Houston Litigation Blog : Houston Insurance Defense Lawyer & Attorney : Newton, Jones & Spaeth Law Firm : Defense Counsel and Civil Trial Lawyers : Serving Harris County, South Texas, Gulf Coast

 

Oral Argument was heard in the Texas Supreme Court on September 16, 2010 in the case of Aaron Glenn Haywood v. Margarita Garza de Escabedo from Angelina County and the 12^th District Court of Appeals. The significance of this case to personal injury practice in Texas is huge. This is the first case to finally make its way to the Texas Supreme Court regarding the application of Section 41.0105 of the Texas Civil Practice and Remedies Code. This is commonly known as the “paid or incurred” rule that limits the recovery of medical expenses to the amounts actually paid or incurred by the Plaintiff. Since being passed in 2003 as a part of a larger tort reform bill, this provision has caused quite a controversy in the bench and bar. Although the statute is relatively clear in its limitation on medical expenses, the application of the rule has been a source of significant debate amount trial lawyers and judges. This debate continues to rage to this day over what evidence is to be admitted at trial on this issue. 

The debate concerns whether the full amount of the medical expenses charged is submitted to the jury or whether only the reduced amount that was paid by health insurance, Medicare or Medicaid should be submitted.   The position of the Plaintiff’s bar is that the full amount of the medical expenses charged should be submitted with the amount awarded by the jury being reduced by the trial court at the time a judgment is entered to the amount paid or incurred. Plaintiff’s counsel argues that to do otherwise, would abrogate the collateral source rule. The position of the Defense bar is that only the amounts actually paid should be submitted to the jury. How a trial court rules on this issue is important not so much for the medical expense issue, but for how the amount of medical expenses affects the other damages awarded by a jury. It is widely believed by both sides of the bar that the amount of medical expenses considered by the jury has a significant impact on the more intangible damages awarded by a jury for elements such as mental anguish, pain and suffering or physical impairment.

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I recently read a speech given by Federal Judge William Young on the importance of our country's jury system.  No where in the world does the citizenry  have the right to play such a vital role in government.  Unfortunately, our jury system is under attack from many different directions.  It is often widely criticized by those who have no experience or familiarity with it.  Even worse it is attacked by those special interests who seek to take advantage of those who most need the protections of it.  The jury has always been the protector of the weak from being overrun by the strong.   Judge Young's speech should be a must read for every adult and high school student in this country.  Here is an excerpt from his speech:

Yet the American jury system is dying. It is dying faster in the federal courts than in the state courts. It is dying faster on the civil side than that on the criminal side, but it is dying. It will never go entirely, but it is already marginalized. It is not at the center of our political discourse. How is this possible, with our Constitution and every one of the 50 state constitutions guaranteeing the right to trial by jury? The general answer is that we do not care.  

The entire speech can be downloaded here.  Download file

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Pending for almost two years, the Texas Supreme Court has finally issued an opinion in Lamar Homes v. Mid-Continent Insurance.  A copy of the opinion can be found here.  This case involves two important questions to the construction and insurance industries. The first is whether a construction defect can be an “occurrence” within the terms of a CGL policy when the only damage is to the building itself. The second question is whether a claim for a defense under an insurance policy is a “first party” claim sufficient to trigger the prompt payment provisions under former Article 21.55 (now codified as sections 542.051-.061) of the Texas Insurance Code. 

In a somewhat surprising opinion, the Court answered “yes” to both questions. As it relates to construction defects, the Court held these can be an “occurrence” or “accident” under the terms of the policy. This is quite a victory for the construction industry and a significant blow to the insurance industry. The trend in the insurance industry had been to resist defend many construction defect cases on the basis that there was no occurrence. With this opinion, insurers will find it difficult to deny defense obligations in most construction defect cases.

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Here is a link to an interesting article published by the Michigan Law Review. www.michiganlawreview.org/archive/105/7/peters.pdf   This article explores the widely held public view that jury verdicts in medical malpractice cases are unfair to doctors.  Interestingly, research conducted over the last three decades indicates that just the opposite is true, juries tend to side with doctors even when the Plaintiff should win.

