Tennessee_state_capitol_.jpgOne industry which has enjoyed an uptick in recent years is that of lenders who finance injury lawsuits. These lenders provide the up-front cash some injury victims need to pursue their case in court. In exchange, they receive a sizable payback later. Some see these lenders as necessary helpers of everyday people as they take on well-funded opponents. Others view them as predators preying upon desperate victims. The Tennessee Legislature in now joining the debate, considering a bill that would regulate the industry and restrict the amount of interest these companies can charge.

We do not advise or encourage clients to use lawsuit financing, as the interest rates are almost always excessive. In almost every case, a client can find another source of funds — family, friends, etc. to help them get through while awaiting a recovery. And debt collectors who are seeking collection of unpaid medical bills will usually suspend their activities if they learn there is a lawsuit from which they might eventually get paid. However, there are some cases in which it might be unavoidable as there is simply no other source of funds to provide for the costs of daily living. In such a case, a lawsuit loan might provide a temporary short term solution.

Lawsuit financing typically operates in the following manner: a lawsuit lender provides an agreed-upon sum of money to an accident victim who is suing those responsible. If the victim succeeds in court, then the lender gets a set percentage of the victim’s settlement or judgment award. The victims usually incurred their injuries in auto accident, workplace accident, slip-and-fall or product liability cases. In successful cases, the total recovery for the lenders often translates to an extremely high rate of interest. Some lenders also charge substantial fees for their services.

Jack Johnson, a state Senator from Franklin, proposed SB 1360, which would install several new protective restrictions on these lenders, including a mandatory five-day period in which a borrower could cancel his/her contract at no cost. The law, if enacted, would also limit lawsuit loans to a maximum three-year period and 25 percent annual interest. “It is absolutely the wild, wild west in the state of Tennessee. There is no oversight, there is no regulation, there is no cap and there is no absolutely no limit on what a lawsuit lender or lawsuit funder can charge,” Johnson told tnreport.com.

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dirt-bike-2.jpgWhile visitors who suffer injury while present on the property of another person often have a reasonable chance of success in a legal action against the landowner for negligence or other misconduct, Tennessee law does construct some hard-and-fast protections for landlowners. One of those shields exists when the visitor becomes injured engaging in recreational activities on the landowner’s property. This aspect of the law ultimately undercut the personal injury case of a motorcyclist paralyzed while riding on another man’s farm.

The case centered around an incident occurring on David Dossett’s farm in LaFollette, where he maintained trails for guests to drive off-road vehicles. Dossett had erected some “jumps” on the trails to allow riders to attempt leaps or other manuevers. Dossett neither trained nor supervised the riders that used his farm. In March 2008, Jordan Wilson visited the farm to ride motorcycles. While attempting a leap, Wilson crashed, with the resulting injuries leaving him paralyzed.

Wilson sued Dossett. The trial court threw the case out, though, determining that the Tennesses Code, specifically Section 70-7-102, shielded the landowner from any liability for the motorcyclist’s injuries. That statute pertains to visitors on the property who partake in recreational activities. The trial court decided that, because the motorcyclist engaged in a recreational activity, and that none of the statute’s exceptions (which are codified in Section 70-7-104) salvaged the injured man’s case.

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railroad-2.jpgThe estate of a lifelong railroad worker received some good news when the Tennessee Court of Appeals revived a multi-million dollar judgment against the employer. The original jury concluded that the railroad negligently exposed its worker to asbestos and other dangerous materials, contributing to the man’s development of lung cancer. Although the railroad convinced the trial judge to award it a new trial, the court of appeals concluded that the jury received adequate instruction and delivered a consistent, non-contradictory decision, so a new trial was not warranted. The ruling is a useful one in the areas of personal injury and employment law, particularly cases arising under the Federal Employers’ Liability Act (“FELA”) demonstrating how narrow the proper grounds are for disturbing a jury verdict.

From 1962 to 2002, Winston Payne worked for CSX railroad. Three years after Payne’s 2002 retirement, doctors diagnosed him with lung cancer. In 2007, Payne sued CSX, contending that it was negligent by exposing him to asbestos, diesel fumes and radioactive materials. Payne died in early 2010, with his case still pending. After a November 2010 trial, a jury ruled in favor his estate and assessed damages at $8.6 million. The jury awarded the employee only $3.2 million, however, as a result of Payne’s own negligence. (He had smoked for 26 years.) At the trial’s conclusion, though, the trial judge granted CSX’s motion for a new trial. The judge in the new trial dismissed the case entirely against the railroad.

