It was reported this week in the New York Times that New York City has agreed to a class action settlement in the amount of $33 million for individuals subjected to illegal strip searches following misdemeanor arrests. The strip searches lled to a Section 1983 suit for the plain violation of the 4th Amendment prohibitions against unlawful search and seizure.

Interestingly, it was reported that this is the 3rd such settlement in the last 10 years that the City has settled cases for illegal strip searches. The first such settlement came in 2001 for $40 million. The second came in 2005 for several million. Now once again, the City has settled for $33 million for essentially the same pattern of conduct.

In the first wave of cases, the illegal searches were conducted prior to intake at the department of corrections. The practice was found to be unconstitutional under the 4th Amendment in Shain v. Ellison and formed the basis of the original settlements.

In response, the City‘s department of corrections apparently determined that the unlawful searches would become lawful in the event that they were conducted following intake and admission into the correctional facilities. Another 100,000 people were, even after the first two rounds of settlements, subjected to the same unlawful strip searches.

The $33 million settlement seems like a very large settlement and it is in total. However, each individual subjected to the illegal searches will receive on average only $2000.00 for having been subjected to the humiliation of strip searches which included cavity searches of both men and women, including menstruating women, despite the lack of any reasonable suspicion that the detainees carried unlawful weapons, drugs or other illegal contraband on their bodies. How much would you accept to be stripped nude and subjected to cavity searches for a minor infraction of the law?

In light of the financial and budgetary crises facing New York City, why might it have agreed to such a large settlement? Clearly, the compensatory damages alone for the 100,000 individuals subjected to the barbaric, inhumane and unconstitutional strip searches could have easily exceeded $33 million at trial. In addition, the City was facing possible punitive damages for the clear lack of effect the prior lawsuits had on the City‘s behavior. Punitive damages are intended to both punish and deter. In fact, the most valuable role that punitive damages serve for society is to deter future illegal, dangerous or reckless practices of both the defendant and others. It is hard to imagine a better case for punitive damages than here where the City, despite two prior class action lawsuits and settlements, had failed to change its policies regarding strip searches.

The lawsuit and the settlement is likely to cause a flood of ranting from the tort reform movement. When you hear these, keep in mind that those subject to the illegal searches had been charged with a vast array of misdemeanors including child support violations, petty shoplifting, jumping a subway turnstile, petty marijuana possession, and trespassing to name a few. Of course, tort reformers will find a way to justify the illegal search and seizures, or in the alternative, try to argue that such suits serve no useful purpose other than enriching trial attorneys while depleting the public coffers of the good folks in the department of corrections who saw fit to engage in these practices.

Ask yourself in response to their arguments, which society you wish to live in, theirs or one that respects the United States Constitution, and the rights of individuals including those of your children, family and friends that in the tort reform world would most certainly fall prey to abusive practices of government, corporations, insurance companies, manufacturers or others who regularly fail to appreciate the rights, safety and welfare of the public they serve.

DISCLAIMER

Related Reading:
Wrongfully Imprisoned Man Awarded $18.5 Million by Jury Following 12 Years in Prison and Years of Civil Rights Litigation
Evidence of the Plaintiff‘s Criminal Past in Personal Injury Cases
New Mexico Statute of Limitations & Exceptions — Time is Always of the Essence!

Collins & Collins, P.C.
Albuquerque Attorneys

As promised in my last post, I will set forth the issues of import for uninsured/underinsured motorist coverage in New Mexico addressed in Salaz v. Mountain States Mutual Casualty Company. The case is particular interest to injured passengers. However, the case also addresses several more general but equally important issues surrounding uninsured/underinsured motorist coverage.

First, and foremost, a passenger injured in an insured vehicle is covered by that vehicle‘s uninsured/underinsured motorists coverge. As such, if the other driver has insufficient policy limits to cover the person‘s injuries, the injured person can make a claim on the uninsured/underinsured provisions of the vehicle in which he or she was a passenger.

