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Anti-Tort Reform Blog: The Tortellini

Tort Reform is a Great Idea, Until YOU Get Hurt

You don't have to look very far on the Web to find websites devoted to eliminating your right to recover fair and just compensation for the carelessness of another individual.  Websites like Overlawyered try to convince everyone that almost every law suit filed is frivolous, and that every jury verdict is pushing the insurance industry and businesses toward bakruptcy. 

The Tortellini, "Bites of Law and Politics, with sauce"

Finally, a new website, The Tortellini , has been started by Stephanie Mencimer, a contributing editor of the Washington Monthly and a former investigative reporter for the Washington Post.

The Tortellini does a great job of debunking the myths of tort reform, and also highlights some of the personal injury lawsuits filed by the mostly Republican members of Congress who, in their "jobs" are constantly trying to eliminate the rights of other citizens to seek fair compensation.  Looks like these tort-reformers have no problem filing lawsuits when they think they have been injured.  Check out her section on Hypocrites.

Mercimer looks at the false propoganda and quickly and efficiently shreds it, revealing the truth behind the fiction of a "tort crisis" in America.  I encourage every consumer lawyer with a Blog or a Website to link to The Tortellini. 

---Chris Nichols

Link to Nichols Law Firm Website 1.800.906.5984

HIPAA Form for download

HIPAA, not just an ungainly African animal

The Health Insurance Portability and Accountability Act (HIPAA) was enacted by the U.S. Congress  in 1996.

Title I of HIPAA protects health insurance coverage for workers and their families when they change or lose their jobs.

Title II of HIPAA, the Administrative Simplification (AS) provisions, requires the establishment of national standards for electronic health care transactions and national identifiers for providers, health insurance plans, and employers.

The AS provisions also address the security and privacy of health data. The standards are meant to improve the efficiency and effectiveness of the nation's health care system by encouraging the widespread use of electronic data interchange in the US health care system.


Chris Nichols

Nichols Law Firm Website 1.800.906.5984

Email, Ethics, Conflicts and Lawyers

NC Business Court Decision says Email "Conflicts out" Lawyer

NC Lawyers Weekly is reporting a recent business court decision by Judge Tennille in the matter of Chemcraft Holdings Corporation v. Shayba (North Carolina Lawyers Weekly No. 06-15-1115, 10 pages) where the Judge disqualified counsel for a prty due to a conflict of interest arising out of email messages.

You can read the full story here, at NC Lawyers Weekly.

The Basic Facts
Without getting all caught up in too much detail, here is what happened.  Lawyer A was contacted by a potential client and was faxed some documents.  After reviewing those documents, that lawyer declined the case but tried to refer the potential client to another lawyer, Lawyer B.  Lawyer A emailed Lawyer B a quick email and attached the previously faxed documents to the email.  The attachments contained attorney client privileged material, summaries of contacts between the adverse parties, and documents analyzing litigation strategies.

Lawyer B read the email but did not open the attachments.  Sometime later, Lawyer B was hired by the opposing party.  The first party opposed his appearance in the case and filed a grievance as well as a motion to disqualify.

Judge Tenille say Email = Snail Mail
While the actual facts of the case were disputed, Judge Tenille said that even if Lawyer B did not open the attachments, the lawyer was still disqualified because of conflict of interest under ethics Rule 1.18.

Judge Tenille found that:

  • Lawyer B had a duty to read the email and the attachments
  • Lawyer B had NOT violated any ethics rules
  • Lawyer B has a duty to not reveal information learned in a "consultation"
  • The action gave an "appearance of impropriety"
  • Lawyer B should be disqualified under the "significant harm" standard

Nothing New Here
I think Judge Tenille made the correct decision, probably.  I agree that email and snail mail are basically the same thing.  There is no real difference between Lawyer B receiving a cover letter that says "This client may contact you and I've enclosed three sensitive documents for your review" and receiving the email. 

Taken a step further, this is no different than receiving a phone call, listening to the potential client describe the facts of the case, and then declining representation.  This happens to family law lawyers all of the time, and so they use their staff to carefully screen calls to avoid "pre-emptory" disqualification.

I think the ruling might have been different if the email had come directly from the client and had been unsolicited by Attorney B.  There are clients out there that "mass email"  questions to lawyers.  If this happens, the best thing is to ignore the email and delete it.  Also, if Attorney B had sent an email back to the client, saying, "I have not opened the attachments and I can not represent you" then I think Attorney B might have been allowed to stay in the case.

