December 19th, 2017

Cuomo Signs NY’s New Auto Insurance Law

Last night, New York’s Gov. Andrew Cuomo signed legislation that alters New York’s auto insurance law, and it’s a win-win deal for everybody.

While the law sounds uber-wonky, it’s quite important due to a fundamental misunderstanding of how auto insurance works by the general public.

Most folks think that the insurance coverage they choose — let’s say a 250K limit — will protect them if they’re involved in a collision. But it doesn’t. That insurance only covers other people.

You, the injured driver, must pursue the guy that plowed into you at the intersection because he was checking his texts, through the limits of his insurance policy. And if his insurance policy is only, let’s say, the bare minimum 25K because his job is flipping burgers and he doesn’t really have a pot to piss in, then you with your fractured pelvis are, as we say in the law, shit out of luck.

But wait! There is one small hope for you, and that hope lies in your own policy provisions for getting involved in a collision with an uninsured or underinsured driver. That provision is known here in New York as Supplementary Uninsured/Underinsured Motorist (SUM) insurance.

The problem? The default on your policy was the state minimum, just 25K. And you can’t even collect that if have received the 25K from the guy that plowed into you.

Only a savvy person — or one with a conscientious insurance broker that informed him — would know that you could elect more SUM coverage. Most don’t, because most don’t know. My own legislator wasn’t aware of this whenI discussed this bill with her a few years ago, and found out only when her daughter was injured in a collision and got caught in this trap.

That law is the one that has now changed. Now the default choice is your SUM insurance matches the underlying coverage that you picked. So if you have a 250K policy you will have 250K SUM, and get as much protection for yourself as you are giving to others.

The cost is minimal and people can easily opt out. The thing is, those that are picking more than the minimum amount of coverage are the ones who understand that they likely have the most to lose. That’s why they bought the higher coverage in the first place.

When a bill becomes a law that has no losers attached to it, it’s a win-win all the way around.

I wrote about this back in June when it passed in the closing hours of the legislative session. The vote was 62-1 in the Senate and 104-6 in the Assembly.

People complain often about dysfunctional governments. But when they get it right we should take notice with a little golf clap in their direction.

December 15th, 2017

It Only Affects 14,000 Doctors. And Their Patients.

New York’s largest medical malpractice insurance company is owned by its doctors. But pretty soon, it will be sold to Warren Buffet’s profit-hungry Berkshire Hathaway. And that’s gonna be a problem.

That company is Medical Liability Mutual Insurance Company, which insures over 14,000 New York doctors and is one of the largest such companies in the nation.

And when its doctors are sued for negligence they hire some of the most competent trial lawyers in the city. Doctors, after all, are not shy about demanding the best.

Many of the current gaggle of defense firms were created from the mid-90s dissolution of Bower and Gardner, one of the largest — if not literally the largest — medical malpractice defense firms in the nation.

Unlike BigLaw firms that do “litigation” these folks actually go out and try cases, and know how to do it well. While every large firm has its bad apples, and this biz is no exception, their reputation is, on the whole, excellent.

So what are the ramifications of this sale to a publicly traded company? For doctors? For patient/litigants? For lawyers?

For doctors, I think this is a losing proposition, regardless of the dollars involved when they get bought out, and my reasoning is simple. Currently, MLMIC owes its allegiance to the doctors that own it and run it. But once sold to Berkshire Hathaway, company loyalty shifts to the shareholders. Warren Buffet, after all, is buying this business for the profits it will make for its shareholders. In fact, the very essence of a publicly traded corporation is that fiduciary duty to the shareholders.

It doesn’t matter if you call that profit motive a bug or a feature of capitalism, that’s the way it is. It’s a plain fact that publicly owned companies and privately owned companies owe their loyalty to different constituencies. Wall Street demands profits, and they don’t care too much whose hide it comes from.

How will this manifest itself? First, by trying to trim costs, of course. And part of that will likely mean trying to trim legal fees.

I fully expect to see a new raft of medical malpractice defense firms, who will pitch their business to Berkshire by undercutting the rates of those that currently lead the defense bar. They will try to trim their prices by focusing more on volume, less on quality. And these firms will hire less experienced (cheaper) attorneys to do the work, so that they can give that lower legal rate to their new masters at Berkshire.

And that will be very bad for the docs.

One of the great advantages that small firms have over large ones is that the small firm lawyer generally knows everything there is no to know about a case — every nuance. But when firms do volume, that nuance is lost. The experienced small firm lawyer that sees a constantly shifting parade of big firms come in on a case with inexperienced lawyers has an advantage.

