Law Reporter

Volume 48, Number 1
February 2005


Worker struck by fishing line swivel: Unsafe workplace: Failure to provide proper equipment: Finger fracture: Settlement.

Nguyen v. Triple N. Fishery, Inc., Cal., Los Angeles County Super. Ct., No. NC 040693, June 1, 2004.

Nguyen, 34, was working on a fishing boat bringing in a swordfish when a fellow crew member let go of the fishing line. The line was pulled rapidly back into the ocean, causing a lead swivel on the line to strike Nguyen’s left hand, fracturing his index finger. Nguyen had surgery to repair the finger, but it was unsuccessful, and he developed reflex sympathetic dystrophy.

He underwent extensive occupational therapy and orthopedic treatment to retain the use of his arm, wrist, and hand. His wrist and hand are disfigured, and he continues to suffer from pain syndrome. His past medical expenses were over $65,000. A commercial fisherman who had earned about $35,000 annually, Nguyen is unable to return to work.

Nguyen sued his employer, which owned and operated the fishing boat, alleging failure to provide a safe workplace and failure to provide the proper equipment.

Defendant claimed plaintiff was negligent in not wearing proper safety gloves and not letting go of the line quickly enough, and that he assumed the risk by working on the fishing boat.

The parties settled at mediation for $250,000.

Plaintiff’s expert witnesses were Tam Nguyen, chiropractic care, Garden Grove, Cal.; John T. Knight, orthopedics, Santa Ana, Cal.; Bryan C. Conley, economics, Pacific Palisades, Cal.; Philip J. Felando, maritime practices, San Pedro, Cal.; and Nga Pham, vocational rehabilitation, Santa Ana, Cal.

Defendant’s experts included Mark Cohen, economics, Lafayette, Cal.; Marie Vien Camerlingo, vocational rehabilitation, Santa Ana, Cal.; Jan Null, weather, Fremont, Cal.; Robert Freundlich, orthopedic surgery, Encino, Cal.; and Pete Dupuy, maritime practices, Tarzana, Cal.

Plaintiff’s Counsel

*Howard D. Sacks, San Pedro, Cal.

Documents in this case are available, courtesy of plaintiff’s counsel Howard D. Sacks.


Attorney’s threats to criminally prosecute adverse party are not privileged communication.

Flatley v. Mauro, 18 Cal. Rptr. 3d 472 (Ct. App. 2004), appeal docketed, No. S128429 (Cal. Sup. Ct. Dec. 15, 2004).

An attorney’s threats to criminally prosecute an adverse party and release damaging information about him to the press are not privileged as prelitigation communication, a California appellate court held.

Here, Mauro represented a woman who claimed that Flatley had sexually assaulted her. He filed a civil claim against Flatley in Illinois. In communications with Flatley’s California attorneys, Mauro allegedly threatened to criminally prosecute Flatley or to release information about him to the press unless he agreed to a satisfactory settlement. Flatley sued Mauro in California for civil extortion, and Mauro moved to strike the complaint, arguing, among other claims, that the threats were protected by the privilege for prelitigation communication. A trial court denied Mauro’s motion.

Affirming, the appellate court noted that California criminal law and the rules of professional responsibility of both California and Illinois specifically forbid attorneys from threatening criminal prosecution to induce adverse parties to settle civil suits. Further, speech that qualifies as a criminal threat is not constitutionally protected in California, the court noted. Accordingly, Mauro’s threats were not privileged prelitigation communication.

The California Supreme Court has granted review.

Rule requiring that attorney fee disputes be arbitrated is constitutional.

Shimko v. Lobe, 813 N.E.2d 669 (Ohio 2004).

A professional responsibility disciplinary rule requiring attorneys to arbitrate fee disputes does not violate the U.S. Constitution or the Ohio constitution, the Ohio Supreme Court held.

Here, Shimko and Lobe, two attorneys admitted in Ohio, had a dispute regarding how to split legal fees in a California case on which they collaborated. Lobe requested mandatory, binding arbitration of the matter from the Cleveland Bar Association, and Shimko opposed the request. Ohio disciplinary rule 2-107(B) states that fee disputes between lawyers should be arbitrated by local or state bar associations.

Shimko sought to stay the arbitration, alleging that forcing the parties to arbitrate the matter violated the U.S. Constitution and the Ohio constitution by depriving him of his right to trial by jury. Shimko further alleged the rule creates or delegates the power to create tribunals that are not authorized by law. The trial court held that the rule passed both federal and state constitutional muster, and an appellate court affirmed.

Affirming, the state high court noted that the state constitution does not guarantee the right to trial by jury in all controversies. The court held that the right to trial by jury does not attach in cases of fee disputes between attorneys. Historically, attorney fees have not been treated as ordinary debts or contractual rights, but have been controlled by the granting or admitting body, the court noted. The practice of law is a privilege bestowed by the judicial branch, and all aspects of it are regulated by the granting authority, the court reasoned. Since the court has the power to create or deny the right to practice law, it may also provide for a dispute resolution procedure other than a jury trial, the court said.

The rule that attorney fee disputes must be arbitrated is designed to allow attorneys to be compensated without compromising the integrity of the legal profession, the court said. Forcing clients into court to help resolve disputes between their attorneys would reflect poorly on the legal profession, the court concluded.

Automobile Accidents

Driver loses control of vehicle: Head-on collision: Inattentive driving: Multiple fractures: Memory impairment: Settlement.

Doe v. Roe, Tex., settled before filing, Apr. 19, 2004.

Doe, 51, was driving on a four-lane highway when a vehicle traveling in the opposite direction lost control, crossing the centerline and striking her car head-on. Doe suffered multiple fractures, including fractures to her legs, hips, and heel, and a lacerated liver. She also suffered head trauma, resulting in memory and speech impairment. Doe, who was a full-time homemaker, incurred past medical expenses of about $340,000, and her future medical expenses are estimated at $135,000.

Doe sued the other driver, alleging inattentive driving and failure to keep a proper lookout. She also alleged failure to take evasive action.

The other driver’s insurer settled with Doe before suit was filed for $1.25 million. Doe’s insurer settled for its underinsured motorist policy limits of $20,000.

Plaintiff’s Counsel

*Earl K. Straight, Austin, Tex.

Pizza delivery vehicle strikes motorcycle: Negligent turning: Leg amputation: Multiple fractures: Settlement.

McCain v. Hite, Wash., Clark County Super. Ct., No. 04-2-02208-1, Sept. 22, 2004.

McCain, 57, was riding a motorcycle on a highway when a pizza delivery driver attempted to turn left across traffic. The delivery vehicle struck McCain’s motorcycle, throwing him from it. McCain suffered multiple fractures and trauma to his left leg, requiring surgical amputation above the knee; multiple upper extremity fractures; and a closed head injury. He continues to suffer from vision problems such as loss of peripheral vision and light sensitivity as a result of the head trauma. His past medical expenses were about $386,300, and his future medical expenses are estimated at between $80,000 and $100,000.

McCain sued the driver of the delivery vehicle, the driver’s employer, and the driver’s wife. Suit against the driver alleged failure to keep a proper lookout and pay attention to traffic when turning, and unsafe speed. Suit against the driver’s employer and wife alleged vicarious liability for the driver’s negligence. The vicarious liability allegation against the driver’s wife was based on the argument that the driver’s activity was for the benefit of their marital community.

The parties settled after mediation before trial for $2.75 million, including $2.5 million from the employer’s insurers and $25,000 from the driver’s insurer.

Plaintiff’s experts were Hank Lageman, vocational rehabilitation, Portland, Or.; and Robert H. Meier III, rehabilitative medicine, Thornton, Colo.

Plaintiff’s Counsel

*Ronald W. Greenen, Vancouver, Wash.

Documents in this case are available, courtesy of plaintiff’s counsel Ronald W. Greenen.

Motorcycle encounters drop in roadway: Creation, failure to warn of hazardous condition: Multiple fractures: Mediated settlement.

Lee v. A.L. Helmcamp, Inc., Tex., Leon County 278th Jud. Dist. Ct., No. AP-03-248A, Mar. 31, 2004.

Lee, 52, was a passenger on a motorcycle. When the motorcycle driver changed lanes, the motorcycle went over an untapered seven-inch drop and overturned, throwing Lee from the motorcycle. Lee suffered multiple fractures, including fractures to her neck, ribs, and hip, and a concussion and lacerated liver, among other injuries. Her past medical expenses were about $150,000, and her future medical expenses are estimated at $50,000. Formerly a dental assistant earning about $2,300 monthly, Lee has been unable to return to work since the incident.

Lee sued the contractor that was working on the road, alleging creation of a hazardous condition and failure to mark the drop-off site with signs, cones, or stripes to warn drivers of the dangerous condition.

The parties settled during mediation for a confidential amount.

Plaintiff’s experts in this case were Robert Johnson, accident investigation, Tyler, Tex.; Alan Jones, physical medicine, Dallas, Tex.; Dale R. Funderburk, economics, Commerce, Tex.; Carl E. Hansen, vocational appraisal/planning, Austin, Tex.; and Jeffrey T. Milburn, engineering, College Station, Tex.

Defendant’s experts were Brian E. Capps, civil engineering, Tyler, Tex.; John E. Bursen, project engineering, Houston, Tex.; and Robert Dewar Cox, vocational appraisal/planning, Sugar Land, Tex.

Plaintiff’s Counsel

*Dan Stroup, Longview, Tex.
*Blake C. Erskine, Longview, Tex.

Pickup truck collides with car: Negligent driving: Vicarious liability: Negligent traffic control: Wrongful death: Contusions: Settlement.

Garcia v. French-Ellison Truck Ctr., Tex., Hidalgo County 93d Jud. Dist. Ct., No. C-1934-01-B, Apr. 2, 2004.

Garcia, 21, was driving with family members through an intersection near a construction area. A pickup truck entered the intersection and collided with Garcia’s car. Garcia’s mother, 47, suffered fatal injuries. Her medical expenses were about $10,000. She is survived by two adult children. Garcia and her 19-month-old daughter received blunt force injuries and contusions. Garcia’s medical expenses were about $7,000, and her daughter’s medical expenses were about $1,700. A full-time homemaker, Garcia did not claim lost income.

Garcia and her brother sued the driver of the pickup truck and its owner, the construction company and its subcontractors, and a utility maintenance company that was doing maintenance near the construction site. Suit against the driver alleged negligence in driving too fast, failing to keep a proper lookout, and failing to brake or swerve to avoid the collision. Suit against the truck owner alleged negligent entrustment of the vehicle to the driver, who allegedly had a history of reckless driving, and vicarious liability for the driver’s negligence. Suit against the contruction company, contractors, and utility maintenance company alleged creation of a hazardous condition by negligently placing vehicles and machinery where they blocked visibility and failure to provide proper traffic control. Plaintiffs also sought damages for discovery abuses from the construction company, which allegedly took steps to conceal that it had a flagman on the construction site directing traffic at the time of the incident.

Plaintiffs settled with all defendants except the construction company and utility maintenance company during mediation before trial for a confidential amount. Plaintiffs settled with the remaining defendants after jury selection for a confidential amount.

Plaintiffs’ experts were John M. Mounce, traffic control/ road safety, College Station, Tex.; and Steve Irwin, accident reconstruction, Dallas, Tex.

Defendants’ experts were Richard P. Bernicker, accident reconstruction, Houston, Tex.; John C. Laughlin, accident reconstruction, Houston, Tex.; Beryl Gamse, traffic control, Kingwood, Tex.; and Joseph D. Blaschke, transportation engineering analysis, College Station, Tex.

Plaintiffs’ Counsel

*Robert E. Ammons, Houston, Tex.

Vehicle strikes truck: Truck swerves into car: Inattentive driving: Lane violation: Multiple fractures: Settlement: Verdict.

Carr v. MXM, Unlimited, Inc., Cal., Los Angeles County Super. Ct., No. BC 278766, Apr. 28, 2004.

Carr, 62, was driving on a highway when another vehicle struck a tractor-trailer, causing the tractor-trailer to swerve into Carr’s lane and strike his car. Carr’s vehicle then struck the center divider. Carr suffered fractured ribs, brachial plexus injuries, and a concussion that resulted in headaches and post-concussion syndrome. His past medical expenses were over $100,000. A cell phone store manager earning about $40,000 annually, Carr missed over three months of work as a result of the incident.

Carr and his wife sued the driver of the other car, the driver of the tractor-trailer, and the tractor-trailer company. Suit against the driver of the other car alleged failure to keep a proper lookout. Suit against the tractor-trailer driver alleged the tractor-trailer should have been in the far right lane and not in the center lane, according to the California vehicle code. Suit against the tractor-trailer company was on a respondeat superior theory of liability.

Plaintiffs settled before trial with the driver of the other car for his policy limits of $120,000. The settlement included $20,000 to Carr’s wife, who was on her cellular telephone with him at the time of the incident, for emotional distress. A jury then found the tractor-trailer company 75 percent liable and the driver of the other car 25 percent at fault and awarded approximately $830,000 in damages, about $73,250 in expert fees and prejudgment interest, and costs totaling about $89,950. Postjudgment interest brought the total award to $1 million. Defendants’ motion for a new trial was denied.

