Interest in Litigation and Marital Property

Transcription

1 Interplay and Pitfalls with Family Law Cases when there is a PI, Wrongful Death and Worker s Comp Case or Claim Family Law Conference August 7, 2015 Kent Emison, Phyllis Norman and Tricia Scaglia Interest in Litigation and Marital Property Interest in Pending Litigation??? What date does the pending litigation become marital property? Time of Suit? Time of Injury? Time of Payment of Suit? No cases support theory that the trial court is required to assign a value to personal injury claims that have not been adjudicated yet. Laffey v. Laffey, 4 S.W.3d 655 (Mo. App. W.D. 2002) Loss of Consortium Claimed? 1

2 What is Marital v. Non Marital in PI Cases In Personal Injury Claim what proceeds would be marital? Loss of future post dissolution wages Non marital Heslop v. Heslop, 967 S.W.2d 249, 254 (Mo. App. W.D. 1998) Wages during marriage Marital Future Medical Non marital Mistler v. Mistler, 816 S.W.2d 241, 251 (Mo. App. S.D. 1991).; see also Schubert v. Schubert, 366 S.W.3d 55 (Mo. App. E.D. 2012). Past Paid Medical Expenses Marital Compensation for noneconomic damages, such as pain, suffering, disfigurement, disability is generally Non marital Mistler, 816 S.W.2d at 251. PI Settlements A settlement for a personal injury claim occurring during the marriage may be both marital and non marital. Petties v. Petties, 129 S.W.3d 901 (Mo. App. W.D. 2004). Courts use the analytical approach, the settlement award is classified by what it is meant to replace. Coffman v. Coffman, 215 S.W.3d 309 (Mo. App. W.D. 2007); Brill v. Brill, 65 S.W.3d 583 (Mo. App.S.D. 2002); Blydenburg Dixon v. Dixon, 277 S.W.3d 815 (Mo. App. W.D. 2009). 2

3 Possible Personal Injury Claim in Divorce Questions for you to ask client: Has a lawsuit been filed? What claims were made? What is your specific claim? Spouse s claim? What is the injury? Impact on job? Impact on daily life? Who is the attorney? Who does attorney represent? Has there been a settlement conference? Is there a court date? SIMPLE CAR ACCIDENT CASE??? Jane Doe Cut Off Approaching Construction Zone Rear Ended by Delivery Vehicle Driven by Joe Schmoe Jane is Paralyzed, $10 Million in Damages Joe Schmoe Has Only State Minimum Insurance $25/50k 3

4 3 rd PARTY INSURANCE CLAIMS Finding the Insureds Driver of Vehicle Owner of Vehicle Types of Coverage BIPD Primary Excess/Umbrella Competing Concerns Immediate Money for Client Preserving Path to Further Recovery TOOLBOX TO MAXIMIZE RECOVERY R.S.Mo Settlement Limiting Recovery to Specific Assets (Usually Insurance Policy) Claim Continues After Agreement Provides Path to: Preserve Venue in State Court Equitable Garnishment Action Bad Faith Claim Refusal to Settle Within Policy Limits Bad Faith Claim Assigned to Plaintiff by Tortfeasor Requires You to Risk Limited Recovery for Unlimited Coverage 4

5 1 st PARTY INSURANCE CLAIM Types of Coverage Med Pay Underinsured Motorist Coverage (UIM) Uninsured Motorist Coverage (UM) Maximizing Recovery Loss of Consortium Claims Stacking Policies Vexatious Refusal to Pay Claims VICARIOUS LIABILITY CLAIMS Establishing Act in Course and Scope of Employment Pattern and Practice Circumstantial Evidence Driver s Appearance and Activities Use and Markings of Vehicle Job Responsibilities Identifying Additional Employers Calling a Person an Independent Contractor Doesn t Make it So Control is the Key Use Elements of Workers Compensation Exclusivity to Your Advantage 5

