Presentation on theme: "Litigation Management: Negotiations, Settlements, Judging Case Value &"— Presentation transcript:
1 Litigation Management: Negotiations, Settlements, Judging Case Value & Documenting the AgreementPresented by:Thomas F. Coleman, Esq.
2 Determine Case Value Know Applicable Law – Temporary Total Disability Law in effect on date of injury controls (Joyce v. Lewis Bolt & Nut Co., 412 N.W.2d 304 [Minn. 1987])Temporary Total DisabilityDOI pre-October 1, 1995: no capDOI pre-October 1, 1995 to September 30, 2008: 104/week capDOI on/after October 1, 2008: 130/week cap Temporary Partial Disability DOI pre-October 1, 1992: no cap DOI on/after October 1, 1992: /week
3 Determine Case Value (cont.) Permanent Total DisabilityRetirement PresumptionDOI prior to 1/1/84 – noneDOI 1/1/84 to 9/30/92 – presumed retired if receiving social security old age or retirement benefits (rebuttable)DOI 10/1/92 to 9/30/95 – noneDOI on/after 10/1/95 – Age 67 retirement presumption (rebuttable)Social Security Disability, Survivor’s Retirement Offset after $25k paid in PTD
4 Determine Case Value (cont.) Permanent total disability thresholdsDOI on/after October 1, 1995Irrebuttable presumptionThresholds17% PPD15% PPD and employee at least age 55 on DOI13% PPD; employee at least age 55 on DOI; not high school graduate/no GEDMinn. Stat. § , subd. 4 and 5Is employee permanently totally disabled, i.e. given age, education, transferrable skills, disability, and relevant labor market, is employee capable of nothing other than sporadic employment with insubstantial income?
5 Determine Case Value (cont.) Permanent Partial DisabilityDOI January 1, 1989 to September 30, 1995: Impairment compensation (IC) and economic recovery compensation (ERC)DOI on/after October 1, 1995: Impairment compensation onlyDOI on/after October 1, 2000: New PPD schedule increases dollar multiplier for PPD ratings (Minn. Stat. § , subd. 26)
6 Determine Case Value (cont.) Cost of Living Adjustment (COLA) (Minn. Stat. § )DOI prior to October 1, 1992: First COLA on first anniversary date of injury; maximum COLA 6%For DOI from October 1, 1992 to September 30, 1995: First COLA on second anniversary date of injury; maximum COLA of 4%For DOI on or after October 1, 1995: First COLA on fourth anniversary date of injury; maximum COLA of 2%
7 Determine Case Value (cont.) Medical Benefits (Minn. Stat. § ) Reasonable and necessary for cure or relief Medical treatment parameters (Minn. Rule to ) not applicable if: Primary liability denied; or Secondary primary liability denial Medical Fee Schedule (Minn. Rule to .4070)
8 Determine Case Value (cont.) Vocational Rehabilitation/Retraining (Minn. Stat. § )
9 Determine Case Value (cont.) Dependency Benefits (Minn. Stat. § )
10 Know the Claim Employee’s background Benefits paid to date TTD/TPD capsAttorney fee paid/withheldPPDOverpayments to recoup per Minn. Stat. § Employee’s backgroundFuture earnings capacity/employabilityAgeEducational backgroundEmployment historyTransferrable skillsDisability/restrictionsRelevant labor marketEmployee credibility/claim savvyPrior claims/litigationCriminal recordSurveillance
11 Know the Claim Available Defenses Primary liability Causation ApportionmentTTD defenses per Minn. Stat. §Nature and extent of injuryContributionFee ScheduleWhether employee is qualified employee for vocational rehabilitation under Minn. Stat. §MMI post 90 daysExclusion of medical provider under managed care plan
12 Know the Claim Review Medical records Vocational rehabilitation records Job logs Personnel/wage record DOLI file Social Security file Discovery Employee’s deposition/deposition résumé/recorded statements IME reports Independent vocational evaluation reports Witness statements/depositions
13 Know the Claim Is Case Ripe for Settlement? Restrictions – permanent or fluid? Medical treatment – done or pending? MMI IME IVE Potential future claim – retraining/medical/PPD/indemnity
14 Know the Claim Know Judge Petition for Judicial Reassignment – 10 days Petition for Judicial Reassignment – cause Minn. Stat. §Minn. Rule
15 Know the Costs of Litigation Defense attorney fees Costs of medical expert/vocational expert Disruption of insured’s business Discovery Cost of maintaining reserves/open file Opposing counsel’s: CostsAttorney fees:ContingentHourlyRoraff.191 feesHeatonEdquist