Secondly, there is indeed a consent to settle requirement, as asserted by Mountain States, in all uninsured/underinsured claims. In other words, an injured person must notify the uninsured/underinsured insurance provider of an offer of settlement prior to accepting the settlement. The insurance provider can conduct its own investigation to determine whether or not the underinsured driver is in fact judgment proof beyond the policy limits in his or her own coverage (i.e. has no money or assets to collect in a lawsuit). Failure to obtain consent prior to accepting a settlement will waive the uninsured/underinsured coverage.

Next, and equally important as the first two, insurance companies in New Mexico are held to a very high duty of fair dealing in dealing with their insured policy-holders. This includes class-two insureds who have no direct contractual relationship with the insurance company such as Ms. Salaz. This is particularly the case as here where the insurance company knew of the claims and the possible uninsured/underinsured coverage for the injured person and deliberately fails to notify the insured of the coverage.

Finally, and perhaps a little off message here, injured persons should recognize that there are many, not all, insurance companies or individual adjusters that will do everything they can to avoid paying the full value of claims. This is in fact what drives many injured people to lawyers. Countless injured individuals, particularly in smaller claims, attempt to work out their claims directly with an insurance company. Unfortunately, some insurance companies will view this as an opportunity to get off cheap or deny the claim completely. Some injured people just give up and accept this outcome. Others caught in this situation grow so frustrated or angry that they are forced to seek the assistance of an attorney.

Then what? You guessed it. The insurance companies cry foul, spend countless dollars on tort reform lobbying, lament the state of the legal system and the abuses of trial attorneys, and even accuse injured parties of greed for seeking the assistance of an attorney. You can bet that the insurance industry and their lobbyists had a part in designating the New Mexico Appellate Courts #5 on the tort reform list of judicial hellholes.

Thankfully, the New Mexico Courts hold insurance companies accountable time and time again leading one to conclude that hellholes are not all bad.

DISCLAIMER

Related Reading:
Uninsured/Underinsured Coverage: An Insurer‘s Duty to Passengers in New Mexico
Recovery of Punitive Damages Under Uninsured/Underinsured Motorists Coverage
Notice Requirements in New Mexico Uninsured/Underinsured Motorist Cases

Collins & Collins, P.C.
Albuquerque Attorneys

The case of Salaz v. Mountain States Mutual Casualty Company was filed in the New Mexico Supreme Court in early 2009. As such, this is not exactly a timely post but it addresses a number of important issues regarding uninsured/underinsured motorist coverage in New Mexico. The case could prove very helpful to those injured in New Mexico as passengers in another driver‘s insured vehicle.

The case involved uninsured/underinsured motorist coverage for a class-two insured which is defined as a passenger in a covered vehicle. Ms. Salaz was injured while riding in a vehicle insured by defendant Mountain States Insurance and therefore came under the policy‘s uninsured/underinsured (UM/UIM) provisions.

Ms. Salaz believed that the car in which she was injured was uninsured due to that indication on the police report. Ms. Salaz had filed a claim against the other driver and his insurance company Farmer‘s . Mountain States learned of this lawsuit, made a subrogation demand to Farmer‘s but failed to notify Ms. Salaz of the coverage available to her as a class-two insured. Ms. Salaz had no reason to know of the uninsured/underinsured coverage available to her, and did not make any attempt to discover the available coverage.

Ms. Salaz subsequently settled for policy limits with Farmer‘s. The check issued by Farmer‘s named defendant Mountain States as a payee consistent with Mountain States subrogation claim. This was the first that Ms. Salaz learned of Mountain States coverage on the vehicle in which she was injured. Ms. Salaz subsequently made a underinsured claim (UIM claim) against Mountain States. Mountain States refused coverage on the basis that Ms. Salaz had breached the “consent to settle” provision in the subject policy.

The District Court granted summary judgment in favor of the defendant Mountain States basically asserting that it was up to Ms. Salaz to determine all available coverage and that Mountain States had no affirmative duty to disclose coverage to her as a class-two insured due to the lack of a contractual relationship between Ms. Salaz and Mountain States.

