By Scott Shachtman on July 1, 2016
Posted in Current Events
By Scott Shachtman on July 1, 2015
Posted in Current Events
By Scott Shachtman on May 13, 2011
Posted in Papers
By Scott Shachtman on March 30, 2011
Shachtman’s former law partner, Sly James, has been elected Mayor of Kansas City, Missouri. Sly James is a wonderful person, who will do an excellent job leading our great City. In 2002, Shachtman joined the Sly James Firm. From 2002 up until June 2010, Sly James and Scott Shachtman worked together on a number of personal injury and wrongful death cases. Shachtman started his own law firm last year and has continued to work on a number of cases with Sly James. The Shachtman Law Firm will continue to work with Sly James as he transitions into his new job as Mayor of Kansas City, Missouri.
Posted in Papers
By Scott Shachtman on November 27, 2010
This month the Shachtman Law Firm helped a very nice man and his family stay in their home. They had fallen behind in their mortage, but had the ability to start making payments again. Although they were served with foreclosure papers, we were able to work out a deal with their lender. In the end, our client’s got their loan reinstated and enjoyed the Thanksgiving holiday in their own home.
Posted in Papers
By Scott Shachtman on October 22, 2010
The Shachtman Law Firm recently settled a truck wreck case for $900,000.00. While driving home from work on 71 Highway our client was rear-ended by a large truck. She suffered a number of injuries and had several surgeries. The money helped pay for her medical bills, lost wages and her future medical care needs.
Posted in Papers
By Scott Shachtman on September 20, 2010
Cameras at stoplights can help show exactly who was responsible for a wreck. In a recent case, our firm was able to get a copy of the red light camera footage, which helped us prove exactly who caused the wreck. In the end, the footage was very helpful in resolving the dispute with the insurance company.
Posted in Current Events
By Scott Shachtman on July 11, 2010
Posted in Current Events
Personal Injury Settlements Knowing Where To Start And Planning Your Strategy For Effective Settlement Drafting
By Scott Shachtman on July 9, 2010
Most cases settle. The value of your client’s case depends on a number of factors, including but not limited to:
- Whether the client is a good, likeable person, worthy of recovery;
- The facts of the case (i.e. clear liability vs. barely a case);
- The nature of the injuries and/or damages being claimed (i.e. paraplegia vs. soft tissue damages vs. emotional distress);
- How hard you work the case;
- The venue;
- Your relationship with opposing counsel and/or the insurance adjuster;
- The Judge; and
- External Factors (i.e. politics, tort reform, the economy, etc…)
A cases value will greatly depend upon whether the Plaintiff is a good person, who the jury and/or insurance adjuster will like and care about. If you do not like the Plaintiff during your initial meeting, you should strongly consider staying away from the case. Juries will not give money to Plaintiffs whom they do not like and/or care about.
A. Types of Settlements
1. Standard Release.
There are as many possible types of settlements as a lawyer can think up. The simplest and most common is the Standard Release. In a Standard Release, the plaintiff agrees to release defendant, his insurance company and every entity or person that may have any tangential connection with the insurance company from all claims, known or unknown. In exchange for that release, the insurance company agrees to pay a sum certain. Other common terms in the standard release include:
- Each side is to bear its own costs and attorneys’ fees;
- Plaintiff’s agreement to indemnify defendant for all liens;
- An acknowledgement that plaintiff has the right to execute the Release and understands the documents;
- Confidentiality; and
- If suit has been filed, an agreement to Dismiss with Prejudice.
2. Mutual Release.
In a case where each party has a claim, or a potential claim, the parties may execute a Mutual Release. This is very similar to a Standard Release, except that it includes language releasing both parties to the accident. Getting a Mutual Release is a good idea when there is contested liability because it prevents the other driver from ever coming back against your client.
3. Structured Settlement.
With a structured settlement, plaintiff agrees to receive at least a portion of the settlement in the form of periodic payments. A structured settlement can provide for payment in pretty much any schedule the parties choose. For example, the settlement may be paid in monthly installments for life, in annual installments over a number of years, or it may be paid in periodic lump sums every few years.
Structured settlements have pros and cons that should be considered before advising your client. On the plus side, the miracle of compounding interest may allow a plaintiff to parlay a small sum of money into a much larger payout. There are also tax advantages to structuring at least a portion of a settlement (i.e. the structured portion grows tax free).
