Transcript Document

CONTRIBUTION & INDEMNITY
IN AN ETHICAL WAY
Ethical Settlement
Goes hand in hand with trial
Must set the case up for trial
Be aggressive about the set-up
Keys to Successful Settlement
Thorough trial preparation
Client/Insured Interview
Impression to the other side that the case
is ready for defense
Attention to detail is key to this
impression
Minimize surprises
Settlement
Know the social value of
your case
Don’t underestimate the
human factor
Be honest but stern
Settlement v. Expenses
Key Expenses
– Records
– Deposition (Attorney, Court Reporter
& Videographer)
– Experts
– Mediation
– Trial [Attorney, Court, Expert, Exhibits Guy]
Uncertainty
Ethical Settlement
Evaluation of settlement possibilities
Background of parties
Witnesses
Circumstances of accident
Damages (Do they get worse?)
Ethical Settlement
Tort Reform 2003 
Purpose
– Penalizes those who reject reasonable offers
– Rewards those making reasonable offers
Shifting:
1) Litigation Cost
2) Court cost
3) Attorney fees
4) Two expert fees
House Bill 4
All lawsuits filed on or after
January 1, 2004
Monetary relief only
[Declaratory, Injunctive other Equities]
Claims Excluded
Class Action
Shareholder derivative
Action against Government
Action under Family Code
Workers Comp
Justice of the Peace
Reasonable Settlement Triggered
Statute says anyone can claim reasonable
settlement
Not triggered until Defendant’s Declaration
Under this statute, Plaintiff can be
Defendant if:
Counter Claim
Or
Cross Action
Reasonable Settlement Triggered
Multiple Defendants?
–Each Defendant must file
separate Declarations
–The Declaration must be
made no later than 45 days
before the case is set for
trial
[Good cause can change]
Reasonable Settlement Triggered
Rule does not apply to:
1. “Any offers made during mediation /
arbitration”
2. “Any offers not following Rules
don’t trigger fee-shift”
Reasonable Settlement Triggered
Requirements
1) Writing;
2) Made under Rule 167 and Chapter 42 Texas Practice
Code;
3) Identify parties making offer and parties offer made;
4) State terms all monetary claims, attorney fees, cost and
interest – may settle;
5) State a deadline – must give at least 14 days
6) Be served on all parties to which offer is made
Tex. Civ. Prac. & Rem. Code § 42.003; Tex. R. Civ. P. 167.2(b)
Reasonable Settlement Triggered
Conditions
1) They may have reasonable conditions
2) Condition Rejected??
No Shifting!
Time Limits
To qualify, an offer may not be made
1) Before a defendant’s declaration is filed;
2) Within 60 days of the appearance in case;
3) Within 14 days of trial; [offer can within 7 days in
response to other] Within 14 days of trial; [offer can
within 7 days in response to other]
Rationale
A. Can’t join and make immediate offer
B. Not on courthouse steps
Time Limits
Successive offers  Yes, as long as favorable
Withdrawal  Yes, in writing
Acceptance  Yes, in writing
[must be filed with request to
enforce same to the Court]
Rejection  Be careful…
Time Limits
Rejection – Offer made. If offeree does nothing,
that triggers the shifting of fees.
Time Limits
“Litigation Cost”
Triggered when the Judgment is
significantly less favorable to
Rejecting Party.
Plaintiff – His award is less than 80% of the
rejected offer
Defendant – The Plaintiff’s award is more than
120% of the rejected offer.
Accident + Injury = Negligence
Plaintiff damages
$10,000
Plaintiff Offers
Defendant rejects offer
Jury Award
$20,000
$25,000
Fee Shift
1) Attorney Fees
2) Cost of Court
3) 2 Experts
Accident + Injury = Negligence
Plaintiff damages
$10,000
Plaintiff Offers
Defendant rejects offer
Jury Award
$20,000
$15,000
Fee Shift
1) Attorney Fees
2) Cost of Court
3) 2 Experts
Accident + Injury = Negligence
Questions
What constitutes judgment?
–Interest
–Modification
–Take Nothing Judgment
Why do I have to
have ethics, I deal
with plaintiff
attorneys all day?
Scenario #1
An employee of your insured, shot and killed a
shopper at the Kroger grocery store (which you
insure) and the person killed was the starting
quarterback for the Dallas Cowboys.
Your
investigation is complete and it shows liability
against Kroger is clear and the claim is covered.
Plaintiffs’ attorney has been demanding your
$1million limit for 2 years. Your adjustor hasn’t
offered anything. The president of Kroger calls and
demands that you settle the case or he is going to
bring a bad faith lawsuit against you.
What do you tell your adjustor?
1. You have to have written documentation on
the lost wage claim before he can offer
anything;
2. The Cowboys are good because of Coach
Parcells and not the quarterback. Offer the
plaintiffs $250,000 to settle.
