-five and never made more than $10,000 a year. Maybe the plaintiff was sixty-five and the medical expenses for the previous year were only $1000 which would make a $225,000 future medical expense award patently unreasonable. But I cannot figure out from this opinion whether the Court's decision is correct or not. And neither can trial judges who are going to have to make decisions on what evidence should go in on such points in the future.

USSC Takes ERISA Reimbursement Case

The United State Supreme Court has agreed to hear a case concerning an ERISA plan's legal right to sue a plan participant for reimbursement. As John Wood explains, "This important issue typically arises when an ERISA health plan pays medical bills for an injured participant. If the participant recovers from a third-party tortfeasor, the plan then seeks to recover its reimbursement interest from the participant."

Read more about the issue and the case here at John's erisaontheweb blog.

Medical Monitoring

When you can't prove a current injury but can prove that, because of the fault of another, you need to be regularly followed by a health care provider you seek damages for "medical monitoring." The claim arises is toxic tort and products liability cases.

In a case of first impression, the Sixth Circuit Court of Appeals has ruled that Tennessee law would recognize a cause of action for medical monitoring. The court said "there is something to be said for disease prevention, as opposed to disease treatment. Waiting for a plaintiff to suffer physical injury before allowing any redress whatsoever is both overly harsh and economically inefficient." (Emphasis supplied). The case, Sutton v. St. Jude Medical S.C., Inc., was brought as a class action on behalf of a proposed class of persons who underwent cardiac by[ass surgery using a medical device called the Symmetry Bypass System Connector.

Read more here.

Plaintiff Can Recover Full Amount of Medical Bills

Another state has ruled tht a plaintiff "may present to the jury the amount that her health care providers initially billed for services rendered" rather than the amount paid by the plaintiff's insurer.

The case is Arthur v. Catour; read the opinion of the Illinois Supreme Court here. The decision cites to the law of other jurisdictions on the issue.