OCTLA THE GAVEL OPERATION VETERANS

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1 OCTLA THE GAVEL A QUARTERLY PUBLICATION of the Orange County Trial Lawyers Association Nuts & Bolts Juries Are Just People Overcoming Liability Waivers: Gross Negligence Judicial Interview: Hon. Wendy Lindley OPERATION VETERANS In-Depth Analysis insurance: the engine that drives the settlement train anniversary flashback: dillon v. legg: 3 simple questions affordable care act s financial effect on settlement planning [PAGE 27] OCTLA S 2013 TRIAL LAWYERS OF THE YEAR TOP GUN WINNERS, PAGE 28 VOLUME 16, NUMBER 4 FALL 2013

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3 The GAVEL Volume 16, Number 4, Fall 2013 OCTLA OFFICERS President Scott B. Cooper President-Elect Casey R. Johnson st Vice President Ted B. Wacker nd Vice President Vincent D. Howard rd Vice President H. Shaina Colover Secretary Geraldine Ly Treasurer B. James Pantone Parliamentarian Jonathan Dwork BOARD OF DIRECTORS Melinda S. Bell Gregory G. Brown Anthony W. Burton Brent W. Caldwell Cynthia A. Craig Jerry N. Gans Robert B. Gibson Paul E. Lee Kevin G. Liebeck Christopher E. Purcell Solange E. Ritchie Sarah C. Serpa Adina T. Stern Douglas B. Vanderpool Janice M. Vinci Atticus N. Wegman Immediate Past President Douglas W. Schroeder Executive Director Janet Thornton Editor Sarah C. Serpa Advertising Janet Thornton Graphic Designer Primary Design Printing The Wolf Printing Co OCTLA Gavel OCTLA s Mission: To protect the rights of people who have been harmed by the wrongful acts of others, by providing superior education and training for attorneys, access to the collective resources, knowledge, and experience of our members, and promotion and support of laws which correct injustice and protect access to the civil justice system. CONTENTS columns 5 Editor s Commentary: Re-Entry Opportunities for All Sarah C. Serpa, ESQ. 7 President s View: Honoring the Top Guns Military and Civilian Scott B. Cooper, ESQ. features 6 OCTLA Board Elections Form 12 OCTLA Judges/Mediators/Arbitrators Evaluation Form 16 Judicial Interview: Hon. Wendy Lindley 17 OCTLA New Members 26 OCTLA Tidbits & Announcements 28 OCTLA Top Gun Trial Lawyer of the Year Awards 31 OCTLA Photo Library 47 OCTLA Verdicts & Settlements 53 OCTLA Calendar of Events in-depth analysis 8 Insurance: The Engine That Drives the Settlement Train Edward Susolik, ESQ th Anniversary Flashback: Dillon v. Legg 3 Simple Questions Gary Chambers, ESQ. 18 The Affordable Care Act s Financial Effect on Settlement Planning Scott MacDonald, CSNC, and Kevin Urbatsch, J.D. nuts & bolts 23 Juries Are Just People John Michael Montevideo, ESQ. 24 Overcoming Liability Waivers: Gross Negligence Casey R. Johnson, ESQ. The Gavel is published quarterly at a subscription rate of $50 per year. Periodicals postage paid at Lake Forest, California. Copyright 2013 Orange County Trial Lawyers Association. All rights reserved. Reproduction in whole or in part without written permission is prohibited. POSTMASTER: Send address changes to The Gavel, Moulton Parkway, #135, Laguna Hills, CA The GAVEL is a publication of: ORANGE COUNTY TRIAL LAWYERS ASSOCIATION Moulton Parkway #135, Laguna Hills, CA PHONE FAX info@octla.org Editor: Sarah C. Serpa Executive Director: Janet Thornton Disclaimer: OCTLA does not endorse or recommend other than those officially endorsed by OCTLA any individual or company it mentions in its magazine. Any business conducted is between the member and the individual or company. 3

4 Trust your case to a Certified Appellate Specialist. Over 30 years of experience Excellent success record Prepared 350+ writs & appeals Donna Bader DeVinney & Dinneen Vocational & Economic Services Terrance Dinneen, M.S. C.R.C., C.E.A. For those cases in which Employability and Economic Losses are an issue We can provide the answers. Certified in both Rehabilitation and Economics Personal injury, wrongful termination, divorce, earning capacity, present value Extensive trial experience in both State and Federal Courts in California, Nevada and Oregon 25 years of practice and experience in Southern California Toll Free Serving the Nevada, California & Oregon area since 1976 Certified Specialist in Appellate Law By State Bar Board of Legal Specialization (949) Donna@DonnaBader.com Blogging at 4 Advertisers Index by Services Offered Annuities and Structured Settlements Patrick Farber Settlements Broker Kaas Settlement Consulting Appeals and Writs Donna Bader Court Reporting Services Jilio-Ryan Hunter & Olsen, Inc Employment and Wrongful Discharge Law Law Offices of Charles Pernice Exhibits and Presentation Services Executive Presentations Court Graphix CSC Anatomy Arts Expert Services DeVinney & Dinneen Kars Advanced Materials, Inc OHM Corp Traffic Engineer Wm. Kunzman Nolta Construction Consulting Legal Associations Public Law Center Marketing Services Kevin Brown Legal Marketing Primary Design Mediators & Arbitrators JAMS The Resolution Experts ADR Services, Inc Judicate West Medical Services Doctors on Liens, Inc Dr. Gregory Fisher, Medical Expert Personal Trainer Sarah Condor, Esq Plaintiff Legal Services Bisnar Chase Consumer Attorneys LLP Callahan & Blaine Hodes Milman Liebeck Mosier, LLP Klein & Wilson Panish, Shea & Boyle LLP AlderLaw Howard Law PC Printing Services Wolf Printing Company Workers Comp. Legal Services Thomas F. Martin Gary E. Skawin

