Study About Kentucky Court System is Bogus

Too many bogus studies put out by business and insurance interests falsely portray the civil justice system as being unfair to business when nothing could be further from the truth. A recent op/ed reveals the truth about the people behind these studies.

"Admit nothing. Deny as much as possible. Stall. Protect, protect, protect. Blame somebody who isn't here to protect himself."

  "Admit nothing. Deny as much as possible. Stall. Protect, protect, protect. Blame somebody who isn't here to protect himself."  Rick Bozich, Louisville Courier Journal, Max Gilpin, The Real Loser in JCPS Report, July 1, 2009

Bozich's article was a scathing indictment of the "investigation" into the death of a 15 year old boy during football practice at a Jefferson County, Kentucky public high school.  The death, and the tragic circumstances surrounding it, have made national news. 

However, this post isn't about that.  Instead, this post is about why no one should be surprised that a defendant would refuse to accept responsibility for its actions. 

As a lawyer that represents people that have been injured as a result of someone else's negligence or misconduct, I see defendants utilize this above strategy everyday in litigation. 

Blaming the victim has long been the strongest weapon in a defense attorney's arsenal.  And it matters not what kind of case it is.  Failure to diagnose breast cancer?  The patient should have sought out a second opinion when her first doctor told her she was cancer free.  Rear-end car wreck?  Injured driver had a pre-existing condition that is unrelated to the accident.  No matter what the kind of case, the defendant always seeks to shift responsibility to the injured party.  Without fail.

And it works.  If you don't believe me, all you have to do is read any of the comments to any online newspaper article and you will see post after post blaming the victim instead of the wrongdoer (most recently in the Louisville Zoo lawsuit they blame the victims and their lawyer, too).

I find this behavior inconsistent with the oft spoken mantra of tort reformers that we need more "personal responsibility."  It seems that what people really want is for innocent injured people to take responsibility for someone else's snegligence.  How else can you justify blaming injured patients when their doctor makes a mistake?  You can't.  At least you can't do so and remain intellectually honest. 

The simple fact of the matter is that deny, delay, defend and blame is business as usual for defendants in litigation, especially corporate defendants and insurance companies. 

Sorry, Bozich.  Sadly, that's just the way it is.  And not just for poor Max Gilpin's family, but for any person that gets injured and seeks justice. 

Hans

Leveling The Playing Field...

Recently, a local Louisville personal injury lawyer filed the first lawsuit against the Louisville Zoo for injuries his client received after the zoo's train derailed.  Nothing unsual about it.  Nothing unusual at all, including the sarcastic and baseless attacks that were launched against the attorney on the Courier Journal's website in the comment section following the story.

What people don't understand is that most personal injury lawyers don't file baseless lawsuits.  There's no money in doing so.  Trust me, insurance companies don't pay big money for frivolous claims (heck, they seldom pay big money for legitimate claims).  A lawyer that works on a contingency fee (meaning she doesn't get paid unless she wins money for her client) has no incentive to file a lawsuit and incur thousands if not tens or hundreds of thousands of dollars in expenses getting the case ready for trial.  Think I'm exaggerating?  I'm not, in my last three trials we spent in excess of $100,000 getting each of them to trial.

Contingency fee lawyers are just like any other business owner, they must turn a profit to pay the salaries of their employees, the rent, and other overhead and expenses.  If they fail to do so, they are not in business long.  My respected colleague John Day in Nashville has a great post on this topic.

Hans

New York Times Exposes Hired Gun Doctors

Recently, the New York Times wrote this great article exposing what lawyers that represent injured people have known for a long time.  The so-called "Independent Medical Exam" doctors are really hired to keep injured people from getting the compensation the deserve for their injuries.
Here in Kentucky, I see the same doctors, hired by the insurance companies, over and over and over again.  There's a reason for that.  The insurance company knows that these doctors will say the injured person a) was never really injured, or b) they injury wasn't very severe and they should have recovered in 4-6 weeks.  This is especially true in car wreck cases.  So much so, that we have started calling them what they really are, Defense medical exams.  There is nothing "independent" about them.
hp

Progressive Launches "My Rate" in Kentucky...is it a Trick?

The Louisville Courier Journal recently revealed Progressive Insurance Company's latest insurance plan in Kentucky.  According to the article, Progressive is launching "My Rate" in Kentucky in order to allow drivers to hook up a device to their car to monitor their driving habits.  The device will monitor how many miles are driven, when the car is driven, acceleration and stopping distance.  Supposedly, "good drivers" will receive rate decreases.

