Fall 1998	A Quarterly Newsletter
Left to right - front row: Michael Hoffman, Patrick Hamilton, John Parisi, Victor Bergman, John Shamberg, Lynn Johnson, Steven Brown, Stephen Six. Left to right - back row: Kristi Razack, Jennifer Spooner, Jill Fordham, Patricia Merrill, Beverly Allen, Deana Wagoner, Stephanie LaSalle, Barbara Kearns, Diane Huey, Jill Miller, Susan Gibson, Gina Richardson, Kate Roades. Negligent Sympathectomy Results in $3.2 Million Dollar Verdict   Christine Abrams, a respiratory therapist, injured her left forearm while attempting to restrain a large patient. Despite prompt treatment and physical therapy, her arm failed to improve and degenerated to a painful condition known as reflex sympathetic dystrophy (RSD). When conservative treatments failed, Mrs. Abrams sought the services of Robert D. Williams, M.D., a cardiothoracic surgeon, to perform a video-assisted thoracic surgery (VATS) sympathectomy to interrupt the pain signals traveling to her arm and hand. The sympathectomy was successful in resolving Mrs. Abrams' pain as a result of the RSD, however while performing the surgery the physician traveled beyond the operative field and removed a section of Mrs. Abrams' thoracic and cervical nerve roots. As a result of severing these nerve roots, she was left with permanent dysfunction of her left arm and hand. Subsequent surgeries to repair the damage were unsuccessful and, as a result of the nerve root damage, Mrs. Abrams was 100% occupationally disabled.   The case was tried by Lynn Johnson and John Parisi to a jury in Jackson County, Missouri before the Honorable Jon R. Gray. Pat Hamilton conducted the pretrial discovery. Following an eight-day trial, the jury returned a verdict in favor of Christine Abrams and her husband Keith in the amount of $3.2 million dollars. The jury awarded Mrs. Abrams $2.7 million, including $2.1 million for future economic and non-economic damages. Mr. Abrams was awarded $500,000 for his loss of consortium claim, including $400,000 in future economic and non-economic damages   The Court denied the defendant's motion for a new trial. Pursuant to R.S.Mo. 538.220, the Court granted the defendant's motion that the future damages portion of the verdict be made in periodic payments over the next twenty years. An appeal is expected. Go Back to the Top Neurosurgeon's Malpractice Leads To "Wentling" Settlement In Kansas - Wrongful Death Action   On the morning of April 22, 1996, defendant Robert Tenny, M.D., performed a left carotid endarterectomy on 74-year-old Mary Baumgartner, which eventually led to her death. Following her surgery, Mrs. Baumgartner was brought to the recovery room, and within a half hour developed neurologic signs and symptoms highly suggestive of a dangerous obstruction of the carotid artery in the area of surgery. These signs necessitated rapid return to the operating room for immediate exploration of the surgical site looking for a blockage. Instead, Dr.Tenny ordered a variety of tests, and then he left to perform an elective procedure on another patient. The test results all supported the idea that there was in fact a thromboembolism which impaired the flow of blood into the left side of Mrs. Baumgartner's brain - a reversible condition with prompt surgery.   Dr. Tenny disregarded these neurologic signs and symptoms and the results of the tests that had been done, and ordered the nurses to infuse heparin, a blood thinner, into Mrs. Baumgartner, in the mistaken belief that heparin could dissolve an existing thrombus. The heparin therapy caused extensive bleeding from the surgical site, placing Mrs. Baumgartner into a downward cycle of starting and stopping of the heparin, resulting in resumed bleeding with each reinstitution of the therapy. Dr. Tenny delayed Mrs. Baumgartner's transfer to the intensive care unit, denied that the bleeding was significant, even though the nurses thought it was, and allowed Mrs. Baumgartner to linger and deteriorate for two days before she was found by a nurse with blood oozing from underneath her left neck dressing, pooled under her head, saturating the sheets and gowns on her bed, and spurting from a hole at the surgical site at the base of her neck.   The plaintiffs had two vascular surgeons who testified that Dr. Tenny must have had a realization of the imminence of danger to Mrs. Baumgartner when the signs and symptoms of carotid artery blockage developed post operatively, and particularly when the tests he ordered came back confirming that there was a blockage, but that Dr. Tenny acted in reckless disregard of this information and Mrs. Baumgartner's safety by not taking her back to surgery immediately. The case was settled before the plaintiffs' planned motion to amend to add punitive damages was filed.   Prior to her surgery, Mrs. Baumgartner had severe underlying coronary artery disease and other medical problems which had left her partially disabled. She was widowed, not working, and had two adult children, who were the plaintiffs in the action. There was a limited amount of evidence that Mrs. Baumgartner had meaningful conscious responses on a few occasions before her death 10 days after surgery. The settlement was for $750,000, including $150,000 for the "survival action" brought by Mrs. Baumgartner's estate for her conscious pain and suffering between the time of the surgery and the time of her death; approximately $80,000 for medical expenses; and the remaining $520,000 for the wrongful death action on behalf of Mrs. Baumgartner's two adult children. The wrongful death settlement included $100,000 of capped non-pecuniary loss, plus $420,000 of "pecuniary" damages including the items set forth in the case of Wentling v. Medical Anesthesia Services, 237 Kan. 503 (1985), including loss of the decedent's services, attention, marital, parental, or filial care, protection, training, guidance, education and loss of complete family.   