5 Guidelines for Manuscript Submission The Gavel accepts unsolicited manuscripts for consideration. Articles are judged on the basis of research, writing, topic, and interest to membership of OCTLA. The Gavel follows a modified version of the California Style Manual for legal citations. Manuscripts submitted should follow those rules as closely as possible. The Gavel prefers authors to avoid footnotes or endnotes, but such use will not be a basis for declining to publish an article. Authors should submit a copy of the article on disk or via , preferably in Microsoft Word format. Please include a photo and brief biography with all submissions. to: info@octla.org. The Gavel retains copyright on all articles. The Gavel freely grants permission to others to reprint the article, upon their agreement to acknowledge the copyright. The editors may make editorial changes to an article, without changing its substance. Submissions to The Gavel are subject to editing. Editorial decisions are based on writing quality, subject matter, potential interest to The Gavel readers, and other concerns the Editor may deem relevant in her sole discretion. The views expressed in the content of The Gavel are those of the authors, and may not be reflective of the views or policy of the OCTLA, its board of directors, and/or its membership. The content of The Gavel shall not be construed as legal advice. The articles, commentary, advertisements, and/or any other content contained herein are the opinions of the authors, and are not intended to be relied upon as legal advice. The views, positions, interpretations of law and arguments of the authors herein are theirs alone, and no endorsement by the OCTLA, its board of directors, and/or its membership should be inferred by virtue of their publication in The Gavel. OCTLA Gavel Re-Entry Opportunities for All Editor s Commentary Sarah C. Serpa, esq. In November, the OCTLA will raise muchneeded funds for the Public Law Center s Operation Veterans Re-Entry during the annual Top Gun ceremony. Operation Veterans Re-Entry provides Orange County veterans and their families with free legal assistance to help facilitate their re-entry into civilian life. Many of our veterans returned from war with debilitating post-traumatic stress and/or brain injuries. They have trouble every day just controlling their anger. Operation Veterans Re-entry can help with the essential task of navigating the legal system when the veteran literally cannot do so on his or her own. Thus, the Public Law Center shares with us a fundamental goal that we should be familiar with as members of OCTLA. As trial attorneys on behalf of consumers, we help those whose circumstances, through no fault of their own, have caused them to meet with hard times that cannot be overcome without help. The laudable goal of the Public Law Center s Operation Veterans Re-Entry is consistent with the purpose underlying our work as trial attorneys. When we represent the injured, the cheated, or persons whose rights have been violated, we realize that through our representation, we too are assisting in these individual s re-entry into their former way of life. Thus, our members are in a unique position to appreciate and support the Public Law Center s efforts for veterans, as it is a shared goal to re-claim the basic human dignity that everyone deserves. For these reasons, we urge each of our members to make sure that this Top Gun ceremony is the most well attended of them all. Similarly, in this edition, we highlight the lifelong service of Judge Wendy Lindley of the Collaborative Courts of Orange County. These Collaborative Courts are working every day to intervene and support individuals, including a court strictly for veterans, so that their lives stay on course and they steer clear of the criminal court system. We hope you find this edition is as inspiring as we believe it to be. We also look forward to seeing all of our readers at Top Gun in November so that we can continue in our goal to make a difference in people s lives. 5

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7 Honoring the Top Guns Military and Civilian One of the more important decisions OCTLA s Board of Directors makes each year is which charity to support with the funds from the silent and live auctions at our Top Gun event in November. The choice says much about not only the quality of the charity, but also the values and priorities of our association. Helping Those Who Protect Us At the beginning of the year, we set out to find an organization that helps military veterans in need. This would allow us to give something back to those who have given up so much for us. As we were doing our research and due diligence, Orange County s Public Law Center ( PLC ) announced the formation of Operation Veterans Re-Entry, a PLC outreach program that provides free legal services to Orange County military veterans and their families to ease their re-entry to civilian life. I don t know if it was fate, providence or luck (or maybe a little of each), but this was the perfect fit for us. PLC s mission just like OCTLA s is to provide access to justice. In the case of PLC, they provide this access to low income residents throughout Orange County, and Operation Veterans Re-Entry is dedicated to doing so for veterans. Once we became familiar with this program and its charge, the choice was easy. Our country recently commemorated the 12th anniversary of 9/11 a day for remembrance. We remember not only the victims of the attacks and the brave first responders, but also the military personnel who serve every day to protect us from future attacks and have protected our liberty and way of life for over 200 years. The next official opportunity to remember and honor those military personnel is the 11th of November Veterans Day. Twelve days President s View Scott B. Cooper, esq. later, on November 23rd, OCTLA will again recognize veterans with our donations to Operation Veterans Re-Entry at our Top Gun Dinner and Charity Auction at the Montage in Laguna Beach. Operation Veterans Re-Entry is being led by PLC attorney Antoinette Balta, an Equal Justice AmeriCorps Legal Fellow. Consistent with PLC s model, Ms. Balta provides legal services herself and also oversees volunteer law students and pro bono attorneys who serve the veterans directly. In just the first eight months of the program, Ms. Balta and the volunteers served over 170 Orange County veterans. Among other services, they assisted with the filing of disability benefits petitions, helped clients stay in their homes, removed barriers to employment, helped repair damaged credit, assisted with child support payments, provided aid on immigration issues, and obtained the return of a veteran s personal belongings that were wrongfully withheld by a landlord, including his Green Beret. 7 Everyone deserves access to justice, but perhaps none are more deserving than those who have put their lives on the line to protect the very justice system to which they seek access. It is estimated that there are more than 140,000 veterans in Orange County, and with troops still coming home from Afghanistan, the number will continue to rise. Given the unique circumstances facing some of these veterans when they return, the need for services will also continue to escalate, and the benefits of providing this assistance are clear. As noted by PLC when announcing Operation Veterans Re-Entry: The unemployment rate for veterans of the wars in Iraq and Afghanistan is over 10 percent three full percentage points above the national average. Relatively minor legal problems can be major obstacles to employment, personal health and family relationships. Once legal problems are resolved, veterans become more employable and significantly more likely to become productive members of society.... Shockingly, homelessness is an epidemic affecting veterans and their families from all eras. Estimates indicate there are between 1,500 and 3,000 homeless veterans in Orange County. Further, it is estimated that nearly 10,000 veteran households are at significant risk of homelessness and half of veterans who are experiencing homelessness have legal issues. Resolution of those issues can place an at risk veteran on a path towards stable housing and a better life. Operation Veterans Re-Entry is dedicated to the memory of a U.S. Marine with roots in Orange County and deep ties to the (Continued, see President, page 41)