Both the New Mexico Court of Appeals and the New Mexico Supreme Court disagreed with the District Court. Both found that indeed there was a duty to disclose available coverage to Ms. Salaz as a class-two insured. As a passenger in the covered vehicle, Ms. Salaz was covered by the uninsured/underinsured (UM/UIM) provisions of the policy. As an insured, Mountain States owed certain duties one of which was to disclose available coverage to Ms. Salaz once it learned of her claims.

The case points out a number of important issues regarding uninsured/underinsured motorist coverage in New Mexico. These will be addressed in the next post.

DISCLAIMER

Related Reading:
Uninsured/Underinsured Coverage: An Insurer‘s Duty to Passengers in New Mexico
Recovery of Punitive Damages Under Uninsured/Underinsured Motorists Coverage
Notice Requirements in New Mexico Uninsured/Underinsured Motorist Cases

Collins & Collins, P.C.
Albuquerque Attorneys

When you Google MRI Risk, MRI Dangers, and so on, the results for the most part indicate that there are no risks. Yet despite the apparent absence of risks of an MRI, a 6 year old boy was killed during an MRI procedure. How could this happen in a presumably risk free procedure? Gross medical negligence?

The child, Michael Colombini, was killed in an MRI chamber when an oxygen tank, drawn by the MRI‘s 10 ton electromagnet, flew into the chamber striking the child in the head. A staffer at the Westchester Medical Center left the oxygen tank in the MRI room despite the universal ban of such metal objects from MRI rooms.

The case settled for $2.9 million while the case was pending in New York state court. The hospital accepted liability within days of the tragic incident. However, the hospital‘s offer of $1 million to settle quietly was refused by the child‘s family.

The child‘s family subsequently filed a wrongful death action against the hospital and nine other defendants, including the supervising doctors, technicians, the MRI administration company, the MRI manufacturer and a nurse. The suit included medical malpractice, products liability, and wrongful death claims. The suit demanded compensatory damages, damages for pain and suffering, emotional distress to the father who was present during the accident and punitive damages.

After 9 years of litigation, the medical malpractice and wrongful death suit was settled for $2.9 million on the eve of trial. The settlement surprised many in the New York legal community for a couple of reasons. Unlike New Mexico, New York prohibits recovery for the parents‘ loss of love and affection of their child (loss of consortium in New Mexico). Instead, recovery in New York wrongful death cases typically is entirely dependent upon economic losses or lost wages. As such, a child‘s life in New York has very little value in the courts since a child has unproven income potential. Certainly, tort reformers can come up with a strong argument for such an atrocious and callous valuation of a child‘s life.

What would cause the hospital in this case to settle for $2.9 million under such defense favorable circumstances? Though the New York appellate courts will often greatly reduce punitive damage awards, potential punitive damages in this case may have swayed the hospital. In addition, there was the possibility of a large emotional distress award for the father who was at the scene when his child was killed. Finally, the attorneys for the family, Matthew Gaier and Tom Moore, were relentless in the pursuit of justice in this case.

No parent could ever place a value on their child‘s life. The court‘s in New York place little value on a child‘s life. Moreover, the New York appellate courts apparently do not lend the same deference to a jury‘s award of punitive damages as the Courts of New Mexico.

Fortunately, there are trial lawyers like Matthew Gaier and Tom Moore that will step up and fight for families who have lost children. Thankfully for patients and families in New Mexico, the Appellate Courts here protect the individual against corporate interests earning them the designation of “judicial hellhole” by tort reformers.

Who could argue that the hospital and the staffer were not grossly negligent? There was clearly a lack of procedure and oversight to protect against such gross incompetence. There was likely also insufficient training and supervision of the staffer. How could a metal oxygen tank be placed in a room with a 10 ton electromagnet in the absence of gross negligence at each and every level of the MRI facility? It couldn‘t. Yet tort reformers will continue to press for medical malpractice limits even in the face of rampant medical negligence in hospitals across the country that leads to incidents such as these placing each of us, and our children at risk every time we must visit a hospital. And without punitive damages, there is no real deterrent to this kind of behavior.