The best reason to advise in favor of a structure, however, may be to protect the client from himself. Plaintiffs receiving lump-sum settlements often spend everything within five years. A structure can protect a plaintiff from having settlement funds dissipated when they are necessary to pay for future needs. In addition, some people aren’t good with money or can’t say no to family members who want to “share the wealth.” Because the plaintiff can’t get to the structure, he can’t whittle away at the money he may need down the road.
Minors may benefit from a structured settlement as well. A structure for a minor could provide for certain costs during their youth, disbursements for college or other educational expenses, and/or disbursements in adulthood. Setting up a structure for a minor may also do away with the need to set up a conservatorship (see below).
On the other hand, some people who enter into structured settlements feel trapped by the periodic payments. They may wish to purchase a new home, or other expensive items, yet be unable to muster the resources because they can’t borrow against future payments under their settlement. In addition, structured settlements generally accrue interest at a very low rate. That’s the trade-off that is made for virtually guaranteed payments. Because of that low interest rate, some people will do better by accepting a lump sum settlement, and investing it themselves. Many standard investments will give a greater long-term return than the annuities used in structured settlements.
4. High-Low Settlement.
The High-Low Settlement is similar to a typical settlement, with a couple twists. With a High-Low, the defendant agrees to pay a minimum amount (the “low”) regardless of the size of the verdict and the plaintiff agrees not to collect that portion of a judgment in excess of a certain amount (the “high”). If the verdict falls between the high and the low, the plaintiff recovers the amount of the verdict. The High-Low settlement insures both sides against an excessive verdict (either excessively high or excessively low). It can be a useful tool when both parties agree on liability, but have a drastically different view on damages. Keep in mind that judicial approval of the High-Low agreement will be necessary in wrongful death or minor-plaintiff case. That approval should be obtained before trial.
5. Mary Carter Agreement
A Mary Carter agreement is an agreement between plaintiff and some, but not all defendants, to limit the financial responsibility of the settling defendants. The agreement does not act as a release, so the settling defendant remains in the case. The agreement gives the settling defendants a financial incentive to help plaintiff’s case against the other defendants. For example, defendant agrees to pay plaintiff $50,000.00 and remain in the case. If, however, the total judgment against all other defendants exceeds $150,000, the settling defendant’s liability is decreased on a dollar for dollar basis for every dollar over $150,000 that is awarded. If the jury awards $200,000 or more against the non-settling defendants, the settling defendant’s liability to plaintiff is completely extinguished.
The classic Mary Carter agreement is kept secret from the other defendants and the judge. Most courts that have examined true Mary Carter agreements have found problems with them. Especially when the agreement is kept secret.
Kansas allows Mary Carter agreements, with certain restrictions. Ratterree v. Bartlett, 238 Kan. 11, 707 P.2d 1063 (1985). In Ratterree, the Court held that the terms and existence of a settlement between some, but not all, parties to a case must be disclosed to the Court and other parties. Id. at 29, 707 P.2d at 1076. If a settling defendant is going to testify, the existence and content of the settlement must be disclosed to the jury, unless such disclosure would cause undue prejudice or confusion. The disclosure to the jury should be no more than is necessary to apprise the jury of the nature of the agreement and the possibility that it may bias the testimony of the settling parties. The jury is not to be informed of the amount of the settlement, except that it shall be apprised in general terms of the financial interest in the outcome of the case of any defendant who is a party to such an agreement. Id. at 30, 707 P.2d at 1076.
B. Special Settlement Considerations
Confidentiality clauses in personal injury settlement agreements are becoming increasingly more common. Many defendants and their insurers frequently insist upon such clauses. Many defense lawyers, especially in medical malpractice, consider confidentiality to be a standard term in a settlement agreement. Some will even add such a clause to the settlement papers even though it had not been discussed during negotiations.
There are many reasons to criticize confidentiality in settlements. To be fair, I assume there might even be some reasons to support confidentiality. Regardless of your position on it, though, confidentiality is often a term that is hotly negotiated.
In some situations, confidentiality will be a deal-breaker. When that happens, the only recourse for a plaintiff is to negotiate the least restrictive clause possible. Some clauses go so far as to make even the “fact” of settlement confidential. A more typical confidentiality clause will restrict disclosure of either the amount of the settlement or the terms of the settlement agreement. Generally, such clauses are not too onerous and can even protect a plaintiff by giving them an out when greedy family members ask about the settlement.
As discussed below, there may be some tax implications when confidentiality is included in a settlement.