How does this affect the patients, who are now litigants? Well, if the case is part of a volume practice for the defense firm, it is less likely that a savvy defense lawyer or adjuster will recognize the dangers ahead and move to settle the case. The matter gets prolonged.

Now a case being prolonged isn’t always bad for an insurance company, as they make money by investing the float — those premiums that they have taken in but not yet paid out in claims. The insurance business model is, of course, to take in as much as you can in premiums, pay out as little as possible, and invest the money in the interim.

In my younger days, no medical malpractice case ever settled until jury selection, even if a sponge or clamp was errantly left behind. In recent years, however, the insurance carriers have become more savvy and recognized they could get a discount with an early settlement on clear liability cases, and that this discount (along with savings on the legal fees) might well exceed the interest on the float that they might make by stalling. (If interest rates go up, of course, that could change.)

On the one hand, this delay could be very bad for desperate plaintiffs who might not be able to work anymore. The reality, however, is that this scenario is already exploited when possible. Desperate plaintiffs don’t do as well, in general, as “tell ’em to go pound sand” plaintiffs. The delay tool is used in some cases, but not all.

But once they get to trial, plaintiffs will magically have the driver’s seat. Now there’s a jury to be reckoned with. The discount factor for early settlement has evaporated, and settlement demands may become more firm, or even rise (as I’ve done on multiple occasions).

My opinions stem, in part, from the fact that Berkshire owns other insurance companies, one of which is Geico. Geico doesn’t exactly enjoy the best of reputations in New York, and on many occasions I think it has put its own insured at risk of excess verdicts due to a refusal to make early good faith settlement offers.

And one would naturally expect the new MLMIC to follow in those footsteps as they will now answer to the same masters. The problem, however, is that an excess verdict means a hell of a lot more to a doctor than it does to a minimum wage worker with a minimal auto policy.

Will the Gecko treat doctors the way it now treats others that it insures? The best guess from my little corner of cyberspace, is yes. I don’t think that selling itself to Berkshire will end well for the doctors.

I would not be surprised at all if, within 5 years, a new medical malpractice insurance company is born in New York, once again owned by doctors, with the interests of doctors as its priority, instead of a bunch of Wall Street traders.

The deal is expected to close in the first quarter of 2018. It was first announced last year.

December 1st, 2017

Cellino & Barnes Divorce Gets Uglier

Sometimes a divorce is amicable. The divorce of Cellino and Barnes, however, is not one of those times.

Back in May I wrote how this large personal injury firm — based in upstate New York but expanded not only to downstate but out to California as well — had collapsed. Some told me privately that I was jumping the gun, and that collapse was too strong a word for this fight.

I speculated back then that the two main reasons for a firm of this size to collapse were money and ego. It appeared to me at the time, based on press accounts and court filings, that Stephen Barnes had already crossed the Rubicon and that there was no going back in his relationship with Ross Cellino, Jr.

And now we see this from the Buffalo News:

Money continues to roll in by the millions of dollars — but there’s no harmony between battling law partners Ross M. Cellino Jr. and Stephen E. Barnes.

On Tuesday, Barnes accused Cellino of trying to burn the Cellino & Barnes law firm “to the ground,” regardless of how many employees are hurt.

But if you think burn to the ground is harsh language, it doesn’t compare to this Barnes comment that comes in legal filings over whether a receiver should be appointed to resolve deadlocked issues regarding the dissolution of the firm. As per Barnes , Cellino said:

“I don’t give a f–k, I will burn the place to the ground and start over with one lawyer. I have the resources. F–k it, f–k Steve and f–k Daryl. Let all these f–king lawyers spend the next 20 years with Steve”

On the flip side of this nastiness is Cellino’s allegation in a November 29th affidavit that Barnes has already set up his own competing law firm and has used Cellino and Barnes assets/personnel to assist in doing so.

The TV and radio ads continue, by the way with an astounding $4.6 million spent from in 2017 through the end of November. In that same Cellino affidavit, he says that it makes no financial sense to continue spending money on a brand that will soon cease to exist. And they spend about $65,000 per month on pay-per-click advertising.

That’s a lot of money, in case you were thinking of following in their footsteps. But remember that money doesn’t buy happiness.

An old proverb states that hell hath no fury like a woman scorned. I’m not sure why that’s limited to women, however, as the emotions related to betrayal, ego, rejection, insult and revenge are all very powerful and cause people to do crazy things. That happens in relationships both personal and business.

This fight, with over 200 documents filed already, won’t be ending soon (or happily).

November 24th, 2017

Count Your Blessings

This is a repost from last year — the message hasn’t changed, but I did run two more turkey trots this year in the costume…
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People in mixed families — some of whom voted for Clinton and some of whom voted for Trump — may be dreading Thanksgiving and seeing certain relatives.