8 Virtually every personal injury settlement involves insurance money. In fact, of the over 500 mediations I have conducted in my career, over 98% have involved insurance in one form or another. Moreover, insurance bad faith, insurance coverage and other insurance complexities frequently arise during med - iation and settlement negotiations. The bottom line is that insurance controls the settlement dynamic, and ultimate decisions regarding settlement are virtually always made by insurance companies. A plaintiff lawyer with an extensive understanding of insurance law and insurance principles is an extremely powerful negotiator. Being able to specifically address insurance coverage issues for example, by way of a separate mediation brief on insurance issues can be dispositive to settlement. Given this paradigm, one would imagine that plaintiff attorneys would be lining up to become experts on insurance law. Stated most starkly, given that an attorney s contingency fee is ultimately dependent on how large of a check is written by an insurance company, one would expect that attorney to do whatever is necessary to learn and understand how insurance works. Ironically, however, that simply does not appear to be the case for the majority of plaintiff s lawyers. Whether it is because of the complexity of insurance law or because OCTLA Gavel Insurance: The Engine That Drives the Settlement Train In-Depth Analysis Edward Susolik, esq. many attorneys are extremely busy with their caseload, most plaintiff lawyers do not acquire the level of expertise needed in order to meaningfully negotiate with insurance companies at mediation. This article attempts to bridge this gap. The article will survey and summarize some of the fundamental insurance issues that arise at mediation and impact settlement of personal injury cases. Further, this article will provide specific advice and strategies for dealing with such insurance issues. Timing Considerations The first issue is when is the best time to settle cases involving insurance companies. Every plaintiff attorney dreams of the early mediation, settling a case with minimal time and effort. However, it is extremely rare that an insurance company will ever pay top money for settlement without going through the discovery and litigation process. 8 Insurance adjusters deal with facts, not potentialities. Most carriers will not provide a true bottom line until they have completed their discovery, including expert analysis. If your case does have experts, I would strongly recommend that the experts prepare reports and the reports are attached to the mediation brief. Even if those experts have not yet been deposed, if the reports are attached, the carrier will know what that expert will say at trial. Many carriers and their defense counsel also feel they must put the plaintiff lawyer through the paces before they will settle the case. The reality is that many plaintiffs and/or their counsel do not want to go through a lengthy litigation process, and will therefore settle early, for less money. Insurance companies understand this psychology, and seek to exploit it. Choosing the Right Mediator Once the decision is made to go to mediation, it is critical to choose the right mediator. There are many excellent mediators in One would imagine that plaintiff attorneys would be lining up to become experts on insurance law Edward Susolik is a senior partner at Callahan & Blaine, and chair of the firm s insurance department. He specializes in catastrophic personal injury, insurance bad faith and complex business litigation. He is also an adjunct professor at USC Law School. California. There are very few mediators, however, who have significant insurance expertise. In my experience, it is preferable to select a mediator with insurance experience to mediate personal injury cases. Given the prevalence of insurance issues that permeate mediation and the settlement process, the mediator should optimally be able to communicate effectively with the insurance company and/or its coverage counsel with respect to such issues. The Mediation Brief The mediation brief is the one chance that plaintiff counsel has of communicating (Continued, see Insurance, page 10)