The court of appeals reversed the decisions and reinstated the judgment against the railroad. Despite some additional aspects of law about which the first judge could have instructed the jury, the instructions that the jury received were adequate. The jury received enough instruction to decide each issue it was required to address: namely, whether CSX was negligent, whether CSX’s negligence caused Payne’s injury, whether Payne partially caused his own injuries through his own negligence and what percentage of the Payne’s injuries were his own fault. The jury answered each of these questions in a consistent and non-contradictory manner, according to the appeals court. Most importantly, the court upheld the principal under FELA that a damages award to an injured worker is not diminished by the worker’s own contributory negligence if the railroad had violated a specific law or regulation, i.e. negligence per se.

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motorcycle-rider.jpgA motorcycle driver injured in Tennessee seemed to face a lose-lose choice: either accept a damages award radically slashed from the original amount a jury awarded him, or endure the agony of starting over and undergoing a new trial. The motorcycle driver received a reprieve, though, when the Tennessee Court of Appeals nixed the trial judge’s dramatic reduction of the driver’s jury award, instead ordering the trial court to hold a new hearing solely on the issue of damages. The ruling offers some very helpful insight into subjective damages awards, and the boundary between excessive and non-excessive awards.

Louis Adams was traveling along Highway 27 when Megan Leamon struck his motorcycle. Adams suffered injuries including broken ribs and apparently soft tissue injuries to his neck, shoulder, and hand. However, the injuries were not so severe to cause him to miss any work. There was evidence that his injuries were permanent, however, and caused him some ongoing pain, disruption in sleep, and impaired his ability to enjoy his lifelong hobby of motorcycle riding. After a two-day trial, a jury assessed ruled in favor of Adams and assessed his damages at $317,000. The jury awarded Adams only $190,000 because he was 40% at fault for the accident. Of Adams’s $317,000 total, nearly $277,000 was for future pain and suffering and future loss of enjoyment of life.

Leamon asked the trial judge for a remittitur, which is a request to reduce the award as excessive, or else grant a new trial. The trial judge agreed and gave Adams 30 days either to accept an award of only $54,000 or else undergo a new trial. Adams accepted the $54,000 sum under protest, and promptly appealed.

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In the recent opinion in Adams v. Leamon, the Court of Appeals discussed whether an award of damages for pain and suffering arising from injuries sustained in an auto accident was excessive. This opinion provides insight into how the Tennessee courts should address the “non-economic” components of an award for car accident victims.

In Adams, the plaintiff was injured when his motorcycle collided with a vehicle being driven by the defendant and he filed suit claiming that the defendant driver’s negligence caused the accident. After a trial, the jury found that both parties were somewhat at fault, but held the defendant more at fault and awarded damages of $317,000. The damages award raised some eyebrows, apparently, because the plaintiff’s medical expenses were only $14,731. The primary driver of the verdict was an award of future pain and suffering in excess of $120,000 and future loss of enjoyment of life of approximately $156,000. The trial court believed that award was excessive, and therefore ordered a remittitur to $90,320. The evidence had shown that although plaintiff had broken ribs and minor injuries to his neck, shoulder, and hand, he did not miss any work. His main complaints were some ongoing pain, restricted movement, and a reduced ability to ride his motorcycle.

On appeal, the Court of Appeals reversed and ordered a new trial on damages only. The Court found that the trial court’s ordered reduction of the jury’s verdict from $317,000 to $90,320 essentially “destroyed” the verdict and could not be sustained. The Court of Appeals also agreed, though, that the award of $317,000 was excessive. In its opinion, the Court of Appeals quoted the Tennessee Supreme Court in discussing non-economic damages:

Damages for pain and suffering are awarded for the physical and mental suffering that accompany an injury. Damages awarded for loss of enjoyment of life are intended to compensate a plaintiff for the impairment of the ability to enjoy the normal pleasures of living. Assigning a compensable, monetary value to non-economic damages can be difficult. The assessment of non-economic damages is not an exact science, nor is there a precise mathematical formal to apply in determining the amount of damages an injured party has incurred. Thus, a plaintiff is generally not required to prove the monetary value of non-economic damages.

In pursuing injury claims in Tennessee, an injured victim and his or her attorney must at some point confront the difficult decision of how to value a claim for either settlement purposes or presentation to the jury. As the opinion above reveals, jury awards for non-economic damages are difficult to predict. A jury can award damages far in excess of the incurred medical expenses if the proof shows that the plaintiff’s life has been substantially affected. In our experience, one of the most important factors driving a jury’s determination will be the plaintiff — does the jury like the plaintiff? Is the plaintiff a deserving victim?

