by A. Turk
He got the firm’s receptionist and asked for Ms. Pierce.
“Pierce here.”
Davis didn’t even like the way the bitch answered the phone. He controlled his voice as he said, “Hello, Amy, I got your letter and offers. Why would you mail it rather than fax it if you set a Thursday deadline? I just read your letter this morning.”
Davis waited for a response, and after a long pause, Pierce replied, “I wanted to give you as little time as possible. You better get on the phone and communicate those offers to your clients, pronto.”
“That may be the first honest thing you’ve ever said to me, Pierce. Well, your newfound honesty doesn’t matter because you’re withdrawing the offers.”
More silence, then Pierce declared, “You’re obligated to take those offers to your clients and then let the fighting begin. At least one of them will want the money. You created this conflict by taking all of these cases.”
Davis leaned back in his chair and raised his voice significantly: “Look, asshole, your offers violate at least three disciplinary rules, and if you don’t agree to withdraw these offers, I’ll conference Boxer into this conversation and let him order you to. Oh, let’s not forget the Disciplinary Board. I’ll prepare a complaint against you and Tweedledee and Tweedledum. I’m one step ahead of you. You’re not going to conflict me out of any of these cases, so forget it.”
“Does Bradley Littleton agree with you?”
“I don’t give a shit what that tub of lard thinks. He’s just as unethical as you are. If he gives me a hard time, I’ll bring his ass before the board too. Now withdraw your offers in writing and make new ones that stand on their own merits, or let’s go to trial.”
“Are you sure you want to try the Jones case?”
“I admit it’s my weakest case, but eventually we’ll get to a gallbladder case. That’s when the fun begins.”
Davis wasn’t willing to admit that he had the slides, but they both knew what he was talking about.
Pierce didn’t respond to his threat. She sheepishly said, “I’ll have to talk to McCoy and Stevenson. I can’t act on my own.”
“You have one hour until I call Boxer and prepare my complaint to the board. You know how easy it is to file one of those.”
Pierce hung up. Forty-five minutes later, she called back. “The offers stand, but they’re not tied to each other.”
Davis immediately responded: “Put that in writing and fax it over by one o’clock today, or I go to the judge and the board. Have a nice rest of your day.”
At one o’clock, Littleton arrived at Davis’s office and was ushered into the conference room by Bella. Davis, Morty, and Sammie joined him there. They discussed the dollar amounts of the offers and appropriate counteroffers. After a half hour, Bella interrupted and brought in copies of the fax from Pierce.
After Davis finished the letter, he turned to Littleton. “What do you think about the new offers?”
Littleton compared the new letter to the one he received earlier in the day. “The dollar amounts are identical. What’s the difference?”
Davis mentally groaned, as he had to explain the ethical dilemma the first set of offers created.
Littleton shrugged. “I guess this is cleaner. Those other offers were complicated.”
CHAPTER THIRTY-TWO
NECESSARY SETTLEMENT
MONDAY, DECEMBER 20, 1993
Davis was not looking forward to the meeting with David and Wendy Jones. He didn’t want to compromise his principles, but the economics of the settlement made sense. The time and effort to get the Jones case ready for trial were not worthwhile investments. The damages to the Joneses were insignificant. She had unnecessary surgery, a permanent scar, and headaches that lasted months longer than they should have if properly treated. Davis was convinced that a jury would not award significant compensatory damages. That was why the defendants, after winning the coin toss, selected the Jones case as the first to be tried.
Davis never recovered the expenses he advanced in the Easter case after he was forced to withdraw. The dismissal of the Easter case reduced the number of his cases from ten to nine.
For the last fifteen months, the costs incurred by Davis were, for the most part, for the benefit of the nine remaining Plainview cases. For that reason, these expenses could be equally divided among all the cases with no one case bearing the excessive burden and risk. However, from this point forward the vast majority of the expense would be borne by the first case to be tried. The Jones case was a bad choice to shoulder that burden because the damages suffered were limited, and so was the dollar amount of anticipated recovery. That was the reason defense counsel chose Jones when they won the flip of the coin.