This case is yet another example of the significant value that the so-called "Wentling" damages can bring to a wrongful death case where there is evidence of a good relationship between the decedent and the heirs-at-law, even where, as here, the decedent's life expectancy was limited even in the absence of negligence.   The case was handled by Vic Bergman, of our office, working cooperatively with our good friend and referring attorney Gary Matthews, who took the lead in the preparation of the case. Go Back to the Top HAPPY HOLIDAYS! Time To Raise The Kansas Limit on Non-economic Damages   On July 1, 1987, the Kansas Legislature imposed a limitation of $250,000 on pain and suffering damages, which was expanded the following year to include all non-economic damages. Based on the consumer price index, the $250,000 cap is effectively $147,500 in 1998 purchasing power. The cap would need to be raised to $353,250 just to keep pace with the changes in the Consumer Price Index. The limitation on non-economic damages has been eroded 41% over the last ten years. The tort "reforms" imposed by the Kansas Legislature in 1987 were claimed to be necessary, based on the perceived medical malpractice "crisis". The claimed crisis was not supported by any independent data and, even if it existed, it has passed. The Kansas Healthcare Stabilization Fund ("Fund"), which provides excess coverage to healthcare providers in the State of Kansas, has almost a $200 million dollar investment balance and it has been refunding surcharges to healthcare providers in recent years. The insurance companies providing primary coverage to healthcare providers in the State of Kansas are also earning record profits on medical professional liability coverage. Juries continue to overwhelmingly return defense verdicts in medical malpractice cases tried in the state. In 1996, 29 malpractice cases were tried, resulting in 20 defense verdicts (70%), 6 plaintiffs verdicts (20%), a hung jury and mistrial. In 1997, 39 malpractice cases were tried, resulting in 27 defense verdicts (70%), 11 plaintiffs verdicts (28%), and one mistrial. Juries returned defense verdicts, on average, 76% of the time in medical negligence cases between 1988 and 1995. The largest malpractice verdict in 1996 was $1 million dollars, while five of the total of eleven plaintiffs verdicts were under $60,000. The largest malpractice verdict in 1997 was $1.2 million dollars, while three of the total of seven plaintiffs verdicts were under $200,000.   Kansas Professional Liability insurers and the Healthcare Stabilization Fund continue to have premiums and surcharges which greatly outpace losses paid. In 1996, Fund revenues outpaced Fund expenses (including claims, operating expenses, salaries, and attorneys fees) by approximately $3 million dollars. At the end of the 1996 fiscal year, the Fund's total cash and investment balance was $195,672,723. From 1990 to 1997 the Fund has paid, on average, $18,000,000 in settlements and verdicts per year. Therefore, without another dollar collected from Kansas healthcare providers, the Fund could fully fund settlements and verdicts for the next ten years. Kansas Professional Liability insurers also continue to experience premiums greatly in excess of claims. The graphic on the previous page illustrates that insurance company premiums outpaced losses for both physicians and hospitals in 1996. The data is similar for 1993 through 1995. With juries returning defense verdicts on average 76% of the time in medical negligence cases over the last ten years, the only "crisis" is the lack of justice injured plaintiffs can expect in our state. With the Fund and the professional liability insurers' books solidly in the black, there is no "crisis" for the insurance companies. Given that there has been a 41% erosion in the value of the $250,000 cap, it is clearly time to revisit the fairness of this harsh artificial limitation placed on injured persons in Kansas. Go Back to the Top Lynn Johnson Lynn Johnson Elected To Inner Circle of Advocates   Our firm's senior partner, Lynn Johnson, was inducted to membership in the Inner Circle of Advocates at the associationÍs annual meeting in San Francisco on August 13, 1998. The Inner Circle of Advocates, which was founded in 1972, is the most exclusive professional association of trial attorneys in the United States with membership limited to 100 lawyers. As a result of LynnÍs membership in the Inner Circle, he joins an even more select group of less than 35 trial attorneys in the country who are members of not only the Inner Circle of Advocates, but are also fellows of the International Academy of Trial Lawyers and the American College of Trial Lawyers. The International Academy and American College are both prestigious professional associations of skilled trial lawyers. Membership in the International Academy is limited to 500 fellows and the American College is limited to no more than one percent of the licensed practicing attorneys in the United States. LynnÍs accomplishment of being invited to membership in each of these three trial lawyer associations serves as recognition by his peers of his ability as one of the best trial lawyers in the country.   Our firm is proud of Lynn for this and his many other exceptional accomplishments. Go Back to the Top Shamberg, Johnson & Bergman John E. Shamberg Lynn R. Johnson Victor A. Bergman John M. Parisi Steven G. Brown Stephen N. Six Patrick A. Hamilton