Plaintiffs’ experts were Alan Keith Miller, accident reconstruction, Pasadena, Cal.; Ronald Fisk, neurology, Beverly Hills, Cal.; Merlyn Robert Wilson, trucking, Whittier, Cal.; and Philip K. Stenquist, neuropsychology, Los Angeles, Cal.

Defendants’ experts were John L. Riggins, commercial vehicle handling, Oak Hills, Cal.; Barry Ludwig, neurology; Peter Conti, neuro-cognitive medicine; Marvin Ament, gastroenterology; and Paul Satz, neuropsychology, all of Los Angeles, Cal.

Plaintiffs’ Counsel

*Donald G. Liddy, Woodland Hills, Cal.

Tractor-trailer changes lanes abruptly: Unsafe passing: Failure to keep proper lookout: Unsafe speed: Multiple fractures: Verdict.

Renquin v. Norseman Trucking, Iowa, Winnebago County Dist. Ct., No. LACV015817, Aug. 13, 2004.

Renquin, 33, was driving a tractor-trailer in a construction zone with his wife, 36, as a passenger. Another tractor-trailer pulled into Renquin’s lane, cutting him off. Renquin’s vehicle collided with the back of the second tractor-trailer. Renquin suffered multiple leg fractures, causing him to develop reflex sympathetic dystrophy. His past medical expenses were about $125,000, and his future medical expenses are estimated at $90,000. His wife suffered a fractured wrist, leading to tendinitis. Her past medical expenses were $5,000. Renquin is unable to return to work as a truck driver. His past lost income was $46,000, and his future lost earning capacity is estimated at $750,000.

Renquin and his wife sued the driver and the trucking company that employed him and owned and operated the tractor-trailer. Suit against the driver alleged excessive speed, unsafe passing, and failure to keep a proper lookout. Suit against the trucking company was on a vicarious liability theory.

Defendants argued Renquin was comparatively negligent in driving too fast for the conditions, losing control of the vehicle, and failing to keep a proper lookout.

A jury found defendants 75 percent liable and Renquin 25 percent at fault. It awarded approximately $1.46 million, reduced to about $1.1 million to reflect the finding of comparative negligence, plus costs and interest. The trucking company’s insurer will pay the entire verdict amount.

Plaintiffs’ experts included William Kluge, accident reconstruction, Raleigh, N.C.; and Michael Gluckberg, vocational rehabilitation, Rhinelander, Wis.

Defendants’ experts were Russell Lindsey, accident reconstruction, Asheville, N.C.; and David Goodman, medicine, Madison, Wis.

Plaintiffs’ Counsel

*Paul R. Jacquart, Milwaukee, Wis.
Donald J. Jacquart, Milwaukee, Wis.
*Colin Murphy, Mason City, Iowa

Documents in this case are available, courtesy of Mr. Paul R. Jacquart.


Seizure of passenger’s carry-on bag containing breathing device and medicine was “accident” under Warsaw Convention.

Prescod v. AMR, Inc., 383 F.3d 861 (9th Cir. 2004).

An airline that required an elderly woman to check a bag containing a breathing device and medication and then lost the bag may be sued under the Warsaw Convention for the woman’s wrongful death from respiratory failure, the Ninth Circuit Court of Appeals held.

Here, Neischer, 75, attempted to board a flight with a carry-on bag containing a breathing device and medication to treat her asthma and emphysema. The airline required Neischer to check the bag on a connecting flight, and the bag did not arrive at her destination, Guyana, until two days after she did. Neischer suffered respiratory distress and died a few days later.

Neischer’s survivors sued the airline under the Warsaw Convention, 49 U.S.C. § 40105, and the trial court ruled in favor of plaintiffs. Defendant appealed, arguing that Neischer’s death was not the result of an “accident” for purposes of the Warsaw Convention.

Affirming in part, the Ninth Circuit noted that, under the convention and case law, “accident” refers to an “unexpected or unusual event or happening that is external to the passenger.” The court held that the airline’s failure to comply with Neischer’s health-based request to keep her bag with her was an “event” under the convention. The court cited U.S. Supreme Court case law holding that an airline’s rejection of a passenger’s explicit request for help is an “event.” Further, the court said, it was “unusual or unexpected” under the convention because airline employees knew of Neischer’s special need for the bag and had explicitly promised her that the bag would accompany her on the same flight. As Neischer’s bag was taken from her “in the course of any of the operations of embarking,” as required by the statute, it is immaterial that her death was at a later time, the court said. The incident that caused her death thus constituted an “accident” under the Warsaw Convention, the court concluded.

Plaintiffs’ Counsel

Bruce J. Altshuler, Beverly Hills, Cal.

Comment: For a case cited by the court here, in which a man who suffered from asthma died after being seated too close to the smoking section on an airplane, see Husain v. Olympic Airways, 316 F.3d 829 (9th Cir. 2002), 46 ATLA L. Rep. 79 (Apr. 2003). In February 2004, the U.S. Supreme Court affirmed the Ninth Circuit’s finding that ignoring the passenger’s request to be moved out of the smoking section of the aircraft is an “accident” for the purposes of the Warsaw Convention, Husain v. Olympic Airways, 540 U.S. 644, 47 ATLA L. Rep. 103 (Apr. 2004). Susie Injijian of Oakland, Cal., represented plaintiff.

Civil Rights

Park security guards improperly search, exclude visitors suspected of gang involvement: Racial profiling: Discrimination: Settlement.

Armendarez v. Six Flags Theme Parks, Inc., Cal., Los Angeles County Super. Ct., No. BC 252 430, Apr. 21, 2004.

Over 100 visitors to an amusement park—many of them minorities—were allegedly searched, detained, assaulted, and battered by park security employees. The security guards were enforcing the park’s anti-gang policy.

The park visitors filed a class action suit against the park, alleging it engaged in racial profiling. Suit alleged false imprisonment, assault, battery, invasion of privacy, and intentional discrimination, among other claims.

Defendant denied discriminatory enforcement of its policy and argued that the security policy was necessary to prevent gang violence in the amusement park.

The parties settled before trial for $5.6 million. Plaintiffs will also receive 7,000 day passes to the park. As part of the settlement agreement, defendant has also agreed to hold diversity training for its employees and to allow plaintiffs’ counsel to review its records of visitors who are turned away over the next four years.

Plaintiffs’ Counsel

*Mike M. Arias, Los Angeles, Cal.
Erik J. Ekblad, Los Angeles, Cal.

A document in this case is available, courtesy of Mr. Ekblad.

Sheriff can be sued under § 1983 for setting up drivers’ license checkpoint outside concert to prevent it by discouraging attendance.

Collins v. Ainsworth, 382 F.3d 529 (5th Cir. 2004).

A sheriff is not entitled to qualified immunity and can be sued under § 1983 for setting up a checkpoint outside a concert venue, allegedly to discourage attendance, the Fifth Circuit Court of Appeals held.

Here, Ainsworth, a county sheriff, set up a drivers’ license checkpoint on a road leading to a tract of land where a rap concert was taking place. Ainsworth allegedly did not want the concert to proceed. Some vehicles were searched at the checkpoint, and some people were arrested for drivers’ license infractions or unlawful possession of alcohol. The concert was canceled.

Some of the drivers who were stopped at the checkpoint sued the sheriff, among other defendants, under § 1983, alleging that the checkpoint was designed to prevent the concert from taking place, in violation of the First and Fourth Amendments. The trial court denied defendants’ motion for summary judgment based on qualified immunity.

Affirming as to the sheriff, the Fifth Circuit noted that although promoting highway safety is a legitimate public concern, plaintiffs have put forth evidence that this was a pretextual reason for the checkpoint, and its actual purpose was to prevent the concert from taking place. Suppressing a concert is an impermissible, nonpublic concern, the court noted. If proven, this allegation violated plaintiffs’ First and Fourth Amendment rights, the court said. Further, the court said, a reasonable police officer would have known that discouraging attendance of a musical performance was not a legitimate public interest that would entitle him to qualified immunity.

Plaintiffs’ Counsel

*Carroll E. Rhodes, Hazlehurst, Miss.

Man accused of passing counterfeit money: Intentional infliction of emotional distress: Negligence: Verdict.

McComb v. Wal-Mart Stores, Inc., Miss., Pike County Cir. Ct., No. 00-067-B, Apr. 6, 2004.

McComb, 23, was shopping at a Wal-Mart store. When he checked out, he gave the cashier a $100 bill. Suspecting that the bill was counterfeit, the cashier called store officials, who then called police. The police searched McComb and arrested him. He took the next day off work to go to the police station, incurring about $50 in lost income. There, police told him the bill was authentic and dropped the charges.

McComb sued Wal-Mart. Plaintiff alleged outrageous conduct, intentional infliction of emotional distress, and negligence in detaining him and calling police over an authentic bill.

A jury awarded plaintiff $250,000.

Plaintiff’s Counsel

*Edwin L. Bean Jr., McComb, Miss.

A document in this case is available, courtesy of Mr. Bean.

Commercial Litigation

Company uses inventor’s vacuum cleaner design without authorization: Fraud: Misappropriation: Royalty losses: Settlement.

North v. Electrolux AB, Tex., El Paso County Ct. at Law No. 3, No. 2002-2099, May 14, 2004.

North, an inventor, presented to Electrolux a design for an upright, bagless vacuum cleaner, which the company rejected. The parties had signed nondisclosure agreements covering the design, but North later discovered Electrolux was selling a vacuum cleaner that allegedly used his “improved cyclonic separation system.”

North sued Electrolux and its subsidiaries, alleging conspiracy to defraud him and misappropriate his design. Plaintiff alleged the fact that defendants obtained a patent for the design just one year after he brought it to Electrolux proved they misappropriated it. He claimed lost profit royalties of $35 million.

Defendants contended its employees invented the design and that it had prior knowledge of the cyclonic design because its use was in the public domain.

The parties settled during trial for $30 million. Defendants are permitted to continue manufacturing the vacuum cleaners.

Plaintiff’s expert witness was John North, engineering, Norfolk, Eng., U.K.

Defendants’ expert was Lewis Koppel, lost profits/reasonable royalties, Chicago, Ill.

Plaintiff’s Counsel

Daniel J. Davis, Dallas, Tex.

Documents in this case are available, courtesy of Mr. Davis.

Company’s truck fleet repossessed: Fraud: Breach of contract: Economic losses: Verdict: Punitive damages.

Schmidt v. Navistar Fin. Corp., Tex., Hamilton County 220th Jud. Dist. Ct., No. 02-08-08802, Aug. 31, 2004.

Schmidt owned Diamond S Trucking. He formed an agreement with Navistar Financial, which agreed to refinance a portion of his truck fleet. Navistar allegedly failed to inform Schmidt that the interest rate would materially increase shortly after the contract was signed, raising his monthly payments. Navistar also reportedly documented the refinancing in a way that facilitated its intended repossession of Schmidt’s trucks.

Shortly after the parties signed the refinancing agreement, Navistar repossessed half of the fleet. Schmidt suffered economic damages of $143,000. Additionally, he suffered damage to his reputation.

Schmidt, individually and on behalf of his company, sued Navistar, alleging fraud, breach of contract, and conversion. Plaintiffs further alleged defendant acted with malice by intentionally misleading him and failing to include material information in the contract.

A jury found defendant acted with malice and awarded about $4.53 million, including $3.64 million in punitive damages and $375,000 for harm to Schmidt’s reputation. Defendant is expected to appeal.

Plaintiffs’ expert witnesses were Robert M. Dohmeyer, economics, and Curtis L. Marsh, attorney fees, both of Dallas, Tex.

Defendant’s expert was Scott Hakala, economics, Dallas, Tex.

Plaintiffs’ Counsel

*Curtis L. Marsh, Dallas, Tex.
Nancy Anglin Yates, Hamilton, Tex.

A document in the Schmidt v. Navistar Fin. Corp. case is available, courtesy of Mr. Marsh.

Consumer Protection

Country club increases reception price: Breach of contract: Fraud: Economic losses: Verdict.

Bertles v. Cohanzick Country Club, N.J., Cumberland County Super. Ct. Law Div., No. CUM-L-24-02, Oct. 4, 2004.

The Bertles signed a contract with a country club to hold their daughter’s wedding reception there. They agreed on a price of about $46 per person and gave a deposit of $3,000, which was nonrefundable. Six months later, the club increased the price by $13.50 per person, demanded additional deposit money, and changed the date when the final payment was due. The Bertles were forced to find another place to hold the reception. They requested a refund, and the country club refused.

The Bertles sued the country club, alleging breach of contract and fraud in violation of the state consumer fraud statute. During discovery, plaintiffs uncovered evidence that defendant had also changed the terms of wedding reception contracts of four other couples, two of whom testified at trial.

Defendant contended it had requested, but never demanded, changes to the contract, and that it was contractually permitted to change the prices up until 90 days before the reception.