Chris Nichols
Nichols Law Firm Website 1.800.906.5984

NC Sex Offender Registry Link

Sex Offenders Must Register
                        The North Carolina Sex Offender and Public Protection Registry was established in January 1996 due to the General Assembly's enactment of Article 27A of Chapter 14 of the North Carolina General Statutes (NCGS 14-208.5). This law requires a person who is a resident of North Carolina and who has a reportable conviction to maintain registration with the sheriff of the county where the person resides. If the person moves to North Carolina from outside this State, the person shall register within 10 days of establishing residence in this State, or whenever the person has been present in the State for 15 days, whichever comes first.

The site is maintained by the NC State Bureau of Investigation (SBI).

You can search the registry by Zip Code, City, County, Status of offender, and name of offender.

Click here to search the North Carolina Sex Offender Registry.

It is always a good idea to know what is in your neighborhood, or your child's school neighborhood.

Chris Nichols
Nichols Law Firm Website 1.800.906.5984

Medicare Liens and Set Asides (MSA) in Liability Cases: Myth or Reality?

What is a Medicare Set Aside (MSA)?
In 2001 Medicare (CMS) announced that it would begin to exercise the Medicare Secondary Payer (MSP) statute.  The concept of the law is that Medicare is a "secondary payer" when any other form of insurance exists to pay claims.  Before 2001, that meant traditional health insurance, but starting in 2001 CMS began to interpret that to mean that even third party insurance, specifically Worker's compensation settlements that "cut off" future medical benefits (clinchers), would be subject to the MSP regulations.

This meant that any Workers Compensation clincher that resaonably cut off future workers compensation benefits would have to be reviewed by CMS to determine if there should be an MSA "allocation."  Accordingly, Medicare would look at the case and decide what the future medical costs for the injury would be.  The future costs would be placed in a MSA trust for the payment of medical services related to that claim. Click here to read what Medicare says about MSA's.

Qualified claimants are  often referred to as Class I and Class II claimants or beneficiaries and  are determined as follows:                   

  • CLASS I - Any claimant who is currently Medicare eligible and the total settlement value is greater than $25,000.
  • CLASS II - Any claimant who has a reasonable expectation of Medicare enrollment in 30       months or less and the total settlement value is greater than $250,000.

Does the MSP apply to Liability Settlements?
The answer is yes, and no.  Yes, because the MSP statute clearly says that liability settlements are covered by the MSA guidelines:

USC Title 42, Chapter 7, Subchapter XVIII, Section 1395y comprises the Medicare Secondary Payer Statute.According to the Code of Federal Regulations(CFR) Title 42, Part 411, Subpart B, Section 411.20 (2), “Section1862(b)(2)(A)(ii) of this Act precludes Medicare payments for services to the extent that payment has been made or can reasonably be expected to be made promptly under any of the following:”

  (i) Workers’ compensation
(ii) Liability insurance
(iii) No-fault insurance

The "no" part of the answer is because CMS has not yet started enforcing Medicare Set Asides in standard laibility cases, but that is coming, I think.

Dark Clouds on the Horizon
Here are the signs that things may be changing in the future:

United States of America v. Baxter International, 345 F.3d 866 (11th Circuit 2003) This was a class-action products liability case centered on leaking silicone breast implants.The defendants settled the class-action lawsuit in 1995 for $4.2 billion with no admission of liability. The Office of General Counsel filed suit in 2001 on behalf of Medicare asserting a right of recovery consisting of payments Medicare made to treat the toxic condition of many of the claimants. The government’s case was dismissed  at the district court level for failure to state a claim.  However, the Eleventh Circuit U.S. Court of Appeals reversed and remanded the case, determining that Medicare did in fact have a right of recovery. The case is significant because it expands the reach of the MSP to civil litigation and upholds Medicare’s secondary payer rights.