With only eight months left before that trial was scheduled to begin, Davis would have to devote most of his time and money preparing for a battle in the courtroom if the case didn’t settle beforehand.
Davis had already spent $12,023.42 on specific expenses in the Jones case, and the Jones case share of the common expenses was $9,823.45. The $21,846.87 of expenses, as provided in the employment contract, would be deducted from the Joneses’ portion of the settlement. Davis would take his one-third after the expenses had been deducted from the clients’ share. The clients didn’t get that money, so Davis knew the right thing to do was to take his cut after expenses. In the Malone case and others the specific expenses were greater than those for Jones, but each case had incurred $9,823.45 in common expenses.
David and Wendy Jones were newlyweds. He worked in a lumberyard, and she worked in Hewes City at the local bowling alley. They had gone to the library on a lark; they never thought that they would be filing a lawsuit. Before and after the surgery by Dr. English, Wendy suffered from severe headaches. They lasted for a total of six months after the surgery, and she was forced to take a three-month leave of absence to have the surgery and to allow the severe pain to subside. Eventually, her headaches were controlled by medication under the care of another doctor from Hewes City.
Davis assured the Joneses that Dr. Herman misdiagnosed Wendy’s problem and that Dr. English performed an unnecessary surgery. He claimed that the hospital knew about it but ignored that it was unnecessary in order to make more money. Davis claimed that both English and Herman should have obtained a sedimentation rate, the gold standard, which was necessary to diagnose Wendy’s problem. He knew the Joneses trusted him; he was their lawyer.
As soon as the Joneses arrived at Davis’s office, Bella brought them back and offered them something to drink. Davis came out from behind his desk and joined them at the conference table. “Good news, I have another offer from the defendants. They’ve offered $80,000, up $14,000 from their first offer of $66,000.”
David asked, “What does that mean to us, Mr. Davis? What do you recommend?”
He pulled out a settlement sheet that had the settlement broken down. It read:
Total Settlement: $80,000.00
Deductions:
Repayment of Medical Expenses to Medicare: $6,423.00
Total Settlement for Distribution: $73,577.00
Specific Expenses: $12,023.42
Common Expenses: $9,823.45
Total Before Attorney Fee: $51,701.13
Attorney Fee (One-Third): $17,233.71
Payment to Clients: $34,427.42
Davis let the information sink in before he spoke. “I know that’s a lot of money. How long does it take the two of you to earn that much?”
Based on what they told him, Davis figured that it would take them together more than a year and a half to earn $35,000.
Davis explained that if they did not settle, they would spend at least another $25,000 in expenses that would be deducted from their eventual share. He also reminded them that the trial, which was scheduled to begin July 5th, would last approximately two weeks and that they would have to take off work to attend.
That straw broke the camel’s back. David looked at Wendy and said, “We’ll take the deal, Mr
. Davis. Thank you for all your hard work. Can we get our money by Christmas?”
“No, the money first needs to go in my escrow account, but you will have the money by the beginning of the new year. The insurance companies will want to get your case off their books before the end of the year.”
“Well, it’s going to be a good New Year’s anyway,” said David with a wide grin.
Davis was relieved with their choice.
Next Davis met with the children of Rosie Malone. There were eleven children in all and ten still living. Six showed up for the meeting; the others lived out of state. Thomas Malone and Lorraine Burke were the spokes-persons.
“I begged Dr. Herman to transfer Momma to Nashville,” Lorraine insisted. “It’s not about the money. They need to explain themselves.”
Davis explained that at first the defendants tied all of the offers to each other, but after some consideration they withdrew those offers and replaced them with new ones independent of each other. He reminded them that if they settled, the dollar amount would be sealed. They couldn’t discuss it with anyone.