The trial court granted plaintiffs a directed verdict on the breach of contract claim. A jury then found for plaintiffs on the consumer fraud claim. It trebled the actual damages, pursuant to the statute, and awarded plaintiffs about $12,100. The parties subsequently settled plaintiffs’ statutory claim for attorney costs and fees.

Plaintiffs’ Counsel

*Theodore H. Ritter, Bridgeton, N.J.
*Matthew W. Ritter, Bridgeton, N.J.

Courts should defer to HUD’s interpretation prohibiting settlement service markups under RESPA.

Kruse v. Wells Fargo Home Mortgage, Inc., 383 F.3d 49 (2d Cir. 2004).

The Second Circuit Court of Appeals held that courts should defer to the federal Department of Housing and Urban Development’s (HUD’s) policy statement regarding whether settlement service “markups” are prohibited by the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. §§ 2601 et seq.

Here, several homebuyers obtained settlement services from Wells Fargo Home Mortgage, Inc. Wells Fargo allegedly outsourced such things as document preparation to third parties, then charged a fee well over that charged by the third party. The homebuyers sued Wells Fargo, alleging, among other things, that the service fees were “markups,” which HUD has determined violate Section 8 of RESPA. The federal trial court granted defendant’s motion to dismiss, holding Section 8 does not apply to markups and that HUD’s interpretation should be given no deference.

Reversing on this issue, the Second Circuit acknowledged several circuits have held Section 8 unambiguously does not prohibit markups. Section 8 provides in part that “[n]o person shall give and no person shall accept any . . . charge made or received . . . other than for services actually performed.” These circuits have held the word “and” requires there be both a person giving and a person receiving settlement services fees for there to be a violation. Thus, applying Section 8 to markups is precluded because it would have the absurd result of making consumers who pay the fees guilty as well. The court here agreed with the Eleventh Circuit, however, holding the “and” creates two separate prohibitions, and a lender can be liable even when a borrower is not.

Having decided Section 8 is ambiguous regarding markups, the court next determined that deference should be given to HUD’s ruling that markups are prohibited. The court said Congress delegated rulemaking and interpretation authority to the agency, and the policy statement was written under that authority. Further, HUD’s interpretation clearly arose out of careful consideration and was within the ambit of HUD’s expertise. Moreover, other circuits have deferred to HUD’s interpretations on other matters. The court held that, in this case, plaintiffs had sufficiently alleged that third-party vendors charged defendant a fee for services and then, without any additional services, defendant charged plaintiffs a markup and kept the profits.

Accordingly, the court remanded for trial.

Plaintiffs’ Counsel

Michael C. Spencer,
Susan M. Greenwood,
*Craig H. Johnson,
*Lon D. Packard, and
Joann Shields, all of Salt Lake City, Utah


Witness to shootings stated claim for negligent infliction of emotional distress even though she was not related to victims.

Lourcey v. Estate of Scarlett, 146 S.W.3d 48 (Tenn. 2004).

The Tennessee Supreme Court held a woman who witnessed a shooting stated a claim for negligent infliction of emotional distress even though she was unrelated to the victims.

Here, Lourcey encountered Scarlett and his wife in the middle of the road, and Scarlett told Lourcey his wife was having a seizure. While Lourcey was calling 911 for help, Scarlett shot his wife in the head and then fatally shot himself. Lourcey and her husband sued Scarlett’s estate for negligent infliction of emotional distress, among other claims. Defendant moved to dismiss, arguing in part that the negligent infliction claim must fail because Lourcey was not closely related to either victim. The trial court granted the motion, but an appellate court reversed and remanded.

Affirming the appellate court, the state high court noted that to recover for injuries based on witnessing the death or injury of a third person, a plaintiff must show that the death or injury and plaintiff’s emotional injury were proximate and foreseeable results of defendant’s negligence. Only two factors are essential to meet the foreseeability requirement: (1) that plaintiff was physically close enough to the injury-producing event to observe it and (2) that the injury was, or reasonably was perceived to be, serious or fatal.

The court noted that the element of foreseeability does not require a plaintiff to establish a relationship to the injured party. Citing difficulties in defining what constitutes a relationship sufficient for recovery, the court said a better approach is to hold that the presence or absence of a relationship is relevant to the duty and causation elements of the claim, as well as to the question of damages, but is not dispositive of the claim.

Applying these principles, the court reasoned that the foreseeability and gravity of the potential harm to Lourcey outweighed the burden on Scarlett to prevent the harm, noting that Scarlett knew Lourcey was in close physical proximity, that Lourcey saw Scarlett shoot his wife, and that Scarlett turned to face Lourcey before shooting himself in the head. Moreover, these and other facts are sufficient to establish that Lourcey suffered serious or severe mental injuries and that Scarlett’s conduct was both the actual and proximate cause of those injuries.

As such, the court concluded, plaintiff’s claim should not have been dismissed. Accordingly, the court remanded.

Plaintiffs’ Counsel

David L. Cooper, Nashville, Tenn.

Employee could seek emotional distress damages for breach of employment contract.

Morris Newspaper Corp. v. Allen, ___ So. 2d ___, No. 2003-CA-00192-COA, 2004 WL 2283608 (Miss. Ct. App. Oct. 12, 2004).

The Mississippi Court of Appeals held that a plaintiff in an action alleging breach of an employment contract was entitled to seek damages for emotional distress. The court found, however, that plaintiff in this case failed to offer sufficient evidence to recover such damages.

Here, shortly after starting work as a television news anchor, Allen was demoted to a reporter position. She was subsequently fired after refusing to resign. She sued the station and its general manager, alleging she had been fired without cause, in violation of her employment contract. The trial court instructed the jury that it could consider emotional distress damages, and it rendered a general verdict in plaintiff’s favor. The trial court denied defendants’ motion for judgment n.o.v. challenging the sufficiency of plaintiff’s evidence on the emotional distress claim.

Reversing, the appellate court rejected defendants’ argument that plaintiff could not recover emotional distress damages based solely on breach of contract. Citing state supreme court case law, the court said a plaintiff may recover such damages upon a showing that the breach was accompanied by conduct amounting to the tort of intentional infliction of emotional distress. Alternatively, a plaintiff may recover upon proof of a negligent act that resulted in some physical manifestation of injury or demonstrable physical harm.

Here, however, the court found plaintiff failed to present sufficient evidence to support recovery of emotional distress damages. The court said plaintiff’s evidence that the general manager cursed and called her names at the meetings, while inappropriate, did not rise to the level of extreme, outrageous, or grossly careless conduct beyond the realm of a mere employment dispute. Likewise, plaintiff’s firing without cause in breach of her contract was merely an employment dispute and was not sufficiently outrageous to warrant emotional distress damages. Further, plaintiff had not submitted sufficient evidence of physical injury to support damages for negligent infliction of emotional distress.

Finding that it was impossible to determine what portion of the jury’s award, if any, was attributable to emotional distress damages, the court remanded for a new trial on the issue of actual damages based exclusively on breach of contract and excluding emotional distress damages.

Employment Law

Indian workers were employees entitled to minimum wages, rather than trainees.

Chellen v. John Pickle Co., ___ F. Supp. 2d ___, No. 02-CV-85-EA (M), 2004 WL 2563265 (N.D. Okla. Aug. 26, 2004).

Indian welders, brought to the United States to work for an industrial equipment manufacturer, were employees rather than trainees and thus were entitled to minimum wage and overtime pay, a federal trial court held.

Here, 52 welders came from India to the United States with the promise of a minimum two-year employment at a factory. After they arrived, the factory took the workers’ documents, including their passports and visas as well as their return-trip airline tickets, and put them in a safe. All of the welders had been chosen because they were highly qualified, and all passed the state welding tests and received praise from their supervisors. None were given training other than that given to every new employee. However, the factory paid them much less than American and non-Indian workers at the same level and gave them no overtime pay.

The company housed the workers in a warehouse converted into a dormitory, rationed their food, and told them they could not leave the premises without permission. It posted an armed guard at the main gate. Eventually, a local resident helped the workers escape.

The workers sued the company and its owner, alleging violations of the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201 to 219. The U.S. Equal Employment Opportunity Commission also sued on their behalf, alleging civil rights violations.

Upholding the FLSA claims, the trial court noted the main issue was whether the workers were “employees” or “trainees” under the law. If they were employees, they were entitled to minimum wage and overtime pay, which they did not receive. The court said the Tenth Circuit Court of Appeals has adopted the six-factor Reich test, which provides workers are trainees if: (1) the training is similar to that given in vocational school, (2) the training is for the benefit of the trainee, (3) the trainees do not displace regular employees, (4) the employer derives no immediate advantage, (5) the trainees are not necessarily entitled to a job after training, and (6) the trainees and employer understand the workers are not entitled to wages for the training time.

Noting it must look at the economic realities of the relationship in applying the factors, the court said the workers here were employees. The court found they were not given any additional training and would not have benefited from any training because they were already highly qualified. The court also determined plaintiffs displaced several American workers who were laid off or did not get desired overtime. Further, defendants derived an immediate advantage by getting what the owner called “cheap labor.” Finally, defendants led plaintiffs to believe this was long-term employment, and they considered themselves entitled to the promised wages.

Accordingly, the matter will proceed to trial.

Plaintiffs’ Counsel

*Richard D. Marrs,
*Fred Everett Stoops Sr.,
Keith Allen Ward,
Mark Louis Collier,
Jeff Nix,
*Eddie D. Ramirez, and
Bill K. Feity, all of Tulsa, Okla.
Joe W. McDoulett, Oklahoma City, Okla.

Pension plan changes reduce value: ERISA violations: Age discrimination: Economic losses: Settlement.

Cooper v. IBM Personal Pension Plan, U.S. Dist. Ct., S.D. Ill., No. CIV. 99-829-GPM, Sept. 29, 2004.

Cooper, 54, has worked for IBM for 25 years and has been a pension plan participant since she began her employment. Prior to 1995, the company used a traditional plan. Such plans typically have more benefit accrual in the last years of employment as a way to reward loyal employees. In 1995, the plan was changed to a “pension credit” formula, which was a mathematical formula that allegedly decreased the amount accrued as the employee got older and stayed with the company longer.

In 1999, the company again changed its pension plan, creating a “cash balance” formula, which gives monthly pay credits at the rate of 5 percent of the employee’s salary and an interest credit at the rate of 1 percent over the rate of return of that year’s treasury security. This formula allegedly means that employees’ benefit accrual diminishes as they get older.

Cooper and two other employees, individually and on behalf of about 140,000 similarly affected employees, filed a class action suit against IBM and its pension plan, alleging the altered pension plans violate the Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1001 et seq. Plaintiffs alleged the two plan alterations constitute age discrimination because the benefits were reduced based on increases in age or length of service, and they accrued at a rate that was reduced because of age, among other reasons. Plaintiffs claimed they suffered economic losses when their benefits were reduced as they got older, instead of being increased as under the traditional plan.

Defendants contended the cash balance formula credits every participant with the same amount, and any plan that projects a given year’s benefit to normal retirement age is going to be worth more in the abstract to younger participants because they will accrue more years of interest credits. However, defendants argued, all participants are treated equally because they will get interest credits on their accounts until they take the benefits out. Further, defendants contended, none of the participants lost benefits.

In 2003, a federal trial court held the pension plan violates ERISA age discrimination statutes. 274 F. Supp. 2d 1010 (S.D. Ill. 2003). Defendant plans to appeal the court’s ruling regarding the cash benefit plan.

After the court’s ruling, the parties agreed to a minimum settlement of about $320 million, including about $22 million to a subset of plaintiffs who worked at the company less than five years and thus did not have vested pensions. The parties also agreed to a sliding settlement scale, based on the outcome of the appeal, with a $1.7 billion maximum liability in the case. The settlement will be used to purchase annuities for employees.

Plaintiffs’ expert was Claude Poulin, actuarials, Washington, D.C.

Defendants’ experts were Lawrence Sher, actuarials, New York, N.Y.; Vincent Amoroso, actuarials, Washington, D.C.; Stewart C. Myers, economics, Cambridge, Mass.; and C. Eugene Steuerle, economics, Washington, D.C.

Plaintiffs’ Counsel

*Douglas R. Sprong, Swansea, Ill.
Steven A. Katz, Swansea, Ill.
Robert F. Hill,
John H. Evans, and
William K. Carr, all of Denver, Colo.

Comment: For a case in which a federal court in Maryland ruled in favor of the employer, see Tootle v. ARINC, Inc., 222 F.R.D. 88 (D. Md. 2004).

Plan participants not told of financial distress: ERISA violations: Breach of fiduciary duties: Economic losses: Mediated settlement.

LaManna v. Steinberg, U.S. Dist. Ct., E.D. Pa., No. 01-CV-3571, Oct. 6, 2004.

Reliance Insurance had an employee savings incentive plan, which purchased or held company stock for the participants. The company allegedly began losing money and accumulating debt but still continued to pay dividends to its officers and directors. The price of Reliance stock fell from about $15 per share in 1998 to two cents per share in 2001. Reliance is now in liquidation.

