Mississippi Litigation Review & Commentary : Mississippi Personal Injury Lawyer & Attorney : Phillip W. Thomas Law Firm : MS Litigation Review & Commentary

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This week the U.S. Bankruptcy Court for the Northern District of Illinois replaced Patrick Collins with Jeffrey Marwil as trustee of the A&O bankruptcy. Here is the Court’s Order.

For persons not familiar with the A&O investment fraud scam, here are my earlier posts on the scam. 

After A&O declared bankruptcy Patrick Collins was appointed trustee in the case. But Jeffrey Marwil won the creditors’ election, entitling him to be trustee. Collins and several creditors objected. The Court found that Marwil won the election fair and square. Also of note is the fact that the Court found that there was no evidence of improprieties by John Spaulding, who is connected with a law firm that represents many creditors and led the election of Marwil.

The Court stated that Collins did a good job as trustee, but that creditors are entitled to elect a new trustee for any reason or none at all.

I am not a bankruptcy lawyer, but this looks like it was a fight over control of the proceeding. Marwil won because he was backed by a larger group of creditors.

Does anyone know where Adley Wahab is these days? 

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There was a $210,000 punitive verdict on top of the $210,000 actual damages verdict in the Natchez asbestos fraud trial discussed in the prior post.

That's a good verdict for Natchez. I got my clock cleaned there this time last year by Carl Hagwood and Michael Phillips. But they have a nice courtroom and Judge Bramlette is a great judge.

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There was a plaintiff’s verdict yesterday in federal court in Natchez in favor of Ill. Central RR against McComb lawyers  William Guy and Thomas Brock. The trial involved the claims in two cases. Here are the Amended Complaints in the Turner case and the Harried case. Ill. Central sued the lawyers and their clients, but the clients obtained a defense verdict at trial.

The Complaints alleged that the individual defendants were plaintiffs in the big Cosey Jefferson County asbestos case that was filed in 1995 in which there was a massive plaintiff verdict around ten years ago. It was one of the verdicts that led to tort reform in Mississippi.

The defendants sued Ill. Central in 2001 in Jefferson County asserting an FELA claim related to exposure to asbestos. The defendants failed to disclose to Ill. Central that they were plaintiffs in the Cosey case and settled their claims with Ill. Central for $90,000 and $120,000 respectively. The individual defendants testified that the lawyers (Guy and Brock) were aware of their prior asbestos claims in Cosey.

Ill. Central sued the lawyers and their clients for fraud. I believe that the verdict was for the $90,000 and $120,000 previously paid by Ill. Central, but a judgment is not on file yet, so I am not sure.

I also do not know what happened in the punitives phase. I hope to report more on this verdict later.

Danny Mulholland and Tanya Ellis with Forman Perry represented Ill. Central. John Corlew and Kathy Smith of Jackson represented the defendant lawyers. Wayne Dowdy of McComb represented the individuals. Judge David Bramlette presided over the trial.

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Wouldn't it be great to have a resource that reports on many civil verdicts in the State of Mississippi? This blog could serve as that resource if more verdicts are reported to me.

Over the last year, I have reported on many verdicts. But my ability to report verdicts is limited to the verdicts that I hear about.

If you hear about a verdict in a Mississippi case, please send me an email about it. In addition to the result, I like information on the facts of the case, venue, judge, attorneys and other interesting information about the case. I typically do not reveal sources on the verdicts that I write about.

It's not unusual for me to hear about a trial going on somewhere in the state, but to not get enough information on it to report the result. Please help build the content on this blog by reporting verdict results.

Please report verdicts by sending me an email or submitting the information on the contact form on my firm web site.

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Litigators can learn a lot about evaluating the settlement value of a case from mathematicians and poker players. Typically, litigators evaluating the settlement value of a case think about factors such as the liability facts, damages, venue and skill of opposing counsel. These factors swim around the lawyer’s brain and the the lawyer spits out an estimated settlement value without really spending time to identify the various possible outcomes and the probability of each outcome occuring.  

Poker players and professional gamblers speak in terms of Expected Value (EV) and try to base their decisions on the decision that yields the maximum EV.   

Lawyers could do a better job of determining the settlement value of a case by using these factors and their judgment to determine the probability of various identified outcomes and then calculating the Expected Value (EV) of the case.