17 Legal guardian or conservator NOT required Settlement Conclusively Presumed To Be Reasonable, Fair, and In Conformity With Act – No Judicial Approval RequiredAll parties represented by legal counsel (not applicable to intervenors)Medical and vocational rehabilitation benefits are NOT closed out full final. Legal guardian or conservator NOT required Minn. Stat. § , subd. 2
18 Negotiations With Opposing Counsel Know Thine EnemyExperienceCaseloadAbility to try a caseWillingness to:Try a caseSettleFinancial positionCalendar conflictsNegotiating techniques
19 Negotiations With Opposing Counsel Know settlement authorityWCRA approval necessary?Be reasonableDo not overreach on pro se employeesDo not bid against yourself
20 Deal with Intervenors Appropriately Know extent of claim, apply Fee Schedule, be aware of Spaeth claims Give intervenors Notice of Right to InterveneFailure to do so may result in 100% liabilityIntervenor’s failure to timely intervene after notice may extinguish their claim (Minn. Stat. § )30 days after notice of administrative conference; or60 days after service of notice of right to intervene.Both Employee and Employer/Insurer have obligation to investigate intervention claims and give notice to potential intervenors Fee schedule bills when appropriate
21 Documentation of Settlement Utilize attorney Contents of Stipulation (Minn. R , Subp. 1)Statement of admitted material factsMatters in dispute/employee claims – attach supporting documentationEmployer and Insurer’s claims/defenses – attach supporting documentationStipulated facts (e.g. DOI, nature of injury, MMI)Establish settlement is fair and reasonablePreserve subrogation rights per Minn. Stat. §
22 Documentation of Settlement Contents of Stipulation (Minn. R , Subp. 1)Intervenors Claim itemizationExtinguish intervention rights – failure to timely interveneSettlement termsPaymentsClose outs – be precise, explicit; specify with particularity all benefits closed out*Cannot close out unknown claims as claims not yet in dispute, i.e. consequential injuries* A stipulation need not explicitly reserve the age 67 retirement presumption as a defense to a PTD claim. Frandsen v. Ford Motor Co., 801 N.W.2d 177 (Minn. 2011)
24 Social Security (SSDI) Language Of the $________ settlement, the sum of $_______ is to be paid to the Employee’s attorney as and for attorney’s fees. The Employee is currently ___ years old having been born on _______, and has a life expectancy of ___ years, ___ months. The balance of $________ shall be paid to the Employee and shall represent a compromise payment of weekly indemnity benefits over the projected term of the Employee’s life expectancy of ____ months, at the rate of $_____ per month, or $_____ per week. - Or -
25 Social Security (SSDI) Language That it is stipulated by and between the parties that had the Employee proceeded to trial and been successful with his permanent total disability claim, he would have been found to be permanently and totally disabled as of (_________). It is further stipulated by and between the parties that in arriving at the lump sum figure, the parties utilized the social security offset provision found in Minn. Stat.§ (4). Specifically, it is stipulated by and between the parties that Employee would have been paid $25, in weekly permanent total disability benefits as of (___________), had this case been actually litigated and an Award of permanent total disability benefits entered by a compensation judge. In calculating a lump sum payment, Employer and Insurers applied the social security offset as of (__________). In other words, the money being paid to the Employee in connection with this Stipulation for Settlement was arrived at by reducing Employee’s permanent total disability benefits by the monthly amount of social security. Employee has opted to receive reduced permanent total disability benefits in the form of a lump sum pursuant to the Stipulation for Settlement rather than receiving them on a periodic basis, having accepted a discount to present value. Additionally, it is recognized that the offset provisions of Minn. Stat.§ (4) (and Minn. Stat.§ (2)(e)) have been applied to this case, arriving at the lump sum.