Two participants, individually and on behalf of about 5,000 other participants and beneficiaries, sued the company’s officers and directors, alleging violations of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001 et seq. Plaintiffs alleged that defendants were fiduciaries under the law and although defendants knew or should have known it was no longer prudent for the plan to hold company stock, they failed to protect the plan participants from large economic losses. Plaintiffs further alleged defendants failed to disclose material information about the company’s financial condition.

Defendants contended they had no fiduciary duty to select and monitor stock under the plan because participants were responsible for making investment decisions. They further contended they did not have information about the deteriorating financial condition and had no duty to disclose any information they did have.

During mediation, the parties agreed to a $5 million settlement to be paid by defendants’ insurers.

Plaintiffs’ Counsel

*Ronald S. Kravitz, San Francisco, Cal.
Steven J. Ross, Atlantic Beach, Fla.
Steven R. Fischer, Philadelphia, Pa.

Nurse terminated: Age discrimination: Economic losses: Verdict.

Scott v. Eufaula Hosp. Corp., Ala., Barbour County Cir. Ct., No. CV-2001-235, Aug. 25, 2004.

Scott, 62, had worked as a nurse at a hospital for 40 years. On her day off, she came in and told her superiors she was taking a $7 jar of burn ointment home to treat her granddaughter’s sunburn. No one tried to prevent her from taking the ointment. The next day, she was terminated. The hospital hired a younger nurse to replace her. Six months after Scott was terminated, she suffered a stroke. Scott has been unable to return to work.

Because her health insurance was canceled when she was fired, the medical expenses related to her stroke, which were about $25,500, were not covered. Her lost wages between the date of termination and the stroke were approximately $16,500.

Scott sued the hospital, alleging violations of the state age discrimination act. Plaintiff alleged younger coworkers had committed similar or worse offenses without being terminated.

Defendant contended plaintiff’s employment was terminated because she stole the burn cream.

After finding defendant acted willfully, a jury awarded plaintiff about $98,600, doubling the actual damages.

Plaintiff’s Counsel

Jerry Roberson, Birmingham, Ala.
Albert H. Adams Jr., Eufaula, Ala.


Trial court erred in excluding testing and causation testimony by plaintiff’s expert.

Nemir v. Mitsubishi Motors Corp., 381 F.3d 540 (6th Cir. 2004).

The Sixth Circuit Court of Appeals held a trial court in a products liability case involving an allegedly defective seat belt buckle erred in excluding testimony by plaintiff’s expert regarding the cause of injury and the expert’s testing of the product.

Here, Nemir was injured in an automobile accident when the seat belt in his 1991 Dodge Stealth allegedly unlatched on impact. In his lawsuit against the car manufacturer, plaintiff’s expert planned to testify that a design defect known as partial latching had caused the belt to unlatch during the collision and that during his own testing, he had been able to create a partial latch of the belt buckle two out of 20 times. The trial court precluded the expert from testifying on causation, finding he had failed to eliminate other possible causes of injury. The court also prohibited the expert from testifying about his testing of the belt buckle on the ground that his methodology—in which he had manipulated the buckle at varying speeds and angles—was scientifically unsound.

Reversing, the Sixth Circuit noted that an expert’s conclusion regarding all admissible evidence need not eliminate all other possible causes of injury to be admissible on the issue of causation. The fact that several other causes might remain uneliminated goes to the accuracy of the conclusion, not to the soundness of the methodology. Concluding the trial court had employed too strict a standard when it required specific knowledge of the precise physiological cause of the accident, the court said the expert should have been permitted to testify that the partial latch of the seat belt had caused the damage in question.

The court also found the trial court erred in prohibiting the expert from testifying about his testing of the product. The court noted that the trial court had determined the expert’s method was scientifically unsound because “[n]o reasonable driver purposefully manipulates the buckle at different speeds and different angles to achieve a state of partial latch as [the expert] does.” The point of the manipulation, however, was to show that partial latching could occur under certain circumstances, not to show directly that plaintiff’s buckle had partially latched during the accident. Given the “infinite possible variations,” the court reasoned, it would have been impossible to determine the velocity and angle with which plaintiff had actually buckled his seat belt on the day in question. The fact that most of the combinations the expert tried did not produce partial latching might affect how heavily the jury weighs the evidence, but not whether it should be admitted.

Plaintiff’s Counsel

*Craig E. Hilborn, Birmingham, Mich.
Mark R. Bendure, Detroit, Mich.

Comment: For a contrary result involving testimony on inadvertent unlatching by the same expert, see Lytle v. Ford Motor Co., 814 N.E.2d 301 (Ind. Ct. App. 2004).

In Norton v. Nissan Motor Co. Ltd., Alaska, Alaska Third Jud. Dist. Super. Ct., No. 3AN-97-8297Ci, July 2, 2003, 11-year-old Norton was a belted passenger in a 1990 Nissan Sentra when the car left the roadway and rolled over. During the roll, several inches of webbing material spooled out of the retractor reel on Norton’s seat belt, allowing the belt to go slack. She was partially ejected and suffered a neck fracture resulting in quadriplegia.

Norton and her mother and sister, who suffered emotional distress, sued the manufacturer of the car, alleging the webbing had spooled out as a result of defective materials and clearances used in inserting an aluminum retaining cap into the belt’s retractor mechanism. Specifically, plaintiffs claimed that the retaining cap had been inserted in such a way that it directly contacted a steel flywheel, impeding the rotation of certain components that triggered activation of the retractor system’s lockup mechanisms. The parties settled for $4 million. Norton received 97.5 percent of the proceeds, most of which were placed in a special needs trust.

Plaintiffs’ experts included Gerald Rosenbluth, seat belt design/failure analysis, Tempe, Ariz.; Peter Dill, seat belt design/failure analysis, Laguna Niguel, Cal.; Lindley Manning, accident reconstruction, Reno, Nev.; Robert Anderson, accident reconstruction, Phoenix, Ariz.; and Joseph Balser, metallurgy, Livermore, Cal. Plaintiffs were represented by *Phillip Paul Weidner, *Wayne D. Hawn, and Michael Cohn, all of Anchorage, Alaska.

In medical negligence action, plaintiff’s mother can be compelled to provide blood for genetic testing.

Cruz v. Superior Ct., 17 Cal. Rptr. 3d 368 (Ct. App. 2004).

A California appellate court held that the mother of a child bringing a medical negligence action could be compelled to provide blood for genetic testing.

Here, Cruz’s son sued a medical practice and others, alleging negligence in his prenatal care and delivery resulted in severe birth injuries. During discovery, defendants moved to compel blood testing of Cruz to determine whether plaintiff’s injuries were genetic. A trial court granted the motion.

Denying Cruz’s petition to vacate the trial court’s decision, the appellate court noted that, where the physical condition of a party or other person is in controversy in a case, Cal. Code Civ. Proc. § 2032 authorizes the physical examination of an agent of any party. The court explained that, although it does not usually view the parent-child relationship as one of principal-agent, there are many circumstances in which parents act on behalf of their children in a capacity that is difficult to distinguish from that of an agent. Citing U.S. Supreme Court case law, the court found that parents have a constitutionally protected fundamental right to make decisions on their children’s behalf. By virtue of this right, parents act as if they were their children’s agents, the court said.

The court rejected Cruz’s argument that there is no agency relationship because children cannot act as their parents’ principals. Although Cruz’s argument is technically correct, the court found that the relationship between a parent and a child is significantly similar to that of principal and agent. For example, parents contracting for medical services for their minor children do so solely as a surrogate for the child, and parents can bind children to arbitration contracts. Therefore, the court found, the term agent as used in the statute is sufficiently broad to include Cruz in this case.

The court further noted that, although it had found a principal-agent relationship in this case, its holding is not that a parent is always to be treated as a child’s agent for discovery purposes. In this case, however, Cruz and plaintiff were contemporaneously under defendants’ treatment, and plaintiff’s claim includes charges that his injury resulted partly from defendants’ treatment of Cruz. In addition, Cruz has a definable economic interest in the outcome of the suit, the court found.

The court also rejected Cruz’s argument that defendants did not support their request with admissible evidence because the reasons given for the blood test were speculative. The court noted that the case law cited by Cruz involved the standards for expert declarations submitted in support of summary judgment motions, which are not relevant here. The standards for summary judgment are quite different from those for discovery. For discovery purposes, information is relevant if it might reasonably assist a party in evaluating a case or preparing for trial. Admissibility is not the test and information is discoverable if it could reasonably lead to admissible evidence. Such rules are liberally applied in favor of discovery, the court explained.

Family Law

Tennessee law controls Florida prenuptial agreement where contract is against Tennessee public policy.

In re Estate of Davis, ___ S.W.3d ___, No. M2003-02614-COA-R3-CV, 2004 WL 1950729 (Tenn. Ct. App. Sept. 2, 2004).

Tennessee law controls a prenuptial agreement notarized in Florida if enforcement of the contract would violate Tennessee public policy, the Tennessee Court of Appeals held.

Here, a couple who resided in Florida for half the year and Tennessee for the other half signed a prenuptial agreement in Florida. As part of the agreement, each spouse waived the right to take against the other’s will as a surviving spouse under intestacy laws. When the husband died, the wife filed a petition in Tennessee for part of the estate, and the estate moved for summary judgment. The probate court determined that Florida law governed and upheld the prenuptial agreement, awarding the estate summary judgment.

Reversing, the appellate court acknowledged Tennessee applies the lex loci rule in contract matters, which provides that contracts are governed by the substantive law of the state in which they were executed. In this case, the court said, the governing state is Florida. Although there is an exception in cases where the parties envisioned performance in accordance with another state’s laws, the court determined that exception does not apply here.

However, noting that the wife argues the agreement violates public policy because it was made without full disclosure, the court said Tennessee law must be applied when the law of another jurisdiction is contrary to Tennessee public policy. Tennessee requires adequate disclosure and the absence of undue influence for a prenuptial agreement to be valid, regardless of whether the issue arises in a probate action or a marriage dissolution action. The public policy behind this requirement is that the marriage relationship is supposed to be one of utmost confidence and thus agreements between the spouses must be made in good faith, knowledgeably, and without duress. In Florida, however, prenuptial agreements in the probate context are treated differently and are valid even without full disclosure. Thus, Florida would allow an agreement Tennessee deems to be against public policy. Here, the parties agree the contract was made without full disclosure, and enforcing the contract under Florida law would violate the public policy of Tennessee.

Accordingly, the court held the prenuptial agreement is invalid.

Wife’s Counsel

Overton Thompson III, Nashville, Tenn.

California grandparent visitation statute does not violate constitutions.

In re Marriage of Harris, 96 P.3d 141 (Cal. 2004).

The California Supreme Court held that the state’s grandparent visitation statute does not violate the state and federal constitutions.

Here, a child’s parents separated shortly before her birth, and her mother allowed the paternal grandparents to visit with the child. For several years, the parties regularly went to court to establish visiting schedules between the child and her grandparents. The matter was revisited when the child was about to start kindergarten, and the mother objected to court-ordered visitation. The trial court ordered visitation. An appellate court reversed, holding the constitution requires grandparents to show by clear and convincing evidence that the parent’s decision to deny visitation will be detrimental to the child.

Reversing the appellate court, the state high court noted that Cal. Fam. Code § 3104 controls in this situation. The statute provides that grandparent visitation may be ordered where the parents live separately and the grandparents have a bond with the child such that visitation is in the child’s best interest, the court said. The act creates a rebuttable presumption that the visitation is not in the child’s best interest if a parent who has sole custody objects to the visitation.

The court rejected the mother’s argument that § 3104 is unconstitutional under the U.S. Supreme Court’s ruling in Troxel v. Granville, 530 U.S. 57 (2000), 43 ATLA L. Rep. 221 (Aug. 2000). In that case, the Court invalidated a Washington state statute that allowed “any person” to petition the court “at any time” seeking visitation, which could be granted if it was in the child’s best interest. A plurality of the Court held the statute allowed a court to grant visitation without giving any special weight to the parents’ constitutional right to make decisions regarding their children.

The court here found the California law is significantly different than the one in Troxel. Grandparents seeking visitation under the act have to overcome a rebuttable presumption in favor of the custodial parent. Thus, special weight is given to the parent’s decision not to allow the visitation, the court reasoned. However, in this case, the appellate court merely considered the best interests of the child without taking the presumption into account.

Accordingly, the court remanded for such consideration.

Grandparents’ Counsel

Paul W. Leehey, Fallbrook, Cal.

Government Liability

FBI releases investigative notes about judge: Federal privacy law violations: Emotional distress: Damage to reputation: Settlement.

Appel v. FBI, U.S. Dist. Ct., D. Colo., No. 03-WY-1967CB, Apr. 26, 2004.

Appel is a state district judge. When the state supreme court’s office of attorney regulation subpoenaed investigative notes from the FBI for an investigation of a private attorney, the FBI released the notes, which also mentioned allegations that Appel had used illegal drugs. The FBI’s investigation of these allegations had concluded they were unsubstantiated. Appel suffered emotional distress and damage to his reputation.

Appel filed suit against the FBI, alleging that the release of the notes violated the federal Privacy Act, 5 U.S.C. § 552(a).