But it isn’t up to me to tell you how to grow up and handle awkward and painful situations. If you haven’t figured it out yet, you are unlikely to learn how to do so here.

This doesn’t mean you can’t be thankful. As you likely should be, if you are reading this post.

The first time I did a Thanksgiving Day message, it was in the form of a Blawg Review, recounting the time Arlo Guthrie came to dinner at my house for a dinner that couldn’t be beat. That was 2009.

In 2011 I wished one and all a Happy Thanksgiving as I celebrated my fifth year blogging. I decorated my blog that year with the photo you see here: me dressed up in a turkey suit for a local race. That message is below.

In 2013 I came back with this message to put away those little pocket computers, unless you wanted to use the phone function that some of them have to talk with those dear to you, but perhaps not so near.

I am now a blogger for 10 years. And this past Sunday I put on that turkey suit that decorates this post for a local 5K, and I’ll put it on again for another on Thanksgiving morning. Because I can.

The costume does not come with a trigger warning. So if I scare the bejesus out of someone — and oddly enough it does frighten some small children — they will just have to deal with it.

Running around in a turkey suit sure beats one of the alternative lives I could be having: Living in the anarchy and horror of Syria. Or suffering with the terrorism in France. Or Lebanon. Or Israel. Or Nigeria/Cameroon. Or Yemen. Mali. Iraq. Libya. Egypt. Afghanistan. And I’m only scratching the surface here.

There are many different ways to count your blessings. This is the way I want to do it. My original posting from 2011 is below.

–Eric “Turkeywitz”

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Now you can see that I have a couple pictures here of me in a turkey suit, shot Sunday at a local Turkey Trot. And you might be wondering what the heck that has to do with blogging, or lawyering, or five-year anniveraries. And, you also might wonder if I’m nuts to put them up here, out of concern that it diminishes the seriousness of what I do for clients in the courtroom. Or that it might be seen by a potential client who will quickly hightail it elsewhere.

Glad you asked.

I see my fair share of human misery come through the doors with busted up bodies that shouldn’t be busted up. Anyone that deals with the consumer end of law will see variations on this theme, from divorce, criminal charges, bankruptcy, etc. And seeing those things gives me (and should give everyone) a greater appreciation for what we have. I know, from seeing it happen to others, that a car could blast through an intersection and instantaneously change my life and those of my family forever. Don’t say it couldn’t happen to you, because it sure happens to some people, who’s only fault might have been sitting patiently at a light. And it only takes a momentary lapse of attention on the part of a driver.

There is no limit to the number of ways that life could be quickly altered for the worse, and I’m not sitting in the middle of a war zone.

So I am thankful for each day that I get. And if I get the chance to dress up silly and run a 1-mile Gobbler race with a few hundred local kids, giving out gift certificates to a local cupcake shop for those that finish near my feathers, then yeah, I’m going to do it. And if I can have a few hundred adults in the 5K race chase the turkey, with a chance to win free entry into a little half marathon trail race I put together, well that is fun too. Community events are often like that. Fun. And it’s nice not just to participate, but to help create them.

In deciding to dress like a turkey for this event for the third year in a row — and with my name I’m the natural choice for this gig — I’m also mindful of Benjamin Franklin’s view of this particular fowl, as he advocated for it to be our national bird instead of the bald eagle:

For the Truth the Turkey is in Comparison a much more respectable Bird, and withal a true original Native of America . . . He is besides, though a little vain & silly, a Bird of Courage, and would not hesitate to attack a Grenadier of the British Guards who should presume to invade his Farm Yard with a red Coat on.

I decline the opportunity to put on the “serious lawyer face” 24/7. You might see the suit and tie shot on my website, but you won’t see it on my blog. Here I get to let my feathers down.

I write this blog the same way I go through life. I try to enjoy it, while at the same time taking what I do for a living very seriously. I think that’s reflected in the 1,000+ posts that I’ve done. And yes, this is the same reason that I have for running the occasional April Fool’s gag.

This week is Thanksgiving. Look around you. Be thankful for what you have. And live each day to the fullest.

I hate to use Latin phrases in law, as it invariably sounds pretentious, but I’ll make an exception today. Carpe diem.

Now if someone could please cue up a copy of Alice’s Restaurant, I’d be most grateful. I hear Arlo may be coming to dinner….

November 13th, 2017

Subverting the Constitution

Brett J. Talley

The news, if you care about the courts and the constitution, was pretty awful last week. The lede in this LA Times story was the the Senate Judiciary Committee rubber-stamping a grossly unqualified and incompetent judicial nominee.