2. Tax Liability
Generally, money received in settlement or judgment for medical bills, property damage and pain and suffering resulting from physical injury is not taxable. See Internal Revenue Code § 104(a)(2). Money received for lost wages, income and punitive damages, on the other hand, is taxable. Because of the tax liability issue, it is always a good idea to have language in the settlement agreement stating that all funds are being paid to settle claims of “personal physical injury or illness.” If you are forced to allocate a portion of the settlement to taxable damages, you need to explicitly delineate the amounts paid for taxable items and those paid for “personal physical injury or physical illness.”
A relatively recent Tax Court decision may impact the taxability of settlements containing confidentiality clauses. Amos v. Commissioner of Internal Revenue, 86 T.C.M. (CCH) 663, T.C.M. (RIA) 2003-329, 2003 RIA TC Memo 2003-329, 2003 WL 22839795 (U.S. Tax Ct.). Amos deals with an incident between Dennis Rodman of the Chicago Bulls and a cameraman.
In 1997, Rodman fell on a group of courtside cameramen and twisted his ankle. As he untangled himself from the fall, he kicked one of the cameramen, Eugene Amos, in the groin. Mr. Amos went to the hospital but did not seek additional treatment for the groin injury.
Mr. Amos retained counsel and negotiated a $200,000 settlement with Rodman. The settlement agreement contained broad confidentiality language, but did not state what amount of the settlement, if any, was paid for confidentiality.
Mr. Amos did not include any of the settlement on his tax return and the IRS investigated. Initially, the Commissioner of Internal Revenue determined that Amos owed income taxes on the entire $200,000. On appeal, the United States Tax Court held that $120,000 of the settlement was properly excludable from gross income as the ordinary proceeds of a bodily injury settlement. It also held, however, that the remaining $80,000 was paid for the confidentiality provisions and was subject to income taxes.
To protect your client and yourself after Amos, you should carefully consider the impact a confidentiality provision could have on your client’s tax liability before agreeing to such a provision. If you are forced to agree to confidentiality, you should insist that the amount paid for that confidentiality be set forth in the Settlement Agreement.
3. Minor Settlements
Court approval is necessary to bind a minor to a settlement. Railway Co. v. Lasca, 79 Kan. 311, 316, 99 Pac. 616 (1909). The rationale behind this rule is the protection of both the minor and the defendant. The court protects the minor by determining whether the settlement is in the minor’s best interests. 79 Kan. at 317-18; In re Estate of Wise, 20 Kan. App. 2d 624, 632-33, 890 P.2d 744 (1995). Because a minor can disavow a contract within a reasonable time after reaching majority (under KSA 38-102), reducing a minor’s settlement to a judgment makes it binding and protects the defendant. Childs v. Williams, 243 Kan. 441, 441, 757 P.2d 302 (1988).
Another wrinkle in a minor settlement is the possibility of having to set up a conservatorship. If a settlement to a minor exceeds $10,000, the money must be placed with a conservator. There is, however, a way to avoid the expense and hassle of setting up a conservatorship. Most courts will approve a minor settlement in excess of $10,000 when all the proceeds are placed in a structured settlement that names the minor as the beneficiary and pays out no money until the minor’s eighteenth birthday. This is an easy way to both comply with the law and to increase the ultimate payout to the minor.
4. Wrongful Death Settlements
A wrongful death suit can be instigated by any “heir-at-law” of the decedent and shall be for the exclusive benefit of all of the heirs. KSA 60-1902. An heir-at-law is “one who takes by intestate succession under the Kansas statutes.” Baugh v. Baugh, 25 Kan. App. 2d 871, 973 P.2d 202 (1999).
Court approval of a wrongful death settlement is necessary to determine the apportionment of the settlement between the heirs. KSA 60-1905. All heirs must be given “reasonable notice” of the hearing in a manner directed by the court. At the hearing, the court will determine the reasonable costs and attorneys’ fees. The court will then divide the net settlement among the heirs “in proportion to the loss sustained by each.”
It is always advisable to get all the eligible heirs to agree to an apportionment well in advance of a hearing. The last thing you want to do is have a family blow-up that requires you to advise certain family members to retain their own counsel.
5. Multiple Claimants and Inadequate Policy Limits
Occasionally, you will come across a claim where there are multiple injured claimants with combined damages in excess of defendant’s policy limits. For example, you may have 3 injured parties with individual claims in excess of $25,000, but an insurance policy with limits of $25,000 per person and $50,000 per accident.
The smart insurance adjuster will try to get all claimants to sit down together and come to an agreement on the division of the policy limits. If that fails, they might consider interpleading the limits into the court.
Some attorneys believe that, if they hold out long enough in such a case, the insurance company will either cave to their demand or put themselves in a bad-faith situation. Holding out, however, may not be the best idea under Kansas law.