According to Gould & Lamb, LLC, an MSA company,

  • In late 2003, CMS appointed a Director of Liability in the Baltimore Home Office to begin addressing liability settlements. They have indicated that CMS is diligently developing the MSP Liability enforcement policy covering liability and no-fault settlements. While the thresholds and case criteria remain unclear, it is clear that liability settlements’  involving consideration of future medical costs will be the target of this CMS program.
  • Medicare Prescription Drug Improvement and Modernization Act of 2003 included changes to the MSP Statute that increase Medicare rights as a secondary payer. The legislation is written as if the changes noted in the Act were included in the original MSP, dating back to 1980. The Act closed loopholes and eliminated previous legal arguments used to defend against the MSP, including “prompt payment” and “self-insured plan” exclusions. The Act also added that an admission of liability is not necessary to have exposure to the MSP; it applies if any payments are made to settle the claim.
  • During a recent CMS Conference in Atlanta (June 2004), representatives of the Office of General Counsel  of the United States confirmed the intention of Medicare to begin enforcing the MSP against liability and no-fault cases in the very near future. They remain guarded about the specifics of the program and Gould & Lamb continues to monitor this situation closely. However, it is our considered opinion that an official MSP enforcement policy will be forthcoming within 12-24 months.

It's Coming, Get Ready
Given that Medicare is continually put on the chopping block by the federal government, and our current administration is not exactly "lawyer friendly", we should expect that we will have to deal with tMedicare Set Aside issues in liability cases in the near future.  Fortunately, in the recent case of Arkansas v. Ahlborn the US Supreme Court has at least given us the ability to argue that if CMS gets a piece of the settlement for future meds, then at least their lein for the past medical expenses must be allocated in proportion to the ratio of the medical costs to the overall value of the case.

Chris Nichols
Nichols Law Firm 1.800.906.5984

Punitive Damages Against an Estate Blocked by Court

The North Carolina Court of Appeals has ruled today that a plaintiff is not entitled to recover punitive damages from an Estate of a tortfeasor.  In the matter of Harrell v. Estate of Perry, the COA addressed an appeal from a Superior Court where the Superior Court had ruled that pursuant to NC Rule of Civil Procedure 12(b)6, the Plaintiff had failed to state a claim upon which releif can be granted under some legal theory.  The gist of the opinion is that punitive damages are awarded to punish the wrongdoer, and the death of the wrong doer precludes his being punished by the assessment of punitive damages.

Drunk Defendant Dies After Injuring Plaintiff
The opinion of the COA is light on facts, but does cite that the Plaintiff alleges he was injured in a motor vehicle collision caused by an intoxicated defendant.

The Plaintiff brought a case for compensatory and punitive damages and the defendant moved to dismiss under 12(b)6.

Levinson: You Can't Deter the Dead with Punitives
Judge Levinson, writing for the panel, cited a 1982 decision that held that punitive damages were not appropriate against a deceased defendant.  The issue in this case was whether the 1996 amendment to the punitive damages statute, N.C. Gen Stat. § 1D-1, expanded the scope of punitive damages in the section that states that punitive damages may be awarded:

“to punish a defendant for egregiously wrongful acts and to deter the defendant and others from committing similar wrongful acts.”

And, But or Or Won't Get You Very Far
While the Plaintiff argued the obvious policy reasons behind the statute, that punitives should be awarded against an estate to discourage similar bad behavior of people that are living, the COA dodged that policy discussion through statutory interpretation.

Judge Levinson wrote:

     It is a common rule of statutory construction that “when the conjunctive 'and' connects words, phrases or clauses of a statutory sentence, they are to beconsidered jointly.”  Lithium Corp v. Bessemer City, 261 N.C. 532, 535, 135 S.E.2d 574, 577 (1964).  Thus, an individual is subject to punitive damages where he or she may be punished for the egregiously wrongful act and be deterred from committing such an act in the future.
    In the instant case, defendant died sometime before plaintiff filed the subject complaint.  Because defendant is deceased, deterring him from committing a similar wrongful act in the future is, of course, not possible.  Consequently, the statutory mandate of G.S. § 1D-1, providing that the appropriateness of punitive damages is contingent upon punishing and deterring defendant from engaging in similar conduct in the future, cannot be achieved.

So there you have it.  The "and" means that if punitives deter someone else, that's great, but that alone will not allow punitive damages to be granted.  You need a live tortfeasor to punish first.

I don't particularly agree with this interpretation.  To me, the "plain meaning" of the statute is that it is meant to deter other acts like this, whether they be from the defendant or from other similarly situated defendants.