DISCLAIMER

Related Reading:
Comparative Negligence Decided by Jury in New Mexico Personal Injury Cases
The Myth of the Frivolous Medical Malpractice Lawsuit
Failure to Detect and Report Medical Errors Jeopardizes Patient Safety

Collins & Collins, P.C.
Albuquerque Attorneys

The 10th Circuit case of Willis v. Bender addressed a doctor‘s duties to disclose the doctor‘s background information to a patient as part of informed consent. Lack of informed consent is often an element in medical malpractice claims in New Mexico particularly in surgical procedures.

Under New Mexico law, informed consent does not typically require that a physician provide the patient with the doctor‘s background information even matters related to competence. The courts reason that such a duty would require the disclosure of large amounts of information not necessarily relevant to the patient‘s medical decision-making.

However, the 10th Circuit Court of Appeals (Wyoming) in Willis v. Bender addressed a situation where the patient explicitly inquired into the doctor‘s background, and the doctor provided false and misleading information in response to the patient‘s inquiry. The Court found that in this case, a failure to provide honest and truthful answers to the patient‘s questions violated the patient‘s right and the doctor‘s duty of informed consent.

Willis v. Bender involved a laparoscopic cholecystectomy, laparoscopic surgery to remove Ms. Willis‘ gallbladder. Ms. Willis had several prior surgeries in her abdominal area causing significant abdominal scarring and adhesions. Due to the scarring and adhesions, the doctor who performed two of the prior surgeries advised Ms. Willis that future surgeries should be performed with an “open” rather than “closed” procedure.

During the consults leading up the surgery with Dr. Bender, Ms. Willis discussed the need for a closed procedure due to the scarring. Ms. Willis asked a number of questions of Dr. Bender regarding his qualifications for the procedure, his past history of such procedures, his success rate, past medical malpractice complaints and prior issues with his license. She also requested that Dr. Bender consult with her prior doctor prior to moving forward with the closed procedure.

Dr. Bender assured Ms. Willis that he had never had a medical malpractice complaint, had no prior issues with his license, that he had a 99.9% success rate with this type of procedure and that he had discussed the procedure with her prior doctor suggesting the two had agreed on the proposed approach to the surgery. In fact, Dr. Bender had had a several prior medical malpractice claims, one involving a wrongful death action resulting from a the death of a patient following a laparoscopic cholecystectomy. In addition, Dr. Bender had past actions against his license by the Wyoming Board of Medicine. Perhaps worst of all in light of the facts, Dr. Bender had never contacted Ms. Willis‘ prior doctor to consult regarding the risks of the proposed closed procedure.

Unfortunately, the closed procedure did not go well due to the existing scar tissue. There were several surgical and post-surgical complications including a bowel perforation and a resulting bowel obstruction, ileus, and severe infection.

The 10th Circuit recognized that a doctor generally has no duty to disclose background information. However, the court stated, “Under these circumstances, if proved, her consent can hardly be considered “informed.”” As a result, the Court reversed the District Court‘s summary judgment in favor of Dr. Bender.

Willis v. Bender raises some important issues. As seen in previous posts, hospitals and surgery carry an alarming level of risks. Patient‘s are advised “Protect Thyself” by taking measures to protect themselves from harm. In light of the lack of an affirmative duty on the part of the physician to disclose relevant background information, a patient should ask the questions. In the great majority of cases, the doctor will respond honestly. However, in those rare situations where the doctor is not honest, the patient will have some recourse for the misrepresentations assuming New Mexico follows the lead of the 10th Circuit Court of Appeals.

DISCLAIMER

Related Reading:
Are Guns Safer than Hospitals?
Hospital Survival: Essential Strategies
Tort Reform and The Hypocritic Oath

Collins & Collins, P.C.
Albuquerque Attorneys

It was announced last week that there has been a $657.5 million settlement to compensate around 10,000 workers harmed during the cleanup of Ground Zero in the 911 Terrorist Attack. Two obvious questions arise: Is it a fair settlement for the injured workers? Why the delay in settlement when the workers were obviously harmed during the cleanup?

