We all have fear. Fear of the unknown. Fear of failure. Fear of success. To have fear is to be alive. To have fear is to understand risk. To have fear is to know something is at stake.

As a trial lawyer I have fear. Most trial lawyers have fear, especially going into trial. Accept fear as a good thing. When we lose fear we lose a valuable emotion. An emotion that makes us better. Better assuming we continue to walk into our fear.

While at Trial Lawyers College I wrote this poem for my son:

Walk Toward Fear

Fear is my friend.

Without fear my life should end.

All that is unknown brings fear.

Facing fear makes the unknown clear.

The fear of failure causes stagnation.

But to venture forward brings origination.

Nothing new happens without walking toward fear.

And growth comes from moving near.

So embrace fear as a gift.

A gift that gives life its lift.

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Recently we settled a significant personal injury case where we addressed the issue of a Medicare Set Aside (MSA). The issue was raised by defense during settlement negotiations. Defendants argued they could be held liable by Medicare as could we if we ignored the MSA issue. They initially attempted to control what portion of the settlement funds would be used for a MSA. This post discuses how we handled the MSA issue.

Medicare and Medicad Liens. The Medicare program was established by Congress in 1965 in the Social Security Act. 42 U.S.C. sec. 1395 et seq. Medicare provides medical payments for Medicare eligible people (people receiving Social Security benefits). Under federal law Medicare has a super lien for reimbursement of Medicare benefits paid for the injured Medicare recipient’s medical specials. Nonetheless, federal regulations require Medicare to reduce the amount of its recovery to take into account the cost of procuring the settlement when the claim is disputed and the recovering party has borne cost in obtaining the recovery. In re: Zyprexa Products Liability Litigation, 451 F. Supp.2d 458(E.D.N.Y. 2006)(analysis of Medicare and Medicade liens). Federal law also recognizes Medicad (state version of Medicare) liens, and provides federal authority for collection of Medicad liens.  See Arkansas Dept. of Health and Human Services v. Ahlborn, 547 U.S. 268 (2006)(Arkansas Medicare statute for plenary lien held invalid, must recognize injured plaintiff).

Medicare Set Aside. A MSA is a fund separately identified from the settlement proceeds to be paid to Medicare for the injured plaintiff’s future medical needs. Recently defendants (insurance companies for defendants) have been arguing the settlement must include a MSA. This argument is made even when the injured plaintiff is not yet and may never be a Medicare recipient. Defendants also try to dictate  the amount of a MSA. In personal injury cases, these arguments must be resisted  to the point of litigating the MSA issue.

Federal Authority. “No federal law requires set-aside arrangements in personal injury settlements for future medical expenses.” Sipler v. Trans Am Trucking, Inc., (D.N.J. 2012). As recognized by the Sipler court, tort cases involve non-economic damages which are not determined by an established formula. See Zinman v. Shalala, 67 F.3d 841,846 (9th Cir. 1995). “[T]o require personal injury settlements to specifically apportion future medical expenses would prove burdensome to the settlement process, and, in turn, discourage personal injury settlements.” Sipler; cf. Ahlborn,  587 U. S. at 268  (in context of Medicad).

Solution. Our solution is plaintiff will consider the need for a MSA after consulting with a  MSA law firm, but plaintiff has the responsibility and discretion to determine the final set aside (if any). The terms of the settlement order  give plaintiff control over the MSA issue. Below is the relevant language:

Finding of Fact-Establishment of Qualified Settlement Fund. The parties have agreed to use a Qualified Settlement Fund  (QSF) established pursuant to section 468B of the Internal Revenue Code for purposes of holding the settlement funds and the disbursement of such funds pursuant to orders of this court.

Conclusion of Law-Orders of Disbursement. Orders of disbursement from the QSF will be made to ensure Medicare conditional payments are reimbursed, that a Medicare Set-Aside (if needed) will be properly funded by plaintiff out of the settlement proceeds, and that plaintiff receives the full benefit of this settlement.

Order. Plaintiff’s counsel shall promptly engage the services of Garretson Resolution Group, a professional firm that specializes in Medicare Secondary Payer compliance, to evaluate the case, determine whether a Medicare Set-Aside (MSA) is recomended, and if so, to present a proposed MSA Allocation. Plaintiff’s counsel and the QSF Payment Administrator shall take into account the MSA recommendation of Garretson to determine if a MSA is appropriate and if so the amount needed to fund the MSA.

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In 2010 I posted a Thought of the Week termed Philosophy of Navy Squash. This philosophy has become my mantra. I personally go through the Navy Squash motto on a regular basis, especially before and during a trial.

Prepare for Your Mission. To try the case we must know the case. This means knowing our client’s story. Our client’s story starts with knowing our client’s background, unique activities, especially those impacted by her injuries, the mechanism of injury, her treatment and our client today. Once we have internalized our client’s story and can discuss it from the heart we are prepared for our mission.

Believe in Yourself. To succeed in trial we must have confidence in our ability to advocate our client’s case. We must believe as in know we can do the job. This comes from a combination of thorough preparation and self acknowledgment of being a capable and effective trial lawyer.