An insurance company has an obligation to settle claims as they are presented within the policy limits. Farmers Ins. Exchange v. Shropp, 222 Kan. 612, 561 P.2d 789, 795 (1973). Paying claims as they are presented allows the insurer to faithfully pay each claim until the policy is exhausted. By doing this, the insurer meets its obligations to its insured. The holdout, however, may get nothing if the policy limits have been exhausted through settlements to more reasonable claimants.
C. Demand Package
To send a proper demand, you need to have all the relevant documents. You will need all medical records and bills for the injuries you are claiming. You may also want to include prior medical records to show that the injury you are claiming was not pre-existing. You will also want to provide any other documents that support your position. These could include the police report, a reconstruction report (so long as it is a report prepared by the state and not your expert), lost wage information, and photographs of the accident site, the vehicles and/or the injuries. You want to organize all this information in an easy to find manner and attach it to your demand.
Once you have your documents, simply write a letter setting forth your position. Start with liability and show why the wreck was the defendant’s fault. Also, never call the wreck an accident. Always be in the habit of calling it a wreck, collision, crash, etc. Research shows that these words connote a greater impact and lead to increased damages.
After you’ve shown why the accident is defendant’s fault, outline your client’s medical course. Although you will be submitting the records and bills, tell the adjuster exactly what your client had to go through and prioritize the injuries from the most serious down. Then itemize your damages. Show how much the medical bills were and how much the lost income was (and show your calculations, if necessary).
The next thing you should include is a discussion of potential problems with the case. Only do this, however, when you are absolutely confident that the potential problem is not a real problem. For example, if you think that the adjuster will argue a pre-existing injury, raise that issue at this point. Then go about proving why there is no pre-existing injury affecting this case.
Finally, make a demand. If you have prior jury verdicts or settlements that are comparable to your case, discuss them. If you have a rational basis for the number you are claiming, explain it. Do what you can at this point to show that you aren’t simply picking a number out of the air.
Once you’ve made your demand, inform the adjuster that it is only open for thirty (or sixty) days and that, if you haven’t heard anything, you will proceed as necessary. Once the time limit is up, file suit.
By Scott Shachtman on July 9, 2010
Type of Action:
Personal Injury – Broken Water Meter Cover
Name of Case:
Carlos Garcia v. The City of Kansas City, Missouri
Jackson County, Missouri
Name of Judge:
The Honorable Judge Ann Mesle
Date of Settlement
Attorneys for Plaintiffs:
Scott Shachtman and Sylvester James, Jr. with the Sly James Firm
Attorneys for Defendants:
Chad Stewart with the City Attorney’s Office
Description of the case:
On June 2, 2007, Mr. Garcia, who was homeless at the time, pushed his lawn mower through a residential area in Kansas City, Missouri looking for work. At around 5:00 p.m. or so that day, Mr. Garcia went to the front door of a home located at 1512 Chelsea Avenue. The owner of the home opened the door and told Mr. Garcia that he did not need his grass cut that day. Mr. Garcia thanked him for his time and proceeded to walk through the yard to the street.
As Mr. Garcia was walking through the yard, he stepped onto a broken water meter cover that flipped open, causing Mr. Garcia to fall and straddle the lid. Mr. Garcia’s groin and penis violently struck the water meter lid and he immediately felt extreme pain in his groin and penis. Since the homeowner saw Mr. Garcia injure himself, he offered Mr. Garcia the use of his garden hose to spray himself off. While Mr. Garcia was waiting for MAST Ambulance to arrive, his penis was bleeding and he was in extreme pain.
The MAST Ambulance Emergency Medical Technicians found that Mr. Garcia had a laceration to the posterior aspect of the head of this penis, directly below the urethral opening. Mr. Garcia was rushed to the emergency room at St. Luke’s Medical Center on the Plaza and was admitted to the hospital for four days where he was diagnosed with and treated for a urethral fracture.
Initially Mr. Garcia was treated with a super pubic cystotomy tube placement (i.e. catheterization). Mr. Garcia remained catheterized for nearly six months and was in and out of the hospital during that time period due to severe pain, bleeding and concern for his general well being. As a direct and proximate result of this incident, Mr. Garcia suffered permanent and debilitating injuries to his penis and urethra, which required and will continue to require medical treatment
Mr. Garcia filed suit against the City of Kansas City, Missouri for having a dangerous and broken water meter lid on its property. Mr. Garcia claimed that the City knew or should have known of the broken lid since it routinely checked the water meter that was underneath the subject broken lid.