The parties settled before trial for $100,000. In addition, as part of the settlement, defendant issued a press release stating there was no evidence of judicial misconduct or drug use by plaintiff.

Plaintiff’s Counsel

*Michael H. Berger, Denver, Colo.

Federal district courts may order U.S. government to pay guardian ad litem fees under FTCA.

Gaddis v. United States, 381 F.3d 444 (5th Cir. 2004).

U.S. district courts may order the federal government to pay a prevailing party’s guardian ad litem fees in cases arising under the Federal Tort Claims Act (FTCA), 28 U.S.C. §§ 2671 et seq., the Fifth Circuit Court of Appeals held.

Here, Gaddis and his wife were stopped at a red light in their car when a postal worker hit their vehicle, causing Gaddis’s wife to deliver her baby prematurely. The baby had serious birth defects. Gaddis and her husband sued the government under the FTCA. The court appointed a guardian ad litem, and, after defendant was found liable, ordered that the guardian ad litem fees be charged to defendant.

Defendant appealed, arguing that the FTCA does not permit courts to tax guardian ad litem fees to the federal government. A Fifth Circuit Court of Appeals panel affirmed.

Affirming, the en banc court noted that the FTCA allows courts to tax the compensation of “court-appointed experts” to the federal government. It is reasonable to interpret the meaning of that phrase to include guardians ad litem, the court said. Guardians ad litem are court-appointed and have a duty to provide their insight as to the best interests of the minor or incompetent person involved. Accordingly, it is appropriate to treat them as experts under the FTCA and tax their fees to the federal government where the opposing party prevails. This finding also defeats any sovereign immunity claim, the court noted, because the FTCA expressly provides that these costs are taxable against the nonprevailing government.

Plaintiffs’ Counsel

*Paul F. Ferguson Jr.,
*James Erick Payne,
Gregory F. Cox, and
George Emerson Bean, all of Beaumont, Tex.


Insurer denies disability benefits: ERISA violations: Breach of contract: Economic losses: Postjudgment settlement.

Corsnitz v. Aetna Life Ins. Co., U.S. Dist. Ct., W.D. Wash., No. C03-1044C, Aug. 31, 2004.

Corsnitz, 55, requested long-term disability benefits under her employment plan after she began suffering fibromyalgia and Raynaud’s disease—in which arteries bringing blood to the fingers and toes constrict—among other illnesses. Her physicians determined her disabilities were related to her occupation, but her insurance company denied her claim. She was already receiving Social Security disability benefits and a disability pension from her employer. Formerly a program analyst earning $80,000 annually, Corsnitz has been unable to return to work.

Corsnitz sued the insurance company, alleging breach of fiduciary duty and bad faith in violation of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1001 et seq.

Defendant contended its physicians reviewed plaintiff’s medical records and rejected the claim. Plaintiff argued these physicians were unqualified and falsified their evidence and that both Social Security and plaintiff’s employer had already determined she was totally disabled.

The trial court awarded plaintiff summary judgment. Subsequently, defendant agreed to pay about $50,800 in back benefits, plus future benefits. Defendant also paid attorney fees and costs of about $30,200.

Plaintiff’s Counsel

*Fred P. Langer, Seattle, Wash.

Documents in the Corsnitz v. Aetna Life Ins. Co. case are available, courtesy of Mr. Langer.

Insurer denies homeowners’ damage claim: Bad faith: Economic losses: Verdict: Punitive damages: Postverdict judgment.

Sherow v. American Family Mut. Ins. Co., Ariz., Pima County Super. Ct., No. C 2001 3000, Aug. 5, 2004.

The Sherows owned a home and had a deluxe homeowners’ policy with their insurer. A capacitor in their heating and cooling system short circuited, causing a fire that destroyed the system, which was worth $5,200. They submitted a claim to their insurer, which was denied.

The Sherows sued the insurer, alleging breach of contract and bad faith in failing to provide coverage. Plaintiffs presented several expert witnesses who had investigated the unit and found that the fire was caused by the capacitor.

Defendant contended the fire was caused by normal wear and tear on the system, which was 15 years old. Wear and tear is not covered under the policy.

A jury awarded plaintiffs about $275,100, including about $213,600 in punitive damages. The trial court then found that an offer of judgment had been made and sanctioned defendant by awarding approximately $141,700 in costs and attorney fees. The entire award has interest that will accrue at 10 percent annually.

Plaintiffs’ experts were John Partlow, industry standards, Pleasanton, Cal.; John McDougall, cause of loss/cost of replacement, Tucson, Ariz.; and Larry Sutton, cause of loss/cost of replacement, Spokane, Wash.

Defendant’s expert was D. Burr Udall, insurance punitive damages, Tucson, Ariz.

Plaintiffs’ Counsel

*Joseph W. Watkins, Tucson, Ariz.

Intentional Torts

Anti-SLAPP law does not prevent suit against creator of Web site that allegedly published defamatory statements.

Wilbanks v. Wolk, 17 Cal. Rptr. 3d 497 (Ct. App. 2004).

Where a Web site publishes allegedly defamatory statements about a company, public policy does not prevent the company from suing the creator of the site for defamation and unfair business practices, a California appellate court held.

Here, Wolk posted statements to her Web site saying that Wilbanks’s viatical settlements brokerage was unethical, provided incompetent advice, and was under investigation. Wolk refused to allow Wilbanks to present his side of the story on her site. Wilbanks and his brokerage sued for defamation and unfair business practices. Defendant moved to strike the defamation claim, arguing it violated the states’s statute barring strategic lawsuits against public participation (SLAPP), Cal. Civ. Proc. Code § 425.16. The trial court granted the motion.

Reversing, the appellate court first rejected plaintiffs’ argument that the anti-SLAPP statute was inapplicable because defendant’s Web site was not a public forum and the statements did not address a matter of public concern, as required for the anti-SLAPP statute to apply. Anyone who chooses to do so may visit defendant’s Web site, the court noted, and the statements were consumer protection information of interest to anyone who sells or buys viatical insurance policies.

However, the court noted, plaintiffs’ defamation claim can still go forward, because the statements on the site, taken as a whole, are provably false. Plaintiffs have presented evidence sufficient to allow an inference that defendant made the false statements at least negligently, and possibly with reckless disregard as to their truth, the court said. Thus, plaintiffs have shown adequate evidence of the probability of prevailing.

Accordingly, the court reversed.

Plaintiffs’ Counsel

Steven Ames Brown, San Francisco, Cal.

Comment: For a case in which an appellate court held that eBay, Inc.’s user agreement shields it from liability for defamatory postings by users of its Web site, see Grace v. eBay, Inc., 16 Cal. Rptr. 3d 192 (Ct. App. 2004).

Medical Negligence

Improper use of vacuum extractor

Settlement and verdict for a couple whose son suffered a right brachial plexus injury after shoulder dystocia occurred when his mother’s attending obstetrician applied a vacuum extractor during labor. The boy’s parents, on his behalf, filed suit against the hospital and the obstetrician and her practice, alleging the physician had failed to properly use the vacuum extractor and handle the shoulder dystocia, among other claims. *Spencer G. Markle, Bellaire, Tex., represented plaintiffs in this case. Documents in this case are available, courtesy of Mr. Markle.

Minton v. Savage, Tex., Travis County 250th Jud. Dist. Ct., No. GN-204489, Sept. 9, 2004.

Failure to respond to fetal distress

Verdict for a boy who suffered asphyxiation resulting in cerebral palsy after his mother’s obstetrician used forceps to deliver his head and shoulder dystocia occurred, causing complete cord compression and a four-minute delay. The boy’s mother, on his behalf, sued the hospital, alleging its nurse failed to properly monitor and respond to signs of fetal distress and go up the chain of command to timely notify an obstetrician. *James T. Ball and Erin Kinahan, both of Chicago, Ill., represented plaintiff.

Villagomez v. Northwestern Mem’l Hosp., Ill., Cook County Cir. Ct., No. 01 L 1030, Oct. 8, 2004.

Comment: See also Doe v. Roe, Mass., confidential ct. and docket no., Feb. 2004. There, plaintiff alleged that a midwife and labor nurse failed to timely call for a physician for assistance in light of the presence of green meconium and dramatic changes in the fetal monitor during the second stage of labor. The parties settled with the insurers for the nurse, midwife, and hospital before trial for $5.5 million. *Andrew C. Meyer Jr. and Krysia J. Syska, both of Boston, Mass., represented plaintiff in this case.

Premature discharge of jaundiced infant

Settlement for a boy who suffered kernicterus and brain damage resulting in cerebral palsy after he was born prematurely with jaundice and a pediatrician discharged him two days after his birth. He sued the hospital and the pediatrician, alleging defendants had negligently discharged a jaundiced, premature infant before testing his bilirubin level or providing follow-up instructions. *Tracy K. Lischer and Charles Carpenter, both of Durham, N.C., represented plaintiff.

Doe v. Roe Hosp., N.C., confidential ct. and docket no., Sept. 2004.

Negligent bunionectomy, credentialing of podiatrist

Verdict and settlement for a woman who developed osteomyelitis in her left foot, requiring amputation, after a podiatrist allegedly made an incision near a diabetic ulcer on her foot and inserted a screw during a bunionectomy. She sued the podiatrist, alleging he had negligently performed the bunionectomy, and the hospital, alleging negligent credentialing of the podiatrist, who was not board-certified and had not completed a surgical residency program. *James E. Pancratz, *Christopher T. Hurley, and Mark R. McKenna, all of Chicago, Ill., represented plaintiff in this case.

Frigo v. Silver Cross Hosp. & Med. Ctrs., Inc., Ill., Cook County Cir. Ct., No. 00L011559, Aug. 26, 2004.

Late treatment of myocardial infarction

Verdict for a woman who suffered heart muscle damage after a cardiologist administered Retavase an hour after an emergency room physician requested permission from the cardiologist to administer the thrombolytic agent to treat angina. She sued the cardiologist and his practice, alleging he had failed to (1) permit the emergency room physician to administer the Retavase immediately and (2) timely come to the hospital. *Alan H. Figman, New York, N.Y., represented plaintiff.

Arnao v. Teigman, N.Y., Nassau County Sup. Ct., No. 16701/01, Aug. 6, 2004.

Failure to perform timely cesarean section

Verdict for a couple whose son suffered a skull fracture and brain damage after he was delivered via cesarean section when he failed to progress though the birth canal and attempts to use a vacuum extractor were unsuccessful. The boy’s parents, on his behalf, sued the obstetrician, alleging she had failed to offer a timely cesarean section in light of the baby’s failure to descend. *A. Roy DeCaro and *Eugene D. McGurk Jr., both of Philadelphia, Pa., represented plaintiffs.

Bough v. Montgomery, Pa., Phila. County C.C.P., Nov. Term 1995, No. 1760, Aug. 27, 2004.

Failure to timely diagnose prostate cancer

Settlement for a man who is likely to suffer a future recurrence of prostate cancer and experiences sexual dysfunction and hot flashes. He underwent treatments for invasive prostate cancer that had spread to the bladder after an internist performed prostate-specific antigen (PSA) testing. He sued the internist, alleging failure to timely diagnose prostate cancer in light of elevated PSA levels. *Philip J. Crowe Jr. and *Florence A. Carey, both of Boston, Mass., represented plaintiff.

Doe v. Roe Internist, Mass., confidential ct. and docket no., Aug. 2004.

Comment: For another failure to timely diagnose prostate cancer case, see Doe v. Roe, Mass., Essex County Super. Ct., confidential docket no., Apr. 2004. There, Doe, 49, was diagnosed as having prostate cancer and underwent removal of his prostate. He sued his treating internist, alleging failure to obtain further testing after Doe’s PSA level increased from 2.35 to 4.18 within three years. The parties settled the case for $500,000. *Andrew C. Meyer Jr. and *Robert M. Higgins, both of Boston, Mass., represented plaintiff.


Woman’s stalker gets her personal information: Negligent disclosure: Invasion of privacy: Wrongful death: Settlement.

Remsburg v. Docusearch Inc., U.S. Dist. Ct., D.N.H., No. 1:00-cv-00211-PB, Feb. 24, 2004.

Boyer, 20, was shot and killed as she left work by Youens, who then killed himself. He had obtained her employment address from an Internet-based investigation service. In numerous separate transactions, the service provided Youens with Boyer’s date of birth, phone number, and social security number. Her work address was obtained when a subcontractor hired by the service called Boyer’s work number and used false pretenses to get her to give out her employment information. After the shootings, it was discovered that Youens had been stalking Boyer since they had a class together in high school and that he had detailed his plans on his Web site. Boyer, who had been a student and dental assistant, is survived by her mother, father, stepfather, brother, and sister.

Boyer’s mother, on behalf of her estate, sued the service, its owners, the individual investigators, and the subcontractor, alleging negligence in disclosing her private information without her knowledge or consent, invasion of privacy, and violations of the federal Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seq., and the state consumer protection act. Plaintiff alleged the service should have known of the potential danger of releasing the unauthorized information to Youens. Plaintiff also alleged Boyer had a reasonable expectation of privacy, and defendants’ invasion caused her death.