My concern is that Progressive will use this "Big Brother" device to RAISE premiums.  I guess we'll just have to wait and see how this plays out.

hans

Lawyers Aren't The Problem With HealthCare Costs- Lexington Herald Editorial Reveals Who Is.....

Sunday's Lexington Herald Leader contained an editorial commenting on a New York Times article dealing with the increasing costs of health care. Here it is:

Tort reform doesn't cut health costs

Part II: The REAL TRUTH About Medical Malpractice Verdicts in Kentucky

Seems my recent post about medical malpractice verdicts in Kentucky got at least one reader stirred up enough to post a comment telling me I was wrong.  Well.... I'm not. 

Kentucky doctors are not leaving the state because of medical malpractice suits (net loss of 19 doctors between 2000 and 2002).  And medical malpractice premiums are not a large part of physician's overhead (less that 4% of revenue goes to insurance--physician salaries are 63% of overhead). 

But those who want to limit injured patient's rights have never let the facts stand in their way.  The phrase "sometimes wrong, but never in doubt comes to mind." 

If your really want to know the truth about medical malpractice in Kentucky, read this report authored by an independent non-profit organization founded by Ralph Nader, Public Justice.  Here is the report: www.citizen.org/documents/KY_MedMal_Report.pdf

hans

Poppe Law Firm Client Awarded $3.9 million in Insurance Bad Faith Case

Yesterday, a Jefferson County jury awarded my client $3.9 million in an insurance bad faith case against AP Assurance for violating the Kentucky Unfair Claims Settlement Practices Act.  I was pleased to be involved with this case along with Ken and Rick Friedman.   Here is the verdict.   You can read the Courier Journal article here
hp

$2.5 Million Dollar Kentucky Bad Faith Verdict

My friend, and fellow Kentucky bad faith trial attorney, Austin Mehr obtained a $2.5 million dollar verdict last night in a third-party bad faith claim against the Medical Protective Insurance Company.  In short, Austin's client  sued her doctor for causing significant injury to her inner ear.  The doctor admitted he made a mistake, but his insurance company refused to settle the claim.  The case was litigated and ultimately resulted in an arbitration award of $1.6 million.  Austin's client then sued then doctor's insurance company, MedPro, for violating Kentucky's Unfair Claims Settlement Practices Act (aka the Bad Faith Statute) alleging, among other things, that MedPro failed to promptly settle the claim when liability became reasonably clear.  After a two-week trial, a Kenton County Kentucky jury agreed and awarded Austin's client $350,000 for the mental stress caused by the delay in settlement and awarded $2.2 million in punitive damages to punish the medical malpractice insurance company for its behavior.

I have a very similar bad faith case going to trial on Tuesday in Jefferson County Kentucky against American Physicians Assurance.

Below is the "Fact Section" from one of Austin's briefs and here is the jury's verdict.

Medical Protective insured Dr. Del Burchell and his physicians' group Internal Medicine Associates of Northern Kentucky, P.S.C for medical malpractice.  On July 3, 2000, Dr. Burchell attempted to clear earwax out of Aurelia Wiles' ear using an ear lavage procedure by which a syringe injects water into the ear.  The syringe was not properly attached, and when Dr. Burchell pressed on the plunger, the syringe exploded into Mrs. Wiles' inner ear. Liability on the part of Dr. Burchell and his clinic was unquestionably clear. Mrs. Wiles had emergency surgery on July 6, 2000, to attempt repair of the injured ear.  On August 17, 2000, Mrs. Wiles' attorney Terry Moore wrote Dr. Burchell and asked that he have his insurance carrier contact him.   Moore wrote Medical Protective's adjuster Gary Duechle on September 15, 2000, to advise of the severity of Mrs. Wiles' injuries, including nausea, ringing in the ears, imbalance, sleep difficulties, and that it was taking her about two hours just to wash her hair because of the nausea and dizziness. Moore wrote again on November 28, 2000, advising Duechle that Mrs. Wiles had a second surgery and based on the poor prognosis was likely totally disabled. On January 12, 2001, after Mrs. Wiles' condition continued to worsen, Moore specifically demanded the two million dollar policy limits from Medical Protective, which had on December 11, 2000, revealed those limits to Moore. As the one-year statute of limitations approached, Moore had written to Medical Protective to discuss his willingness to extend the statute of limitations so that suit did not have to be initiated against Dr. Burchell, but on March 9, 2001, before suit was filed, Duechle wrote to Moore and instructed him to direct all future correspondence through MedPro's defense attorney Mark Arnzen.         Instead of reviewing and giving credence to the opinions of Mrs. Wiles treating physicians, who were documenting the severity and worsening of her medical condition, Medical Protective consulted a neurologist, Dr. Greg Smith, on February 2, 2001.  Dr. Smith developed the opinion that Mrs. Wiles' traumatic injuries were not the result of the syringe projectile but that they were caused by a coincidental onset of Meniere's Disease around the same time in July 2000.