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10 Insurance (continued from page 8) directly with the decision-makers at the insurance company prior to trial. Such communication is unfiltered by anything that the defense lawyer can do. There are a number of considerations that will maximize your message. Timing of the Brief. It is critically important to serve the mediation brief on the insurance company and the defense well before the mediation. Two weeks or more is the optimal time. The reason is simple. If you want your brief to be persuasive and to be considered by the decision-makers, you must give them sufficient time to read, analyze, critique and digest your brief. Further, the more significant your case, the busier are the decision-makers who will be considering your arguments. Procedural Aspects of the Mediation Brief. In addition to the timing considerations, your mediation brief must have a highly professional appearance. You are trying to impress upon the other side that you will be a powerful opponent at trial. A brief full of misspellings, unpersuasive arguments or incomplete thoughts sends exactly the wrong message. Conversely, a persuasive, well-edited and highly polished mediation brief sends a message to the other side that your approach at trial will be equally powerful. The extensive amount of time you spend preparing such a brief will pay dividends many times over. By way of example, in a recent case, our office spent over six weeks writing a brief in a personal injury case. That brief ended up containing 82 pages of text, plus 300 pages of exhibits. I am absolutely certain that our 82-page mediation brief, when compared to the 11-page brief prepared by the defense, made a huge impression on the insurance companies on the other side and motivated their decision to settle the case at top value. Even matters such as formatting and copying are important in communicating your message of strength. Rather than using staples or fasteners, we will frequently use spiral binding or other sophisticated printing techniques to bind the brief in order to give the document the most professional look possible. When serving the brief on the other side, you should make multiple copies for the service. If you go through the expense of putting together a highly polished mediation brief and merely allow the other side to make their own photocopies, you ll be eliminating much of the shock and awe effect of receiving an expensively bound brief. Estimate the number of parties, counsel and insurance carriers on the other side, make multiple copies, and have them delivered by hand to counsel. Remember, this is your opportunity to have an ex parte communication with the insurance adjuster on the other side. Given that they will be personally reviewing your work, it pays to put your best foot forward by preparing a professional copy of the mediation brief. The Fallacy of Confidentiality. It is critical to share the facts and documents of your case with the insurance company on the other side. For that reason, the concept of a confidential mediation brief is completely contrary to meaningful mediation. Defendants are especially fond of submitting confidential mediation briefs. In my opinion, that is a fundamental mistake. The most fruitful way to a successful mediation result is to share your best and most persuasive arguments with the other side. The only exception is if you truly have some strong and powerful facts or arguments (such as a damaging sub rosa tape) that the other side is not yet aware of. In that case, I would encourage a separate, confidential mediation brief discussing such issues. Video Mediation Briefs. As Bob Dylan said years ago, The times, they are a changin. With the sea storm of powerful 10 technological changes, the prevalence of video imagery and entertainment in our society, and the fundamental shift in the manner in which people assimilate infor - mation ( s, mobile phone, TM, IM, Internet, blogs, etc), there has been a major paradigm shift toward the introduction of digital and video technology into trials and litigation. I strongly encourage all plaintiff s lawyers to introduce such technology into their mediation presentation. It will have a major WOW effect on the insurance companies evaluating the claim, and will send a strong message of what they are to expect at trial. What I am suggesting is far beyond the traditional day in the life video presentation. Rather, what I am recommending is a comprehensive and lengthy settlement video, a digital mediation brief. Put together through sophisticated production techniques, the video includes detailed video evidence of the plaintiff both before and after the accident, interviews with the plaintiff and his family, experts sitting down and summarizing their expert testimony, third-party witnesses testifying and the incorporation of sophisticated accident reconstruction and other scientific digital and video evidence. This type of production, although extremely expensive, is very powerful and persuasive in the mediation context, especially to busy insurance adjusters. Under the theory that a picture is worth a thousand words, a 30- minute video production is, in effect, a mini-trial presentation for the opposing party and its insurance adjusters. The power of the video presentation to reach the intended audience is strong and focused. One telling example of the power of the settlement video approach is a recent personal injury case we settled for over $28 million. We spent approximately $80,000 putting together a settlement video. The (Continued, see Insurance, page 42)

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13 50th Anniversary Flashback! APRIL 1982 Continued on next page 13

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16 Hon. Wendy Lindley Rising Above the Rhetoric Here at OCTLA, our slogan Take No Challenge Alone captures the essence of our group. This year, Judge Wendy Lindley will retire from the bench. One of her legacies will be that she was instrumental in creating an alternative to the traditional State criminal court for defendants who, with the help and understanding of Judge Lindley s Collaborative Courts, did not have to face their challenge mental illness, homelessness, addiction alone. Collaborative Courts A New Way of Thinking Welcome to Your Community Court is the first thing you see when you step into the unassuming building at 909 N. Main Street in downtown Santa Ana. The second thing you will notice is the homey feel of hardwood floors, wooden doors, and the Spanish decorative tile. If this doesn t look like a regular court, there is a reason it isn t. This is the Orange County Collaborative Courts building, the brainchild of a few enlightened State Court judges and staff who realized that they were seeing the same offenders over and over in the State Court criminal law system. They believed there had to be a reason for this, and they believed they could do something to stop the vicious cycle. More than 20 years later, the statistics are astounding. The majority of people who participate in the Collaborative Court system do not re-offend. Studies have shown that $7 million has been saved for Orange County in 2012 alone. The Collaborative Courts receive referrals from State Court for its Adult Drug Court, Combat Veterans Court, Homeless Court, Interview by Sarah C. Serpa, Esq., editor of The Gavel. Contact her at sserpa@callahan-law.com. Judicial Interview Hon. Wendy Lindley DUI Court, Opportunity Court (for mentally ill offenders), and Recovery Court. The approach is a team effort, so that individuals have the best chance to succeed. In any particular person s case, the Sheriff, the District Attorney, the Public Defender, the Probation officer, and the Court all work together to see that offenders follow-up with the Court, get tested regularly, get the proper physical and emotional counseling and stay out of the criminal law system. This Court is equipped with a computer lab so that clients can learn basic computer skills, there are vocational rehabilitation specialists and even a Children s Chambers so that there is childcare while the parent seeks help. The Veterans Court is also currently a Mentor Court which provides training for professionals who would like to emulate its methods throughout the world. The individuals who come through these Courts are also offered assistance in areas that we might take for granted. What if the reason you cannot get hired or keep a job 16 was simply because your eyesight is bad and you cannot afford glasses? This Court can help with that. What if you have tooth pain because you cannot afford a dentist and this pain keeps you from concentrating on work? This Court can assist with that too. The vicious cycle experienced by many offenders that were habitual defendants in State Court has been broken by simply understanding the other factors affecting the behavior. In many instances, this means merely getting the right medication and the right counseling. These Courts are designed to instill a sense of personal dignity and pride in working through the issues causing the criminal conduct, and the results speak for themselves. Judge Wendy Lindley Judge Wendy Lindley has been instrumental in the success of this Collaborative Court system. She graduated from USC with a BS in 1972 and Pepperdine Law School in She spent time as a District Attorney in Orange County and then as a Municipal Court Judge seeing how the State s criminal courts really worked. She came to notice that there was a need for early intervention and supportive services. She understood that the courts should be less short-sighted and understand that such supportive services could have a lasting effect on recidivism and costs to the State. She knew there had to be a better way. Judge Lindley was a leader in establishing this alternative court system. Her legacy upon her retirement next year will certainly include the undisputed success of these Collaborative Courts in Orange County. Amid criticism that her courts are soft