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Many consumer contracts — checking account contracts, cellphone contracts, even nursing home or hospital contracts — now contain arbitration clauses. Despite being buried in the fine print, these contracts often require consumers to give up their right to a jury trial in favor or arbitration. Many also expressly forbid “class actions” within the arbitration context. When consumers have disputes with one of these business, they are prevented from filing a claim in court and must, instead, submit to arbitration, often in a far-away forum and usually at a cost of several thousand dollars. What happens when a consumer is cheated by a corporation for $100? Arbitration clauses effectively foreclose any legal right of action. Unfortunately, these arbitration clauses have been upheld by the United States Supreme Court and, unless Congress takes some action (unlikely) to fix the problem, consumers will remain at the mercy of large companies.

The Wall Street Journal, not surprisingly, has been a long-time champion of arbitration clauses, claiming that arbitration is cheaper, faster, and more informal than court proceedings. While that may be the case when two large companies are fighting over a large contract dispute, it is certainly not the case when a lone consumer is pitted against a large company. Without the ability to consolidate claims in a “class action”, the consumer is prevented from bringing any case. Recently, the Wall Street Journal published an article decrying the unfair treatment that many soldiers and other service members were receiving from banks. Despite its coverage of the situation, the paper noted in its article that soldiers had been prevented from bringing legal action because they were barred by arbitration clauses. The irony was apparently lost on the Wall Street Journal, who failed to recognize that the outcome they were bemoaning was exactly what they had championed for years.

Public Justice has a good, concise piece up about the issue here.

Most people have by now heard of the travails of celebrity chef Paula Deen, whose business empire and sponsorships crumbled this Summer following revelations from a civil lawsuit that she had used the N-word in the past and was part of other potentially offensive racially charged activities. This post is not to defend Ms. Deen nor, frankly, to argue that she deserved the enormous backlash and financial consequences that came from the revelations of apparently long ago conduct. Rather, the question is “Why?”

The lawsuit in question arose when a white employee of one of Ms. Deen’s restaurants sued her for discrimination, alleging sexual discrimination and a racially inhospitable work environment. At some point during the litigation, the attorneys for the plaintiff scheduled and took the deposition of Ms. Deen, during which numerous questions were asked about the racial allegations, Ms. Deen’s use of the N-word, etc. It was that deposition, and specifically the public release of the deposition testimony (by the attorneys for the plaintiff?), that led to the media firestorm and the destruction of Ms. Deen’s empire and career. But, again, “Why?”

This week, the Court overseeing the lawsuit against Ms. Deen, not surprisingly, dismissed the claims arising from racial discrimination. According to media reports, the plaintiff’s claims were dismissed because as a white woman she didn’t have standing to seek damages for discrimination against non-whites. That comes as no surprise to me and I doubt it does to any lawyer practicing in employment discrimination. If these claims had been eliminated earlier in the lawsuit, the deposition questions relating to race would have been objectionable and likely the attorneys could have prevented Ms. Deen from having to answer such questions. The whole firestorm could have been avoided, perhaps. But it didn’t need to come to that.

In a recent opinion, Long v. Greyhound Lines, Inc., 203 Tenn.App. LEXIS 405 (Tenn.Ct.App. 2013), the Tennessee Court of Appeals reversed the trial court’s grant of summary judgment to two of the defendants involved in a multiple vehicle accident involving tractor trailers and a Greyhound bus. The decision is interesting to lawyers practicing in the area of personal injury, because of its strong affirmation of the legal principle that negligence (and causation) are not amenable to summary judgment. The decision should also be of some interest to lay persons, because, in essence, it puts the question to the jury of whether a motorist doing nothing more than “rubber necking” at the scene of a prior accident can or should be held liable for causing a subsequent accident.

In the Long case, the plaintiff (Ms. Long) was involved in a collision with an eighteen-wheeler truck on Interstate 40 in Tennessee. Ms. Long’s car was smashed and rendered inoperable in the left lane of the highway. Following that collision, another large truck stopped on the right shoulder (emergency lane) of the highway to render assistance. Ms. Long, at some point, crossed the road on foot (or was carried across) to wait for help in the emergency lane. Another car, shortly thereafter, came across the scene and — inexplicably — stopped in the right hand lane. Because there were only two lanes, the highway was now completely blocked. A Greyhound bus then came across the scene of the accident and, unable to stop in time, hit the car which had stopped in the right hand lane, pushing it into the truck parked in the emergency lane and pinning the driver and plaintiff (Ms. Long), causing severe spinal fractures.