           Soon after, Arnzen wrote to Duechle on April 4, 2001, and stated, "With respect to the injury itself, Dr. Burchell admitted that there was no product failure and no excuse for the injury which occurred.  He stated that he failed to insure that the top of the syringe was properly secured to the body of the syringe."Even though it knew its insureds were at fault, Medical Protective still made absolutely no attempt to settle the Wiles' claim. Medical Protective, likewise, never responded to Moore's offer to extend the Statute of limitation and suit was filed on May 14, 2001, against Dr. Burchell and his physicians' group, as well as against Medical Protective for violations of the Unfair Claims Settlement Practices Act. ("UCSPA")  

In addition to creating a defense with Dr. Smith, surveillance was conducted on Mrs. Wiles.   In December 2001, video footage showed that because of Mrs. Wiles' condition, she had to be dropped off at her door by her next-door neighbors, who subsequently backed out of her driveway and pulled into their own (about 40 feet away). This verification of the severity of her condition garnered no offer of settlement or negotiation from Medical Protective.  

In January 2002, Mrs. Wiles endured a third surgery, this time a brain surgery that lasted seven hours.  Still Medical Protective made no offer of settlement.  On April 8, 2002, Moore wrote to Storm reiterating his willingness to accept the policy limits on behalf of the Wiles even though there had not been any offer made or even a discussion of an offer from Medical Protective. A letter from Arnzen to Duechle on June 25, 2002, urged Duechle to contact him about the settlement demand.  Soon after, more surveillance was conducted on July 27, 2002. This time the video showed approximately twenty minutes of Mrs. Wiles struggling to slowly work in her garden.  She had to sit on her buttocks because of her imbalance and when she attempted to walk just a short distance, she had to hold a bag and bucket in each arm to balance herself as she battled to stay on her feet. Again, these facts still did not conjure settlement discussions from Medical Protective.

On October 7, 2002, Arnzen wrote to Duechle suggesting that Medical Protective stipulate to liability. Internal correspondence from Duechle to Robert Ignasiak of Medical Protective shows that it "always viewed the case as one of liability…" but that no offer had been extended to settle the case.  Finally, after never discussing an offer of settlement with the Wiles for twenty-seven months, Medical Protective offered $500,000.00 on October 7, 2002.  During this time, Medical Protective had Mrs. Wiles submit to a medical examination with Dr. Smith, who maintained that there was a simultaneous chance occurrence of Meniere's Disease and that Mrs. Wiles was magnifying her symptoms, even though Medical Protective knew that surveillance footage indicated otherwise.

In the meantime, Dr. Burchell and his physicians' group grew nervous about MedPro's claims adjusting, had hired their own counsel to urge Medical Protective to settle for the policy limits.  Attorney Andre Busald wrote to Duechle on November 22, 2002, informing him that Dr. Burchell and his physicians' group were "extremely concerned about the chances of a verdict being rendered against them in excess of the $2,000,000 policy limits – especially where liability is not an issue."Busald followed up again on December 2, 2002, and chided Medical Protective for refusing to attempt to settle the case before trial for the policy limits.  Throughout the years of correspondence, there was never a question as to liability.

Finally, after agreeing to a high-low arbitration agreement, the parties put the claim before an arbitration panel in April 2003, and the panel awarded $1,650,000 on May 15, 2003.  This settlement process was not without detriment to the Wiles, who had incurred substantial medical bills, legal bills, and litigation expenses while suffering from a sizeable loss of income and emotional suffering during the period of time the claim was active.  


Hans

Kentucky Court of Appeals Says "This Insurance Isn't Really Insurance"

My friend, Kevin Burke recently summarized the recent Kentucky Court of Appeals Opinion that ruled that a religious medical expense sharing plan isn't insurance and isn't subject to state insurance regulations.  I think this opinion sets a dangerous precedent and, more importantly, means that the people who have this plan have no legal safeguards in place if the plan refuses to pay their medical bills.

"What is insurance? This appeal attempts to answer that question in the context of a quasi-insurance medical payment program known as Medi-Share.