17 OCTLA Welcomes the Following New Members S. Edmond El Dabe James Fraser Ian Siverthorne Clayton Williford AFFILIATE Members Quinlivan Mediation Services, Patrick Quinlivan ILYM Group, Inc., Settlement Administration Experts, Lisa Mullins THANK YOU OCTLA would like to thank these members who have recruited one or more NEW members this past quarter: Jerssalem Beligan April Blackman Briny Woods LAW STUDENT Members Wanli Chen Carley Millian Alis Rabet on crime, or taking resources from traditional criminal courts, Judge Lindley proved the dissenters wrong. These Collaborative Courts enjoy statistics for a lack of repeat offenders that prove the success of this program. For example, for defendants that are sentenced to regular, State prison, within 18 months, 75% of them recidivate. At the Orange County Drug Court, after 18 years of statistics, 73% have not recidivated. This is an almost direct reversal, evidencing long term solutions that have worked. Judge Lindley explains that the approach is strictly research based. Therefore, the methods employed have been scientifically proven to work by studies that spanned over 20 or 30 years. The methods range from drug testing and simple incentives, such as applause by the whole courtroom for someone who successfully completed a phase of the program, to a one-night stay in jail to remind the person where they do not want to end up. Judge Lindley compares it to a tough love parenting approach where, [W]e re providing you with a strict program of accountability, responsibility and structure, and we require that you fulfill the requirements of the program and when you don t, the sanction will be swift and immediate. But it will also be certain not changing the rules, making sure that everyone is treated fairly and using research based techniques to do so. Interestingly, before her career in law, Judge Lindley had experience in occupational therapy and psychology, so at her core, she has always had a passion and instinct to help people get back on their feet. With the assistance of her loyal staff, this goal is achieved every day. There have been over 4000 graduates of these combined courts. The are people who have stated that if not for Judge Lindley, they would be in jail, on the streets, or worse. Coincidentally, Governor Chris Christie recently signed into legislation a state-wide mandatory Drug Court program. Judge Lindley shared the quote from the Governor during our interview, No life is disposable and that [drug court] is a common sense, fiscal and moral imperative to help individuals dealing with drug addiction to reclaim their lives with treatment rather than warehousing them in prison. This is Judge Lindley s wish for the future of the Orange County approach with its Collaborative Courts. She concludes, To me that seems the way a humane society would treat their fellow community members and, as I said, we save lives, we save money and we make our communities safer. What could be better than that? An Example for Us As civil litigators who strive to stand up for those who cannot, it is inspiring to see 17 what good our colleagues on the criminal side are doing in the same regard. Judge Lindley will always be remembered for her courage, determination and hard work which has made the Orange County Collaborative Courts a shining example for how successful such a program can be. DON T MISS IT! October 24, 2013 SOCIAL MEDIA AND Legal Ethics TUSTIN RANCH GOLF CLUB < Register at >

18 Settlement planning is the process of ensuring that a plaintiff who has a significant disability, lacks capacity, or has a complex financial situation will receive his or her litigation proceeds in such a way that it will not jeopardize his or her future retention of other benefits. The imminent implementation of the Affordable Care Act (ACA) presents a new challenge (and opportunity) for plaintiffs with disabilities. This article will employ a sophisticated financial analysis to determine when it makes financial sense for a plaintiff s litigation recovery to be held in a special needs trust (SNT) or not. After analysis, the authors have determined that it will make financial sense to utilize an SNT if the plaintiff also receives Supplemental Security Income (SSI) unless the net settlement to the plaintiff is just under $3,000,000. This article will go through the analysis all plaintiffs with disabilities should utilize in reaching these life-altering decisions. There are many factors to settlement planning, but one concern has always been lifetime access to affordable healthcare. For persons with disabilities, this has been a challenge because Medi-Cal is often their only option for healthcare. Moreover, before the enactment of ACA, persons with disabilities were oftentimes barred from private health insurance because the insurance companies automatically denied them due to their disabling pre-existing condition. OCTLA Gavel Affordable Care Act s Financial Effect on Settlement Planning In-Depth Analysis Scott MacDonald, csna In order to qualify for traditional Medi-Cal, a person with a disability must retain less than $2,000 in his or her name. A person with a disability was allowed to retain more than $2,000 in his or her name if a SNT authorized by 42 U.S.C. 1396p(d)(4)(A) or (C) 1 is used. Thus, up until now, most plaintiffs with disabilities had no other 18 option but to place his or her litigation recovery into an SNT if they wished to preserve eligibility for Medi-Cal and preserve funds for future use. It is nearly always preferable to have the funds managed in an SNT rather than a conservatorship Financial content by Scott MacDonald, Senior Financial Advisor for Merrill Lynch Wealth Management and Certified Special Needs Advisor (CSNA). Legal content by Kevin Urbatsch, J.D. Kevin Urbatsch, j.d. There are many non-healthcare related reasons for a person with a disability to place funds in an SNT. The SNT preserves eligibility for SSI, which is often their only access to income. Plus, any person with a disability who lacks capacity and has public benefits must have his or her litigation recovery placed into some type of ongoing court supervised entity, typically a conservatorship or SNT. See Prob. Code ,3. In the author s opinion, having established and supervised hundreds of SNTs and conservatorships, it is nearly always preferable to have the funds managed in an SNT rather than a conservatorship because it is less expensive and easier to do so. Even for those persons with disabilities who do have legal capacity, it is rare that they have the sophistication to properly manage any type of wealth in a reasonable and pragmatic fashion. An SNT would allow a plaintiff to preserve eligibility for benefits (without court supervision) and have a trustee who has a fiduciary obligation to utilize these funds for the plaintiff s sole benefit under a prudent investment standard. Further, the availability of unfettered access to cash for many persons with disabilities makes them prime targets for financial predators from strangers and even from family members looking to take advantage. Under these circumstances, an SNT will provide the best option to safeguard and protect a person with a disability.