How do I know he was grossly unqualified and incompetent? Because he has just three years of actual practice and has never tried a case:

Brett J. Talley, President Trump’s nominee to be a federal judge in Alabama, has never tried a case, was unanimously rated “not qualified” by the American Bar Assn.’s judicial rating committee, has practiced law for only three years and, as a blogger last year, displayed a degree of partisanship unusual for a judicial nominee, denouncing “Hillary Rotten Clinton” and pledging support for the National Rifle Assn.

On Thursday, the Senate Judiciary Committee, on a party-line vote, approved him for a lifetime appointment to the federal bench.

And so while various politicos think and talk in terms of grooming judges for future higher judgeship where they can become activist in shaping policy and interpreting laws and the constitution in a way favorable to their political ideology, those of us in the trenches are forced to practice law in front of them. But this potential judge has never brought a case or even argued a motion:

“He’s practiced law for less than three years and never argued a motion, let alone brought a case. This is the least amount of experience I’ve seen in a judicial nominee,” said Kristine Lucius, executive vice president of the Leadership Conference on Civil and Human Rights.

Once upon a time, a judicial appointment was the capstone of a career spent in the law, with new judges bringing the wisdom of their decades of experience. Now it is turning into a political training ground for clueless baby lawyers.

But it is not enough to rail against Trump for doing this, because Trump only nominates. And nominating/appointing the most competent people to positions has not exactly been the hallmark of his administration.

Talley can only take the bench if the Senate says so. So far, the Judiciary Committee, which should know better than to sabotage the Constitution, simply bent over for Trump and took it. It is inconceivable that any person on that committee believes Talley has the competence for being a judge.

So what can go wrong? The people that will suffer are litigants who are force to come before him if the Senate continues the Judiciary Committee’s rubber stamping.

And if you think this will auger well for those of a conservative bent, under the theory that Talley is merely a political hack who will do their bidding, then I think you’re mistaken. Bad rulings lead to appeals. And delays. This is money and time. Getting a favorable ruling in the trial court only to be reversed on appeal is not a benefit.

There are many lawyers who, if a judge is about to commit reversible error, will stop the judge even if the ruling would favor them at trial. Because a tainted verdict is quite often a very bad problem. (Others, of course, will gleefully grab the bad decision and just worry about the ramifications later.)

The Senators know what they should do. The question is will they have the courage? Will they show respect for our Constitution? Will they allow incompetence to take the bench?

We will find out soon.

Addendum: I wrote this in 2009 about what I want to see in a SCOTUS nominee, but much of it holds true for lower level federal judges as well. I want to see experience: The SCOTUS Nominee and The Tissue Box Test

Elsewhere:

He has never tried a case, but Trump wants to make him judge for life (Phillips @ The Washington Post)

Brett Talley, a 36-year-old lawyer whom President Trump nominated for a lifetime federal judgeship, has practiced law for only three years and has yet to try a case….

…Talley’s lack of experience in the courtroom and his partisan commentaries, however, were repeatedly questioned by Democrats on the Judiciary Committee.

“Your overall qualifications and preparation for becoming a lifetime-appointed federal judge are a concern to me,” Sen. Dianne Feinstein (D-Calif.) said, according to her written questions to Talley.

Sen. Richard J. Durbin (D-Ill.) did not mince words, asking questions like: “How can you claim to be qualified for a lifetime appointment to supervise federal trials on a daily basis when you have never yourself tried a single case?” and “Do you think it is advisable to put people with literally no trial experience on the federal district court bench?”

Donald Trump’s Unqualified Judges (Mataconis @ Outside the Beltway)

Where [Trump] differs from those predecessors is in the percentage of nominees who have been rated “not qualified.” As can be seen [in the attached chart], he is far ahead of any of his four immediate predecessors in this category, with roughly 20% of his nominees to date receiving the rating.

Talley Ban (Greenfield @ Simple Justice)

He worked in the Alabama Attorney General’s office for a couple years, and now for DoJ since January. Talley’s is the resume for a senior associate position at Biglaw, and he would almost certainly get the job. It’s not a bad resume. It’s just not federal judge material…

…So what makes Brett Talley unqualified? It’s the package. He’s a legal kid, a babe in the legal woods. Born in 1981, a year before I graduated law school, he’s been admitted to practice ten years. Had he been in the trenches for all ten of those years, he still wouldn’t be qualified to serve as a federal district court judge. Nobody knows their ass from their elbow in so short a time. Nobody gains the breadth of legal, or human, experience without paying their lawyer dues. Regardless of the pieces that comprise the package, the sum total of the package is what matters. His package is almost empty.