This article discusses in depth research conducted over the last 30 years in malpractice litigation.  What is interesting is that even when a panel of medical experts agrees that malpractice has been committed and that the Plaintiff should prevail, juries tend to find in favor of the doctors about 50% of the time.  In those cases that the panel of medical experts determines that no malpractice was committed, the research show the jury virtually always finds in favor of the doctor.

This article confirms what trial lawyers have known intuitively for years, ie. that juries in medical malpractice cases tend to bend over backwards to find in favor of the doctor.  The popular idea that doctors are somehow being mistreated by runaway juries is not supported by the research. 

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We are pleased and proud to announce that Dwayne Newton has been elected to membership in the American Board of Trial Advocates.  Membership in ABOTA is extended by invitation only in recognition of an individuals high personal character, honorable reputation and proficiency as a trial lawyer.  After meeting stringent practice requirements, an invitation to membership requires a nomination from an ABOTA member along with an affirmative vote of 75% of the membership of the local chapter.

The mission of ABOTA is the preservation of the 7th Amendment right to trial by jury and to foster improvement in the ethical and technical standards of practice in the field of advocacy to the end that individual litigants may receive more effective representation and the general public be benefited by more efficient administration of justice consistent with time-tested and traditional principles of litigation.  For more information on the purpose and missions of ABOTA go to www.abota.org.

Congratulations, Dwayne

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The importance of witness preparation applies whether you are the Defendant in the litigation or the Plaintiff.  Here is a link to a good article on witness preparation from the perspective of the Plaintiff. www.tlrcblog.com/2007/06/articles/-case-work-up/tips-on-defending-personal-injury-depositions/ In his post, Tips on Defending Personal Injury Deposition, Ron Miller provides 6 tips on how to prepare a Plaintiff for his deposition.  From my experience, his advice for Plaintiffs is right on target.  When I take a Plaintiff's deposition, the main piece of information I am looking for is what type of impression this individual will have on a jury.  To me, this is even more important than what the Plaintiff says about the accident or his injuries.  As a defense lawyer, I can always deal with his testimony regarding the facts.  What can be much more difficult to deal with is how he will present as a witness.  A Plaintiff that makes a good witness in his deposition will enhance the value of his case and make it more likely to settle.  The converse is also true.  A Plaintiff who makes a poor witness will decrease the chances that his case will settle.  Fortunately, for me, most lawyers do not spend much time preparing their clients to be good witnesses.  This is a universal problem on both sides of the docket.

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This week, the Texas Supreme Court issued a stay order, staying the deposition of Lord Browne, the former CEO of British Petroleum. This was issued in response to the February 9, 2007 order of a lower appellate court that denied BP’s Petition for Writ of Mandamus to Quash the deposition.  This is an issue I wrote about when it first arose last fall.  See Taking the CEO's Deposition.   This has been an on again – off again issue.  The Supreme Court has asked for briefing and will likely entertain oral arguments on this issue. I will be surprised if the Supreme Court orders the deposition to go forward.  This is a very pro-business Supreme Court. In addition, current authority strongly supports the BP position on this issue.

 

From my observations, I don’t think the Plaintiffs really care whether they get Lord Browne’s deposition or not.  BP has already stipulated to liability for the explosion and any potential punitive damages are subject to a very strict cap.  The real strategy here is to make life as uncomfortable as possible for BP and its lawyers to drive a better bargain in settlement.  So far this strategy has been very effective. Every time this issue comes up, more cases are settled.  The two cases that were set for trial on Monday were just settled.  Although the settlements are confidential, I am sure they were very favorable for the Plaintiffs.

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My recent post on Presenting Witnesses for their Deposition has been one of the more popular posts on this blog.  From the looks of the hits to this post, there are a lot of people out there looking for information on how to get ready for depositions.  Here is a link to a video that I think you will find entertaining if not educational.  This clip falls under the category of making sure the witness is ready to answer the hard questions that the other lawyer may ask without losing his cool. www.youtube.com/watch

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I was recently asked by a business acquaintance what he should do in the event he is sued.  I gave him a copy of our firm's pamphlet called The Legal Survival Guide which answers a number of basic legal questions  If you would like a copy of this pamphlet send me an e-mail with your name and address and I will drop one into the mail for you.

