In the last two posts, I talked about what Proposition 51 was, why it came to be, some of the unanticipated consequences, and how judgments are calculated, including the mechanics of allocation of pre-trial settlements to post-trial credits for the defense. In this post, I’ll discuss some ways that defense counsel can improve the judgment that is entered on the verdict.
First of all, of course, one would think that keeping the economic damages low is a good idea, because they are joint and several. Plaintiff’s counsel certainly think of that, and we have seen increasing values for “loss of household services.” But low economic damages aren’t always a good thing. For example, if the non-economic damages are $2 million, and economic damages are only $100,000, the ratio between the two is such that the remaining defendant at trial would be entitled to only 4.76% of any prior settlements as a credit against the economic damage portion of the judgment. What is important is keeping the economic and non-economic damages in a reasonable ratio (although I would not suggest increasing the economic damages for the plaintiff!).
Another strategy is to bring every possible variable before the Judge for a ruling. One case where that went very well for the defense was the case of Jones v. John Crane. Mr. and Mrs. Jones sued John Crane (and many other defendants, who settled before trial) for his injuries, which were going to result in his death, and for his wife’s loss of consortium. At trial, the jury awarded roughly $1 million in damages to Mr. Jones for his economic damages, $3.5 million for his non-economic damages, and awarded Mrs. Jones $500,000 for her (non-economic) loss of consortium damages.
At the post-verdict stage, when credits for settlement were being calculated counsel for plaintiff announced that they had allocated the just-over $1.5 million in settlement 60% to the personal injury case, 20% to loss of consortium, and 20% to the potential future wrongful death damages. That meant, given the ratio of economic to non-economic damages, defendants were entitled to $208,736 in credits against the economic portion of the verdict.
The defense managed to persuade the trial Judge to take an alternative approach – using logic similar to that in Greathouse v. Amcord (discussed in an earlier post), the trial Judge here agreed that there was no reason to use Plaintiffs’ counsel’s allocation of settlements to the loss of consortium claim, because the jury had already done so. And sine the jury’s allocation of damages for loss of consortium was 9.9% of the total verdict, that was the amount of the settlement that plaintiff’s could shield from being used as a settlement credit. The trial Judge also held that he had seen no evidence of the value of the potential future wrongful death case, and refused any allocation of settlement proceeds to that cause of action. Result? The credit for prior settlements applied to the economic damages came up to $347,894!
In wrongful death cases, we similarly face a situation in which Plaintiffs’ counsel have allocated a portion of the settlement monies to the personal injury case. As in Jones, the settlement apportionment should be limited to the jury’s actual verdict, not an arbitrary percentage. (This is especially true when no defendants settled before the death of the decedent.)
Another case to be aware of is Torres v. Xomox. In that case, a defendant settled out of a case after the jury’s verdict. The Court held that settlement would not be treated as a pre-verdict settlement. Instead, the share of the settlement that represented that defendant’s share of non-economic damages would come off the top, and the entire rest of the settlement would be applied as a credit against the economic damages. In addition, the Court held that workers’ compensation benefits count as settlements, and are apportioned like any other pre-trial settlement.
Proposition 51 certainly complicated post-trial procedures. Because of the limited wording of the Proposition, however, there has been a need for quite a bit of judicial interpretation. The good part of that is that, if you can find a new angle, you have the chance to get the Court to look at issues concerning Proposition 51.