Day on Torts

January 3, 2007

Update on Legal Malpractice Issue

Last Fall I wrote several posts ( here and here) on a one portion of the causation issue in legal malpractice cases.

A summary of my view: I believe that a plaintiff in a legal malpractice case arising out of a claim that a personal injury case was mis-handled must prove that amount of damages that would have been collectible in the underlying tort case. First, the plaintiff would ordinarily prove the amount of liability insurance, if any, available to the original defendant. Second, if the plaintiff wants to collect a judgment more than the amount of the liability insurance originally available, he or she should have to prove that it was more likely than not that the plaintiff could have collected more than that amount from the tortfeasor. This will require proof of the income, assets and liabilities of the original defendant. In appropriate cases, the lawyer defendant will want to demonstrate that the income, etc. of the original defendant is such that the plaintiff cannot prove that the judgment would not have been collectible above the amount of liability coverage or that the evidence offered is insufficient to prove that any monies could have been obtained over and above the insurance monies.

I think the burden of proving collectibility should be on the plaintiff because it should be deemed part of the causation argument. More specifically, the plaintiff has to prove damages by reason of the alleged malpractice of the lawyer. (The lawyer failed to have process re-issued in a timely fashion, and the case was dismissed with prejudice). That means plaintiff must prove that what damages, if any, he would have been able to collect in the underlying tort action against the original defendant. The plaintiff should not be able to collect more damages from the lawyer defendant that he would have been able to collect against the original defendant. What the plaintiff lost was the right to proceed to trial against the original defendant, and therefore what he should be able to collect from the lawyer is what he could have collected from the original defendant.

January 2, 2007

Insurance Industry Profits Up

by The Law Offices of John Day, P.C.

The property and casualty insurance industry has reported after-tax profits of $44.9 billion for the first nine months of 2006, up 50.1% from a year earlier. If this path continues for the last three months of the year, it "would lead insurers to their best financial performance in nearly 20 years," according to the Insurance Information Institute.

"Strong underwriting results are being reported in virtually every key line of insurance" including comp and auto insurance.

What is most interesting is that the combined ratio is down to 91.5, down from 99.8 for the same nine-month period in 2005. The "combined ratio" is the cost of paying and adjusting claims compared with premium income. A combined ration of 91.5 means that the industry paid out 91.5 cents for each dollar it collected in premiums. If the industry ends the year with a combined ratio at 91.5 it would be the best result in nearly 60 years.

December 22, 2006

Oklahoma Supreme Court Strikes Down Tort Reform Measure

by The Law Offices of John Day, P.C.

The Oklahoma Supreme Court has struck down a requirement that an affidavit of merit from an expert be filed with medical negligence lawsuits.

The statute at issue "requires that a plaintiff alleging medical malpractice attach an affidavit to the petition stating that the plaintiff: 1) has consulted with a qualified expert; 2) has obtained a written opinion from a qualified expert that the facts presented constitute professional negligence; and 3) has determined, on the basis of the expert’s opinion, that the malpractice claim is meritorious and based on good cause. Plaintiffs may petition the trial court for an extension for filing the affidavit of merit not to exceed ninety days. The request must be accompanied by a showing of good cause. Although the defendant may obtain a copy of the expert’s opinion, upon which the affidavit of merit is based, the opinion is inadmissable at trial and may not be utilized in discovery."

The requirement was struck down as a violation of a provision of the Oklahoma Constitution that provides that ""The Legislature shall not except as otherwise provided in this Constitution, pass any local or special law … Regulating the practice or jurisdiction of, or changing the rules of evidence in judicial proceedings or inquiry before the courts."

December 21, 2006

Middle District Expert Rule Criticized – Is It Dead?

by The Law Offices of John Day, P.C.

The Federal Court for the Middle District of Tennesse has a local rule on expert witness that has been criticized for decades. The rule provides as follows

"Expert witness disclosures shall be made timely in accordance with any order of the Court, or if none, in accordance with Fed. R. Civ. P. 26(a)(2). Expert witness disclosure statements shall not be supplemented after the applicable disclosure deadline, absent leave of Court. No expert witness shall testify beyond the scope of his or her expert witness disclosure statement. The Court may exclude the testimony of an expert witness, or order other sanctions provided by law, for violation of expert witness disclosure requirements or deadlines. …"

Rule 39(c)(6)(d). Not all of the judges enforced the Rule.

December 20, 2006

Railroad Derailment Alleging Personal Injuries Cannot Be Certified As Class Action

by The Law Offices of John Day, P.C.

The Illinois Supreme Court held that it was not appropriate to certify a class of personal injury plaintiffs who received injuries as a result of chemical exposure after a train derailment.