Here is what I told him about the steps that should be taken in the event he was sued:

1.     Don’t ignore the suit! Once you have been served there is a specific time period in which the suit must be answered. In some cases it is as short as 10 days. If a timely answer is not filed, you may lose by default.

2.     Don’t call the other lawyer or person who has sued you without consulting your own attorney.  Statements you make to the lawyer or other party can be used against you.

3.     If the suit is covered by insurance, call your insurance agent or carrier immediately. Most auto accidents are covered under automobile insurance.  Other personal injury suits may be covered by your homeowner’s policy. If covered, your insurance company will hire a lawyer for you.

4.     If the suit is not covered by insurance, consult with an attorney immediately. In choosing your attorney, you should consult with one experienced in the handling of civil lawsuits.  Ask the attorney about his/her experience.

5.     Turn over all of the papers served on you to your insurance carrier or attorney.

6.     Follow up with your insurance carrier or attorney to make sure that a timely answer has been filed.

7.     Cooperate fully with your attorney or insurance carrier in the defense of the suit.

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The tort reform war is over and business has won. Here is a link to an article from Business Week on-line declaring victory in the tort reform movement.  www.businessweek.com/magazine/content/07_02/b4016001.htm The article is an interesting read.  It is consistent with my post from September about  a jury climate that greatly favors Defendants. www.houstonlitigationblog.com/2006/09/articles/jury-trials/for-defendants-now-is-the-time-to-go-to-trial-in-texas/ Jurors have become so inundated with lawsuit phobia that it is next to impossible for a Plaintiff to get a favorable jury verdict.   

In the 20 years that I have practiced law, I have seen the judicial makeup of Texas change from virtually all Democrat judge to virtually all Republican judges. During this same time period, I have seen juror attitudes change from favoring the Plaintiff to now favoring the Defendant.  As a result, those companies and individuals who find themselves being sued should take advantage of this trend. Ultimately, I tend to think the current trend will eventually shift back, the only question is when...........

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I continue to be amazed at the number of lawyers who fail to properly prepare their witnesses to give a deposition.  Over the last 20 years, I have frequently seen large settlements generated in otherwise defensible cases because a lawyer failed to properly prepare his corporate witness to give a deposition.  No other aspect of the defense of a lawsuit is as important as preparing the witness to face the opposing lawyer during the discovery phase of the case.  

While it is common for lawyers to spend days preparing themselves to take an effective deposition, these same lawyers mistakenly think they can spend an hour or so immediately prior to the deposition preparing their own witness to be deposed.  This can have disastrous results on the defense of a case.   A number of years ago, I was involved in the defense of a very complex multi-party explosion that resulted in a number of burn deaths. The deposition testimony of our co-defendant’s employee witnesses was some of the most damaging I have ever seen in a personal injury case.  As it turns out, co-defendant’s counsel spent only a very short time on the day before the deposition preparing the witness. The witnesses were grossly under prepared for the subsequent examinations. Because of the poor showing by its witnesses, the co-defendant was forced to enter into settlements that exceed $100,000,000.00.  In contrast, our trial team approached witness preparation in a much more strategic manner.  We put serious thought into which witnesses we wanted to produce and in what order.  We began preparing our witnesses to be deposed weeks before their deposition dates.  We assigned one member of the trial team to be primarily responsible for the preparation of all of our witnesses. We also made sure that the witnesses were thoroughly familiar with not only the facts, but also the questioning style and expected strategy of the lawyers that would be deposing them.  As a direct result of our witness preparation, the case developed in such a way that we were able to successfully defend the case that no one else thought could be defended.  

Here are my thoughts on successfully producing witnesses to be deposed in a catastrophic case.

Control the order and timing of when your witnesses are deposed.  

If at all possible, your best witness should be offered for deposition first.  This is not always your most knowledgeable witness. Instead, your best witness is the one you have determined to be best equipped to handle questions under pressure, particularly ones that you may not have thought of prior to the deposition.   By the time this deposition is finished, you as the lawyer should know 95% of your opponent’s case and be in a good position to prepare the rest of your witnesses.