6 INDEPENDENT CLAIMS Negligent Entrustment Possessing a License is Not Determinative History of Violations/Accident Knowledge of Intoxication Key is Foreseeability Negligent Supervision/Training Failing to Identify Unfit Driver Failing to Train Driver to Overcome Dangerous Habits ADDITIONAL DEFENDANT CLAIMS Product Liability Claims Dram Shop/Social Host Claims Highway Construction Claims 6

7 IDENTIFYING A PRODUCTS CLAIM Injuries or Vehicle Damage Greater Than Expected Ejection With Restraint Use Post Collision Fire Failure of Vehicle Component TYPES OF VEHICLE PRODUCT CLAIMS Post Collision Fires Airbag/Seatbelt Failures Seatback Failures/Reclined Seats Roof Crush/Vehicle Instability/Rollovers Tire/Brake/Component Failure 7

8 PRESERVING A PRODUCTS CASE Preserve the Product No Product Often Equals No Products Case Need to Establish Chain of Custody Find/Keep an In State Defendant Who Could It Be? Driver, Employer, Dealer Why Is It Important? State Court Rules on Experts Often Less Strict Than Federal Court Requires Patience and Balancing of Interests Postpones Recovery from Automobile Insurance to Provide Access to Greater Insurance and Assets of Manufacturer DRAM SHOP/SOCIAL HOST CLAIMS Differences in Claim Business or Individual Identifying Defendants Business, Bartender, Waitress, Person Providing Alcohol, Home Owner Building Your Case Individual Testimonials Photos/Video Surveillance/Receipts Toxicologist 8

9 Settlement Agreements Once you know what all is marital property, do you set up the settlement agreement to outline the amounts of each type of proceeds? Most PI attorneys will NOT do this unless a family law attorney gets involved because earnings are taxed and may only represent the injured party. What if you represent the spouse of person who is settling his case? Need to contact PI attorney to work out Loss of Consortium and Marital Property arrangement for settlement agreement. Settlements/Marital Property If settlement agreement does not outline the proceeds, do you put on this evidence at trial and have the Court decide these issues? To determine the intent of the settlement when dividing marital property, a court may look to what the parties would have received if the claims had been adjudicated Blydenburg Dixon v. Dixon277 S.W.3d 815 (Mo. App. W.D. 2009). Might need to seek tax attorney advice on this as well. 9

10 Structured Settlement Payments Monthly Annuities in name of both husband and wife? Case: Blydenburg Dixon v. Dixon, 277 S.W.3d 815 (Mo. App. W.D. 2009). Placing separate property into the names of both spouses creates presumption that the property has been transferred to the marriage Husband argued only reason for both names was because he had disabilities from being quadriplegic and all funds were his. Wife argued it was inferred that settlement included loss of consortium and to compensate marital estate for loss of income and medical expenses. ANSWER: Court found that although it could be inferred that some of the monies were for loss of consortium and wife helping husband during marriage sufficient compensation had already been paid in lump sums and prior monthly payments. Remainder was for FUTURE! PI Lump Settlement In re the Marriage of Tullier, 989 S.W.2d 607 (Mo. App. S.D. 1999). Partied deposited money in joint account. Court used analytic method: Classifying husband's $250,000 lump sum personal injury settlement as marital property, and not as husband's separate property, was reasonable, Because husband would have earned $128,000 in eight year period from date of award to date of divorce, (which was the some portion of award reimbursed husband for medical expenses related to injury and incurred during the marriage) and Some portion may have been attributable to loss of consortium, and Husband provided no evidence to show what portion, if any, was intended to replace wages he would have earned after divorce. 10

11 Workers Compensation Benefits in Divorce Missouri Courts seem to treat a Workers Compensation Settlement Similar to a PI Settlement. Analytical approach. Wage Treatment. Payments received during marriage are marital property. Payments received after divorce belong to the injured spouse as separate property Treatment as personal injury award. Payments that cover lost wages or medical expenses during the marriage are marital. Payments for wages and medical costs not during the marriage are the separate property of the injured spouse. Payments for the loss of a limb or bodily function are also viewed as the separate property of the injured spouse. NOTE: When a workers compensation award is commingled in with marital funds, courts are apt to decide that the entire award is marital property. Workers Compensation Benefits in Divorce Questions to ask your client: In addition to questions to ask in a PI case: What was the injury? How long off work? Did resume same job? What are the long term effects? How does the injury impact job requirements? Daily life? 11