Medi-Share is a faith-based, medical payment sharing product sold by The American Evangelistic Association (AEA) and Christian Care Ministry (CCM). Medi-Share's Chairman and CEO is former insurance executive, John Reinhold. "Subscribers" complete a detailed application (including medical history) and agree to live by specific biblical and religious principles. If accepted, subscribers pay a monthly "donation" which is not tax-deductible as such per IRS regulations. According to Medi-Share's website (medi-share.org), a "donation" for a healthy married couple age 40-59 is $399 per month. Contributions are pooled, administrative costs (salaries, marketing, claims costs) deducted, and subscribers' medical expenses paid from the remainder. Claims adjusters review claims, negotiate payment to medical providers, and keep subscribers within the preferred provider network. Medi-Share asserts a right of subrogation and reimbursement for payments made. If a subscriber fails to pay the monthly donation, Medi-Share cancels the subscription or charges a late penalty. If a subscriber violates any condition of acceptance, Medi-Share terminates the subscription. Subscribers agree to arbitrate any disputes. Interestingly, Medi-Share explains in its terms and conditions that it is not insurance because it assumes no legal obligation to pay claims. Medi-Share's multi-million dollar marketing campaign touts Medi-Share as "biblical sharing" and the embodiment of Galatians 6:2: "Carry each other's burden, and in this way you will fulfill the law of Christ." 

The Commonwealth filed suit in Franklin Circuit Court seeking a declaration that Medi-Share is "insurance" subject to regulation under the Kentucky Insurance Code. After a bench trial, the court ruled in favor of Medi-Share. The Court of Appeals affirmed in a 2-1 opinion. Judge Rosenblum found that "insurance" is an arrangement for transferring and distributing risk. Because Medi-Share does not guarantee payment, it never transfers or distributes risk, and therefore is not regulated by the Kentucky Insurance Code. Judge Rosenblum noted in dicta that Medi-Share is also exempt from the Kentucky Insurance Code under KRS 304.1-270(1) even if classified as insurance. 

Judge Nickell concurred in part. He described Medi-Share as a "health care contrivance" which the Kentucky General Assembly should "rein in...before it runs wild, stampedes and tramples the rights and reasonable health care protection Kentuckians expect." However, Judge Nickoll agreed that Medi-Share is not insurance. He disagreed with Judge Rosenblum's dicta exempting Medi-Share under KRS 304.1-270(1). The statute requires a direct donation to a specified recipient. Because Medi-Share acts as an intermediary and takes out a hefty cut for administrative costs, it does not qualify for exemption. 

Judge Thompson dissented. He noted that other states consider Medi-Share to be a form of insurance, and expressed his fear that similar programs "will be sold in Kentucky and remain unregulated in an insurance industry susceptible to unscrupulous tactics." Medi-Share bears all the indicia of insurance yet deliberately evades regulation by using unique terminology. Although Medi-Share does not technically share "risk" like other insurers, its actions and advertisements induce people to participate based on the belief of a shared risk. Judge Thompson noted that Medi-Share is not exempt under KRS 304.1-270(7).

Note: An open question is whether Medi-Share violates the Kentucky Consumer Protection Act. Medi-Share markets itself as a reliable alternative to health insurance and represents that "all eligible needs have been met." It communicates its reciprocal obligation to subscriber's through Galations 6:2 which mandates "carrying each other's burden." Despite the biblical quotation, Medi-Share carries no actual burden (i.e. risk) to evade regulatory protection for its subscribers."  by Kevin Burke

Duke University Sues Its Own Insurance Company for Refusing to Pay Claim

Anyone that follows sports, and many who don't, will probably remember the Duke University mens' Lacrosse team scandal.  According to a North Carolina newspaper, Duke has now been forced to sue it's own insurance company, National Union Fire Insurance Co., (an AIG affiliate) for refusing to provide insurance coverage and pay the damages that Duke paid to those players to settle the players' lawsuits against the University.  The lawsuit is likely a combination of breach of contract and insurance bad faith.
"Because National Union has not paid, Duke has been forced to bear the full financial impact of its own defense,' Duke attorneys wrote in the lawsuit.
According to The Herald Sun, the insurer has refused to reimburse Duke for legal bills of $11-million because it believes the university’s policy is capped at $5-million. D uke's demands are considerable: it wants National Union to "advance and/or pay all of Duke?s Defense Costs (as defined in the insurance policies) for the Underlying Claims and the full amount of Duke?s settlement with certain claimants," and "a declaratory judgment (i) that National Union is liable to advance the costs for any future defense of Duke in connection with the Underlying Claims, and (ii) that National Union is liable for any reasonable settlement entered into by Duke in the Underlying Claims and/or any judgment entered against Duke in the Underlying Claims."

hans