Defendants contended they were acting in their professional capacities as investigators and had no duty to obtain Boyer’s consent.

A federal trial court initially certified certain questions to the New Hampshire Supreme Court, including whether a private investigator has a duty to a third party with respect to the sale of the party’s information. The state high court determined the risk of criminal misconduct is sufficiently foreseeable and thus an investigator has a duty to exercise reasonable care in disclosing a third person’s personal information to a client. The court further held that a person who obtains information by using pretext may be liable under the state consumer protection act. 816 A.2d 1001 (N.H. 2003), 46 ATLA L. Rep. 132 (May 2003).

The parties then settled before trial for $85,000. The Web site’s insurer will pay $75,000, and the independent contractor and one of the investigators will each pay $5,000.

Plaintiff’s experts were Robert Ellis Smith, privacy, Providence, R.I.; and Robert Douglas, computer research, Oak Creek, Colo.

Plaintiff’s Counsel

*David M. Gottesman, Nashua, N.H.
*Anna Barbara Hantz, Nashua, N.H.

Documents in Remsburg are available, courtesy of Mr. Gottesman.

Car backs into police officer: Driving while intoxicated: Thumb ligament tear: Verdict.

Kirk v. Scott, Ala., Jefferson County Cir. Ct., No. CV 03-4994, Oct. 6, 2004.

Kirk, 28, a police officer, was responding to a report of trespass, harassment, and threats. The suspect got in his car, which was blocked by Kirk’s police car. Kirk approached the suspect, and the suspect opened his door. The suspect then reversed, striking Kirk with the car door and knocking him to the ground. Kirk suffered a ligament tear to his thumb, requiring surgery. His past medical expenses were about $20,000. Kirk, who earns about $35,000 annually, was unable to work for five months. He received workers’ compensation for both his medical expenses and his lost earnings.

Kirk sued the suspect, who failed a breathalyzer test upon his arrest, alleging negligence in driving while intoxicated, wantonness, and assault and battery.

Defendant contended that as a police officer, plaintiff assumed the risk of being injured on the job, and that plaintiff was contributorily negligent.

A jury awarded $150,000, finding defendant liable for negligence but not for wantonness or assault and battery. A workers’ compensation lien of $26,000 will be asserted against the settlement.

Plaintiff’s Counsel

*Steven F. Long, Pelham, Ala.

Home air conditioning system creates mold: Breach of contract: Improper installation: Mold-induced illness: Verdict.

Sailor v. R.S. Andrews, Ga., Fulton County Super. Ct., No. 2002 cv 57237, Sept. 20, 2004.

Sailor, 33, had a heating, ventilation, and air conditioning (HVAC) system installed in her recently purchased home. Subsequently, she began experiencing sinus problems, respiratory infections, and nosebleeds, among other things. She was tested for several illnesses, but nothing was diagnosed. Five years later, she had her air duct system inspected, and the inspectors found high quantities of mold. Sailor was forced to move out of the home, leaving many of her belongings, and was unable to sell it. Her past medical expenses were $30,000.

Sailor sued the company that installed the HVAC system, alleging breach of contract and improper installation. Plaintiff alleged defendant placed the system directly on the floor instead of mounted on blocks as required by contract and building codes. Thus, the system blew moisture and dirt throughout the house.

Plaintiff did not claim lost income.

Defendant acknowledged the breach of contract but contended there was no excessive mold and that plaintiff did not offer medical proof that mold caused her illnesses.

A jury awarded plaintiff about $556,300. Defendant plans to appeal.

Plaintiff’s experts were George Osborne, industrial hygiene, and Dave Bennett, construction, both of Marietta, Ga.

Defendant’s expert was Ronald N. Thaman, industrial hygiene, Columbus, Ohio.

Plaintiff’s Counsel

*R. Hutton Brown, Atlanta, Ga.

Girl bitten by dog: Strict liability: Lacerations: Mediated settlement.

Doe v. Roe, Wis., confidential ct., docket no., and date.

Doe, 9, was going door-to-door delivering cookies to her neighbors. A dog at one of the houses bit her in the face. She suffered several lacerations, requiring 45 stitches and plastic surgery to repair the scars. Her past medical expenses were about $15,000.

Doe and her mother sued the dog owner, alleging strict liability under a state dog bite law. Doe’s mother, who witnessed the incident, claimed bystander emotional distress.

Defendant contended Doe provoked the dog by trying to get it to do tricks. Further, defendant contended that damages were diminished because plastic surgery repaired the scars, several of which were in the girl’s mouth and thus not visible.

The parties settled during mediation for $150,000.

Plaintiffs’ Counsel

*Jay Urban, Milwaukee, Wis.

A Court Document Set by Topic on dog attacks and an Abstract Set on animal attack cases are available.

Car hit by another vehicle: Negligent operation of vehicle: Neck, back injuries: Verdict.

Marseca v. Jonni Angel, Fla., Palm Beach County 15th Jud. Cir. Ct., No. CA 02-09196 AG, Aug. 4, 2004.

Marseca, 32, was shopping in a supermarket when his 6-year-old daughter tripped and fell into a woman. Marseca and the woman got into a verbal altercation. As the Marsecas were leaving the parking lot in their car, the woman’s vehicle collided with Marseca’s driver side door. The woman then allegedly pulled forward and reversed, once again hitting the door. Marseca suffered reinjuries to his neck and back, requiring neck surgery and a back fusion. His past medical expenses were $294,500. Formerly an operator of a pressure cleaning business, earning $15,000 annually, Marseca was unable to work while recovering from surgery. His past lost wages were $375,000. He also claimed future lost wages due to work limitations.

Marseca sued the woman and the company she owned, which owned the vehicle, alleging negligent operation of the vehicle.

Defendant contended she was afraid of plaintiff and was trying to escape.

A jury awarded plaintiff $999,500. It found plaintiff 25 percent at fault, and the award was reduced accordingly.

Plaintiff’s experts were Charles Theofilos, neurosurgery, Palm Beach Gardens, Fla.; Craig Lichtblau, rehabilitation, North Palm Beach, Fla.; and Bryant Buchner, accident reconstruction, Tallahassee, Fla.

Defendants’ experts included Robert Brodner, neurosurgery, and Lee Thomson, vocation rehabilitation, both of West Palm Beach, Fla.; Ro Baltayan, vocational rehabilitation, Jupiter, Fla.; Peter Livingston, radiology, Hollywood, Fla.; and Craig Depkin, accident reconstruction, Chattanooga, Tenn.

Plaintiff’s Counsel

*Lake H. Lytal III, West Palm Beach, Fla.
*Marci Fuentes Ball, West Palm Beach, Fla.

Practice & Procedure

Limitations statute does not begin to run until plaintiff knows, or reasonably should have known, tortfeasor’s identity.

Tarnowsky v. Socci, 856 A.2d 408 (Conn. 2004).

The Connecticut Supreme Court held that the state’s two-year statute of limitations for personal injury actions, Conn. Gen. Stat. § 52-584, does not begin to run until a plaintiff knows, or reasonably should have known, the identity of the tortfeasor.

Here, Tarnowsky was injured when he slipped and fell on an icy sidewalk in March 1997. During discovery in his suit against the property owner and tenant, plaintiff learned that Socci was responsible for removing ice and snow from the property, and, in August 2000, added a claim against him. The trial court granted defendant summary judgment on the ground that suit was barred by § 52-584, but an appellate court reversed, holding that actual or constructive knowledge of the identity of a tortfeasor is an essential element of an action for damages.

Affirming, the state high court noted that the limitations statute provides that a personal injury action must be brought “within two years from the date when the injury is first sustained or discovered or in the exercise of reasonable care should have been discovered.” The court had previously held that injury, or “actionable harm,” occurs when plaintiff discovers or should have discovered the essential elements of a cause of action. Thus, breach of duty by defendant and a causal connection between the breach and the harm are necessary ingredients for actionable harm.

The court noted that it had not previously addressed whether a plaintiff can suffer actionable harm before discovering a tortfeasor’s identity, although the appellate court had indirectly determined that actual or constructive knowledge of the tortfeasor’s identity is an essential element of a personal injury action. Likewise, a majority of states that have considered the question have held that a cause of action does not accrue until plaintiff has discovered or should have discovered the tortfeasor’s identity.

Agreeing with the appellate court and the majority of jurisdictions, the court said there is no sound reason to distinguish between the discovery of a breach or of the connection between the breach and the injury on the one hand, and the discovery of the tortfeasor’s identity on the other hand. Reasoning that the very phrase “actionable harm” suggests knowledge of the tortfeasor’s identity, the court reasoned that a plaintiff who knows the identity of one tortfeasor but has no reason to suspect the existence of additional ones cannot bring an action against the unknown parties until he or she discovers their existence. In these cases, the court said, the blameless failure to discover the existence of the unknown tortfeasor is tantamount to a blameless failure to discover a causal connection between defendant’s breach and the injury, a failure that clearly tolls the limitations statute.

Plaintiff’s Counsel

*Brenden P. Leydon, Stamford, Conn.

A document in this case is available, courtesy of Mr. Leydon.

Class representative’s claim was not mooted by Rule 68 offer of judgment.

Weiss v. Regal Collections, 385 F.3d 337 (3d Cir. 2004).

The Third Circuit Court of Appeals held that a defendant in a class action lawsuit could not defeat subject matter jurisdiction by making a Rule 68 offer of judgment to the class representative in an attempt to moot the representative’s claim.

Here, Weiss brought a federal class action suit against a collection agency, alleging statements in the agency’s payment demand letter violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692. Before plaintiff moved to certify a class, defendant made an offer of judgment under Fed. R. Civ. P. 68 of $1,000 plus attorney fees and costs, the maximum an individual may recover under the FDCPA. Plaintiff rejected the offer. Defendant then moved to dismiss, arguing the claim was rendered moot because Rule 68 provided plaintiff the maximum damages available under the statute. The trial court granted the motion.

Reversing, the Third Circuit cited U.S. Supreme Court case law holding that once a class has been certified, mooting a class representative’s claim does not moot the entire action because the class acquires a legal status separate from the interest asserted by the named plaintiff. Moreover, in a subsequent decision, the Court expressed concern that allowing defendants to “pick off” actions by representative plaintiffs by making offers of judgment before an affirmative ruling on class certification would frustrate the objectives of a class action and invite waste of judicial resources by stimulating successive lawsuits by other aggrieved parties.

Here, because plaintiff’s claim was allegedly mooted by Rule 68 before he filed for class certification, the court never had an opportunity to consider certification under Fed. R. Civ. P. 23. Nevertheless, the court said, there is authority to suggest that the “relation back” doctrine should apply. Under the doctrine, class certification is related back to the filing of the class action complaint so that the class representative retains standing to litigate certification even though his individual claim is moot. Although most cases applying the doctrine have done so only after a motion to certify has been filed, the court reasoned that “reference to the bright line event of the filing of class certification motion may not always be well-founded.”

Here, the court reasoned, although the representative had not filed a motion for certification, neither was there undue delay. In such circumstances, the court concluded, the best approach is to relate the certification motion back to the filing of the complaint. Reasoning that the tension between Rules 23 and 68 is best resolved in this manner, the court said it would direct the trial court to allow plaintiff to file such a motion.

Plaintiff’s Counsel

*William J. Pinilis, Morristown, N.J.
*Gabriel H. Halpern, Morristown, N.J.


Woman slips, falls on wet marble floor: Creation of dangerous condition: Knee injuries: Settlement.

Marseille v. EOP-Santa Monica Bus. Park, Cal., Los Angeles County Super. Ct., No. SC 078 512, Sept. 8, 2004.

Marseille, 44, was walking into her office building when she slipped on the interior entryway’s wet marble floor and fell. She injured her left knee, resulting in thoracic outlet syndrome, a condition affecting nerves connecting the neck and arms that causes pain, weakness, and fatigue in these areas. Marseille also suffered a knee injury, requiring surgery. Her past medical expenses were about $44,300, and her future medical expenses are estimated at between $105,850 and $151,200. Marseille did not claim lost income.

Marseille sued the office building property management company, the janitorial service, and the building owner, alleging creation of a dangerous condition by allowing water that had entered during washing of the exterior walkway to remain on the interior marble floor, and failing to use rubber mats or post warnings around the wet area.

Defendants denied that the entryway was wet.

The parties settled plaintiff’s claim for $500,000.

Plaintiff’s experts were Thomas Gunzler, safety; Vernon B. Williams, orthopedic surgery; and Samuel Ahn, orthopedic surgery, all of Los Angeles, Cal.; Peter Francis, biomechanical engineering, Poway, Cal.; and Jacob Tauber, orthopedic surgery, Beverly Hills, Cal.

Defendants’ experts were T. Page Eskridge, safety engineering, Tustin, Cal.; James G. Kent, biomechanical engineering, Los Angeles, Cal.; Martin D. Levine, orthopedic surgery, Encino, Cal.; and Frederic G. Nicola, orthopedic surgery, Beverly Hills, Cal.

