February 12, 2007

2006 P/I OVERVIEW: SKY WAS THE LIMIT FOR SIGNIFICANT INJURIES

The January 2006 award of $26.5 million to trucker Shawn Pouliot, who was rendered paraplegic due to a defective lift gate, was the year’s first and largest Connecticut jury verdict.

It came just weeks after the 2005 record, when steelworker Norman Pelletier won a $32.1 million verdict for spinal injuries he suffered when a two-ton girder gave way, due to uninspected welds.

Pouliot’s lawyer was Michael A. Stratton, of New Haven’s Stratton Faxon. Pelletier was represented by William H. Clendenen and Kevin C. Shea, of New Haven’s Clendenen & Shea. Both cases are evidence that, even in Connecticut, stratospheric personal-injury verdicts are anything but rare.

In the medical malpractice arena, Richard A. Silver, of Stamford’s Silver, Golub & Teitell, negotiated a $17 million settlement for the second patient that anesthesiologist Jay D. Angeluzzi left in a permanent vegetative state. That was evidently the year’s largest settlement in Connecticut. And at Bridgeport’s Koskoff, Koskoff & Bieder, partner Kathleen L. Nastri won a record $3.5 million award in October for a baby’s birth injury, exceeding partner Joshua D. Koskoff’s $2.49 million record verdict for that type of case several months before.\

“I think the value of cases of significant injury is going up,” said Silver. “But I don’t think that’s true when there’s disputed liability or something less than significant injury.”

New Haven trial and appellate veteran William Gallagher concurred: “The so-called shake-and-bake cases are getting a lot harder to win. So, if we get a case referred in that’s minor injury, soft tissue, all chiropractic treatment, no impairment or questionable liability, we probably wouldn’t take it.”

Rigid Insurers

Some insurers are notoriously rigid in flatly refusing to settle claims they deem weak. But increasingly, they do so at the risk of paying more than the full policy amount—sometimes many times more—to escape liability for bad faith refusal to settle inexpensively, back when they had the chance.

Last year, an insurer’s inflexibility was a gold mine for Kenneth J. Laska, of Plainville’s Segal & Laska. He represented motorcyclist Kenneth Furlong III, who claimed Elizabeth Merriman suddenly pulled out from a parking lot onto Route 66 in Middletown, forcing Furlong to brake so violently he was thrown from his Harley Davidson. His riderless bike struck Merriman’s car, so State Farm pigeonholed the case as a rear-end collision and refused to offer a cent on its $50,000 policy, despite Furlong’s serious injuries. (Indeed, Merriman and her passenger both countersued the bloodied cyclist for their alleged impact injuries, but to no avail.)

Before trial, Laska filed a $20,000 offer of judgment. State Farm rejected it. After jury selection, Laska offered to settle for $90,000, which also was refused.

At trial, the case hinged on testimony from accident engineer Kenneth Vliet, of Manchester, who pegged Furlong’s speed at somewhere between 50 and 80 mph, calculated from the point of impact.

Laska said he used the court reporter’s transcript to highlight 16 places where police and Vliet characterized the point of impact as “approximate.”

Said Laska, “During the cross examination of the police officer and of Mr. Vliet, it was established that if the point of impact was not at the stated point, his calculations regarding speed, time and distance would be inaccurate.”

The verdict, with interest, came to $238,000. State Farm had promised Merriman it would cover any amounts over her $50,000 policy to protect her from personal liability.

Commented Laska, “When State Farm rejected my offer of judgment for $20K on a $50K policy, they made a tragic mistake. They set themselves up for any kind of excess judgment. They would have saved $30,000 if they took the offer but ended up paying close to $250,000.”

Laska praised his opposing counsel at Halloran & Sage, Kevin M. Green. “He did a damn good job. Did everything he could do, but I think his hands were tied by the adjuster.”

Reached for this article, Green said simply, “I thought we would win. I tried to win.”

Stratton Faxon’s Joel Faxon, in a case that settled in July, made an offer of judgment to Infinity Insurance Co. of Birmingham, Ala., of $100,000 for the policy limits.