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In This Issue

• Verdict in Missouri Malpractice Case
• Neurosurgeon's Malpractice Leads To "Wentling" Settlement in Kansas - Wrongful Death Action
• Tire Defect Litigation
• Lynn Johnson Elected to Inner Circle of Advocates
• Raising the Non-economic Cap
• False Claims Act Cases
• Confronting The Missouri Periodic Payments Statute
  
  

  We are pleased to present this holiday issue of our newsletter.

  In this issue we feature case reports on a noteworthy Missouri verdict, another "Wentling" settlement in a Kansas medical negligence case, a feature on the firm's tire defect litigation, and an important call to raise the cap on non-economic damages in the State of Kansas.

  As the end of the year and festive holidays approach, all of us here at Shamberg, Johnson & Bergman wish you and yours a happy and safe holiday season and a new year filled with health, happiness, peace and success.

False Claims Act Cases - Unique Law Makes Everyone a Winner

  Win for Justice: dishonest profiteers who fleece the public welfare system are exposed and held accountable. Win for the Public: the badly strapped and sagging federal budget is significantly replenished. Win for the whistleblower: they are rewarded for their trouble and efforts. Ten percent of Medicare's budget, or roughly $17 billion, goes to pay false or inflated claims from health care providers. Attorneys have an opportunity to rectify some of the abuse through the False Claims Act.

  Passed at the request of Abraham Lincoln in 1863, the False Claims Act, 31 U.S.C. § 3729 et seq., provides financial incentives for "whistleblowers." Under the Act a person who discloses the existence of fraud to the government by filing a False Claims Act case is rewarded by receipt of between 15% and 30% of the total amount recovered.

  The amount the relator, or "qui tam plaintiff" will receive depends on who prosecutes the action. By law, the Department of Justice has the first option to prosecute the claim. Such prosecutions have been targeted as a high Justice Department priority nationwide. If the government agrees to prosecute the lawsuit, then the relator receives no more than 25% of the recovery. However, if the government elects not to intervene, then the relator gets between 25% and 30% of the amount recovered.

  Since 1986, False Claims Act cases have generated more than one billion dollars in recoveries to the federal treasury, which is a very small part of the total loss. The totals recovered keep accelerating every year as larger fraud schemes are uncovered. These cases represent a growing area of our firm's practice.

  Relators under the False Claims Act are entitled not only to a portion of the proceeds recovered, but also to reasonable attorneys fees, costs, and expenses. This makes the False Claims Act cases particularly attractive federal civil actions because the recovery is not diminished by litigation costs and expenses.

  Recoveries can be large even where the actual amount at issue is not particularly significant on a per claim basis. This is because the court first trebles the damages, and then tacks on a civil penalty for each fraudulent claim submitted in an amount no less than $5,000 and no more than $10,000. Just 100 small false claims can easily add up to between $500,000 and $1,000,000 in civil penalty liability alone. For example, an $8.00 overcharge billed to 100 patients becomes a potential liability of $1,002,400.00 because of the civil penalty provisions.

  False claims cases can be found in the process of doing medical records reviews (e.g. hospital or home care companies charging for services not provided), verifying Medicare or Medicaid liens, in the context of employment law matters, or even in the process of helping friends or relatives deal with medical bills or providers.

  Workers in health care settings discharged for various reasons may have specific knowledge of false or fraudulent claims made by their present or former employers. Of the cases filed by this firm in 1996 and 1997, nine of the relators were former hospital or business employees with direct knowledge of fraudulent and inflated claims. Most had documents or testimony that directly supported their claims.

  Time is of the essence in filing a False Claims Act case. While the statute of limitations stretches back six years, the statute provides recovery only to the first individual to file and disclose the existence of the fraud. The Act is somewhat technical and exacting. There is a mandatory sealing period during which the existence of the suit cannot be disclosed. Violating the seal can be grounds for dismissal. More importantly, the sealing period cuts off the relator from the normal pre-trial discovery processes since the Complaint cannot be served on the opposing side until the Department of Justice makes a decision whether to intervene.