19 There are also a few situations where maintaining Medi-Cal eligibility is of utmost importance, as Medi-Cal is the only payor for certain types of benefits. This includes In-Home Support Services (IHSS) that allows a person with a disability to remain in their residence and skilled nursing home care for those whose healthcare needs require round-the-clock care in a facility. The Medi-Cal program also provides access to certain waiver programs that provide free targeted solutions for the unique needs of persons with disabilities, which cannot be replicated or replaced with the ACA programs. The ACA changes things for persons with disabilities. For the first time, ACA requires insurance companies to not discriminate against persons with pre-existing conditions. This means that private health insurance will be available for persons with disabilities. The ACA also makes private healthcare more attractive because it removes the lifetime limits on health insurance that made private plans unattractive to many persons with profound disabilities. The ACA caps the amount of money that a person will have to pay out-of-pocket each year depending on a person s income level. For example, if the person in California earns less than $17,235 a year in 2013, the annual out-of-pocket limit he or she has to pay is $2,250. Otherwise, the general ACA annual out-of-pocket limit for an individual is $6,250 per year 4. The ACA allows individual states to adopt expanded Medi-Cal. Expanded Medi-Cal takes away the resource requirement for Medi-Cal and instead focuses on the individual s income. California has already passed expanded Medi-Cal. Thus, for people between ages of 19 to 65, Medi-Cal eligibility will be expanded to include individuals with incomes up to 133 percent of the Federal Poverty Limit (FPL) (plus an automatic 5 percent income disregard) ($15,586 for individual in 2013) 5. It is important to note that this new expanded program does not apply to persons currently receiving Medi- Cal or applying for long-term care nursing home care and some other restrictions. The ACA also provides government-subsidized assistance to healthcare premiums for those with incomes of 138% through 400% of the FPL ($15,586 $45,960 for individuals in 2013) 6. For those plaintiffs with a disability who have capacity and are determining whether it makes financial sense to utilize an SNT or to take their litigation recovery in their own name and forego public benefits, the essential question is: will foregoing an SNT and purchasing ACA insurance via the California exchange improve their future financial situation? There appear to be at least four options for the person with a disability who obtains a litigation recovery. (Continued, see Financial, page 20) 19