The holding: "Although proof of the cause of the derailment will be relatively straightforward, this alone will not establish the Railroad’s liability. Proof of proximate causation and damages will be highly individualized and will consume the bulk of the time at trial. Because the statutory requirement of predominance cannot be met in this case, we hold that the circuit court abused its discretion in certifying the class."

The case is Smith v. Illinois Central Railroad Company, Docket No. 102060 (Ill. S. Ct. 11/30/06); read it here.

December 19, 2006

Failing to Warn of Risk of Loss

by The Law Offices of John Day, P.C.

The Court of Appeal of California has ruled that a lawyer may be sued for failure to warn a client that the failure to settle a claim against the client would put the client at risk for paying the adversary’s attorneys fees. The Court held that it was not appropriate to dismiss the client’s claim against the attorney on that issue, and remanded the case to the trial court for consideration of the merits.

There is no need to state all of the facts here, but suffice it to say that the plaintff was upset about having the pay their original adversary’s attorney’s fees of over $600,000 (and their own attorney over $350,000) in a dispute that originally involved less than $20,000.

The case is Charney v. Cobert, B188087 (Cal. Ct. App. Div. 7 11/28/06); read it here.

December 18, 2006

Court Decides Business Tort Case

by The Law Offices of John Day, P.C.

The Tennessee Supreme Court has ruled that a parent corporation may be sued for intentional interference with a contractual relationship between a partially owned subsidiary and a third party.

The Court had ruled in an earlier case that " a parent corporation has a privilege pursuant to which it can cause a wholly-owned subsidiary to breach a contract without becoming liable for tortiously interfering with a contractual relationship.” However, in this case the Court said that "[w]e conclude that the privilege does not extend when a parent owns less than 100% of a subsidiary. The foundation of [our prior decision in] Waste Conversion and the reasoning upon which it rests is that the qualified privilege should be extended when there is a full and complete identity of interest between a parent corporation and its subsidiary. When there exists such an identity of interest, courts are justified in treating two legally separate entities as one and in extending the immunity from tortious interference that is normally enjoyed only by the parties to a contract. However, courts are not justified in extending the privilege when the interests of the parent and the subsidiary are not identical."

The Court said this as well: "Having availed themselves of the benefits of separate corporations, the [defendant] Companies argue that we should now disregard their corporate structure in order to shield them from liability. … Because we respect the separate legal status of a corporation and its shareholders, we are equally reluctant to disregard corporateness to create liability as we are to disregard corporateness to remove liability."

December 15, 2006

Another Vioxx Trial, Another Defense Verdict

by The Law Offices of John Day, P.C.

Merck won another Vioxx case in federal court, but when you hear the background of the plaintiff it is easy to understand why.

According to an AP report posted on Law.com, the plaintiff "had other risk factors for his heart attack, including tobacco use, high blood pressure, high cholesterol, diabetes and cocaine use." The article goes on to state that defense lawyer "Phil Beck attacked [plaintiff] Dedrick’s credibility, noting five worthless-check convictions and allegations that Dedrick lied under oath at a disability hearing. Beck questioned whether Dedrick was telling the truth when he said he continued taking Vioxx even after being prescribed a narcotic painkiller. "

You have to wonder why the hell that case was filed, much less tried. My guess is that it was filed to toll the one-year statute of limitations in Tennessee and that it was tried because it was part of the case-picking process used by the federal court in New Orleans to establish some benchmarks for the balance of the cases.

December 14, 2006

Absence (Makes the Heart … Forget?)

by The Law Offices of John Day, P.C.

Well, yesterday I had to be a lawyer again, taking a deposition in a matter pending in Bankruptcy Court where we have been hired to represent the Trustee. I find myself doing more and more commercial litigation and, quite frankly, it is quite enjoyable. I majored in business and economics in undergraduate school and like to have the opportunity to put some of what I learned into use. Of course, I will always love tort law, but the fact of the matter there is a good deal of that can be put to use in commercial litigation.

Today I am in court in Clarksville on some motions in limine for a trial I have next month. Therefore, I lack the time to write a substantive post.

I’ll have something for you on Friday.

December 12, 2006

Mass Tort Article

by The Law Offices of John Day, P.C.

Law.com has published an interesting article titled "Who Killed the Mass Tort Bonanza?"

The opening paragraph: "The power of the plaintiffs bar is on the wane in this country, and will be for a long time to come." Followed shortly thereafter by this: "Neither [business interests or trial lawyers], however, would deny that the civil justice system looks drastically different than it did even two years ago. The true triumph (or tragedy, depending on your perspective) of the tort reform movement has been its ability to leverage the success of its public relations campaign into concrete and hard-to-reverse changes. State legislatures have passed laws that undercut the trial lawyers’ successes in Washington, D.C. — especially in the asbestos litigation, which has declined precipitously since the early 2000s. "

This article has done a nice job of explaining the current lay of the land in mass tort litigation.