Explanation of Expected Value (EV)  

Expected Value (EV) is a math calculation used to describe the long-term average outcome of a given scenario. Wikipedia has a good section on expected value.

Here is a simple explanation: if you flip a coin and someone gives you $1 every time it lands on heads and zero when it lands on tails, then the expected value of each coin flip for you is 50 cents, since half the time you will get zero and half the time you will get $1.

The calculation looks like this: (1/2 x 1) + (1/2 x 0) = .5. If you don’t trust my math, you can use this on-line expected value calculator.

EV calculations can be useful in evaluating the settlement value of a case.

Example of Expected Value in a Liquidated Damages Case

Say there is a lawsuit pending with purely economic damages of $100,000. The defendant agrees on the damage amount, but denies liability. If the parties also agree that there is a 50% chance that the plaintiff will win at trial, then the expected value of the case is $50,000: (1/2 x 100,000) + (1/2 x 0) = 50,000. That is not an opinion, that is math. In that situation, the case should settle for $50,000.

Expected Value Calculation in Personal Injury Cases

Let’s say you have a personal injury case. The plaintiff has decided to ask the jury to award $300,000 in damages. The defendant denies liability. The defendant also contends that if the jury does find for the plaintiff, then a reasonable verdict would be $50,000. To calculate the EV in this case you need to use your skills as a lawyer to decide on the probability of various outcomes at trial.

This could look something like this:

Defense verdict- $0: 50%

Plaintiff verdict– $300,000: 10%

Plaintiff verdict– $50,000:  10%

Plaintiff verdict– $100,000: 10%

Plaintiff verdict– $200,000: 10%

Plaintiff verdict– $250,000: 10%

Expected Value = $90,000.  (using EV calculator).

While I am not advocating basing all settlement decisions on the calculated expected value, I am suggesting that using the calculation would allow lawyers to make more informed recommendations to their clients regarding settlement.

But it's Not that Simple

These examples assume that the expected value for the plaintiff is the same as for the defendant. That is, the defendant’s loss equals the plaintiff’s gain. In litigation, however, that is not the case due to the affect of attorney’s fees and case expenses. I will look at how these factors impact settlement values in a later post.

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Litigation Logic– A Practical Guide to Effective Argument is an interesting book. As stated in the introduction:

This book is dedicated to presenting informal fallacies through legal arguments…

The product description on Amazon is:

Learning to use, and defend against, informal fallacies are the keys to effective argument. This one-of-a-kind book examines informal fallacies and features a three-page Legal Logic Flow Chart to help identify the appropriate informal fallacy and counter them. Through the flow chart this book provides two legal examples on which to practice using the chart. This book is ideal for any lawyer who wants to craft a flawless argument.

The focus of the book is principles of logic utilized in legal arguments. 

The book defines informal fallacies as arguments that are flawed, but not in a technical sense. Examples include personal attacks, appealing to bias and prejudice and something you occasionally see in Mississippi courtrooms: appeals to regionalism. The book goes into detail indentfying improper arguments and provides examples from mostly U.S. Supreme Court cases.

I view this book as an academic book as opposed to a practical guide that will be used by trial attorneys. Litigators should know what arguments are improper, but little time is devoted to the subject in law school or bar review exams. This book would be very useful as required reading in law school trial practice and ethics classes. In fact, a law school ethics course that uses this book as a text would be more useful than traditional approaches to ethics courses that are based on case books.

I disagree that the book is ideal for any lawyer who wants to craft a flawless argument. I view it as a theory type book and not a practice book. It is a good book that is worth reading, but it is not going to provide a roadmap for arguing cases.     

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In an article for the Atlantic, legal analyst Andrew Cohen calls tort reform anti-democratic, but ingeniously marketed by corporate America:

Supporters of tort reform, invariably corporatists and others who believe in this self-defeating supply-side notion of justice, have scammed or otherwise brainwashed millions of Americans into thinking that tort reform will save them from despicable "trial lawyers," a convenient target group in this ever-litigious world. But no 'trial attorney" ever went into the jury room and voted for a large verdict against a greedy corporation which purposely hid health risks from its customers. No "trial judge" ever put a gun to a foreperson's head and made that man or woman sign off on a big reward against an environmental polluter or tobacco company or maker of unsafe toys.  