The injured workers individual compensation will vary greatly depending on their injuries. Some will receive thousands while others may receive in excess of $1 million. Many of the injured workers have suffered severe and permanent physical injuries. Most of the injuries are respiratory in nature, the most common being asthma. Others have suffered from a variety of cancers, some of which have proven fatal.

There has never any doubt that these workers were injured as a result of the Ground Zero cleanup activities. In fact, the federal government set up a $1.1 billion dollar fund which was and remains available to handle these claims. So why did it take so long to settle these claims?

Plaintiff‘s trial lawyers get knocked around a lot in the media. They are an easy and popular target for politicians of every stripe. But what about the defense trial attorneys? It takes 2 to tango as they say.

The New York Times reported that the insurance company for the City of New York handling these claims, the WTC Captive Insurance Company, paid attorneys $200 million in legal fees to defend against these claims. The plaintiff‘s trial attorneys are already taking heat for their fees and the judge is looking at knocking them down by 50% or more. No such movement is afoot to reduce the $200 million paid to the insurance defense firm.

The plaintiff‘s firm was working purely on contingency, taking huge risks, with huge financial investment, and huge commitments of time with the possibility that they get nothing in case of a loss at trial. By contrast, the defense firm was able to accumulate $200 million in legal fees defending the indefensible knowing full well that the case would settle prior to trial. All this, while there was a $1.1 billion fund available to settle these claims.

So, again, why the delay in settlement of these obviously meritorious claims? Perhaps, as they say, the case was not ripe for settlement. It takes a long time to run up $200 million in defense attorney fees.

Is the settlement fair? Let‘s see. There were 10,000 injured workers. This would allow for about $65,700 per worker assuming the settlement is spread evenly among the workers which it is not. However, the settlement may be reduced to $575 million if more than 95% of the workers do not consent to the settlement. That knocks it down to $57,500 per worker. The defense attorneys will take $200 million for successfully dragging out the litigation for years. The $1.1 billion insurance fund is left with $442.5 million. The workers will continue to suffer from their injuries for the remainder of their lives.

In the coming weeks and months as the debate rages over the fairness of the suit, rest assured the focus of the debate for many will not be on the unjust denial and delay of the workers rightful claims, or the under-compensation of many of the more seriously injured workers, it will be on the fees earned by the plaintiffs‘ trial attorneys. When the debate arises, and it will, I hope some thoughtful commentators in their attack on plaintiff trial attorneys, will also consider the fact that the defense of the indefensible claim is often at the root of litigation. And most importantly, the question will be asked whether these workers can rest in knowing that they and their families will be justly compensated and their future medical needs will be met.

Collins & Collins, P.C.
Attorneys at Law

The debate over frivolous lawsuits almost always leads to the McDonald‘s scalding hot coffee case. The case, Liebeck v. McDonalds‘s was filed in Albuquerque‘s Second Judicial District Court. The outcome was a jury verdict of $160,000 in compensatory damages which reflected a finding of 20 percent comparative negligence on the part of Stella Liebeck. In addition, the jury awarded $2.7 million in punitive damages. This is the portion that gets everyone so excited.

There are many misconceptions about what happened. Many argue that Ms. Liebeck was driving, the coffee was normal temperature, that she knew she could get burned and that somehow it was her own negligence that caused the injuries. Finally, it is often suggested that Ms. Liebeck suffered only minor injuries. The jury did find her 20% responsible. The rest is false.

Ms. Liebeck was not driving. She was a passenger in the car. The car in which she was a passenger was not moving, it was parked so that she could put cream and sugar in her coffee. The coffee was 185 degrees, where industry and safety standards dictated that the coffee be no hotter than 155 degrees to avoid serious burns.

As Ms. Liebeck was opening the Styrofoam cup to put in sugar and cream, the cup collapsed pouring the entire contents of the cup into her lap. Ms. Liebeck suffered 3rd degree full thickness burns over 6 percent of her body around her groin, buttocks, and thighs. She was hospitalized for 7 days where she underwent skin grafting, and very painful daily debridement treatments to prevent infection which can prove fatal in burn cases.