Infinity, which focuses on low-end “minimum limits” policies, did not accept Faxon’s offer in time. Before trial, it offered $150,000 but plaintiff Thomas Casciato’s medical costs alone were over $153,000.

Lawyer-mediator Gerald H. Cooper, of New Haven, had valued the case at $750,000. Ten minutes before Faxon’s settlement deadline, Infinity accepted that amount—over seven times its policy limits.

“This saves my client three years of litigation pursuing a bad faith claim,” said Faxon.

Andrew Sharp, Infinity’s top staff counsel in Hartford, said Faxon’s use of the term “bad faith” was inapt, because the company protected its policyholder.

Sometimes the desire to save $10,000 on a settlement can cost $100,000 above policy limits. That may be the case for Joseph Foti, at the Cheshire firm of Moore, O’Brien, Jacques & Yelenak. He made an offer of judgment on behalf of Arelis C. Perez for a little over $30,000. The insurer’s best offer was about $20,000, on a $100,000 policy. The jury came back with a $165,000 verdict, which with interest is $195,000, said senior partner Garrett M. Moore. The insurer then offered $175,000. “We didn’t take it, but so far that’s $75,000 over their policy,” he said.

Added Foti, “We are anticipating the full amount here.”‘A Huge Drop’

For plaintiffs’ lawyers, a recovery in excess of policy limits is an unusual dividend in the increasingly difficult world of personal-injury litigation.

About 15 years ago, Allstate Insurance Co., followed by State Farm Insurance Co., began exhibiting a zero tolerance approach to many of the low-impact, soft tissue cases that had become an economic mainstay for many plaintiffs’ lawyers.

Said New Haven plaintiffs’ attorney, Michael Stratton, “It used to be that a 5 percent permanency of the back case would be worth $30,000. This is the typical rear-ender, where the orthopedist says you’ll always have back troubles, but don’t need surgery. Today,” he said, “the medium settlement value of that kind of a case is more like $7,000. It’s a huge drop.”

Gallagher agreed that, even as high-end cases rise in value, the low end is sinking: “While juries tend to be more generous in the major cases than they were in the past,” he said, “in the soft tissue cases, I can’t tell you the number of cases we get as consultants on appeals where the verdict is for the economic damages alone, and nothing for pain and suffering.”

Stratton said he has a four-point test for culling unprofitable cases: “Does the person have a preexisting injury? Is there a lack of visible damage to the vehicle? Is there objective evidence the person was injured—an X-ray, an MRI, something. Or was there a subsequent injury? One of those four factors is OK, but if you have more, you want to reject the case.”

Silver, who won the $17 million med mal settlement, said the rising cost of long-term care is driving the value of settlements and verdicts. “You have now more sophisticated caregivers, and care is much better than it was 10 or 15 years ago for truly handicapped children” and adults. “And, generally the life expectancy of a brain damaged child, if properly cared for, is not significantly less” than for an uninjured child.

In Connecticut, unlike New York, expert witnesses are deposed in medical malpractice cases, Silver noted. “Here, where we are doing depositions, it really puts the expert opinions out to be analyzed, so everybody can make a better determination of what the liability is. In a way, the defense bar is more sophisticated, appreciating excellent liability cases with significant damages, and they’re advising the insurance companies better.”

Fewer Trials

And while the topmost verdicts and settlements drift upward, and the lowliest fall lower, there’s another trend in the middle. Middleweight cases are heading ever more away from the courtroom’s winner-take-all extremes due to the leveling effect of arbitration.

Moore said his eight-lawyer firm is seeing a dramatic drop in cases tried to verdict over the past three years. In 2003, it was 36, last year it was 19—a difference he attributes to binding arbitration within negotiated high-low parameters.

Insurance companies are much more risk-averse, Moore added. “It makes it hard for us, because often we would like to take a chance, and try to get a million dollars for [the] client, when there’s an upside to the case.”

On the other hand, “when the insurer offers to guarantee a minimum of $100,000—which you don’t get with a jury—the client often says ‘I want to take the conservative route.’ A lot of times,” Moore said, “we end up going to arbitration, passing on a good upside. Our clients are more conservative, the insurance companies are more conservative, and therefore you’re seeing fewer trials.”