December 22nd, 2010

New York Jury Returns $50.5M Verdict For Brain Injured, Paralyzed Scaffold Worker

David Golomb, plaintiff's lead counsel

Late Tuesday afternoon, a New York jury returned a blockbuster $50.5 million verdict for a brain injured, paralyzed scaffold worker. Daniel Savillo, who was 29-years-old on the date of the accident, had mis-stepped and fallen while working on a 15-foot high scaffold storage platform on February 12, 2007.

Since the owner and chief foreman had admitted that there was no fall protection provided to workers, Justice Emily Jane Goodman granted summary judgment in favor of Mr. Savillo in September of  this year. That determination came in accordance with New York’s Labor Law. As Justice Goodman wrote:

Because Labor Law § 240 (1) “imposes absolute liability on owners who fail to provide adequate safety devices to workers laboring at elevated work sites, when that failure is a proximate cause of the workers’ injuries” , and because Greenpoint Landing provided no safety devices and that failure was a proximate cause of plaintiff’s injuries, that part of plaintiff’s motion which seeks summary judgment on the issue of Greenpoint Landing’s liability under Labor Law § 240 (1) is granted

With respect to the employer, All-Safe, Justice Goodman added in a footnote:

Given All-Safe’s complete disregard for safety (discussed infra), the name of this company strikes this Court as very ironic.

The nine-day trial before Justice Goodman in Manhattan (who also blogs for the Huffington Post) was, therefore, only to assess the amount of damages.

Prior to the trial, the plaintiff had rejected a settlement offer of $8.125M, holding firm in a demand for $14.5M. Given the breathtaking jury verdict, as well as the huge settlement offer that had been rejected, it’s worth taking a closer look at the verdict and damages.

As a result of the fall, Mr. Savillo suffered a complete cord injury at level T11 and had no sensation below an inch below his umbilicus. He had spinal surgery, screws, rods and cross-pieces placed in his back extending from from T7 to L2.

One of the many custom made exhibits used at trial

He also suffered significant brain contusions and hemorrhages, though no surgery was done on the brain. Evidence was presented of  traumatic brain injury, with significant cognitive deficits, particularly in mental flexibility, information retrieval, processing speed, visual memory, short-term memory. He is unable to do more than a single task at one time. The progression of the brain damage can be seen from this exhibit that was used at trial (click to enlarge).

Other injuries consisted of a neurogenic bladder and bowel. This forces him to self-catheterize six to eight times each day for urination, and to manually evacuate stool after inserting suppositories on a daily basis.

The $50.5M jury award was broken down as follows:
  • Past medicals expenses, approximately $600k;
  • Past lost earnings, $200K;
  • Past lost fringe benefits, approximately $50k
  • A life care plan demonstrated over $9.224M for future medical care;
  • Lost earnings and fringe benefits were approximately $5.6M;
  • Past pain and suffering was $10M; and
  • Future pain and suffering was $25M

The jury was unanimous in its determination. And of particular note, two of the jurors were lawyers. One was a fourth year tax associate at a major firm and the other works for the City of New York defending civil rights cases.

The plaintiffs called as expert witnesses: a neuroradiologist regarding the films, a rehabilitation expert,  the neurosurgeon who repaired the spine an economist, and a vocational rehabilitation expert. The defendants conducted five separate defense medical exams, but didn’t bother to call three of the people that did exams (neurosurgeon, orthopedist and wound care surgeon). The plaintiff also called the defendants’ own rehabilitation expert on his own case, since his report was so devastating to the defendants.

The defendants called a neuropsychologist and an economist.

All of which is to say, that there were a lot of witnesses in a short amount of time.

A final word on the numbers. The jury total is about $50.5M. To that gets added interest, at a 9% annual rate, from the date that summary judgment was granted in September. From that gets subtracted certain things too. For example, the future economic costs must be reduced to present value at a later proceeding pursuant to CPLR 50-B. In addition, there may be a set-off for Social Security Disability payments that have been made, and with reasonable certainty will continue to be made going forward under CPLR 4545.

One can also assume that the pain and suffering verdicts will be challenged as excessive. How New York courts go about reducing (or increasing) verdicts from time to time was the subject of one of the first posts on this blog: How New York Caps Personal Injury Damages.

In other words, while the headlines will scream $50M, as this one does, the reality will one day be something else. And it will take quite a bit of lawyering to figure out what that will be.

The stars seemed aligned for a mega-verdict here, given the catastrophic injuries, that liability was already determined, that 9% interest would be running on any verdict (thus giving a comfort level to the plaintiff regarding the potential for defendants dragging out the litigation), that numerous experts were lined up and ready to go, that defendants had a fear of their own experts, and that an experienced trial lawyer was ready to take the verdict.

The case was Daniel Savillo v. Greenpoint Landing Associates, LLC (landowner) v. All Safe Heights Contracting Corp. (scaffolding co., employer). The plaintiff here sued the landowner, who turned around and sued the employer. In New York, those who are injured on the job generally can’t sue their employers under the Workers Compensation Law.

Plaintiff’s counsel was David Golomb, who is a past president of the New York State Trial Lawyers Association and a frequent lecturer on medical malpractice (and who I’ve known for many years). He is also a founder of Trial Lawyers Care, the massive pro bono effort put forward by the nation’s trial lawyers in response to the September 11 attack and the establishment of the September 11 Victim Compensation Fund. He was assisted at trial by Roy Jaghab, of Jaghab, Jaghab & Jaghab.

Greenpoint’s attorney was Edward Lomena.

All Safe’s attorneys were Scott Miller and Michael Manarel.