  The seal provision also makes it difficult for the relator's attorney to conduct an independent investigation into the merits of the claim. Since tipping off the target of the investigation might arguably violate the seal provisions, the relator's attorney is somewhat limited in terms of an active investigation of the claim.

  Our firm has developed knowledge and experience in these complex and worthwhile matters.

Michelin HiTour 79X tire used on the Honda Goldwing motorcycle. Our firm is currently litigating cases in Kansas and Idaho arising from the failure of this tire.

  When investigating a serious personal injury or death case arising out of an automobile or motorcycle collision, always be alert to the possibility that factors other than the driver's action may have contributed to the collision or to the severity of the injury. Some examples are highway design defects, traffic signal malfunctions, defects in vehicle design or manufacture, or malfunctions such as a defective tire. In past issues of the newsletter, available from our office or on the SJ&B website, we have addressed many of the above subjects. The focus of this article is on tire defect cases.

  A tire defect case is based upon the failure of a tire manufacturer to fulfill its duty to design and manufacture a reasonably safe tire that will not fail when subjected to real world use. It is up to the attorney to consider and evaluate whether a tire defect contributed to cause an accident.

Step 1:

  Preserve all of the evidence. If there is any possibility that a defective tire contributed to cause an accident, all physical evidence must be located, impounded and stored in a safe place in its post-accident condition. It is critically important to obtain the tire and wheel at issue, which may mean purchasing the vehicles involved. In addition, all accident reports and investigative documents including officers' field notes and photographs of the scene or vehicles should be obtained. Witness statements should be taken while the events are still fresh in everyone's memory.

Step 2:

  Immediately retain an accident reconstruction expert. The collision or accident must be investigated and reconstructed by an expert as soon as possible. It is vital that the expert inspect the scene of the collision and all physical evidence, and interview witnesses as soon as possible. Every dent on a vehicle and skid marks or scrapes on the road are important evidence to the reconstruction expert. Just as memories fade with time, so does physical evidence at an accident scene.

Step 3:

  Determine the history of the particular tire involved in the failure. Contact the National Highway Traffic Safety Administration ("NHTSA") to obtain recall information. All tires manufactured for sale in the United States must comply with Federal Motor Vehicle Safety Standards 109 and 110 which mandate certain design and performance characteristics. If a problem exists with your particular tire, NHTSA may have helpful information about its history.

Step 4:

  After the accident has been reconstructed, if there is an indication that tire failure caused or contributed to cause the accident, it is time to retain an expert witness who specializes in the investigation of tire failures. Tire experts inspect tires visually and by x-ray to determine the cause of a failure. Expert witnesses can help you determine whether a tire has a manufacturing and/or design defect that may have caused the accident.

  If you are representing someone who has been seriously injured or killed in an automobile collision, particularly when it appears tire failure may have occurred, you should always think of the potential for a tire defect case. Tire defect cases can be difficult, expensive, and time consuming. We are always prepared to offer advice or assistance in these matters. Our firm is currently litigating two tire defect cases against Michelin.

Confronting The Missouri Periodic Payments Statute

  A portion of the malpractice "tort reform" legislation passed by the Missouri legislature in 1987 included a provision that upon a verdict in favor of a plaintiff, the defendant may request the Court to order the future damages portion of the verdict to be made in installment payments. The statute, R.S.Mo. 538.220, has been the subject of several appellate court decisions.

  In Vincent v. Johnson, 833S.W.2d 859 (Mo. banc. 1992), the Missouri Supreme Court upheld the constitutionality and validity of the periodic payments statute. A few of the more salient points to the statute are set forth below:

• The statute only applies if the future damages award exceeds $100,000.
• Past economic and non-economic damages are not subject to the periodic payments statute.
• Although the request for periodic payments is usually made by the defendant, it can be made by any party to the litigation.
• Upon a Motion for Periodic Payments, if the parties cannot agree upon a payment schedule, the Court must hold a hearing on the issue of periodic payments.
• At the hearing, the Court is to decide the appropriate amount of the future damages award subject to future periodic payments; the interest rate to be paid by the defendant on that amount; and the number and timing of payments to be made in the future.
• Attorney's fees and litigation expenses are to be paid at the time the judgment becomes final, not in the future.
• As a condition to authorize periodic payments of future damages, the Court may require a defendant who is not adequately insured to post security or purchase an annuity to assure full payment of the future damages awarded by the judgment.
• If the plaintiff dies, the unpaid portion of economic future damages passes to their estate, while the non-economic damages need not be paid by the defendant.