U.S. District Judge encourages GM settlement acceptance

U.S. District Judge Jesse Furman told lawyers that he strongly encourages serious consideration by plaintiffs of the GM settlement offered by claims administrator Kenneth Feinberg, the Associated Press reported on August 11.

Furman was assigned to preside over more than 100 lawsuits which have common attributes. Most of these are not personal injury claims, but lawsuits for economic damages. A bankruptcy judge is currently reviewing whether economic damages are protected by GM’s 2009 bankruptcy.

When GM finally recalled the defective cars after being aware of the problem since 2001, the number of cars affected amounted to 16.5 million. In an attempt to reform its practices, GM has appointed a new safety chief and is not hesitant to continue recalling vehicles with issues.

A person harmed in a personal injury accident is burdened not only with physical and emotional injuries, but also with expensive medical bills. If you have experienced an accident due to someone else’s negligence, whether a manufacturer or another reckless driver, the attorneys at Crowe & Mulvey, LLP, may help you pursue compensation. Contact our Massachusetts offices today at (617) 426-4488.

When Asking Once Isn’t Enough

A recent federal court decision is an important reminder to litigants of the need to safeguard physical evidence that may be relevant to a products liability lawsuit.  In Fireman’s Fund Insurance Co. v. Bradford-White Corp., U.S. District Judge Gorton rejected the defendant’s argument that the case should be dismissed, but will allow argument that a negative inference should be drawn on account of the plaintiff’s failure to preserve the product at issue.

The subrogation case involved Fireman’s Fund’s efforts to recover damages it paid on account of water damage at an apartment complex in Marlborough.  The insurer alleged that the leak was caused by a defect in a water heater manufactured by the defendant, Bradford-White.  Fireman’s Fund had requested its insured, Bell Partners, to retained the water heater when it was replaced after the leak.  However, other than making this request, it does not appear that Fireman’s Fund make efforts to insure that its instructions were followed, or that the heater was properly identified and segregated to insure its availability for inspection.  According to Judge Gorton’s opinion, the insurer compounded its failures by its dilatory response to the defendants’ request to inspect the heater.  When the day for the defense inspection finally arrived, the parties discovered that the water heater was not available, its whereabouts and date of disposal unknown.

However, Judge Gordon did not find any bad faith or intentional spoliation on the part of Fireman’s Fund.  Rather, the court noted, this was simply a case where the plaintiff insurer could have done more–at most, its actions were negligence.  The court then focused on the prejudice to the defendant flowing from its inability to inspect the water heater at issue.

After considering the alternative sources of evidence available to the defendant, including two heaters which, although similar in design to the heater at issue, had been used under different atmospheric conditions, Judge Gorton concluded that dismissal of the claim was not warranted.  The judge further declined to bar the plaintiff’s expert, who had examined the water heater before it went missing, from testifying about her findings.  However, the defendant will be permitted at trial to offer evidence of the plaintiff’s failure to safeguard the heater, and to argue that the jury might infer from the heater’s disappearance that it would have been damaging to the plaintiff’s case.

While the plaintiff no doubts feels fortunate to have dodged the dismissal or exclusion bullets, even the adverse inference seems harsh in a situation where the insurer had requested that the water heater be preserved, and the third party who had custody of the evidence was responsible for its disappearance.  Although not stated, perhaps the fact that the custodian was the insured of the plaintiff may have made the court more willing to attribute Bell Partner’s negligence to its insurer, Fireman’s Fund.  Further, although the court criticized the plaintiff for delaying in scheduling the inspection, there was apparently no evidence that the water heater’s disappearance occurred during that period of delay.

The take-home message, though, is that parties who have cases dependent on physical evidence would be well-advised to take multiple affirmative steps to secure the evidence, and, where possible, take charge of the product or other evidence themselves rather than relying on a third party.  By failing to insure the continued availability of the water heater, Fireman’s Fund no doubt made its case unnecessarily difficult, when a few simple steps could have avoided the problem altogether.

Read the opinion in Fireman’s Fund Insurance Co. v. Bradford White Corp. here.

Massachusetts Court Upholds Punitive Award

Punitive damages, the target of tort reformers in many areas of the country, are relatively uncommon in Massachusetts and most of the New England states.  Unlike many other states, Massachusetts does not allow punitive damages–those awarded not to compensate the injured plaintiff, but to punish the wrongdoer–in most personal injury cases, no matter how egregious the defendant’s conduct.  A notable exception is a claim for wrongful death.

As a result, there is a paucity of case law in the Commonwealth defining the appropriate amount and standard for the award of punitive damages.  A recent case, Aleo v. SLB Toys USA, Inc., is the Supreme Judicial Court’s most recent opinion on punitive damages, and contains the Court’s first significant discussion of the appropriate amount that may be awarded as punishment.  In Aleo, the Court showed a willingness to uphold a reasonably significant punitive award, particularly where the underlying compensatory award was relatively modest.

Aleo involved a claim for the wrongful death of a 29-year-old wife and mother, who was rendered instantly quadriplegic as she slid down an inflatable slide into a swimming pool.  The slide collapsed, and she struck her head and neck on the concrete deck of the pool, fracturing two vertebrae.  She died the following day.  The plaintiff claimed that the inflatable slide was dangerous and defective because it failed to comply with federal standards requiring such slides to support up to 350 pounds of weight.  In an interesting twist, the warning label on the slide itself proved non-compliance, stating that it could support just 200 pounds!

The jury’s award of $2.6 million in compensatory damages for the loss to the woman’s husband and daughter, including loss of companionship, loss of household services, and lost earnings.  Considering the woman’s age, most observers would consider the verdict rather low.  Yet it was balanced by an award of $18 million in punitive damages.

The Court had little difficulty finding that the defendant’s conduct in selling a slide which did not comply with federal standards was grossly negligent, thus warranting a punitive damage award.  A large portion of the Court’s opinion focused on various federal decisions attempting to  define the proper considerations in evaluating a punitive damage award, as well as on the appropriate relationship between a compensatory and a punitive award.

The Court noted that the evidence product had caused death, and that the defendant had demonstrated indifference to the safety of others, and had endangered a large number of people, since approximately 4000 slides were sold throughout the country.  All of these factors would support a significant award.

Finally, the Court considered various Supreme Court decisions addressing the proper ratio between compensatory and punitive damages, finding no excessive punishment in a punitive award that was less than ten times the compensatory award.  Here, the Court noted the relatively modest verdict in light of the age and circumstances of the decedent as another factor that supported a large punitive award.

A jury’s ability to award punitive damages in appropriate cases is an effective public safety measure, as it allows citizens to make a statement about the reprehensibility of conduct, with the goal of punishing the most egregious cases of negligence and deterring similar conduct in the future.  The Supreme Judicial Court’s affirmance of the verdict recognizes the importance of allowing jury’s statement to stand as an expression of the community’s standards and views.

Read the Supreme Judicial Court’s decision in Aleo here.