The trial court had granted summary judgment to the driver of the late arriving car, finding that as a matter of law her actions in stopping her car were not negligent. It was this decision that the Court of Appeals reversed. In essence, the Court found that there was conflicting testimony in the record about where exactly each of the vehicles was stopped and why. There was evidence that this vehicle was not forced to stop at all, but could have continued traveling past the accident. Or, if they wanted to stop to render assistance, they should have pulled off on to the shoulder. The evidence, however, would support a finding that they stopped without regard to other traffic on the road and thus made a minor accident into a serious one, resulting in permanent and serious spinal injuries. Whether the driver of the second car should be held responsible was determined by the Tennessee Court of Appeals to be a question for the jury.

A recent decision from the United States District Court for the Eastern District of Tennessee reaffirms the rule that police officers cannot be held liable for failing to stop or arrest a drunk driver. In Harris v. City of Knoxville, a pedestrian brought suit against Knoxville and two police officers individually after he was seriously injured by a drunk driver. As it turned out, the drunk driver had been stopped only a short time before he struck the pedestrian by a suspicious police officer. After investigating, however, the officer determined that while the passenger of the vehicle may have been intoxicated, it did not appear that the driver was drunk or driving under the influence of drugs. No field sobriety test was administered.

The injured pedestrian plaintiff’s suit alleged several claims against the officers and the City, but the case turned on whether the failure to stop the drunk driver was a deprivation of the injured plaintiff’s due process rights. This appears to have been a creative attempt by the plaintiff to recover damages for his injuries, but well-established case law should have foreshadowed the outcome. In particular, the U.S. Supreme Court’s decision in DeShaney v. Winnebago County which held “a State’s failure to protect an individual against private violence simply does not constitute a violation of the Due Process Clause.” The District Court set out the test for determining whether an individual could sue as an exception to the general rule in DeShaney. In order to bring a claim under the “state created danger” exception, a plaintiff must show: (1) an affirmative act by the state that either created or increased the risk that the plaintiff would be exposed to an act of violence by a third party; (2) a special danger to the plaintiff wherein the state’s actions placed the plaintiff specifically at risk, as distinguished from a risk that affects the public at large; and (3) the state knew or should have known that its actions specifically endangered the plaintiff. Under this test, it seems fairly clear that a police officer cannot be held responsible for failing to arrest a drunk driver. First, under such a circumstance the officer does not “create” or “increase” any risk. And, second, letting a drunk driver continue driving does not specifically endanger any individual, but rather poses a risk (at most) to the general public. And this is exactly what the District Court held.

Indeed, given the relative ease in which the District Court dismissed this case, it seems somewhat surprising that it was even brought in the first place. If the attorney for the plaintiff had done more than a cursory review of the law, it would have been hard to conclude that the case would be held viable by the District Court. While a plaintiff injured through no fault of his own certainly deserves compensation, that doesn’t necessarily mean a case should always be brought. Here, it seems likely that the responsible driver didn’t have car insurance or didn’t have sufficient car insurance, and that the plaintiff also didn’t have uninsured (UM) motorist coverage. As a result, the plaintiff tried to hold a third party (the police) responsible for the injuries caused by the drunk driver. The result of the case, though, makes clear that even if the police behave negligently in letting a drunk driver continue driving, neither the police officers nor their employer can be held liable for any resulting injuries.

In an opinion released on May 30, 2013, the Tennessee Court of Appeals upheld the grant of summary judgment to a defendant driver who had unquestionably caused a car accident and injuries to another person. In Smith v. General Tire, the injured car accident victim sued the responsible driver and her employer, whose vehicle she was driving at the time of the accident, to recover for injuries he sustained. The facts of the case, however, showed the defendant driver had lost consciousness due to a sudden onset of hypoglycemia associated with her diabetes. The diabetic driver wore an insulin pump and also took additional shots of another medication to help control her blood sugar levels.

The trial court had granted summary judgment to the diabetic driver, however, on the basis that her loss of consciousness was unforeseeable and therefore that although she caused the accident she was not negligent. The attorneys for the injured victim had taken two depositions of the diabetic driver, and had retained a medical doctor to testify about the dangers of the medications she was taking, but were unable to establish that she should have foreseen a sudden loss of consciousness.

The outcome of this case is that an innocent injured car accident victim obtains no recovery. Of course, the ruling also essentially stands for the proposition that a driver who experiences a sudden, unforeseeable loss of consciousness is just as innocent as the person she hurt. I think this is, unfortunately for the innocent injured party, probably the right outcome. In a different case, the facts could lead to a different outcome. For instance, if more evidence could be developed that the diabetic (or epileptic, or cancer patient, or other person with any medical condition) had experienced similar episodes in the past, or had been instructed by a doctor not to drive, or was otherwise more aware of the dangers of their condition or side effects of their medication, the injured plaintiff would likely be able to establish a prima facie negligence case. Better testimony from a medical expert would also be of great assistance.