Plaintiff’s Counsel

*Andrew C. Bryman, Calabasas, Cal.

Woman shot while working in store: Negligent security: Wrongful death: Settlement.

Ritterson v. Philadelphia Home & Design Ctr. Joint Venture, Pa., Phila. County C.C.P., No. 00394, Mar. 19, 2004.

Ritterson, 49, was working as a store manager when the store was robbed. The robbers forced Ritterson to open the safe, then shot her in the head. Ritterson suffered fatal injuries. She is survived by her husband, two minor children, and three adult children. Ritterson had earned about $35,000 annually as a store manager.

Ritterson’s husband, on behalf of her estate, sued the owners of the shopping center and the property management company, alleging negligent security. Specifically, plaintiff claimed the shopping center where the store was located had inadequate lighting and lacked rear door alarms or security personnel.

Defendants contended that the risk of robbery was too low to merit hiring security personnel. In addition, they argued that Ritterson’s murder was unforeseeable.

The parties settled during trial for $1 million.

Plaintiff’s Counsel

*Keith S. Erbstein, Philadelphia, Pa.

Documents in this case are available, courtesy of Mr. Erbstein.

Products Liability

Plaintiffs in SUV design defect case did not open door to defendant’s comparative accident statistics

The Ninth Circuit Court of Appeals held plaintiffs in a suit alleging defective design of a sport-utility vehicle did not open the door to defendant’s comparative accident statistics by introducing a magazine article and expert testimony to show defendant had notice of the vehicle’s danger before designing it. Plaintiffs were represented by *Paul L. Stritmatter and *Garth L. Jones, both of Hoquiam, Wash.; and *Paul W. Whelan and *Peter J. O’Neil, both of Seattle, Wash. Documents in this case are available, courtesy of Mr. Stritmatter.

Jaramillo v. Ford Motor Co., No. 03-35326, 2004 WL 2370564 (9th Cir. Oct. 21, 2004).

Lack of emergency shutoff device on trailer conveyor

Settlement for a worker who suffered traumatic partial amputations of his right leg and left foot while operating a conveyor in a “live floor” trailer when his right leg became trapped in a pinch point between the conveyor’s moving parts and a metal plate at the rear of the trailer. He sued the company that manufactured the trailer and conveyor, alleging, among other things, failure to guard the conveyor’s drive mechanisms and include an emergency shutoff device. Plaintiff was represented by *J. Randolph Pickett and *R. Brendan Dummigan, both of Portland, Or.; and Stephen F. Mannenbach, Dallas, Or. Documents in this case are available, courtesy of Mr. Pickett.

Howard v. Western Trailer Co., Or., Multnomah County Cir. Ct., No. 0303-03212, Oct. 14, 2004.

Defective compressor in wall air conditioner unit

Postverdict settlement for the estate and survivors of a boy who died of carbon monoxide poisoning after a window air conditioner unit allegedly caused a fire in his mobile home. His mother sued the manufacturer of the unit, alleging, among other things, that it used an underrated compressor relay and relay terminal connections that were not capable of safely withstanding excessive current without overheating. Plaintiffs were represented by *Craig M. Sico and *Roger S. Braugh Jr., both of Corpus Christi, Tex.; and José Chapa, McAllen, Tex. Documents in this case are available, courtesy of Mr. Sico.

Ibarra v. L.G. Elecs., Inc., Tex., Hidalgo County 332d Jud. Dist. Ct., No. C-1077-03-F, Nov. 1, 2004.

Defective interlock on fire truck’s pump governor

Settlement and verdict for a volunteer firefighter who suffered numerous injuries when she was pinned between a moving pumper fire truck and a gate. The woman sued the manufacturer of the truck, alleging defective design of a mechanical interlock on its pump governor, which was intended to prevent pump activation while the truck’s transmission was attached to its wheels. Suit against the pump manufacturer alleged failure to improve the shift mechanism, which could “hang up” in “road” mode when the operator attempted to shift to “pump” mode. Plaintiff was represented by *William H. Carpenter, David Stout, and William Snead, all of Albuquerque, N.M.

DeLeon v. Northrop Grumman Sys. Corp., U.S. Dist. Ct., D.N.M., No. CIV-02-1379 JC/RLP, Aug. 3, 2004.

Defective design of minivan’s plastic liftgate door

Settlement for a man who suffered severe crush injuries to his right arm and left leg, requiring partial amputation of the leg, when a van’s rear hatch failed and separated from the vehicle in a collision, and he was ejected through the opening. He sued the manufacturer of the van, alleging it was defectively designed in that the liftgate door was composed of plastic panels and did not have a steel frame like the vehicle’s main doors. Plaintiff was represented by *Henry T. Courtney and *Sara Courtney Baigorri, both of Miami, Fla.; and *Stephen C. Swain, Virginia Beach, Va.

Taylor v. General Motors Corp., Va., Chesapeake City Cir. Ct., No. CL00-32, Sept. 16, 2004.

Lack of flame-retardant materials in sofa

Settlements on behalf of a woman and her three daughters who died in a fire that allegedly started when a baseboard heater in their home ignited a sofa. Their estates and survivors sued the manufacturer of the sofa, alleging failure to add flame retardants to the sofa’s highly flammable urethane foam filler. Plaintiffs also sued the heater manufacturer, alleging a defective weld in the heating coil had precipitated an explosion, igniting the sofa. Plaintiffs were represented by *Mark J. LeWinter, *Joel D. Feldman, and *James A. Keating, all of Philadelphia, Pa.

Hughes v. Federal Pac. Elec. Co., Pa., Phila. County C.C.P., Oct. Term 2000, Nos. 1990, 1993, Sept. 17, 2004.

Professional Negligence

Unnecessary prostate surgery

Settlement for 14 residents and the estates of three former residents of an adult home who reportedly suffered from incontinence and underwent prostate surgery at a hospital, which resulted in complications, including impotence and total incontinence. The residents sued the home and its operator, the hospital, the treating urologist, and another urologist who referred the patients for the procedures, alleging defendants had negligently subjected the residents to unnecessary prostate surgeries. Lisa E. Cleary, New York, N.Y.; Jeanette Zelhof, New York, N.Y.; and Timothy Clune, Albany, N.Y., represented plaintiffs.

Bowen v. Rubin, U.S. Dist. Ct., E.D.N.Y., No. 01CV0070, July 29, 2004.

Comment: Suit against additional defendants in this case—two home health care agencies, several corporate officers of those agencies, and an employee of one of the agencies—is expected to go to trial in early 2005.

Trustee fee overcharging, inadequate refund

Settlements, including punitive damages, for about 6,500 beneficiaries whose trusts had been overcharged in fees and were refunded the overcharges and paid in simple interest after the bank merged with Bank of America. The beneficiaries brought a class action suit against Bank of America. Plaintiffs alleged that defendant owed them additional compensation. *Derek G. Howard, Oakland, Cal.; Jerome B. Falk Jr., San Francisco, Cal.; France Jaffee, San Francisco, Cal.; and Robert Mills, San Rafael, Cal.; represented plaintiffs. A document in this case is available, courtesy of plaintiffs’ counsel.

Nickel v. Bank of America, U.S. Dist. Ct., N.D. Cal., No. C94-2716 SBA, May 2004.

Negligent failure to prosecute case

Verdict for a woman who retained a personal injury attorney to sue a state’s child protection agency for the wrongful death of her son. The agency was granted summary judgment before trial. The woman sued the attorney and his firm, alleging defendants had negligently failed to prosecute the wrongful death case. *William G. Walker, Tucson, Ariz., represented plaintiff.

Hendrix v. Sylvester, Ariz., Pima County Super. Ct., No. C 2002 1169, May 21, 2004.

Debt collector that did not itemize amounts owed in collection letter violated FDCPA

The Seventh Circuit Court of Appeals held that under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692e-f, a debt collector must clearly and fairly communicate information about the amount of a debt that is owed by a debtor, including how the total amount due was determined if the demand includes payment for attorney fees or collection costs. *Daniel Edelman, Chicago, Ill., represented plaintiff.

Fields v. Wilber Law Firm, P.C., 383 F.3d 562 (7th Cir. 2004).

Improper restraint of psychiatric patient

Settlements for the father of a woman who died from restraint asphyxiation after being held to the floor face down by several guards and security technicians of a county-run hospital psychiatric wing. Her father sued the county and the security technicians’ employer, alleging defendants had failed to properly train their employees on patient restraint. *Phillip B. Tor and *Martin Rodriguez, both of Tucson, Ariz., represented plaintiff.

Gazda v. Pima County, Ariz., Pima County Super. Ct., No. C20041725, Sept. 20, 2004.

Comment: For another case involving improper restraint of a mental health treatment center patient, see Colwell v. Baker, 14 PNLR 15 (Feb. 1999). *Robert L. Langdon and *Bradley D. Kuhlman, both of Lexington, Mo.; and *Donald P. Thomasson, Cape Girardeau, Mo., represented plaintiffs. Documents in Colwell are available, courtesy of Mr. Langdon.

Improper provision of Fentanyl patches

Verdict for the family of a woman who overdosed on Fentanyl, prescribed by her estranged husband, a psychiatrist, by wearing four patches simultaneously. Her family sued the psychiatrist and his practice, alleging he had negligently failed to formally prescribe the drug or instruct his estranged wife to use only one patch at a time, among other claims. *Steven W. Bancroft, Fairfax, Va., and Brett Datto, Philadelphia, Pa., represented plaintiffs.

Feury v. Member, Va., Spotsylvania County Cir. Ct., No. CL 03-46, May 7, 2004.


Car hit by train: Failure to maintain railroad crossing: Wrongful deaths: Verdict: Postverdict settlement.

Finegan v. CSX Transp., Miss., Hancock County Cir. Ct., No. 1058, June 18, 2004.

Finegan and Winningham, both 12, were passengers in a car that was crossing a railroad grade. The car got stuck in a drop-off along the side of the crossing. A train hit the car, killing Finegan, Winningham, and the driver, who was Finegan’s half-sister. Finegan is survived by his parents. Winningham is survived by his mother, father, and two half-siblings.

Finegan’s parents, individually and on behalf of his estate, and Winningham’s mother, individually and on behalf of his estate, filed suit against the railroad. Plaintiffs alleged that defendant had failed to maintain the crossing by allowing the crossing to deteriorate, which led to the hole forming and becoming a dangerous condition. Plaintiffs introduced evidence of other incidents in which vehicles were stuck in the same location.

Defendant contended that the driver was negligent because she drove off the road at the crossing and that the city was negligent because it failed to maintain the roadway leading to the crossing.

A jury awarded Finegan’s family $2.3 million and Winningham’s family $2.8 million. The awards were then reduced by 50 percent for comparative negligence, to reflect the jury’s finding that the railroad was 50 percent liable, the driver was 30 percent at fault, and the city was 20 percent at fault. Defendant appealed, and the parties reached a confidential postverdict settlement.

Plaintiffs’ experts were Brian Pfeiffer, accident reconstruction/roadway design, Tallahassee, Fla.; and G. Richard Thompson, economics, Clemson, S.C.

Defendant’s experts were Glenn A. Burdick, railroad operations/human factors, Dade City, Fla.; and George Reed, crossing design, Palm Harbor, Fla.

Plaintiffs’ Counsel

*John C. Grazier, Houston, Tex.
*Wynn E. Clark, Biloxi, Miss.

Comment: Before trial, plaintiffs agreed to a confidential settlement with the city and the city department of transportation.

Worker exposed to asbestos: FELA violations: Failure to warn: Mesothelioma: Verdict.

Williams v. CSX Transp., Inc., N.C., Scotland County Cir. Ct., No. 03 CVS 763, Sept. 30, 2004.

Williams, 60, worked for a railroad for 38 years, holding various positions at a railroad station. In 2002, he was diagnosed with mesothelioma, a cancer caused by exposure to asbestos, which was used as insulation in the railroad’s boilers, pipes, and construction material. He underwent surgery to remove his lung and subsequently had surgery on his internal organs, which migrated into his chest cavity after his lung was removed. He has undergone chemotherapy, but the mesothelioma has metastasized to his lymph nodes. His past medical expenses were about $80,000. He did not claim future medical expenses because his life expectancy is very short. Williams is retired from the railroad but had been working part-time at a golf course, earning $8,000 annually. His future lost wages are estimated at $80,000.

Williams sued the railroad, alleging violations of the Federal Employers’ Liability Act, 45 U.S.C. §§ 51 et seq., in negligently exposing him to asbestos and failing to warn him of the dangers. Plaintiff presented documents showing defendant knew in the 1930s that asbestos presented hazards and knew of precautions to be taken and that it was aware in the 1960s that asbestos could cause cancer, but did not begin taking precautions or warning employees until years later.

Defendant contended plaintiff was not exposed to asbestos, and his smoking habit is responsible for his cancer.

A jury awarded plaintiff $7.5 million. Defendant’s appeal is pending.

Defendant’s experts included James D. Crapo, lung disease pathology, Denver, Colo.; Peter Barrett, radiology, Boston, Mass.; Mark Badders, industrial hygiene, Jacksonville, Fla.; and Victor Roggli, pathology, Durham, N.C.