20 Financial (continued from page 19) 1. Use an SNT only; 2. Use an SNT but also buy ACA private healthcare; 3. Not use an SNT and buy ACA private insurance; or 4. Not use an SNT but rely on new expanded Medi-Cal. Under each option that uses an SNT, a probabilistic forecast was completed counting the costs estimated in establishing an SNT at $3,000, maintaining an SNT at 1% of trust assets per year, and then adjusted for future inflation estimated at 2.5% per year. The financial calculation includes counting SSI that provides a monthly check of $ for an individual in California in The SSI check is also subject to a cost of living adjustment (COLA) estimated at 2.5% per year. Under each option that includes purchase of ACA insurance, the healthcare expenses were calculated using California s Silver Plan premium levels derived from the average published rate for each of 19 regions from the Covered California publication, Health Plans & Rates for 2014: Making the Individual Market in California Affordable. The amounts (where applicable) were also reduced by the applicable governmental subsidy for low-income individuals as well as the full annual out-of-pocket maximum expense for the Silver Level Plan. All income and expense items were inflated using the same rate assumption as for the SNT options. The chart below describes the achievable lifestyle that a 40-year-old woman with a disability who receives SSI and Medi-Cal could obtain utilizing different litigation net recovery amounts. As seen below, if a plaintiff receives a net settlement amount of $2,868,000, it still makes financial sense to utilize an SNT to achieve a higher monthly income than to take the funds and purchase private health insurance. In fact, across all options, the value of adopting an SNT and receiving the resulting SSI payments resulted in dram - atically increased standards of living for all age groups tested, across all settle - ment levels. The primary reason for these results is access to SSI over a lifetime with a COLA. The value of that income is generally in the hundreds of thousands of dollars for most beneficiaries. For example, consider a $1,000,000 settlement. Funding the litigation recovery into an SNT could provide an attainable annual total budget of $33,484. If instead, the plaintiff took the settlement in his or her own name and purchased private healthcare, the annual budget would be reduced to $15,494. This is an annual reduction of $17,690 of available income. If you add in the loss of the SSI s COLA (Continued, see Financial, page 37) PLANNING PROJECTIONS (40 YEAR OLD FEMALE) SETTLEMENT NET ASSET LEVEL > $100K $396K $500K $1 M $2.868 M Net Spendable Income Annual Amount [u] SNT Only [v] $12,610 $23,751 $22,208 $33,484 $67,500 No SNT, Buy ACA Insurance [w] EM EM $11,196 $15,794 $67,504 SNT with ACA Supplemental [w] EM EM $17,700 $20,684 $53,766 No SNT, Expanded Medi-Cal $3,614 $14,291 NQ NQ NQ Income Percent of Federal Poverty Limit [x] 34.80% 138% [y] % % % Average Annual ACA Premium (Net Subsidy) [z] 7 $0 $0 $4,508 $12,800 $15,552 Average Monthly ACA Premium (Net Subsidy) $0 $0 $376 $1,067 $1,296 Source: Merrill Lynch Wealth Management Analysis through the Wealth Outlook Program, May Chart Footnotes: EM = Qualifies for the Expanded Medi-Cal Program. NQ = Not Qualified for Expanded Medi-Cal Program. u After-tax spendable income, net of premium or SNT expenses, assuming 2.5% COLA through actuarial life expectancy of the beneficiary. v Net Spendable Income for SNT options has been reduced by $3,000 expense to establish the SNT and 1% annual administrative expenses. Assumes $856 monthly SSI income received with 2.5% annual COLA. w Net Spendable Income for ACA options has been reduced by average annual premium and maximum annual out of pocket expenses for the respective income level (based on percent of FPL). x Assumes 4% annual taxable income based on the settlement net asset level. y Maximum annual income level to qualify for the Expanded Medi-Cal Program is 133% of the Federal Poverty Limit ($15,282) plus 5% ($11,490 *.05% = $ ) any income disregard = $15,856 for z Average of highest premium rate for that income level across the 19 California regions. Amount shown is beneficiary's cost after federal subsidy. 20

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22 OCTLA S ANNUAL BENCH & BAR GOLF TOURNAMENT THANK YOU SPONSORS TITLE SPONSOR TOURNAMENT SPONSORS ALDERLAW BISNAR CHASE CALLAHAN & BLAINE ILYM GROUP, INC. HODES MILMAN LIEBECK MOSIER, LLP SHERNOFF BIDART ECHEVERRIA BENTLEY, LLP PURCELL LAW GIBSON & HUGHES THE COOPER LAW FIRM COHN & SWARTZON, PC KAAS SETTLEMENT CONSULTING GARY DONOVAN, JUDICATE WEST ROBINSON CALCAGNIE ROBINSON SHAPIRO DAVIS, INC. TEE SPONSORS AITKEN*AITKEN*COHN VERDICT VIDEOS MEDIATORS OF JUDICATE WEST VERITEXT LEGAL SOLUTIONS BRANT HICKEY STRUCTURED SETTLEMENTS COMPEX LEGAL SERVICES, INC. DOCTORS ON LIENS ZAMUCEN & CURREN, LLP ARAGON-HAAS INSURANCE BROKERS JANE RILEY-PUGH, EPS SETTLEMENTS MEDIVEST BENEFIT ADVISORS, INC. HEALTHPOINTE DTI GLOBAL HIGH IMPACT PREMIER MEDICAL INSIGHT JAMS, THE RESOLUTION EXPERTS MEA FORENSIC ENGINEERS & SCIENTISTS

23 Juries Are Just People While earning my business degree from Loyola Marymount University I had a business professor affectionately known as Grandpa Fred. Grandpa Fred was one of those professors who taught you more about life than any particular text or subject matter, and somehow through these life lessons everything else made more sense. As part of a class exercise, Grandpa Fred asked me how I wanted my life to be summarized in an epitaph on my tombstone. He then said I could only use five words. The words I chose: He made a positive impact. I didn t know it at the time, but those five words changed my life and they dictate how I practice law. Flash forward roughly nine years later and I find myself in the middle of my first closing argument at trial. Over the years I had worked up hundreds of cases, second chaired several trials, but now it was my responsibility to plead my client s case before a jury and somehow make all of this testimony and evidence make sense. How do I bring this case out of the smoke, focus it on the issues that drive the case and get a jury behind my client? It was at that moment it clicked. This was my Ah ha moment. All I had to do was talk straight and be genuine. No magic analogies. No perfect flow. Just be honest, logical and reasonable. My client wouldn t be here if this accident was something they could have walked away from and said whew! that was a close call. No, the fact was that it wasn t a close call and she couldn t just walk away and be okay. We won that trial. My client was taken care of and the jury John Michael Montevideo is an Associate at the injury law firm of DiMarco Araujo Montevideo. He practices in the area of personal injury, including work injuries, product liability, auto and traumatic brain injury cases. He can be contacted via at johnmichael@damfirm.com. Nuts & Bolts John Michael Montevideo, esq. 23 was with me. The verdict came in at nine times the last offer before trial. In litigation, it all starts with what matters at trial. Everything you do to prepare your client s case begins with your theme and the story you find throughout discovery to relate to your jury. Our job as trial attorneys is to validate and answer one simple question for the jury: Why did we bring you here to decide this matter. In my young career I ve beat my head against the wall a few times and learned quite a few lessons in the process. Many of my legal lessons can be broken down to understanding my forum, looking ten steps down the road, treating people with respect (including opposing counsel) and managing the amount of stress that comes with the job. Below are a few tips I ve picked up along the way: 1st Chair, 2nd Chair or Watch a Trial Knowing where you are going will show you how to get there. Trial experience will put all of your battles in discovery and law & motion into context. There are trials going on every day in every court house throughout the state. If you can t get one at work, get one via pro-bono or simply go watch. Argue a Motion for Summary Judgment Stay laser focused on the difference between arguing a motion and proving your case at trial. When arguing a motion you don t have to prove your case; rather you have to meet the threshold established by the motion you are arguing, i.e. proving a triable issue of material fact to get your case to trial in an Opposition to a Motion for Summary Judgment (The issue in an MSJ is not whether can you prove you case; rather do the issues in this case require a trier of fact, i.e. a jury, to make the determination). Learn How to Get Your Evidence In Getting your evidence in at trial begins with foundation. It s not enough to just find the evidence in discovery; rather you have to be able to introduce it at trial to use it. Research Tips Use jury instructions early on in your case. It will guide you to what the jury will have to answer at trial and help you provide answers for them during trial. CEB Action guides (Meeting Statutory Deadlines) and Rutter Guides are a helpful reference tools. If you have a statute, go to it, read it and use the annotations (you will find many of the Seminole cases on the issue). Study for 1 Hour Every Morning I have found that 1 hour every morning to study or review a subject is a great tool. Study insurance coverage or medicine (in order to explain to a jury what is going on or happened or will happen, you have to understand it yourself to the point that you can simplify it). Respect the Business of Law and Know Your Role Believe it or not, law firms are businesses. (Continued, see Juries, page 39)