3. To tell the president of Kroger that he can’t
sue for bad faith because this is a third
party claim.
4. Please settle ASAP and go read Rocor, 77
S.W. 3d 253(Tex.2002) to avoid a bad faith
lawsuit.
Scenario #2
Your insured was in an auto accident and liability is
not clear.
Your defense attorney takes the
depositions of two witnesses who say your insured
was not at fault. Plaintiffs’ attorney, How Dewey
Cheatham, calls and demands your policy limits.
You refuse his offer. The Plaintiffs’ attorney then
says he is going to get you for these unfair
settlement practices and he is going to amend his
pleadings to allege Breach of the Duty of Good
Faith and Fair dealing against the insurance
company.
What do you tell your adjustor?
1) You can now have the policy limits, we
only respond to threats.
2) You need to go read Allstate v. Watson,
876 S.W. 145 (Tex. 1994)
3) Please don’t do that, I might get fired!
4) Didn’t you work for the Texas
Hammerhead formerly known as the
Smart Tough Lawyer?
Scenario #3
A Plaintiffs’ attorney known as the Texas
Hammerhead calls your adjustor and asks
about all insurance coverage which is
applicable to a death claim from a trucking
accident which caused a death. You know
that your company has a $50,000.00 trucking
policy and a $500,000.00 excess policy.
What do you tell your adjustor to say to the
Plaintiffs’ attorney?
The Adjustor’s Response
1. You must have the wrong insurance
company we don’t have any coverage.
2. Hey, Mr. Hammerhead, you’re in luck, we
got a $50,000.00 policy.
3. Tell him you got both policies, but that
you hired Godwin Gruber, so he will
never see a penny.
4. Ask him, Hey – what’s your yearly
advertising budget?
Scenario #4
One of your adjustors is handling a claim by Mr.
Procrastinator, an 82 year old who was rear ended
by your insured. The date of loss is June 26, 2002.
Mr. Procrastinator is not represented by counsel.
You have the file reserved at $10,000.00. Your
adjustor has been negotiating with the claimant for
about 4 months. Your adjustor tells you that Mr.
Procrastinator called this morning and offered to
settle his claim for $4,500.00. Your adjustor’s last
offer was $4,000.00. What do you tell your adjustor
to do?
What do you tell your adjustor?
1.
2.
3.
4.
Tell your adjustor to call Mr. Procrastinator on
Monday (June 28, 2004) and tell him that the gig
is up and he gets NOTHING!
Tell your adjustor to call Mr. Procrastinator
today and tell him that, after careful
consideration, her revised (and final) offer is
$2,500.00.
Tell your adjustor to call Mr. Procrastinator and
tell him that he needs to get an attorney
because the statute runs tomorrow.
Tell your adjustor to call Mr. Procrastinator and
offer him $4,250.00 as a best and final offer.
Scenario #5
Your insured ran a red light and hit a car in which the
mother was driving and her 6 year old son was the
passenger. Thankfully, the mother was not hurt. The
child, however, was transported from the scene due to
loss of consciousness. At the hospital, the child was
thoroughly checked out and the tests came back
normal. The final diagnosis was a mild concussion. It
has been one year since the accident and the child
has had not further problems. The total medical bills
are $1,600.00 The Plaintiff’s attorney accepts your
settlement offer of $2,500.00; however, he does not
want to have the case resolved with a friendly suit.
What do you tell your adjustor?
1.
2.
3.
4.
Cut the check for $2,500.00 and get the mom to
sign a standard Release.
Tell the Plaintiff’s attorney that unless there is a
friendly suit – and a minor prove up – there is no
deal.
Cut the check for $2,500.00 and get the mom to
sign a Release where she acknowledges that she
is settling her son’s claim regarding the accident.
Call the Plaintiff’s attorney and see if $3,000.00 will
convince him of the need to conclude the case via
a friendly suit.
Scenario #6
Your insured has a $50,000/$100,000 auto
policy. Your insured is speeding, runs off
the road, and all five passengers in the car
are injured. One of the passengers (a 17
year old girl) is in a coma and is diagnosed
with a severe brain injury. Within 28 days of
the accident, an attorney for the girl’s family
makes a demand for $50,000.00.
What do you tell your adjustor?
1.
2.
3.
4.
Tell the adjustor that until you get a report from a
neuropsychologist of your choosing, there will be
no settlement offers made.
Tell the adjustor that you can’t pay $50,000.00
because that will leave only $50,000.00 for the
remaining four passengers.
Tell the adjustor to get it done yesterday.
Tell the adjustor to wait six or more months and
then agree to pay $50,000.00 on girl’s claim (see
Calich vs. Allstate)
Thank You!
Kirk Willis
MEMBER
469-893-1870
[email protected]