Plaintiff’s Counsel

*H. Forest Horne, Raleigh, N.C.
*E. Spencer Parris, Raleigh, N.C.


Coach has unlawful sex with student: Negligent hiring, supervision: Emotional distress: Settlement.

Doe v. Roe School, Cal., Los Angeles County Super. Ct., confidential docket no., Mar. 5, 2004.

Doe, 16, was a high school student. A 27-year-old coach at the school allegedly engaged in an unlawful sexual relationship with Doe that continued for several years. Doe suffered emotional distress. Her therapy bills were $5,000.

Doe sued the school and the coach. Suit against the coach alleged unlawful sexual contact. Suit against the school alleged negligent hiring and supervision of the coach in failing to perform a criminal background check, which allegedly would have revealed a felony conviction and drug convictions. Further, plaintiff alleged that another coach knew of the illegal relationship, but failed to report it.

Defendant contended the coach did not have sex with Doe when she was under 18 years old.

The parties settled for $700,000, paid by the school.

Plaintiff’s Counsel

*David M. Ring, Los Angeles, Cal.

Crossing guard had no duty to prevent student from leaving school grounds.

Lane v. State Farm Mut. Auto. Liab. Ins. Co., 883 So. 2d 5 (La. Ct. App. 2004).

A Louisiana appellate court held that a city that trained and provided school crossing guards was not legally responsible for injuries sustained by a second-grader who was struck by a car after leaving school grounds without permission before the beginning of a school day.

The court found that to hold defendant liable, plaintiff must prove that, among other things, the crossing guards owed plaintiff a duty of care. Under the New Orleans crossing guard program, guards must ensure the safe crossing of students from curb to curb during the hours they are assigned to a specific intersection. Further, the court noted, guards are not hired to supervise children left at school before it opens.

Citing case law, the court concluded that crossing guards do not hold the same authority and duty as school officials, who have general authority over children and are responsible for providing reasonable supervision. To the contrary, the court held, a crossing guard’s training and duty do not encompass more than safely crossing children through an assigned intersection.

Thus, the court found a trial court had properly granted summary judgment to a city sued by an injured child’s mother for the alleged negligence of its crossing guards.

Student struck by lightning during school baseball game: Failure to end game in light of weather conditions: Coma: Settlement.

Thomas v. Board of Educ., N.J., Essex County Super. Ct., No. L-2268-00, June 11, 2004.

Thomas, 15, was playing baseball on a high school team when he was struck by lightning. He suffered severe brain damage and went into a coma. He remains in a vegetative state. His past medical expenses were about $700,000, and his future life-care costs are estimated at $17 million.

Thomas’s parents sued the two umpires in the game and the school districts that employed them. Suit against the umpires alleged negligence in failing to call off the game because of the thunderstorm and to warn of the danger. Suit against the school districts alleged failure to provide a safe environment and to adequately supervise the students.

Defendants argued that there was no indication of an impending electrical storm.

The parties settled during trial for $2.6 million, which will be placed in a special needs trust.

Plaintiffs’ expert was Donna Flannery, life-care planning, Fairfield, N.J.

Defendants’ experts were Neil Dougherty, athletics, New Brunswick, N.J.; and Raymond Faustich, athletics, Ridgefield, Conn.

Plaintiffs’ Counsel

*Jack Wurgaft, Springfield, N.J.

Toxic Torts

Hog farming operation is single facility for purposes of CERCLA’s emissions reporting requirements.

Sierra Club v. Seaboard Farms Inc., 387 F.3d 1167 (10th Cir. 2004).

A hog farming operation that is managed, owned, and operated as one facility is considered a single facility under the Comprehensive Environmental Response, Compensation, and Liability Act’s (CERCLA’s) ammonia emissions reporting requirements, 42 U.S.C. § 9603(a), the Tenth Circuit Court of Appeals held.

Here, Seaboard Farms Inc. (Seaboard) operated a hog farming operation made up of two farms and including several buildings using a common waste management system. The Sierra Club sued Seaboard under CERCLA, alleging that it violated the statute’s ammonia emissions standards.

Defendant argued that the statute defines a facility as an individual building, structure, lagoon, or similar individual structure, and not a farm as a whole. Although the farm as a whole emits a reportable quantity of ammonia, defendant argued, the individual structures on it do not. The trial court granted defendant’s motion for summary judgment.

Reversing the trial court’s decision, the Tenth Circuit held the statute’s definition of a facility includes an unambiguous catchall provision defining “any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located” as a single facility. This definition clearly includes the entire farm site here, the court said, noting that the farm is managed and operated as one facility, with one particular site purpose—producing swine products. Interpreting the definition broadly comports with the purpose of the statute, which is to alert officials of a potential hazardous substance release that may require response and assistance from the government.

Accordingly, the court remanded for further proceedings consistent with its opinion.

Plaintiff’s Counsel

Barclay B. Rogers,
Patrick Gallagher, and
David Bookbinder, all of San Francisco, Cal.

Comment: For other cases involving “factory” hog farms, see Blass v. Iowa Select Farms, L.P., 46 ATLA L. Rep 173 (June 2003), Goeke v. National Farms, 35 ATLA L. Rep. 301 (Oct. 1992), and Kopecky v. National Farms, Inc., 34 ATLA L. Rep. 268 (Sept. 1991).

Workplace Safety

Man struck by falling plywood: Negligent management of work site: Improper stacking: Knee injuries: Settlement.

Hillman v. James E. Roberts-Obayashi Corp., Cal., San Francisco County Super. Ct., No. CGC-02-406755, Feb. 12, 2004.

Hillman, 55, was working on a construction site. He was pulling a piece of electrical tubing from a bundle through the window of an unfinished building. A stack of plywood that was leaning against the building by the window began to fall toward Hillman. He tried to get out of the way, but tripped over a scrap of wood on the ground and fell down. The plywood struck Hillman’s knees, pinning him. Hillman suffered a fractured right kneecap and torn cartilage in the left knee, as well as bruises, lacerations, and swelling. His past medical expenses were about $114,000, and his future medical expenses are estimated at $123,100. He had arthroscopic surgery and later a total knee replacement on the left knee, and is expected to require a second left knee replacement in the future.

Formerly a journeyman electrician who had been earning about $88,000 annually, Hillman is unable to return to that occupation and will be limited to semi-sedentary work. Hillman’s past lost income was about $286,350, and his future lost income is expected to be between about $704,800 and $815,500.

Hillman and his wife sued the general contractor that controlled the site, alleging negligent management of the work site, including creating a dangerous condition by leaving the scrap wood on the ground and improperly stacking the plywood.

The parties settled during mediation for defendant’s insurance policy limits of $1 million immediately and either $1 million from the insurer for Hillman’s employer upon a showing that Hillman’s employer was at fault to any degree or $500,000 from defendant’s excess insurer upon a showing that the employer was not at fault.

Trial on the issue of fault against Hillman’s employer is now pending.

Plaintiffs’ Counsel

*James Butler, San Francisco, Cal.
*William L Veen, San Francisco, Cal.

Worker suffocated by machinery: Failure to train, supervise: OSHA violations: Wrongful death: Postverdict settlement.

Martinez v. Milk Prods. LP, Tex., Travis County 353d Jud. Dist. Ct., June 30, 2004.

Martinez, 40, was working at a milk plant machine and was assigned to a new workstation after another worker called in sick. Her coworker, who was not trained on the machinery, went on break, and she was left alone with a milk crate conveyor machine she had not been trained to use. The machine had two conveyor belts running in between two metal walls—one stationary and another that pushed crates toward the stationary wall and from one conveyor belt onto another. When the machine stopped, Martinez attempted to remove a crate she believed was jammed in the machine. In order to do that, she walked between the two walls. When Martinez removed the jammed crate, the machine instantly started up again, and the moving wall pushed a stack of crates into her back, forcing her against the stationary wall and squeezing her chest.

The coworker returned but did not know how to turn the machine off. A supervisor arrived but allegedly refused to turn the machine off even though he knew how and then spent several minutes looking for maintenance staff, believing it was their job to do so. Martinez died of suffocation after several minutes. She is survived by her husband and adult son.

Martinez’s estate sued the plant’s owner, alleging negligence in requiring Martinez to work with machinery with which she was not familiar and failure to properly supervise. Plaintiff also alleged the plant violated federal Occupational Safety and Health Administration (OSHA) regulations in that it modified the machinery, leaving the “off” button hidden and unmarked, which made it difficult for employees to find it in emergencies. OSHA later issued two citations to defendant.

Defendant contended Martinez was trained in the use of the machine and that she was solely at fault for failing to turn the machine off before she removed the crate. It further argued its actions were reasonable given that there had never been an accident in the several years the machine was in use, and it had no reason to anticipate an incident like this. Plaintiff contested this argument, citing an earlier incident in which an employee was similarly trapped but was pulled out before he suffocated.

Defendant attempted to bring in the machine’s manufacturer as a third-party defendant, but a court granted plaintiff’s request to sever the unreasonably dangerous design claim.

Before jury deliberations, the parties entered into a high-low settlement agreement. The high amount was $1.3 million, and the low amount was $175,000.

A jury awarded plaintiff $17 million. The award includes $7 million in punitive damages.

Plaintiff’s experts were James Knorpp, OSHA standards, Keller, Tex.; Amish Singhal, treating physician, Austin, Tex.; and Kevin Marshall, economics, Dallas, Tex.

Plaintiff’s Counsel

*Gary L. Rodriguez, Austin, Tex.
Lynn Watson, Austin, Tex.
Allen T. Craddock, San Antonio, Tex.

Comment: Martinez’s son settled his case against defendant before trial for $600,000. He was represented by Chad Matthews, Houston, Tex.

Documents in Martinez are available, courtesy of Mr. Rodriguez.

Court must consider all facts when applying relative nature of work test to distinguish employees from independent contractors.

Odsather v. Richardson, 96 P.3d 521 (Alaska 2004).

The Alaska Supreme Court held that application of the relative nature of work test to distinguish between employees and independent contractors for workers’ compensation purposes requires an analysis of all of the relevant facts.

Here, two truck owners who leased their trucks to the same company were involved in an accident. One truck owner sued the other for negligence. Defendant requested summary judgment, arguing they were employees of the same company and thus plaintiff’s exclusive remedy was the workers’ compensation act. The trial court granted summary judgment.

Reversing, the state high court noted that Alaska has adopted the relative nature of work test, which looks at two factors: (1) the character of the claimant’s work or business, including the degree of skill involved, whether it is held out as a separate business, and whether the claimant bears the accident burden; and (2) the relationship of the claimant’s work or business to the purported employer’s business, including the extent to which claimant’s work is a regular part of the employer’s work, whether it is continuous or intermittent, and whether it amounts to a continuous service or a contract for a specific job. Thus, all relevant facts must be considered before a determination can be made.

In this case, the court said, the trial court improperly concurred with defendant that the company’s agreement to carry workers’ compensation insurance indicates an employment relationship. Noting the trial court should have considered all of the evidence and not just the agreement, the court said a full reading of the agreement also raises substantial questions because it mentions several times that the truck owners are independent contractors. Further, the court has held in the past that an agreement to carry insurance is simply evidence to be considered in determining employment status. Moreover, plaintiff’s application for workers’ compensation might be an admission that he is an employee, but such admission is only evidence of that status, not conclusive proof, the court said.

Accordingly, the court remanded for trial.

Plaintiff’s Counsel

*Theodore D. Hoppner, Fairbanks, Alaska

Worker falls off lift: Labor law violations: Head injuries: Cognitive defects: Structured settlement.

Antoine v. El Al Israel Airlines, Ltd, U.S. Dist. Ct., E.D.N.Y., No. 02-CV-1992, July 22, 2004.

Antoine, 50, was cleaning the interior of an Israeli-owned airplane. He had to use a hi-lift to lift him from the tarmac to the plane. While he was unloading garbage from the plane, the lift allegedly dropped about two feet, propelling him over the side onto the tarmac. Antoine suffered a head injury, requiring a craniotomy for a subdural hematoma, eye surgery, and jaw surgery. He also sustained hearing loss in one ear and has residual cognitive difficulties. He still requires extensive cognitive and physical therapy. His past medical expenses were about $430,200, and his future medical expenses are estimated at $950,000.

As an aircraft cleaner for a contractor, Antoine had earned $400 weekly. He has been unable to return to work. He claimed lost wages of about $370,700. Antoine’s employer asserted a lien of about $312,500 for medical expenses and lost wages paid.

Antoine sued the airline in federal court, alleging violations of the state labor laws. Plaintiff alleged that the lift, which had been provided by his employer, was defective and that defendant was liable as the supervisor of the trash removal.

Defendant contended plaintiff was not part of the class that was protected by the labor laws. Defendant further alleged plaintiff was negligent for using equipment he knew was unsafe and that plaintiff had made a good recovery.

The parties settled before trial for $5 million.

Plaintiff’s Counsel

*Steven G. Schiesel, New York, N.Y.



~ Endowed by Sidney Gilreath ~

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