Personal experience in talking with clients and prospective jurors in voir dire during trials makes me conclude that average citizens do not understand tort reform. Most people think that tort reform addresses frivolous lawsuits instead of lawsuits involving the worst possible conduct. People do not understand that:

It takes control over damage awards in many civil cases away from local judges and juries and gives them to state politicians, who often are just shills for their corporate campaign contributors and lobbyists. It protects corporations from punishment for their worst excesses. It diminishes good incentives for corporate carefulness and increases bad incentives for shoddy work and services.

In order to sell tort reform, corporate America applies a bait and switch commonly referred to as a “straw man” argument. Barry and Soccio define the straw man attack as follows in their book Practical Logic 104:

The straw man fallacy is an argument that so alters a position that the result is easier to attack than the original and yet claims that it has provided grounds for attacking the original.

Corporate America claims that tort reform is the solution for frivolous lawsuits. But "frivolous lawsuits" is their straw man. They use frivolous lawsuits as their straw man because what they really desire is their offered solution: damages caps that reduce their liability for wrongdoing.   

Why do tort reform’s proponents push a solution that does not apply to the “problem” of frivolous lawsuits? Because frivolous lawsuits is not really the problem for corporate America. They can squash a frivolous lawsuit like a bug. What they can’t squash without damages caps is their liability exposure for terrible conduct such as covering up a product’s dangerous defect. And they know that the public wouldn’t go along with it if the public knew the truth.

The reason that people do not understand tort reform is because proponents of tort reform do not want them to. Tort reform proponents invariably talk about merit-less lawsuits when selling tort reform.

So they pull a bait and switch using a frivolous lawsuits straw man. They talk about despicable trial lawyers and frivolous lawsuits and push through damages caps that don’t even address their stated “problem.”  It’s a ploy—but it’s a smart one to get what they want.

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You heard me. Losing a trial sucks. On multiple levels. Sorry if you don't like my vocabulary.

Even worse, a win does not even out a loss. Tennis great Andre Agassi described it as well as anyone that I've heard even though he was talking about tennis and not trials:

Now that I've won a slam, I know something that very few people on earth are permitted to know. A win doesn't feel as good as a loss feels bad, and the good feeling doesn't last as long as the bad. Not even close.

Shortly after I started my first job as a lawyer I heard veteran trial lawyer Natie Caraway say basically the same thing. It took personal experience winning and losing trials to understand it. 

For me a loss on appeal does not feel bad as a loss at a trial. And the loss of a bench trial does not feel as bad as the loss of a jury trial. The loss of a jury trial feels the worst because you hang it all on the line for twelve people who you don't know and you are shattered when you find out that you could not convince them. And if you believe in your clients case--and most lawyers do--you think that the jury got it wrong. That makes it worse.

I have no answer for the best way to deal with a loss. But I agree with Chicago lawyer John Tucker on this point:

Courtroom lawyers and people who play sports are engaged in an endeavor where there is a  winner and loser of every contest, and no matter how good they are, sometimes they lose.In fact, in both endeavors it is often true  that the better they are the harder their contests and the more  often they will lose. You don't have to like it-in fact, you had better not-but you won't last long if you don't learn to get over it, or at least put it far enough behind you to go on to the next case.

Some lawyers lose a big trial and never recover. They are habitually afraid to re-enter the courtroom for fear of losing again. The best lawyers get over it and seek the adrenalin rush of going back in and putting it all on the line again.

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Sid Salter with the Clarion-Ledger penned this story yesterday about the efforts of Mississippi nursing home owners to defeat a bill pending in the legislature that would require nursing homes to carry $500,000 in liability insurance coverage. My understanding is that the bill passed in the House of Representatives. There is a rumor circulating that Senate Insurance Chair Buck Clarke has been instructed to let the bill die in his committee by the powers that be. That would be horrible for all Mississippians.

Putting a Loved One in a Nursing Home is a Decision Many Mississippians are Faced with Every Day

Like many Mississippians, Salter had to put his parents in nursing homes when their failing health left them unable to care for themselves and in need of more care than family members could provide. This is very common and it could happen to anyone. If you have elderly parents who are not wealthy and you have a job so that you can not provide 24–hour care, then it can happen to you. Salter recognizes that his parents were lucky because they received good care, but that is not always the case:

My folks were fortunate. The people we paid to care for them when we could no longer care for them treated them with respect and compassion.

