Wilkes & McHugh Agrees to Pay $4 million Settlement in Overcharging Clients Case

The Memphis Commercial Appeal is reporting that the national plaintiffs nursing home litigation firm Wilkes & McHugh has agreed to pay $4 million to settle a class action alleging that the firm overcharged clients in Tennessee. Here is the article.

The suit alleged that the firm overcharged clients with expenses, such as for lawyers flying to Tennessee from other states on private jets to work on their cases. Wilkes & McHugh maintained that it did nothing wrong. The settlement calls for payments ranging from $5,200 to $110,000 per client.

The lead plaintiffs' attorney in the case was Frank Watson III of Memphis.

For many years lawyers have been speculating as to whether there could be a boom in cases against law firms for overcharging clients. There does appear to be recent growth in this area.

Earlier this year a suit was filed against prominent New York firm Chadbourne & Parke alleging that the firm overcharged for legal research fees. In September professional wrestler Hulk Hogan announced a lawsuit against his former attorneys alleging that they overcharged him by over $1 million. In addition, in April a Kentucky jury convicted fen phen lawyers of stealing millions from their clients.  

Clients are entitled to an itemization of fees and expenses charged by their attorneys in a case. Unscrupulous defense attorneys can overcharge in the amount of hours billed and unfairly run up expenses. Unscrupulous plaintiff lawyers are more likely to just unfairly charge the client with expenses, since a contingency fee is usually transparent. 

Clients who have concerns in this area should request an itemization that specifically lists the fees and expenses charged by the law firm. Pretty much all businesses, including law firms of all sizes, use accounting software that can easily generate reports that will show the amount of each item charged to a matter. If a law firm refuses, the client should file a complaint with the state bar and seek assistance from another attorney.   

Mississippi Legislature Should Enact Laws Banning Drivers from Text Messaging and Talking on Handheld Cell Phones

Cell phone Car Accident

Accidents caused by drivers text messaging or talking on cell phones is a growing problem in the United States. In Ohio a bus driver was convicted of vehicular homicide after running over a pedestrian in a cross walk while talking on her cell phone. Here is a website containing pictures and stories of accidents caused by drivers on cell phones. The website includes lawyer advertisements. I have no affiliation with it.

We know that drivers on cell phones drive as badly as drunk drivers. Conclusions of a study by the University of Utah include:

"We found that people are as impaired when they drive and talk on a cell phone as they are when they drive intoxicated at the legal blood-alcohol limit” of 0.08 percent, which is the minimum level that defines illegal drunken driving in most U.S. states, says study co-author Frank Drews, an assistant professor of psychology. “If legislators really want to address driver distraction, then they should consider outlawing cell phone use while driving.”

The Utah study concluded that cell phone users were 5.36 times more likely to be in an accident. Texting Leads to Accidents

My personal observations driving around Jackson is that talking on cell phones and texting are both problems, with texting being the bigger of the two. I have seen a lot of young people driving and texting who stopped paying attention while focusing on a text message. This effectively put a blind person behind the wheel of a moving car. I see more young men doing this than women.

My observations of people talking on cell phones have been a little different. The problem appears to be primarily with people who do not have a hands-free device and drive with one hand cradling the phone. People driving like this appear to develop tunnel vision and do not look all around them while turning or switching lanes. This causes them to turn into the paths of other vehicles. Often they are oblivious to the fact that they almost caused a wreck. I see more middle age women doing this than men.CellPhoneDriving.jpg image by msanto

Currently only six states ban all drivers from talking on handheld cell phones when driving. Nineteen states ban text messaging for all drivers. Here is a link to a chart showing the status of the law in all states.

As usual, Mississippi is not a leader in this area. What seems to happen in other states is that state legislatures do nothing to address the issue until there is a horrific high-profile accident that kills one or more people. Then there is a public outcry and the legislature enacts laws that ban texting and/or using handheld phones while driving. 

Mississippi's legislature convenes in January and should get ahead of this growing problem by enacting bans on both text messaging and driving and using handheld cell phones and driving. This would make our roads safer for everyone.   

AP Writes Horrible Description of Helen Gable's Lawsuit Against Railroad

On Tuesday the Clarion-Ledger website posted this AP story about the lawsuit filed in Tupelo by a woman who was struck by a train. Here is a quote of the entire article:

Helen Gable was taking pictures on the railroad tracks in Tupelo in 2006 when a train nearly cut off her leg as she tried to get out of the way.

Gable and her husband are suing the railroad company for nearly $6 million. 

Gable says the company should have posted trespassing signs to keep people away. 

The lawsuit also claims the train was exceeding federal speed limits and that a cable was hanging off the side and cut her. 

BNSF Railway Company spokeswoman Suann Lundsberg said the company is investigating and is sympathetic to Gable’s injuries, but “she admits in her lawsuit filing that she was trespassing” to take photos on the track. 

Lundsberg also said BNSF has equipment that detects if something is hanging or dragging from a train.