Thomas changed the subject. “What about the state charges, Mr. Davis?”
“I have no control over those. We believe the state case will be heard next year, before our July trial date, but I can’t promise anything. I will tell you we’ve got strong evidence that Dr. English removed a healthy gallbladder from your mother and nicked her bowel while doing so.
“We were thinking of requesting mediation.” Davis explained that mediation was a nonbinding hearing where the parties, in person, tried to negotiate a settlement of their case. If it failed, you gave up nothing, and the trial would proceed in July as scheduled.
Secretly, Davis wanted to go to mediation. At the negotiations he could rub the defense’s noses in the slides and maximize the dollar amount of the settlement in the remaining eight Plainview cases. If it failed, he would use the slides in the Malone trial and take his chances with a jury.
The Malone family opted for mediation, and so did his seven other clients. They trusted Davis’s confidence, even though they didn’t know about the slides. The Davis team, with the knowledge of the existence of the slides, was even more confident of winning big.
The next day he sent a letter to defense counsel suggesting a mediation of all remaining Plainview cases, supervised by Judge Boxer, in January. He reminded them that the settlement of each case was independent of the others. His offer was accepted, and arrangements were made to use Plainview High School. The mediation was scheduled for the second Saturday in January.
CHAPTER THIRTY-THREE
MEDIATION
SATURDAY, JANUARY 8, 1994
Herman was anxious about the mediation. It took almost two weeks to set up. It involved coordinating the schedules of twelve people on the defendants’ side and more than twenty-five people on the plaintiffs’ side. Ultimately, a Saturday accommodated everyone’s schedule. The high school was the only building with a sufficient number of rooms to separate all parties.
The participants signed a waiver agreeing that Judge Boxer could act as mediator and still preside as judge at the trials, should mediation fail.
Everyone started in the auditorium, and Barnes informed Herman that after the judge’s instructions, they would move to their separate rooms. Barnes also explained that Boxer would move from room to room trying to pressure the parties to settle, pointing out each party’s weaknesses.
He looked around the auditorium, which was almost a third full. Seven Malone children showed up, so Davis had twenty clients in the eight remaining cases. He would have to move from room to room, holding their hands and leading them through the process. Each defendant was assigned a classroom. McCoy, in a lemon yellow bow tie, Jack Barnes, Larry Pinsly from Tennessee Mutual, and Herman were assigned to classroom 35. Amy Pierce, Lowell Thomas, and Davenport from PIC were assigned to classroom 39. English was still MIA, but McCoy, according to Pierce, informed Herman that English agreed to be standing by at a phone booth at the top of every hour, beginning at ten. Stevenson, Dr. Robert Kelly, and Woody Douglas were assigned to classroom 37.
Judge Boxer made it clear that although the defendants could continue to make lump sum offers in each particular case, rather than each making a separate offer, they could not tie the settlement of one case to another. Barnes advised Herman that because of the doctrine of comparative fault, Davis insisted that any case settled would require settlement with all defendants. Davis was unwilling to try a case only against the hospital or only against the doctors. According to Barnes, it was Davis’s opinion that there was too much uncertainty in an empty chair trial, whereby the remaining defendants would take potshots at the settled defendant, trying to shift blame.
Judge Boxer’s opening statement was short, and he concluded by saying, “Let’s get these cases settled. Everyone needs to be reasonable. It’s not in anyone’s best interest to try all eight of these cases. Good luck.”
In a serious tone and with the intent to motivate, Boxer told Dr. Herman, the only defendant physician present, “The ball’s in the defendants’ court to make the first offers. Isn’t the Medical Licensing Board hearing set for next month? If the board finds recklessness, that finding will be admissible in the Malone case set in July. The doctor defendants might not want that to happen. You might be better off if there were no pending civil case at the time of the board’s hearing. I suggest that your next increase be material as a sign of good faith. The more you move forward, the more I’ll expect them to meet you halfway.”