12 Wrongful Death Monies in Divorce Scenario: My husband received a sizable sum of money from a wrongful death lawsuit he brought against a nursing home that neglected his mother and I'm interested to know if this is considered a marital asset? Is this inheritance? Does spouse need to ascertain damage amount and husband s portion of the award? NOTE: When a spouse s wrongful death award is commingled in with marital funds, courts are likely to decide that the entire award is marital property. What if filed for divorce then husband dies do you still have a wrongful death claim? Need to advise client to contact an estate planning attorney and a tax attorney. Modification Can Settlement Monies from PI case affect modification? Modifying maintenance after receive settlement: The trial court assigned Wife her interest in both claims and Husband his collateral interest in both claims. It placed no assigned value on the claims, finding that any substantial recovery at a future date may be a basis for a modification of maintenance, but the Court does not find that it should further impact the division of marital property. In his appeal, Husband admits, the value of the personal injury claim and malpractice lawsuit cannot now be determined with certainty. Laffey v. Laffey, 72 S.W.3d 143 (Mo. App. W.D. 2002). CHILD SUPPORT?? (This could be a case that happens after which changes income). If Confidential, how do you find out? Should you contact PI attorney and have the ex wife s name added as to one of the individuals who can know about the finances. Should this provision be included in family law case Judgment? 12

13 Ethical Duties of Family Law Attorney Related to Personal Injury Claims Duty to Advise Family Law Client on Potential PI or Wrongful Death Case; including statute of limitations and; if in fact, claim exists. Potential Legal Malpractice if no advice Potential Legal Malpractice if TOO much advice Can you put in your contract you don t represent on any civil case? Is that enough?? Language Protecting You on Attorney Client Relationship Be specific as to your representation Be specific as to what potential claims you are not representing client on Send a letter memorializing conversation 13

14 Attorney Client Relationship An attorney client relationship exists when a person seeks and receives legal advice and assistance from a lawyer who intends to give legal advice and assistance to the person, but reliance alone upon the advice or conduct of a lawyer does not create an attorney client relationship. Collins v. Missouri Bar Plan, 157 S.W.3d 726 (Mo. App. W.D. 2005). Legal Malpractice Elements The question of the legal duty owed by an attorney to non clients is determined by weighing six factors: (1) the existence of a client's specific intent that the purpose of the attorney's services be to benefit the non client plaintiffs; (2) the foreseeability of harm to the plaintiffs as a result of the attorney's negligence; (3) the degree of certainty that the plaintiffs will suffer injury from the attorney's misconduct; (4) the closeness of the connection between the injury and the attorney's conduct; (5) the policy of preventing future harm; and (6) the burden on the profession of recognizing liability in those circumstances. France v. Poodleski, 303 S.W.3d 615 (Mo. App. 2010). 14

15 How Much Legal Advice Is Too Much When a lawyer declines to accept a legal matter, he or she should be careful not to give any legal advice or opinion regarding the prospective client's claim. Any such advice can provide the basis for a later malpractice claim against the lawyer if it turns out that the advice or assessment was wrong and the prospective client relied on that advice to his or her detriment. See In Togstad v. Vesely, Otto, Miller & Keefe, 291 N.W.2d 686 (Minn. 1980). * A lawyer rejected a possible medical malpractice claim after meeting with a prospective client for 45 minutes and told client case was not worth pursuing and would not represent her. SOL had not expired at the time of the consultation, but it later expired before the woman consulted another lawyer. Client claimed that she relied on the lawyer's opinion that his case was not worth pursuing in not seeking the opinion of another attorney until it was too late. A jury found the lawyer guilty of malpractice for giving her erroneous advice about the merit of her case and entered a verdict against him for $649,500. Non Engagement Letters "Non engagement letters" should clearly inform the prospective client that the law firm will not represent the prospective client in that matter and that he or she should not rely on the lawyer for any advice or legal action. It is not necessary or even desirable in every case to inform the client on which the statute of limitations will expire. In fact, sometimes doing so will create a basis for a claim of malpractice if the information is wrong. You may not be aware of shorter notice requirements that must be met. (i.e. Nursing Home Cases; Cases against City etc). Although you should not give advice about when the statute of limitations will expire, it is important to tell the prospective client that claims may become barred if not filed within the time provided by law and that the client should immediately seek the advice of other counsel regarding the claim. This can be accomplished without giving an opinion about the exact date on which the claim will become time barred. 15