Accept the Possibility of Failure. It took me a while to understand  this third prong of the Navy Squash motto. We are programmed to prepare to win and think we will win. But to win we must be ourselves. To be ourselves we must overcome the natural fear of being disliked by the jury. Accepting the possibility of failure allows us to relax and try the case naturally. Stated another way accepting the possibility of failure divorces us from being result orientated during trial. We are at our best when we forget about possible results and focus on the trial moment doing the best we can in the trial moment. Before a trial I have a silent communion with myself in essence a mediation where I acknowledge and internalize the possibility of failure. This is an important step in reaching the state I need to be in in trial-freely living in the trial moment.

Give Your Best Effort. This is different than believing in yourself. This is the doing part of the equation. This means living the trial from start to finish. Although it is essential to prepare for the trial, all trial lawyers know a trial takes a life of its own. We must adapt as this occurs. Adaptation means fine tuning and at times retooling in the day during trial and at night before the next trial day. Giving our best effort means a solid focused work effort from start to finish.

Never, Never Quit on Yourself. The great trial lawyer Paul Luvera teaches trial is a battle. There will be times when the other side is scoring points. There will be times when things do not go as planned. There may be times when things go bad. The key is to never stop battling. The Navy Squash team built its winning tradition by contesting every point to the end.  We must do this in trial.

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This post discusses lessons I have learned from wise people to make me a better lawyer.

James A. von der Heydt. Patience and a calm demeanor. A recognition the answer is found with an understanding of the facts and meticulous research.

Lewis Gordon. Keep a sense of humor. Law is hard enough so learn to laugh. Remember the environment and advocate for it whenever possible.

Simon Rifkind. All trials are plays. Cast your client as the hero. If client must be the villain cast as a lovable villain. Judge trials are the same as jury trials except judge is a sophisticated theatre goer. Never waive opening statement.

Phil Carter. Professionalism. Look like a lawyer and act like a lawyer. Never underestimate your opponent.

Robert Tjossem. The best defense is a strong offense. Analogy is that of a bullet train. With your argument stay on your track, go at full speed to the station. Watch as the other side moves to your track and gets run over.

Charlie Burdell. Graciousness with confidence. A non ending sense of fairness. The quality of being a friend to many.

Rod Pierce. Fearless and unflappable advocacy. Unfazed in defeat; one battle does not make the war. Prepare for the next battle.

John Strauss. A fierce belief in the case. Strike first. Unwavering confidence in winning the case.

Rob Kornfeld. Accept the winners turn down the losers. Never rest on success. Stay on the horse and ride into the next one.

Scott Bowen. Reasonableness in attorney’s fees. Help those that need help. Firmness with compassion.

Steve Lingenbrink. Community involvement. Involvement by helping others with collateral benefit of attracting clients.

Bob Dawson. Think outside the box. Big defendants only respect the power of a quality well prepared case. Try the case and tell the story.

My Wife. Kindness to others, especially clients and staff.  A confident and happy legal assistant is a quality legal assistant. Nice to all without pretense.

Still Learning. I continue to learn from others. The day I stop learning and growing as a lawyer is the day I retire. At my rate this will be a long time.

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Being a quality lawyer is like being a duck:

Calm on the Surface. A duck is calm on the surface but underneath the duck is paddling to keep up. Calm on the surface is the key. The quality lawyer remains cool and collected in adversity. For instance in a jury trial when a witness’s testimony is damaging the quality lawyer shows a calm reaction. The jury looking at the lawyer’s body language for cues on the significance of the testimony sees the body language of a non event as in this is nothing to be concerned about.

Active Underneath the Surface. The duck’s work is underneath the surface in the form of paddling.  This allows the duck to stay calmly afloat while making progress. This is the trait of a quality trial lawyer. Thinking calmly on his feet he rapidly calculates his next move and goes there moving the trial forward. In the office the quality lawyer works the amount of time it takes to draft pleadings that show a well thought, organized argument.

Loyal. Ducks are loyal. They are said to mate for life. The female is fiercely protective of her young showing them how to get to water and how to grow to a mature duck. The quality lawyer bonds with her client. The quality lawyer protects her client. The quality lawyer leads the way for her client to progress successfully through his case.

Know When to Migrate. Ducks instinctively know when to migrate. This means they know when to move. The quality lawyer has an instinctive ability to move the proper direction in a case. This means when to settle, when to file, when to interview witnesses, when to schedule depositions, when to schedule witnesses,  and when to move into positions and arguments in trial.

Let the Water Roll Off. In a rain storm when humans and animals seek cover the duck stays in the rain and lets the water run off. The duck is unfazed by the adverse element of rain. The quality lawyer weathers adversity in the same way. Adversity is part of the job. Sometimes it rains. So what. The quality lawyer does not run for cover. The quality lawyer weathers the adversity, unfazed, and continues to move forward.

Duck Looks Like a Duck.  As the saying goes: “If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.” When a lawyer is accepting, looks like a lawyer, moves like a lawyer, and speaks in concrete terms using nouns and verbs, then the person is probably a quality lawyer.