So why the $2.7 million in punitive damages? McDonald‘s had documented over 700 similar incidents with its coffee, many also resulting in 3rd degree burns. McDonald‘s knew of the danger. McDonald‘s also knew that the temperature of their coffee posed a risk to patrons. It was well documented both within and outside McDonald‘s that 185 degree coffee posed a serious risks of injury to customers. McDonald‘s also recognized and admitted that the industry standard, due to safety issues, was to maintain coffee temperature at 145-155 degrees. The risks was even more pronounced due to the fact that the very purpose of the drive-through coffee sales was to put coffee in the hands of drivers in moving vehicles, a combination certain to lead to spills.

In short, McDonald‘s was well aware of the danger of its coffee. Ms. Liebeck to the contrary had no reason to expect that a coffee spill would result in 3rd degree full thickness burns over 6 percent of her body. There was simply no reason for Ms. Liebeck to expect such injuries, nor any reason for her to take extraordinary caution to protect against them.

Despite the clear finding of liability and fault and a finding that McDonald‘s action was reckless, callous and willful, and that $2.7 million represented only 2 days of coffee sales, the court reduced the punitive damages to $480,000. The parties eventually settled. The final settlement amount is not known to the public but rest assured it was much higher than the original offer of settlement of $20,000 from Ms. Liebeck to cover her medical expenses.

So why bring up the McDonald‘s coffee lawsuit now? McDonald‘s is back in the news with a lawsuit related to exploding pockets of grease in its chicken sandwiches. The news and commentators should be bristling with outrage in the coming weeks over the audacity of a McDonald‘s patron to sue over what surely must be an assumed risk of eating at McDonald‘s.

Certain to be absent from the these discussions is corporate arrogance, greed and irresponsibility that led McDonald‘s to refuse a modest offer of settlement in the coffee case, and now leads them to dodge responsibility for explosive chicken grease in its sandwiches. I guess it is asking too much for McDonald‘s to accept responsibility and fix the problem on its own. Instead, McDonald‘s is forcing the litigation which if its gamble does not pay off it will later herald as the downfall of democracy, capitalism, and everything we hold dear in America.

DISCLAIMER

Related Reading:
Sorting Out Responsibility in a New Mexico Premises Liability Claim
Personal Injury, Insurance Coverage and the Lies of Tort Reform
Tort Reform Ignores Bad Corporate Behavior: Case in Point, Toyota!

Collins & Collins, P.C.
Albuquerque Attorneys

Personal injury lawsuits can often take a very long time. They are often highly stressful on a marriage for a number of reasons. Many times, the injured person is in significant pain following an injury. This can cause a lot of marital friction. In addition, the injured person many times cannot work causing serious financial strain on the marriage. Finally, the injuries will on occasion severely interfere with the intimate relations of the couple. All these strains can lead to divorces in the middle of a personal injury lawsuit or soon thereafter.

The question that arises is whether the personal injury verdict or settlement is community property in New Mexico. The answer is partly yes, mostly no.

A personal injury lawsuit results in compensation for damages associated with the individual‘s injuries. These damages include compensation for the physical injuries as well as the pain and suffering associated with those injuries. In a nutshell, compensation for physical injuries and pain and suffering are not community property. The damages are awarded to compensate the individual for injuries personal to the individual.

However, personal injury settlements also often include amounts for damages beyond the physical damages and pain and suffering. They typically will include damages for medical expenses (past and future) and lost earnings (past and future). These can be far more difficult to classify.

For medical expenses, the classification of the recovery is dependent upon the source of funds for those medical expenses. If the medial expenses were paid out of community funds, then the recovery for medical expenses is community property. However, if the medical expenses were paid from insurance, then the bulk of the recovery for medical expenses is not community property.