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In the construction and energy business sectors it is common for general contractors and operators to require their subcontractors to name them as an additional insured under the sub’s CGL policy.  Often these clauses require the subcontractor’s coverage be primary and non-contributory.  In doing so, the general contractor or operator can shift much of its insurance costs onto the subcontractor.  However, a recent opinion by the Houston Fourteenth Court of Appeals may have a major impact on general contractors and other parties that are frequently named as additional insureds. In D.R. Horton v. Markel International Insurance Company, the Houston Court of Appeals adopted a construction of the typical additional insurance clause that greatly limits an insurer’s obligation to defend these additional insured.  A link to the opinion can be found here.  www.14thcoa.courts.state.tx.us/opinions/htmlopinion.asp

The Horton opinion turns on the wording of the additional insurance clause in the CGL policy.  The clause in question limited the general contractor’s status as an additional insured to claims arising out of the subcontractor’s work.  This is a fairly typical additional insured clause in Texas.  In this instance, the petition filed by the Plaintiff did not contain language alleging that the cause of action arose in some respect out of the subcontractor’s work.   As a result, under the eight corners rule, the insurer was under no duty to defend the general contractor because the additional insured endorsement limited the general contractor’s status as an additional insured.  The Court would not consider extrinsic evidence that indicated the cause of action did, in fact, arise out of that portion of the work performed by the subcontractor.  In this instance, the general contractor was completely at the mercy of the pleadings filed by the Plaintiff.  Because the petition did not contain the magic language indicating the cause of action arose out of the subcontractor’s work, the additional insured endorsement did not apply and there was no duty to defend.  

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Last week the First Court of Appeals in Houston issued a writ of mandamus directing the judge in the BP case to withdraw her order allowing for the live broadcast of the BP trial.   www.1stcoa.courts.state.tx.us/opinions/htmlopinion.asp  Here is a link to the opinion.   Although the issue is moot at this point because of the settlement of the entire case, the current rules make it difficult for a civil trial in Texas to be televised. Photographing and broadcasting of court proceedings is governed by Rule of Civil Procedure 18c, which provides:

A trial court may permit broadcasting, televising, recording, or photographing of proceedings in the courtroom only in the following circumstances:

(a) in accordance with guidelines promulgated by the Supreme Court for civil cases, or

(b) when broadcasting, televising, recording, or photographing will not unduly distract participants or impair the dignity of the proceedings and the parties have consented, and consent to being depicted or recorded is obtained from each witness whose testimony will be broadcast, televised, or photographed, or

(c) the broadcasting, televising, recording, or photographing of investiture, or ceremonial proceedings.

Because there are currently no guidelines provided by the Supreme Court for the broadcasting of civil trials, section (b) provides the only basis under which a trial may be broadcast.  This provision requires the consent of both parties.  In addition, it requires that each witness who is to be photographed or broadcast must also give consent.   Under these rules, it is virtually impossible to broadcast civil cases unless local rules have been adopted and approved by the Supreme Court that change these conditions.  In Harris County, such local rules have been adopted and approved. These rules allow the trial judge broad discretion to allow the broadast of a civil trial.  A link to the Electronic Media Local Rules of Harris County can be found here.  www.justex.net/courts/civil/ElectronicMediaRules.aspx

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Over the last several months, most lawyers, clients and insurance adjusters I have talked to have indicated that in their opinion there are fewer cases being filed today in the Texas courts.  This is what would be expected since (1) we have had sweeping tort reform legislation in this State; (2) our Supreme Court is the most conservative it has been at any time in the last 20 years; and (3) juries in Harris County, Texas have become so defense oriented that it is often difficult to empanel a jury that will award medical expenses to the Plaintiff, much less in tangible damages. 

However, in spite of this, case filings have remained fairly constant.  Below is a table of personal injury case filings for Harris County, Texas since 2001.   This information was obtained from theTexas Office on Court Administration.  While there are some variations, new case filings since tort reform in both the motor vehicle category and non-motor vehicle category are as high, if not higher than they were in 2001 prior to the tort reform legislation of 2003.

New Personal Injury Case Filings

New Filings	Motor Vehicle Injuries and Damages	Average per month	Non MVA injuries and Damages	Average per month
2006	2158	239.78	3163	351.44
2005	3128	260.67	6044	503.67
2004	2994	249.50	3743	311.92
2003	3434	286.17	3857	321.42
2002	3298	274.83	3448	287.33
2001	2874	239.40	3535	294.58

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