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Although many lawyers choose to practice law in casual attire. For court appearances and most matters I dress like a lawyer. This means professional attire that inspires confidence-as in a client seeing me as their lawyer. As in a client thinking he looks like a professional who knows what he is doing. As in a client thinking damn I’m glad he’s my lawyer.

Generally this begins with the first impression. Like it or not first impressions are made on how we appear, and this means how we dress. Below are my maxims for a professional appearance:

Always Neat. Take time in the morning to address personal hygiene. I give thought to what I am wearing so when I leave the house I have consciously chosen my outfit. I present a decent appearance. I present in a way I will be able to meet a new client even if I do not expect this to happen.

Hair. My hair is professionally styled.  What is important is my hair is neat and clean. It appears I have put some thought on making sure it looks professional.

Shirt. Generally this means a dress shirt. For me this translates to a button down all cotton professionally laundered white or light blue shirt. I wear Gitman Brothers shirts which are high quality and look high quality.

Suit/Sport Coat. I wear a suit or sport coat and slacks 80% of the time. The suits are quality and I buy them at Nordstrom Rack stores or at outlet malls. At these venues I pay about 50% of the original price. I buy classic suits and sports coats that never go out of style. Suits are often Hickey Freeman. Sports coats are Harris tweed or tasteful low key wool patterns. Liking the Ivy League look, I a blue blazer worn with tan or gray slacks.

Tie. Ties are silk, usually purchased at the Nordstrom Rack where a $75 tie sells for $25. I favor ties that are mostly blue or mostly red. These are power colors. I like classic stripe ties and conservative pattern ties. My tie matches my shirt and suit/sport coat. I almost always tie a half windsor knot. The tie always descends to the belt.

Shoes. Here I go with quality leather dress shoes. My favorite shoes are made by Allen Edmunds.  I have black, cordovan and brown. I wear classic styles with my favorite being cap toes. My shoes are always shined. Never skimp on shoes. Good shoes aren’t cheap and cheap shoes aren’t good.

Belt and Socks. I always wear a belt. My belt matches my shoes. I almost always wear socks. My socks match my slacks.

Watch. I have a Rolex Explorer white face. I used to wear a cheap watch to trial. But this is phoney so now I wear the Rolex, and at times a Hamilton. Both are simple but classic. 

Casual Friday. On Fridays and days where I chose to go casual I dress like a golf pro. This means cotton khaki slacks with a collared shirt.

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Once we have agreed to settle with the negligent party’s insurance company we address the settlement proceeds. Here we deal with potential subrogation interests of our client’s insurance company. In a personal injury case a subrogation interest arises when our client’s insurance company has made payments for accident related expenses.

Components of Case Value. To understand subrogation we must recognize a personal injury case recovery is usually based on different components that added together equal case value. These components include our client’s past and future medical bills, past and future economic loss, and general damages (disability, pain and suffering, loss of enjoyment of life and disfigurement). The components that may give rise to a subrogation interest are past medical bills and past wage loss.

If our client’s insurance company has made payments for medical bills and/or wage loss it will make a subrogation claim for the return of of its payments from the case recovery. It is not automatic our client’s insurance company will have an enforceable subrogation interest.

Made Whole Doctrine. First our client must be “made whole” before a right of subrogation arises. This means our client must receive the full value of all case components that are unique to her alone. These are the general damage components. To illustrate if our client’s case has a total value of $150,000 with past medical bills of $30,000 and lost wages of $15,000 this means the combination of future medical, future wage loss and general damages total $105,000. If the negligent party has only $100,000 in insurance coverage there is insufficient insurance to pay the $105,000 necessary to “make our client whole.” When this happens there is often no subrogation right for our client’s insurer.

Insurer Stands in Shoes of Client. The subrogation right of our client’s insurance company can be no better then our client’s right of recovery against the negligent party’s insurer. When our client’s recovery is reduced by the comparative negligence percentage of our client then the subrogation amount must be reduced by the same percentage.

PIP IME. Often our client’s auto insurance company has done a PIP IME. When the PIP IME doctor states our client received medical care that was unnecessary and/or not accident related then we use the IME against our client’s insurance company. We discount its subrogation interest by all amounts its IME doctor states were not necessary for treatment.

ERISA. The Employment Income Security Act (ERISA) is federal law that often gives absolute subrogation rights to the client’s health insurance company. Before agreeing a ERISA plan has absolute subrogation rights we get the plan language. We read the plan to see if the made whole doctrine applies under the plan, or if there is language allowing a credit for attorneys spent by our client. Even when there is a rock solid ERISA plan allowing for complete recovery of the subrogation interest we request the plan review our case and agree to payment of attorney’s fees.

Attorney’s Fees. Washington and many other states require the insurance company with a subrogation interest to pay a portion of the client’s attorney’s fees. This translates to a discount of about one third of the subrogation interest. We pass this discount to our client so she receives a greater recovery. In all cases our goal is to maximize the net recovery to our client. This can only be done by thoroughly dealing with the subrogation claim of our client’s insurance company.

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