The calculation becomes more complex in the case of future medical expenses. Certainly, any medical expenses incurred after the marriage would be separate property. The issue would be complicated in a case where the divorce is pending, or not yet begun, at the time that future medical expenses are awarded. This would require a calculation of the separate portion of those medical expenses still remaining at the time of the divorce, whenever that might occur. This is something that would be addressed in a Marital Settlement Agreement in the property division, or by trial if necessary. It might require the assistance of an expert in accounting or annuities to properly classify the community portion of the settlement.

Lost income is accounted for in much the same way. Any income during the marriage is community property. Therefore, any losses of income accrue to the community. As such, compensation for these losses is also community property. Again, the real complication arises in considering future lost wages. In cases of serious personal injury, the future lost income may represent the vast majority of any settlement or verdict. This is particularly so when the injured person is no longer able to work at all. The calculation of future lost income can be somewhat complicated. In a nutshell , however, future lost earnings involves a calculation of the individual‘s expected future income over the remainder of his or her working life based upon a variety of factors that indicate income potential. The resulting figure is then amortized back to the present for the calculation of future lost wages.

Clearly, income earned following a divorce is separate property. Income following a legal separation is also separate. Again, the timing of the divorce is critical. If the divorce occurs prior to the final verdict or settlement, then future lost income is clearly separate property and not an issue. If the divorce occurs following the verdict or settlement, then the lost wages will be apportioned according to the date of divorce.

Other complications occur as well. In many cases, the personal injury funds end up getting commingled with other community property such as home improvement projects. This sort of commingling can seriously complicate the allocation of the personal injury verdict or settlement between community and separate property.

The bottom line is that anyone involved in personal injury litigation should consider these issues very carefully if the marriage is on the rocks. The issues can become quite complicated and convoluted. Consultation with an attorney, both family law and personal injury, would be well advised to avoid any possible unpleasant surprises in the division of the verdict or settlement as community property.

DISCLAIMER

Related Reading:
Loss of Consortium Claims in New Mexico
Loss of Consortium Claims: Discovery Can be Brutal
Steps Necesssary to Prove Your Damages in a New Mexico Personal Injury Case

Collins & Collins, P.C.
Albuquerque Attorneys

Punitive damages are a hot topic both for businesses and for individuals harmed by the conduct of businesses. Punitive damages are just that, “punitive”. They are awarded above and beyond compensatory damages to punish outrageous and dangerous corporate behavior. More importantly, they serve the purpose of deterring future bad behavior. Punitive damage are relatively rare awarded only in cases of extreme behavior. They come into play only when the safety of the public is at stake.

In light of the rarity of punitive damages awards and the purpose that they serve which is to protect the public from reckless and irresponsible corporate behavior, the bill moving through South Carolina is pretty remarkable. The South Carolina House approved, by a vote of 104-9, a tort reform measure which would limit punitive damages across the board to $350,000.

The rationale for the bills is faulty on several grounds. The primary argument is that it is an economic development tool made necessary because nearby states, including Florida, Georgia and North Carolina, have passed similar measures. It is argued that businesses will not locate in South Carolina without the $350,000 cap. The implicit suggestion is that punitive damages are out of control in the State.

The reality could not be further from the truth. The South Carolina Trial Lawyers Association found 136 personal injury verdicts in South Carolina‘s 3 largest counties in all of 2007 and 2008. Of these, only seven included punitive damges, and only 2 of the 7 included punitive damages greater than $7000. This reinforces the fact that punitive damage awards are both rare and stingy. If a company has engaged in such outrageous behavior to incur punitive damages at these odds, is this the kind of business that South Carolina or any other state would want to attract?

Secondly, it is argued after all, “Isn‘t $350,000 really enough to deter bad behavior?” Ask Toyota this question. Apparently, Toyota saved $100 million by limiting the recall on its vehicles leaving millions of defective vehicles on the roads. In the meantime, uncontrolled and sudden acceleration of Toyota and Lexus vehicles led to 2000 accidents and over 30 deaths.

Arguments for caps on punitive damages, like tort reform arguments generally, ignore the fact that there are companies that behave very poorly, motivated only by profit with little or no consideration for the safety of the public. The deterrent effect of punitive damages lies in the possibility of financial hardship for those that ignore the public‘s safety. Punitive damages are typically calculated as a measure of corporate income. The jury is left, within reason, to determine what amount of a company‘s annual income would serve to properly punish the reckless corporation while also deterring other like-minded companies in the future. The amount must be significant to serve a deterrent purpose.

