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Articles Posted in Settlements

Doctors, nurses, physicians’ assistants and other medical providers are not always good listeners. I know this from personal experience, but also because they frequently misquote my clients in their medical records.

For example, I once had a client who tripped on a broken-up walkway on the way into a store and suffered a serious knee injury. But the emergency room record said that the patient had “slipped and fell” and injured his knee.

“Slipped”, “tripped”, what’s the difference, right? For the doctor, none. For me, the difference was crucial. The doctor made this mistake because it didn’t matter to him how the plaintiff came to fall; for the purposes of diagnosing and treating the patient, his or her only concern was that he fell, and what part of his body he landed on. So he was only half listening when the patient told him how he ended up falling. He was more interested in learning what part of the knee hit the concrete, where it hurt, and whether the patient had mobility there.

President Obama reportedly told Syria, in sum or substance, “if you use chemical weapons on your people, we will use punish you militarily”.

Then Syria used chemical weapons on its people. But instead of inflicting military damage on Damascus, as promised, Obama hemmed, hawed, asked his allies what they thought, asked Congress what it thought, etc.

So what happens the next time the U.S. says to a dictator, “if you do x, we will do y”? What does an empty threat do to our credibility for future negotiations?

Tax season, which is now upon us, is, for most people, about as fun as sticking a fork in your eye. But your Central New York personal injury lawyer brings good tax news for personal injury victims! You’ve all heard the refrain, “nothing is certain except death and taxes”. That’s definitely true for death, but not always so for taxes, at least not for personal injury victims. Let me explain.

Many of my injured clients are pleasantly surprised to learn they don’t have to pay income tax on their personal injury settlements. This is because compensation for pain and suffering is not considered “income” but rather money to replace a loss suffered. In other words, the loss + settlement = a net wash, i.e., no income earned.

Another thing our clients are sometimes surprised to learn is that they can avoid paying tax even on interest they earn on their settlement money. How? Well, If you take the money in a lump sum (cash), and place it in the bank, and earn interest on it, you must pay a capital gains tax on the interest earned. But if you instead take a “structured settlement“, you can earn the same or even more interest tax free! Assume, for example, you get a $100,000 net settlement and elect to have it “structured” so that you earn an extra $10,000 on it. The insurance company pays you $10,000 a year for 11 years for a total $110,000 in payments ($10,000 of which corresponds to interest earned). Normally, you have to pay a capital gains tax on interest earned, but not if you earned that interest on a structured settlement! That’s because technically the insurance company that structures your settlement money “owns” the money while it is cooking up the interest (you are not earning it – they are!) and pays you only after the interest is generated. A gimmick, yes, but a legal one that helps you keep all the interest you earned on your settlement money.

Are you against frivolous lawsuits? Good, me too. Not to worry. I’ve got the solution. Hold on. First a story.

Several years ago, a fellow Central New York personal injury lawyer secured a famously large settlement on a personal injury case. At a party a few days later, someone took issue with his fee. “Your 1/3 fee on that big settlement is not fair”. My quick-witted friend replied, “you’re right — it’s not fair. I did ALL the work, I took ALL the risks, but my client gets 2/3 of the money – NOT FAIR!”.

He was just kidding, of course. But in Spanish there is a saying: “From every joke, some truth does poke” (de broma en broma la verdad se asoma). The point of the joke is that, yes, the contingency fee IS fair! Actually, not only is it fair, it is the only system that makes “justice for all” possible. That’s because most people could never afford charge-by-the-hour legal fees. But even if you are poor, if you have a legitimate claim, you can find a lawyer to take the case on a contingency fee basis.

As 2012 comes to a close, it’s time to look back on this year’s successes at the Central New York personal injury law office of Michaels & Smolak. Yes, we’re proud of our victories. They have allowed us to truly help people, people we have come to care about, people we have stood beside through thick and thin from the day they were injured until the day, sometimes years later, they finally tasted sweet justice. When, after a long struggle, we finally ring the bell of justice, we celebrate.

Although we fight for fair compensation in both small and big injuries cases, the big ones stand out because they are so life-altering. Without our efforts, many of those clients would sink into financial ruin. Those unfortunate few, those severely injured victims, are not just “down on their luck”, they are crushed by the overwhelming bad luck of having been at the wrong place at the wrong time in striking distance of the wrong wrongdoer. Not only can they no longer work to support their families, not only are they swimming in unpaid medical (and other) bills, but they must wake up in pain, drag themselves through the day in pain, and then lie down in pain again, only to relive the same pain again, and again, and again, every day of their lives. It’s like a horror-movie remake of “Groundhog Day“.

From our perspective, it’s amazing, even immoral, that the insurance carriers don’t pony up a fair settlement for these clients early on. Sadly, they often wait till the eve of trial to begin to make reasonable settlement overtures. Sometimes they only “see the light” or more accurately, feel the fear of a big verdict, at trial.

Monday I was scheduled to try a Seneca County NY motorcycle accident case in the Seneca County Courthouse in Waterloo. But as often happens, the case settled on the eve of trial, in this case Sunday afternoon.