The comments to the story are brutal and unanimously agree that the case is frivilous. But reading the entire Complaint makes the lawsuit sound more reasonable.

Here is the actual Complaint filed by the plaintiff. According to the Complaint, Mrs. Gable was six feet off of the tracks, but was hit by a cable hanging off the train as she tried to get further from the train. It does not sound normal that there would be a cable protruding six feet from a train. She alleges that she could not get further from the train because the train was speeding. 

The plaintiff's attorney is Roy Parker of Tupelo and the railroad's lawyer is Billy Spencer with Mitchell McNutt in Tupelo. I do not know Parker. Spencer is a good lawyer and if the plaintiff's claim does not have merit, then I am confidant that he will win the case on behalf of the railroad. I have no idea what really happened and I have no opinion on the merits of the case.

Northern District Judges Withdraw Request to Eliminate Divisions

Last month I wrote about the request by the federal court judges in the Northern District to eliminate divisions. Last week the Mississippi Bar reported that the judges have withdrawn  the request:

Last week the Bar was notified by the Fifth Circuit that the judges of the Northern District of Mississippi have agreed by consensus to withdraw their request to eliminate statutory divisions at this time. Thank you to those of you who provided comments.

My interpretation of this is that the members of the Bar were not in favor of the request and spoke out against it in response to the Bar's request for feedback.

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Keith Ball of Jackson New Southern District Magistrate Judge

Keith Ball of Jackson has been named the new Magistrate Judge for the Southern District of Mississippi. Ball replaces the popular retiring Magistrate Judge James Sumner. Ball beat out four other finalists and many more applicants from a field narrowed by the Magistrate Selection Panel. The sitting Southern District Judges made the selection.

Ball is originally from Jackson and is a 1990 graduate of the University of Mississippi School of Law. He practiced in Jackson as a civil litigation defense lawyer with Phelps Dunbar and Currie Johnson before moving to Louisville. In Louisville he had a general practice that is typical for many small town lawyers. He stayed in Louisville for about five years before returning to Jackson for another stint with Currie Johnson. At the time of his selection as Magistrate Judge, Ball was working as the Director of Development at Reformed University Ministries.

 I expect Ball to be a popular Magistrate. The fact that he has two stints with the same law firm suggests that he gets along with people and does not burn bridges.

I am not nearly as concerned that Ball drinks the defense side cool-aide because of his years in a general practice in Louisville. This comment is not a slam of defense lawyers. I would not want a judge who drinks the plaintiff side cool-aide either. 

Great judges are the ones who both sides believe are fair. Ball has the potential to be that kind of judge.   

No Punitive Damages in Wind vs. Water Trial

On Thursday a federal court jury in Gulfport awarded no punitive damages in the latest State Farm Katrina wind vs. water trial. The jury, which had previously awarded the plaintiffs $52,300 in compensatory damages, took 80 minutes to reach its decision.

This is the kind of result where there is no real winner. The plaintiffs cannot be happy with $52,300 for a destroyed home, especially since they may have had over $50,000 in litigation expenses in the case.

State Farm is no doubt happier than the plaintiffs, but having a jury find that State Farm should have paid over $50,000 more than it did may not be good for State Farm's long-term sales. State Farm also would have had $50,000 or more in litigation expenses, plus well over $100,000 in attorney's fees. If you told me that State Farm paid its attorneys $300,000 in fees in the case I would not be surprised.   

Earlier posts on trial:

Judge Senter Encourages State Farm to Settle Latest Wind vs. Water Trial

Split Decision in Wind vs. Water Trial

DOJ Stalling in Ed Peters Immunity Agreement Appeal

Shockingly, the government has another trick up its sleeve to stall on producing the Ed Peters immunity agreement. Taking a page out of Dean Smith's playbook, the DOJ has gone into the four corners.

Note: The four corners offense is an offensive strategy for stalling in basketball. Four of the players stand in the corners of the offensive half-court and the fifth dribbles the ball in the middle. Most of the time the point guard stays in the middle, but the middle player would periodically switch, temporarily, with one of the corner players.

Amazingly, I was unable to find a decent video of the four corners offense despite an exhaustive (10 minutes on You Tube) search.

Here is the DOJ's letter .

I can sue DOJ to try to get a judge to order production of the agreement, but not until the appeal is decided. I'm sure DOJ will be in a big hurry to rule on (deny) the appeal. I'm starting to see how Yossarian felt.

Summary of Trustee's Update in A&O Bankruptcy: It's a Mess

Here is the bankruptcy trustee's initial report in the A&O debacle. It details irregularities and problems that observers of A&O have come to expect. Some of the noted problems include:

  • many of the A&O policies have lapsed.
  • there are ownership disputes with many of the policies that haven't lapsed. This means that A&O may not really own the policies.
  • Provident Capital probably is not going to pay on the bonds that were supposed to back up the policies.
  • there was a bait and switch pulled on investors: they were told that they were getting one type of investment, but actually got something else.