16 Duties of Family Law Attorney What basic questions must be asked prior to taking a case to make sure your client or their spouse have NO civil cases that could relate to the property division, maintenance or child support? Consider adding to your questionnaire/client intake questions regarding potential civil cases including time of incident etc. Duties of Family Law Attorney If civil case at issue, what questions to ask to make sure you protect client from SOL, etc. proceed cautiously! 16

17 Ethics In Representing Multiple Parties When Would You Represent Multiple Parties to One Action? Driver/Passenger (Husband and Wife) Heirs of Decedent Employer/Employee Parties to Contract Insured/Insurer Rule 4 1.7(a): Conflict of Interest Except as provided in Rule 4 1.7(b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if: (1) the representation of one client will be directly adverse to another client; or (2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client, or a third person or by a personal interest of the lawyer. 17

18 How to Resolve Conflicts Resolution of a conflict of interest problem under this Rule requires the lawyer to: (1) clearly identify the client or clients; (2) determine whether a conflict of interest exists; (3) decide whether the representation may be undertaken despite the existence of a conflict, i.e., whether the conflict is consentable; and (4) if so, consult with the clients affected under Rule 4 1.7(a) and obtain their informed consent, confirmed in writing. The clients affected under Rule 4 1.7(a) include both of the clients referred to in Rule 4 1.7(a)(1) and the one or more clients whose representation might be materially limited under Rule 4 1.7(a)(2). [Comment 2: Rule 4.17] Can All Conflicts Be Resolved? NO!!! 18

19 Can All Conflicts Be Resolved? Ordinarily, clients may consent to representation notwithstanding a conflict. However, as indicated in Rule 4 1.7(b), some conflicts are nonconsentable, meaning that the lawyer involved cannot properly ask for such agreement or provide representation on the basis of the client's consent. When the lawyer is representing more than one client, the question of consentability must be resolved as to each client. [Comment 14: Rule 4 1.7] Rule 4 1.7(b) Prohibited Representation Notwithstanding the existence of a concurrent conflict of interest under Rule 4 1.7(a), a lawyer may represent a client if: (1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client; (2) the representation is not prohibited by law; (3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and (4) each affected client gives informed consent, confirmed in writing. 19

20 Alignment of Parties in Litigation Rule 4 1.7(b)(3) prohibits representation of opposing parties in the same litigation, regardless of the clients' consent. On the other hand, simultaneous representation of parties whose interests in litigation may conflict, such as co plaintiffs or co defendants, is governed by Rule 4 1.7(a)(2)...commonrepresentationofpersonshavingsimilarinterestsin civil litigationisproperiftherequirementsofrule4 1.7(b) are met. [Comment 23: Rule 4 1.7] Whether clients are aligned directly against each other within the meaning of Rule 4 1.7(b)(3) requires examination of the context of the proceeding. [Comment 17: Rule 4 1.7] Formal Opinion: Driver/Passenger C. of Int 118 QUESTION What ethical problems are presented when the same lawyer represents both driver and passenger of a motorcycle who were killed in a collision with another vehicle that was driving on the wrong side of the road. Thereisnoevidenceofnegligenceonthepartofthedriverofthemotorcycleandboththedriverandthe passenger of the motorcycle were minors. A full and frank discussion has been had with the parents of both deceased boys. It is agreed by all parties, including counsel, that a separate action should be brought for each and that the driver's action should be brought first to avoid consolidation. The attorney submits the following questions: 1. Is it ethical for the law firm to represent the parents of both the driver and the passenger of the motorcycle with respect to their claims, if the lawsuits are directed solely against the owner and operator of the other vehicle as the sole defendant? 2. If, in the passenger's lawsuit, a third party petition is filed by the other driver against the motorcycle driver's estate, which would be defended by the motorcycle driver's insurer and a guardian ad litem appointed for that defendant, is it still ethically proper for the law firm to represent the survivors of the motorcycle passenger on their death claim? 3. Assuming the law firm in the passenger's death case, for technical reasons, includes as defendant a guardian ad litem for the deceased motorcycle driver, can the law firm ethically pursue the passenger's lawsuit while at the same time representing the mother of the motorcycle driver? 20