Why do personal injury cases settle so late in the game, after the attorneys have put so much work into preparing for trial”? In one word, “pressure”. The pressure of an upcoming trial transforms the psychology of the parties and the lawyers. The weaknesses of your own case suddenly come into focus as never before. The risks of trial loom larger. This happens on both sides. When the parties’ positions are not far apart to begin with, splitting the difference suddenly seems more palatable.

Trying cases is exciting, fun and, yes, frightening, especially for the client who usually has never been to court. The cases that get tried are the ones where the parties are miles apart. Where the positions are “within firing range” of each other, the pressures of trial often lead to a settlement on the courthouse steps.

A client of mine is having a very merry Christmas indeed. I already blogged about his Waterloo, New York car accident case. Guy was passenger in his buddy’s car, who was stopped and waiting for traffic to clear so he could turn left into a driveway. Driver from behind, lost, looking at a map while driving, rear-ends them at full speed, causing them to flip over. Our guy ends up with a herniated cervical disc that takes him out of his welding job, for good, and requires surgery. The surgery helps, but does not rid him of the pain.

At first, there appeared to be no more than $100,000 in insurance, the policy limit of the driver/owner of the at-fault vehicle. There was no indication in the police report, or anywhere, that the negligent driver was doing anything but his own business when he rear-ended our guy. But an off-the-cuff remark by him at the scene — about some “bovine sperm bottles” he had in his pickup truck — tipped us off that perhaps he was working for some company that dealt in such products, even though he owned the vehicle and there was no company emblem or signage on it.

After some investigating, we turned up a California employer. The insurance carrier for the employer discloses a $1,000,000 insurance policy. Now we’re talking! But still, we felt our client’s case was worth more – what with all his pain and suffering, his completely altered life style, and the loss of his job.

You should never settle a New York personal injury case until you have let enough time go by so that you are fully aware of all your injuries, and the full extent of them. It is not uncommon for New York personal injury lawyers to wait a year or more before even making a settlement demand; they want to see where the injury “ends up” before they settle. Once you settle, you generally can’t go back for more money, so you have to be absolutely sure you know the full extent of your injuries before settling.

But let’s say you were not so prudent. Let’s say you got into a car accident and suffer an insignificant neck injury. Instead of hiring a lawyer, you settled your case on your own with the insurance carrier for the at-fault driver for a small amount of money. As part of the settlement, you signed a “release” that said you were releasing the at-fault driver, and his insurance carrier, from any and all liability for all injuries “known and unknown” that were caused by the car accident. After you sign, and after you get the settlement money, you start noticing pain in your lower back. The back pain gets worse and worse, and your doctor tells you it was probably caused by the car accident. The doctor is recommending surgery on your back.

You want to undo the settlement, because now you feel the small amount of settlement money is not nearly enough to compensate you for a severely injured back. You re-read the release you signed. It clearly says you release the at-fault driver and his insurance carrier from liability for ALL injuries KNOWN AND UNKNOWN that stem from the car accident.

This is the fifth and final part of the 5-part blog series about the pitfalls of trying to settle your own New York personal injury claim without a lawyer. Here’s pitfall number 5:

5. WATCH OUT FOR VULTURES. In some cases, you can’t take the settlement money without others, officially called “lien holders”, but whom I call “vultures”, holding out their hand for a piece of the pie. I call the lien holders “vultures” because they don’t participate in the “hunt”, i.e., the hard work of getting the settlement, but sit around and wait for you to make the kill, and then swoop in for a piece of the meat.

Unfortunately, this is their legal right. In a New York personal injury case, this is true especially if Medicare or Medicaid or ERISA-qualified health insurance policy paid for some or all of your treatment. Also, workers’ compensation will have a lien to recover any medical treatment or wage loss payments. If you take the settlement money, and then spend it, without first paying off the vultures, bad things will happen! They will come after you for reimbursement, and in the case of workers’ compensation, they might cut you off completely from any further comp benefits. And if you did not calculate these liens into your settlement demand, well, you’ll have to sit back and watch them eat the whole carcass of your settlement, leaving you nothing but scraps, or nothing at all.

This is the fourth part of the 5-part blog series about the pitfalls of trying to settle your own New York personal injury claim without a lawyer. Here’s pitfall number 4

4. DON’T ASK FOR TOO MUCH, OR TOO LITTLE, TO SETTLE YOUR CASE. Let’s face it; you have no idea how much your case is worth. Even an experienced New York personal injury lawyer has a hard time putting a number on some injury cases. So many factors come into play: your age, how strong your “liability” looks, how bad the injury is, and how long it will last, your state of health and whether you have “pre-existing injuries”, what county the case must be tried in, and a few dozen other factors.

You might think you know how much your case is worth because a friend of a friend had the same or a similar injury, and his lawyer got him x amount. But that friend of a friend might have had a stronger or weaker liability case than you, and he might be older or younger, and he might have had, or not, pre-existing injuries to the same body part. All these things will make your case different from his, so it is a mistake to think your case is worth what he got.

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