-Chris Nichols 1.800.906.5984

Insurance Company Profits Soar to $60 billion

My friend Mike Daisley, a great lawyer in Charlotte, NC with Wells, Daisley & Rabon, P.A., passed on this story to me today.  In addition to being a trial lawyer, Mike is also a radio host on a local Charlotte station, WBT News Talk Radio.

Not a day goes by that I don't read or hear about Trial Lawyers getting blamed for "the high cost of insurance" but the reality is that insurance companies traditionally take as much as they can.  The insurance industry is thriving, and yet, rates keep increasing across the board. 

The entire article from the New York Times can be read here.  Here is an excerpt:

Earnings for Insurers Are Soaring

Published: October 14, 2006

Insurance companies are expecting record profits in 2006 after predictions of  another year of  devastating hurricanes have so far come to naught.




Industry experts are estimating that profits may reach $60 billion, on a combination of higher premiums along the coasts, no major payouts for natural disasters and strong investment returns. The insurers also had high profits on other lines of coverage like auto insurance, workers compensation and general liability.

The record profits expected this year come after a terrible 2005, when insurers paid out $61 billion for damage from Hurricane Katrina and other storms. Even so, the insurers ended up with a profit of $43 billion for the year because of exceptionally good results on investments, declining claims on policies on homes away from the coast and profits on other lines of coverage.

I know that insurance is a business, and thus profits are the goal, yet at the same time, insurance companies are constantly poor mouthing to everyone who will listen.   When I represent someone who has a serious injury and the insurance company for the negligent driver wants to "nickle and dime" us to death, I can't help but think about $60 BILLION dollars and wonder how much of that money is owed from the blood sweat and tears of my clients.

-Chris Nichols 1.800.906.5984

History of a Sex Abuse Law

I stumbled across an old post today on the website of the National Association to Protect Children, which bills itself as "America's First Political Lobby to Protect Children."  The Association is based out of Asheville, my old stomping grounds.

National Association to PROTECT Children -

The author of the article, Grier Weeks, details the long path that a NC bill to toughen incest laws took through the legisalature and political circles.  It shows the "gap" that sometimes exists between theory and practice on issues concerning the protection of children.  In politics, those with the strongest voice, and often the deepest pockets, get the most "movement" on laws.

The PROTECT website sums it up as:

Children don't vote—but neither do firearms, clean air, or whales. Adults protect their self-interests with money, lobbyists, and modern campaign strategies. Children make no political contributions, don't hire media specialists, and can't form PACs.  

Children's protection is our responsibility, but too often we have offered children nothing more than vague non-profits and feel-good rhetoric.

Thankfully, groups like Week's stand up for children and give them a voice.

The article is interesting and worth a read.  READ IT HERE.

-Chris Nichols 1.800.906.5984

Insurance Points in NC

Speeding_ticketI get a lot of questions from friends and clients about insurance points.  In NC, when you get in a car wreck, or receive a speeding ticket, you get license points AND insurance points.

Insurance Points = $$$$

Insurance points determine the increase in the cost of your insurance.  For example, if you pay a speeding ticket for 75 in a 55, you will get 4 insurance points and your rates will go up by 90%.

Compare Convictions & Points
You can view the chart and the explanation of insurance points on this pamphlet published by the North Carolina Insurance Commission. Insurance Points Form
Don't Just Pay the Ticket
Also, don't simply pay the ticket!!!  You may have ways to reduce the ticket and save yourself money, and even more importantly, your license.

Chris Nichols 1.800.906.5984

Medicaid, ERISA, Medicare & Ahlborn Seminar: What to Do With Ahlborn

I will be teaching a seminar at the North Carolina Academy of Trial Lawyers this Friday on the implications of Ahlborn on Medicaid Third Party reimbursement.  I will also talk about the implications of the recent Ezell case in NC.  The Seminar is being "webcast" so if you can't come to Raleigh, you will be able to attend from the comfort of your own office.Lien_seminar

The Seminar is titled, "What You Don't Know Will Hurt You" and it features two other incredible lecturers.  Art Donaldson, on ERISA claims, Jason Wolf, on Medicare.  I'm honored to be with these folks.

You can view the seminar description here. Looks like the registration is now closed, but I wonder why they can't add more people to the Webcast?  Call NCATL if you really want to be on this webcast.

-Chris Nichols 1.800.906.5984