The trustee's website is a great A&O resource and there is not much that I can add from an information standpoint.

From an opinion and commentary standpoint, I am impressed with the efforts of the trustee. If I was an investor I would support the current trustee based on the information that I have seen.

As far as blame, do not buy into Russell Mackert and A&O's attempt to blame this debacle on Prestige Title and Stephen Colson. They are using Prestige and Colson as scapegoats. All indications are that the interpleader case that froze Prestige's funds accelerated A&O's demise rather than caused it. All you really need to know about A&O is that the founder (Adley Abdulwahab) lied about his education in touting A&O as a legitimate enterprise. If this is not evidence of a con man, then I do not know what is.

If I were an investor who has not yet hired an attorney, I would be looking for an attorney who is willing to file suit against the agent who sold me the investment. I continue to believe that agents' errors and omissions policies are the best hope for recovery. In addition, if the government prosecutes and recovers funds in the case, then there could be an avenue for the victims to recover losses from the government. Finally, Russell Mackert and any insurance coverage that he carries could also be a potential target if, as expected, it turns out that the A&O sale to Blue Dymond turns out to be a sham.

Split Decision in Wind vs. Water Trial with Puntive Phase on Thursday

The Sun-Herald reports that in the latest Katrina wind vs. water trial a federal court jury deliberated 80 minutes before ruling for State Farm on the wind vs. water issue and the homeowners on the contents claim:

After deliberating for 80 minutes Tuesday, a jury said Reginald Bossier isn’t entitled to any additional money for damage to his Biloxi home during Hurricane Katrina, but State Farm does owe him $52,300 for damage to its contents.

In the case of Bossier v. State Farm Fire & Casualty Co., the jury of five men and three women also found Bossier shouldn't’t receive any compensation for additional living expenses after his home was destroyed.

The jury will return to federal court Thursday at 1 p.m. to decide if Bossier should be awarded punitive damages in the case. Sr. Judge L.T. Sent er Jr. said State Farm had no legal reason for denying Bossier’s claim for three years on and outbuilding and the contents of that building.

Bossier had asked the jury for the policy limit of $650,000 on his home on the north side of Biloxi’s Back Bay. The judge instructed the jury members they could award him from zero to a maximum of $325,337.87 for damage to the home and up to $255,907 for contents.

State Farm appears to be spinning the verdict as  a win, but a large punitive verdict for not paying the contents claim would change their tune. Plaintiffs' counsel were Judy Guise and Shanon Fountain Jr.

Legal Sector Losing Jobs in Down Economy Nationally and in Mississippi

According to Law.com the legal sector lost 5,800 jobs in October with more layoffs at large firms than at any time in the last 30 years. The blogs Above the Law and Law Shucks also track the carnage on a weekly basis. Law Shucks states:

The National Law Journal has put out its 2009 survey of the largest firms in the US, and the numbers are just about as awful as would be expected. Headcount is down pretty much across the board, with the total number of lawyers employed by the 250 largest firms back at 2005 levels, wiping out three years’ growth.

In our view, the data support what we’ve been saying all along: firms are grossly underreporting layoffs and stealth layoffs are running rampant.

 In the Jackson area Currie Johnson recently laid off five associates and McGlinchey laid off two in its Jackson office. These numbers may not sound like a lot until you compute the percentage of lawyers in these offices who were let go.

The down economy for law firms in Mississippi started around 2004 with the Mississippi Supreme Court's opinion in Janssen v. Armond, which eliminated joinder of large numbers of plaintiffs in mass tort cases. This caused a huge hit to many defense firms who had a large presence in mass tort litigation. Mississippi firms slowly began to lose attorneys as natural attrition and stealth layoffs led to a reduction of the associate ranks.

Today many Mississippi firms look top heavy, with a lot more partners than associates. That's how firms looked in the early 1990's. The litigation boom of the late 1990's and early 2000's allowed firms to become leveraged by adding associates, of-counsel and paralegals. That meant more jobs for associates and more income for partners.

Ironically, associates in Mississippi who were forced to find new jobs several years ago turned out to be lucky. The economy was fine and it was usually not that hard to find another job. While finding another job often required leaving the state, some would say that is a positive. Today, it is much harder to find a job.

I do not expect the job market to significantly recover with the economy. Corporations and insurance companies are in a trend of bringing more legal work in-house. This is resulting in more lawyers going in-house from private practice. But since most of those types of jobs are outside Mississippi, the trend is a negative for Mississippi attorneys.

I'm not sure what will happen to the legal industry over the next 100 years. I hope a hundred years from now there are more lawyers who are practicing because they want to help resolve disputes and less who are practicing because they thought that it would be a path to making a lot of money.

There are too many well paid but unhappy lawyers who don't like the practice but are dependent on the income. I would like to see a leaner profession where most lawyers like the practice and do not attribute income with happiness.  It may take fewer lawyers and less money to make this dream a reality.