26 Medical Closeouts Typical “soft” medical expenses Chiropractic Acupuncture/acupressureChronic pain clinic (inpatient/outpatient)Psychiatric/psychologicalChemical dependency treatmentHealth clubDurable medical equipmentDurable exercise equipmentHousehold remodelingHome nursing services by family membersMassage therapyTreatment with certain healthcare providersMotor vehicle modificationCertain medications, e.g. narcotics.
27 MSA Trust CMS approval of MSA Trust required if: Must account for and reasonably allocate to Medicare’s interests if:Employee receiving SSDIEmployee over age 65Reasonable expectation of Medicare enrollment within next 30 months CMS approval of MSA Trust required if:Employee:Medicare eligible; andSettlement is $25, or more; orReasonable expectation of Medicare enrollment within 30 months and settlement exceeds $250,000.00Bifurcate work comp settlement from MSA Trust approval
28 Medical CloseoutsBe aware of the employee’s situation regarding Social Security and whether or not a Medicare set aside is required.Consult with your client to determine if the best way to go is establish a Medicare set aside, or if you should simply leave various medicals open. Certain medical expenses are not covered by Medicare and could be closed out in a Stipulation without having to establish the Medicare set aside.
29 Hold Harmless Language Do not include hold harmless language in the Stipulation wherein the employee agrees to hold the employer and insurer harmless as and against any third-party intervenors who may have a right of intervention.The courts have consistently found these provisions unenforceable. Van Den Einde v. Henry’s Candy Store, 1992 WL (W.C.C.A ).
30 Settlement of Non-Workers’ Compensation Claims Sometimes as part of overall workers’ compensation settlement, the employee will agree to voluntarily resign his or her employment and will agree to waive any non-work compensation related employment law claims.These claims cannot be closed out under a workers’ compensation Stipulation as the compensation judge lacks jurisdiction to consider and determine claims outside of Minn. Stat. § 176.Have the employee execute concurrently with the Stipulation, an employment law Release and Voluntary Resignation of Employment. Be sure to allocate adequate consideration to the close out of employment claims and a voluntary resignation. See Karnes v. Quality Pork Processors, 532 N.W.2d 560 (Minn. 1995).
31 Settlement of Non-Workers’ Compensation Claims (cont.) Separate considerationEmployment Release Voluntary resignation
32 Question and Answer Language Purpose: to ensure that the employee knowingly and willingly consents to agreementSample LanguageThe Employee agrees and represents to the Office of Administrative Hearings, Workers’ Compensation Section, that he/she freely and without reservation has answered and initialed the questions following in his/her own handwriting:
33 Question and Answer Language (cont.) Employee must answer and initial all questions.Have you read the entire Stipulation for Settlement?Do you understand it?Do you realize and understand in entering into this Stipulation for Settlement that the difficulties you have had with your (injury) might change in the future and become substantially worse than they are at present?Do you realize and understand in entering into this Stipulation for Settlement that if your (injury) condition should unfortunately become worse in the future, it could involve a disability of a very serious and prolonged nature and even surgery?
34 Question and Answer Language (cont.) Do you acknowledge and stipulate that your attorney, (Full name), has reviewed and explained the provisions of this Stipulation regarding (supplementary benefits and) adjustments and do you further acknowledge that you understand that this Stipulation for Settlement forever precludes claims for (supplementary benefits and) adjustments?Do you acknowledge and stipulate that your attorney, (Full name), has reviewed and explained the provisions of this Stipulation for Settlement to you and that you fully understand and comprehend the terms and scope of this Stipulation for Settlement?
35 Question and Answer Language (cont.) Do you wish to have the Office of Administrative Hearings, Workers’ Compensation Section, approve this settlement on the terms and understanding set forth above?Further Recommendation:In cases where surgery has been recommended or discussed, it would also be advisable to add an additional question wherein the employee acknowledges that a certain type of surgical procedure has been discussed or recommended by his treating doctor or other doctors, and that this surgery could result in further additional disability.You would also want to attach as an additional Stipulation exhibit the medical report, chart note, or correspondence from the medical provider documenting the need for or possibility of surgery.
37 Settlement Due DatesFiling of Stipulation within 45 Days of settlementPayment per Award within 14 days from the date of service and filing of Award (Minn. Stat. § , subd. 26) Consequences of late payment:Penalty per Minn. Stat. § to DivisionPenalty per Minn. Stat. § to Employee