Many companies spend significantly more on their corporate retreats $350,000. Is this amount really enough to deter reckless profit only driven corporate behavior to take away a golf outing? South Carolina is known for its golf. Perhaps, now we are have arrived at the real root of the argument.

DISCLAIMER

Related Reading:
Caps in New Mexico Medical Malpractice Claims Against the Government: No Wiggle Room for Multiple Beneficiaries
Caps on Medical Malpractice Damages Do Not Lower Insurance Premiums or Healthcare Costs
Tort Reform Ignores Bad Corporate Behavior: Case in Point, Toyota!

Collins & Collins, P.C.
Albuquerque Attorneys

Auto accidents are among the leading causes of death of teenagers and young adults (ages 15-24) in New Mexico. Youth, drinking and driving is a lethal mix with often lethal consequences. The DWI/DUI laws and underage drinking laws in New Mexico are very strict to avoid the tragedy of youthful DWI/DUI accidents.

There are strict laws against underage drinking including felony charges for providing alcohol to underage drinkers. These penalties can be particularly harsh for service of alcohol to minors. However, despite these laws, minors often manage to obtain alcohol as a result of negligent or reckless bartenders, hosts, clerks or cashiers. Unfortunately, this negligence or recklessness can result in catastrophic injury and sometimes wrongful death.

Fortunately, New Mexico law holds these individuals and entities accountable for the damages caused by their negligence under dram shop laws, social hosts laws, and criminal laws designed to protect individuals from such behavior.

A recent case in California illustrates the law, the possible harm, and the potential recovery for injuries arising out of dram shop or negligent social host situations. The case of Apodaca v. Bradley involved two 20 year olds, Joshua Apodaca and Sean Patrick Bradley, who were served alcohol at a Sonoma County winery during a wedding reception, and then again at convenience store following the reception. The two were served alcohol at the wedding reception despite failing to present identification. Even more remarkably, they were later sold alcohol by a convenience store again with no identification which they then consumed in the store‘s parking lot.

Bradley who was driving crashed his car into a rock wall as the two travelled home. Apodaca suffered closed head traumatic brain injuries. Apodaca‘s brain injuries led to severe and permanent cognitive and motor deficits.

Unlike New Mexico, apparently California does not have formal dram shop laws. Instead, the lawsuit was brought under specially enacted laws to address teenage DWI/DUI. The result was a $3.1 million settlement. The winery contributed policy limits of $3 million under its insurance policy. The parents of Bradley contributed their policy limits of $100,000. Bradley himself contributed $5000.

The $3.1 million can never fully compensate Apodaca for all of the damages associated with his severe traumatic brain injury. Apodaca will likely suffer a lifetime of pain and suffering, loss of enjoyment of life, and permanent mental and physical limitations. The loss of income and earnings over his lifetime associated with his injuries are hard to calculate due to his youth. Rest assured, however, even a moderate income over his working life would approach the value of the settlement.

Instead, the bulk of the settlement proceeds will go toward a lifetime of medical care and expense for Apodaca. There will likely be little left to address his remaining damages. Unfortunately, this is often the reality of auto accidents, where there is inadequate insurance to compensate injured persons. In New Mexico, a $3.1 million settlement in an auto accident is extremely rare due to the high level of uninsured/underinsured motorists in the State. Though the settlement cannot possibly compensate Apodaca for his injuries, it is far better than the outcome in most DWI/DUI accidents where there simply is no insurance or financially responsible party to compensate the accident victim other than his or her own uninsured/underinsured motorist coverage.

DISCLAIMER

Related Reading:
Dram Shop Liability: Shifting Burden of Proof
Change In Evidence Requirements For Dram Shop Claims
The Potential Costs of “Cool” Parenting are High During High School Graduation Season

Collins & Collins, P.C.
Albuquerque Attorneys