Barnes told Herman that the settlement process was controlled by the hospital’s board and the two insurance companies. Davenport of PIC and Pinsly of Tennessee Mutual called the shots for the doctors.
The defendants agreed in principle that the settlements would be structured forty percent paid by the hospital, thirty-five percent paid by English’s insurer, PIC, and twenty-five percent paid by Herman’s insurer, Tennessee Mutual. Those were the percentages paid in the Jones settlement, so there was at least reasonable basis for the division of liability and damages.
Pinsly explained to Herman that his coverage was a maximum of $1 million for 1991 and another $1 million for 1992. Neither annual dollar amount included the cost of defense and expenses. There was no dollar limit on defense costs. Tennessee Mutual paid $20,000 in the Jones settlement, which applied to the 1992 coverage.
Herman did the math: $980,000 left for that year. Four of the remaining cases occurred in 1992. He also understood that, since no payments had been made for any of the 1991 cases, he had the full $1 million coverage available for the four cases that occurred in 1991.
He was concerned about Boxer’s last remark about the board hearing. He just wanted these Plainview cases to go away. He didn’t care how much it cost Tennessee Mutual as long as it was within his coverage, and he didn’t have to pay out of pocket. He knew that Pinsly wanted these cases over; they had cost his company a fortune in legal fees and expenses.
Tennessee Mutual, over less than two years, paid McCoy and Barnes, by Herman’s estimation, more than $750,000 along with more than $200,000 in expenses.
Herman was convinced that Pinsly of Tennessee Mutual didn’t like him. At first, he was very supportive and encouraging. However, as Pinsly learned more about the Plainview cases and the board charges, he became more distant.
Once in classroom 35, Barnes turned to McCoy and Pinsly: “It’s our turn to make an offer. The judge wants this to move quickly. We don’t have to take his advice. It’s your money, Larry, or at least it’s your company’s money.”
Herman knew through Barnes that Pinsly was a veteran negotiator, and he was tired. He wanted to settle these Plainview cases.
Pinsly said, “Despite what Boxer says, all I care about and all my company cares about is the total amount we pay. We don’t give a shit how it’s divided among the plaintiffs. But the judge insists that these offers be made separate from each other, so let’s see how much money we can
save.”
Barnes said, “Our share of the last offers was $250,000 of the $1 million. Let’s increase it by ten percent. That should get the ball rolling.” McCoy increased each offer by ten percent across the board.
Herman didn’t think that $1,100,000 would settle the eight remaining cases. McCoy secured the agreement of Davenport, the other defendants agreed, and the offers were delivered to Davis.
Herman was surprised by how quickly Davis conferred with his eight clients. In less than thirty minutes, Davis returned and handed McCoy a piece of paper. Davis did not say a word.
McCoy read the note to himself and then out loud:
Defendants, their counsel, and insurers:
Let me start by demanding under Rule 54 of the Tennessee Rules of Civil Procedure that, based upon my affidavit filed in each of the remaining Plainview cases, the defendants pay costs of $284,636. These are expert witness fees, costs of deposition and hearing transcripts, copying costs, and other incidental expenses recoverable under the rule. The court, after jury verdict, would order these expenses paid if we tried these cases, and if tried, the dollar amount of costs would increase significantly.
Second, if we proceed to eight separate trials, your attorney fees and costs, independent of the dollar amounts awarded by the juries, will exceed $2.5 million.
Third, eventually, one of these juries will award punitive damages against one, but more likely all, of the defendants. I hope that the hospital shared with the other defendants and their insurance companies that it misplaced some important evidence, which I very fortunately found. I speculate that each doctor for the two years has at least $1 million in coverage. They’ll need it.
I have been authorized to settle each of the Plainview cases, independent of each other, as follows:
Malone—$700,000
Williams—$440,000
Boyers—$700,000
Darsinos—$560,000
Mueller—$700,000
Andrews—$600,000
Lane—$700,000