24 Overcoming Liability Waivers: Gross Negligence In an article published several years ago in The Gavel ( Signing Away All Your Rights Not Really ), we explored the detailed analysis required to determine the enforceability of a tortfeasor s liability waiver/written release to evaluate its validity and applicability to the actions (or inactions) that actually caused a plaintiff harm. Typical deficiencies in a liability waiver/release which were addressed as oftentimes sufficient to overcome a primary assumption of the risk defense included limited scope, ambiguity, or incomprehensibility of the release language, lack of prominence of the waiver provisions and illegibility. An additional consideration in any case involving a written release or liability waiver is whether the actions (or inactions) giving rise to plaintiff s injuries constituted gross negligence which cannot be waived. Such an inquiry is particularly important in matters involving children and organized sports or related activities. While liability waivers have been upheld in a broad range of activities, including recreational sports, the California Supreme Court has unequivocally held that agreements that purport to release liability for future gross negligence are unenforceable as a matter of public policy. (City of Santa Barbara v. Superior Court (Janeway) (2007) 41 Cal.4th 747, , , 781.) To demonstrate gross negligence, a plaintiff does not bear the burden of proving a reckless disregard of consequences, and, in fact, gross negligence has been found to differ from ordinary negligence only in degree and not in kind. (Pacific Bell v. Casey Johnson of Aitken*Aitken*Cohn specializes in personal injury and insurance litigation. He is the President-Elect of OCTLA and past editor of The Gavel. He can be reached at casey@aitken law.com. Nuts & Bolts Casey R. Johnson, esq. Colich (1988) 198 Cal.App.3d 1225, 1240 (citations omitted.)) [N]egligence and gross negligence are relative terms, proportional to the risk. (Id. citing Gore v. Board of Medical Quality Assurance (1980) 110 Cal.App.3d 184, 197.) No less an authority than Prosser on Torts provides: Gross Negligence. This is very great negligence, or the want of even scant care. It has been described as a failure to exercise even that care which a careless person would use. Looking specifically at governmental entities, courts have explained that to avoid a finding of gross negligence, it is not required that a public entity must pursue all possible options. It is required only that they exercise some care, that they pursue a course of conduct which is not an extreme departure from the ordinary standard of conduct. (Franz v. Board of Medical Quality Assurance (1982) 31 Cal.3d 124, 138.) Whether conduct constitutes gross negligence (as opposed to general negligence) is generally a triable issue of fact. (Pacific 24 Bell v. Colich (1988) 198 Cal.App.3d 1225, 1241.) In the City of Santa Barbara v. Superior Court (Janeway) (2007) 41 Cal.4th 747, the California Supreme Court held that California would follow the majority rule and the bulk of published authority, and that liability waivers could not be extended to gross negligence. In City of Santa Barbara, the mother of a 14-year-old developmentally disabled girl enrolled her daughter in a summer camp for developmentally disabled children run by the City. (Id. at ) The application, which was signed by the minor s mother, contained a release of all claims of liability against the City and its employees based upon negligence, arising from camp activities. (Id.) The minor daughter had a history of seizures, which was fully disclosed to the summer camp, and the summer camp assigned a counselor to her. (Id. at 753.) On the first day of the camp, the disabled minor swam without incident. On the second day, the minor suffered a mild seizure that lasted a few seconds. After observing the minor for 45 minutes following the seizure, the counselor allowed the minor to swim. (Id.) The counselor lost sight of the swimming minor after turning her attention from the minor for no more than 15 seconds. (Id.) After searching for the minor for two to five minutes, an air horn was blown to evacuate everyone from the pool, at which time the minor was pulled from the bottom of the pool. (Id.) She died the next day. (Id.) The California Supreme Court, following an exhaustive analysis of out-of-state authority and various treatises, as well as public interest considerations, held that releases of liability are invalid for future gross negli-