October 14th, 2010

Is The Workers’ Compensation Lien Really Bulletproof?

I hate dealing with liens when handling a case. In fact, everyone seems to hate them, except of course, the company that wants to reach its hand into a settlement and grab a little something for itself.

And the big reason lawyers hate dealing with liens is an inherent conflict of interest. An injured person hired you, yet you are forced to do the work of someone else trying to capitalize on your work. Almost all of the health care liens, however, were knocked out late last year when New York passed an anti-subrogation law, prohibiting health insurers from trying to scrounge part of the lawsuit proceeds.

In New York’s Workers’ Compensation world , however, — and stay with me here even though you think this might be a boring post — the lien under Workers Compensation Law section 29 is thought to be bulletproof. Which is to say, they get paid back some of the money they spent to the extent it exceeds certain limits.

But I’m not so sure that lien is bulletproof. After a quick, general rundown of how Workers’ Comp works, I’ll explain why there is an avenue to explore for those trying to deal with an oppressive carrier that wants to take virtually all the proceeds of a lawsuit.

This is how it comes up: If Peter Plaintiff gets into an accident in an intersection while making a delivery for his boss, he can’t sue his boss because he’s entitled to Worker’s Comp benefits automatically. Fault for causing the accident is not an issue.

But Peter might sue Danny Defendant, the other car in the accident, because Danny was drunk as a skunk when he blew through that red light. Let’s assume there  are big medical bills and lost earnings for Peter, because those are the only times someone might consider this strategy.

Now this is where Workers’ Comp comes in: The insurance carrier exerts a lien on all amounts it pays over $50,000. So if the WC carrier paid out $100,000, it has a claim on $50,000 from the lawsuit.

So let’s say Danny D has a $25,000 insurance policy on his car, which is the minimum here in New York, and that policy gets tendered by his auto insurer because Danny was convicted of DUI and there is now way in hell he’s going to win a civil trial. What does the badly injured Peter get from the 25K? Potentially nothing as the WC carrier swoops in.

Still with me here? Because this is where it gets interesting. The 25K from the insurance policy is first used to pay the lawyer (1/3, because without the lawyer no one is getting anything). That leaves about 16K (depending on expenses). But with a 50K lien, reduced by 1/3 to  34K, Peter Plaintiff might get bupkus.

Please don’t leave…this is where it gets good. And that is because Peter isn’t restricted to going after the 25K policy, and can go after personal assets. It doesn’t happen often, but it is a right he has, and it might happen when the accident is particularly egregious if Danny has some assets.

But the WC carrier is standing there with its hand out. So why should Peter’s lawyer go after the personal assets, if it is the WC carrier that will benefit?

Plaintiff’s counsel has a conflict of interest in trying to maximize recovery, serving two different masters: The client that retained him (Peter) and the WC carrier with its hand out. Why should the lawyer do the work if his client won’t get any money out of it? More importantly, if the lawyer is getting a percent of the whole,and thus the fee is already fixed in a settlement, where is the incentive to fight for Peter for as big a piece of the pie as he’s legally entitled to?

The Court of Appeals discussed a similar conflict last year Fasso v Doerr, regarding the conflict between the injured and health insurers that would like to intervene to take a piece of the recovery. The Court wrote:

[I]ntervention [by an insurer] can create an adversarial posture between a plaintiff/insured and its insurer because neither has an incentive to consider the interests of the other, especially where the potential damages exceed the available sources of recovery. The injured party’s goal is to maximize recovery without regard to whether its insurer recoups any monies it expended for the plaintiff’s medical bills; the insurer’s objective is to reclaim as much of the money it paid as possible regardless of whether its insured has a desire to settle the case rather than proceed to trial.

Now if an attorney’s fee is on the gross lump sum, as is almost always the case in personal injury litigation, that attorney no longer needs to be as concerned with any individual client’s recovery.  The attorney will be less motivated to maximize the recovery for any single individual/client so long as s/he maximizes the gross recovery.

For an individual attorney to represent both the personal injury client and the health care provider, therefore, where resolution is contingent upon both parties accepting a single lump sum to be divided/negotiated by that attorney, would appear to be a patent conflict of interests and a violation of the Professional Rules of Conduct (Rule 1.8(g)):

“A lawyer who represents two or more clients shall not make or participate in the making of an aggregate settlement of or against the clients.”

The Plaintiff’s attorney is expected to “sell” the ultimate resolution to his retained client.  He also is expected to maintain the illusion that he, the attorney, is solely interested in his retained client’s best interests.  But the attorney knows that he will be fully paid his fee from the total settlement regardless how much or little his client recovers.

The Court of Appeals recognized that conflict in Fasso.  It is equally obvious that the avoidance of conflicts of interest is one of the primary principles underlying the integrity of the legal system and personal injury law.

New York’s highest court long ago warned that where divided loyalties exist, a lawyer may act detrimentally to the client.

So what is the solution when faced with the lien? The practitioner may wish to consider making a motion to sever the Workers’ Compensation claim from the suit, citing the conflict, as the lawyer can’t work for both masters. The plaintiff can settle the car accident case, and the WC carrier can pursue the personal assets of the negligent driver, standing in the shoes of the plaintiff.

Will it work? I don’t know as there isn’t any law on it yet that I know of. I tried it recently, but the carrier chose to settle rather than litigate. The carrier may have realized that my client had zero downside in going forward, but if a decision came out against it, Worker’s Compensation carriers around the state would suffer enormous repercussions.

And a tip of my hat to J. Michael Hayes in Buffalo, for helping me wrestle with some of these issues last year. He discusses the issues in more depth at his site dealing with Workers Compensation liens.