That's the way it is in most of Mississippi's nursing homes, but not in all of them.

Nursing home abuse happens in Mississippi like it happens in the rest of the country - physical abuse, sexual abuse and financial abuse. There are over 15,500 Mississippians in 184 Mississippi skilled nursing facilities.

Like Salter, I know what it is like to have a parent who needs constant care. You may say that you would never put your loved one in a nursing home. But until you see what it means for someone to need 24–hour care, you really don’t know what you are talking about.  

You can read my thoughts on choosing a nursing home for a loved one here.

Many Mississippi Nursing Homes Carry Little or No Liability Insurance

Most Mississippi nursing homes provide consistently good care to their residents. Many carry adequate liability coverage that is available to compensate victims when the care is not good and causes injury. But there are many Mississippi nursing homes with little or no insurance. Even worse, it is the nursing homes without insurance that provide the worst care.

I represent victims of nursing home abuse and neglect and their families. Most calls that I receive about a potential case involve a small group of nursing homes. Even worse, it is these repeat offenders who carry no liability coverage or only enough to pay their defense attorneys in defending a case.

Exposing the Litigation Strategy of the Nursing Homes with Little or No Insurance 

Not carrying liability insurance is not a financial necessity. Nursing homes are very profitable. It is a defense strategy to avoid being held accountable. When threatened with a suit, the first thing these nursing homes do is write a letter to the victim’s lawyer stating that there is either no insurance, or only enough to pay the defense lawyers. If liability is clear, the nursing homes then make an unfair low-ball settlement offer and insinuate that the nursing home will file bankruptcy if you obtain a big verdict in court.

This creates a no win situation for the victims—and the nursing home owners know it.

Nursing Homes are Very Profitable

Don’t believe nursing home operators when they say that they cannot afford liability insurance. I have seen financial statements from nursing homes. A 100 bed facility that has a Medicare and Medicaid pay source for most of its patients (this applies to most Mississippi nursing homes) can make a $1 million profit in one year. That profit is drained from the nursing home's books by the owners, leaving the facility with no assets on paper that could be recovered in a lawsuit.

There is a Hidden Incentive for Nursing Homes to Provide Bad Care After the First 100 Days

Mississippi is the poorest state in the nation. That means that for many people, Medicare and Medicaid are the only pay sources for nursing home care. That is a good news– bad news situation. The good news is that Medicare eligible patients typically get a lot of therapy during the first 100 days of their stay in a nursing home because the home can bill individual care items to Medicare.

The bad news is that after 100 days in a nursing home Medicare eligibility expires. Medicaid pays the same rate no matter how much therapy and other care the nursing home provides. This often results in everyone getting therapy for 100 days and no one getting therapy after 100 days.

Many residents’ health declines after improving during the first 100 day period because they start receiving less care. If a resident’s health declines and they die, it allows the nursing home to replace the low-rate Medicaid resident with a high-rate Medicare resident. Nursing homes with a lot of new Medicare residents will make a lot more money that homes with fewer Medicare residents. This creates a profit incentive for nursing homes if their long-time residents die.

Again, most nursing homes and their employees provide the best care that they can for as long as they can. But for the cold-hearted greedy owners, there are financial reasons to not provide quality care for all their residents.

Liability insurance balances the playing field.

Liability Insurance Increases Accountability

Mississippi requires us to carry liability insurance if we drive on the roads. That way, if our negligence causes a wreck, then we can be held accountable to the victim. The same should apply to nursing home owners and operators. If it’s fair that we all have to carry car insurance, then it’s fair that they all have to carry liability insurance. Sid Salter said it well:

But it seems that some Mississippi nursing homes don't carry enough liability insurance to cover those damage caps if a vulnerable elderly person is injured, mistreated or abused while in their care.

House Bill 536 requires non-government nursing homes to carry the same $500,000 in liability coverage that government nursing homes carry under the Tort Claims Act. But insurance company and nursing home lobbyists are working overtime to kill the bill. Why?

The nursing homes and the insurance companies got the "tort reform" caps they sought. Now, the elderly deserve some accountability from those same entities with the passage of HB 536.

Mississippi's elderly need less tort reform, not more.