21 ANSWER The Committee views the factual situation submitted as one wherein a possible conflict can arise in the representation of the parents of the driver and the parents of the passenger on the motorcycle. This conflict can be waived, however, and if the waiver is obtained, it is permissible for the attorney to take all the actions set out in Questions 1,2, and 3. The Committee suggests that all waivers of conflict be obtained in writing and the parents of the passenger be given an opportunity to consult outside counsel on the question of whether or not the driver of the motorcycle should be named as a party defendant in their lawsuits. Rendered August 29, [Rule 4 1.7] Informal Opinion: Driver/Passenger Informal Opinion QUESTION Attorney represents a client who was a driver in a boating accident with another boat. Passengers in the client's boat want Attorney to represent them also. Attorney knows that the client was drinking at the time of the accident. Is there a conflict of interest and can the conflict be waived? 21

22 ANSWER Yes, there is a conflict of interest under 1.7(a) and under1.7(a)(1) it cannot be waived. [Rule 4 1.7] Informal Opinion: Driver/Passenger Informal Opinion QUESTION A case has arisen involving an automobile accident in which the child was a passenger and the mother was one of the drivers. There is no reason to believe that the mother is liable. May the clients waive the potential conflict of interest? May Attorney represent the driver and passengers in the accidents? 22

23 ANSWER Yes, the passengers may waive the potential conflict of interest. Concerns are raised if the mother acts on the child's behalf to waive the conflict. The father, or other independent person, should act on the child's behalf regarding the waiver. If an actual conflict develops, Attorney must withdraw from representing all clients. Attorney should be certain that Attorney has made sufficient disclosures and has thoroughly documented the disclosures as well as any consent given. [Rule 4 1.7] Informal Opinion: Between Family Informal Opinion QUESTION Attorney has been hired to represent parents and child in a suit involving an accident in which the child was injured. No issue of comparative negligence by the parents has been raised but it is conceivable that it might be. Does Attorney have a conflict of interest? If yes, can it be waived? 23

24 ANSWER This situation creates a conflict of interest under Rule 1.7. Attorney must first determine that joint representation would not reasonably be expected to adversely affect the relationship with either client. If a genuine issue of comparative negligence develops, this step in the analysis would dictate that the conflict could not be waived. Once step one is satisfied, the clients must be willing to consent after full disclosure. The parents may not consent on behalf of the child. Only a next friend appointed by thecourtmayconsentforthechild.ifthenextfriendwillnot consent, Attorney may continue to represent the parents unless information has been obtained that could be used to the child's detriment. Attorney has obtained information from the parents such that Attorney could not represent only the child unless the parents consent. [Rule 4 1.7] Conflict Example in Family Case Between Family FACTS Attorney represents both Husband and Wife in a Car Accident case where both receive monies. Case is settled. Then wife comes to attorney to have him represent her in her divorce case against the husband he previously represented??? Found following informal opinion that may apply. 24

25 Informal Opinion: Co Plaintiffs Informal Opinion QUESTION Attorney represents an individual as nominal plaintiff in a lawsuit in which another individual is the real party in interest. On behalf of another client, Attorney wants to sue the nominal plaintiff in the other case. Is this a conflict of interest? ANSWER Yes, under Rule 4 1.7(a), Attorney would have a conflict of interest by filing a lawsuit against the individual who is Attorney's current client even though that individual is only nominally a client. [Rule 4 1.7(a)] 25