| Fall, 1996
Bankruptcy Update I have written about this topic frequently. It concerns the use of credit cards, and whether or not balances generated in the months preceding filing for bankruptcy are going to be deemed dischargeable, and whether or not the Bankruptcy Court is going to force the debtor to remain obligated for some or all of the balance(s). The Federal Ninth Circuit Court of Appeals in Bankruptcy of Anastas now gives debtors greater strength in arguing for allowing discharge. In an unusually tolerant opinion with facts involving a $40,000 credit card balance linked to gambling debts, minimal assets, and a negative monthly budget, the Court distinguished the holding in a prior case which imposed much more stringent standards. That fine distinction redefines one of the prior criteria relied upon by creditors in demonstrating bad faith and fraudulent use of credit. The Court stated, in part: "the representation made by a card holder in a credit card transaction is not that he has an ability to repay the debt; (but) it is that he has an intention to repay." In essence, what was previously objective and, perhaps, measureable, has now been changed to a subjective, difficult to prove concept. FOOTNOTE: Although it is difficult to generalize, the new case
may very well explain a recent result I obtained. That result included
the final discharge of the largest amount of unsecured credit card debt
I have ever dealt with since beginning the practice of law.
Item: The Federal Reserve is reporting that American consumer debt load is the highest it has ever been. The surprising statistic in all of this, however, is that the debt load is being carried by predominately fully employed, middle and upper income families. Item: One of the hottest shows on TV for the new fall season is a game show called "Debt", in which participants detail how they got there. Verdict Update: Better than TV Two contrasting verdicts will give you an idea of the "topsy turvy" world of employment and wrongful discharge litigation. In one case, a car salesman who alleged he was fired as a result of a cancer diagnosis was able to secure a $150,000 settlement (San Diego Superior Court, April, 1996). In another case, an ice cream sales driver who alleged her firing was due to her thyroid condition was defensed at trial (US District Court, N. Calif.). In the car salesman case, the injured party, a 53 year old male, was able to point to 27 years industry experience, an employer advertisement for his replacement, and a "pretextual" enforcement of a sales license policy which was arbitrarily being enforced coincidental to his diagnosis and need for surgery. He was also able to rely upon the Americans with Disabilities Act (ADA) passed during the Bush administration---a Federal law which deems discriminatory firing on the basis of a handicap or illness unlawful. In the other case, the injured party was a 38 year old female who had her thyroid removed in April, 1993. Her employment was terminated one year later. In her Federal court lawsuit, she attempted to rely upon her medical condition, and requested accomodations for her medical condition, as a basis for arguing violation of the (ADA), gender discrimination and wrongful termination. Her employer claimed that she was medically released for work by her own doctor; had been provided three written warnings over an extended period; and produced other evidence indicating the injured party was actually bad mouthing and contemptuous of being forced to drive a sales route. Comment: Wrongful termination continues to be actively represented in the court system. The distinguishing features of cases that produce relief and good results seem to be the same, despite the numerous changes that have occurred in this area: the plaintiff or injured party is older or middle aged, has an extensive work history, can link their harm to some discriminatory conduct of their employer, can place that conduct (or its ratification) in upper levels of management, and the discriminatory conduct is related to some violation of law or public policy. Dogbite: Golden Goose or Egg? (A Personal Injury Lawyer’s Analysis) I constantly get comments from family, friends, past and existing clients---about some large "settlement" or "verdict" they heard about. I often caution those people that "what you heard" is very often only the "tip of the iceberg" (or has been mangled beyond recognition). In order to understand a verdict, what a jury of twelve of your peers does, or would have done (affecting the settlement outcome), you have to understand the entire case. The following is an example. A simple dog bite case pending in San Bernardino Superior Court involving a four year boy produced a $225,000 settlement (July, 1996). There was a second plaintiff present at the scene of the bite, the little girl’s 7 year old brother. The children were being supervised by the uncle, who was present at the dogowner’s home to visit a friend. While talking with the friend in the home, the children were playing in the back yard, where the bite occurred. The case was in litigation for 2 ½ years. It was Arbitrated with the result in favor of the four year old for $175,000. Why would the Arbitration and settlement be so high? It is first important to understand the injury. The dog bite, incredibly, produce a "golf ball sized hole" in the child’s cheek. Defendants had very little hope at trial of doing anything other than preventing a runaway verdict. The liability is absolutely clear because the dogbite statute makes the owner of a dog liable for any injury inflicted. In light of the child’s age, the Defendant and the insurance company would have little hope of developing adverse evidence, preventing sympathy, and fundamentally had to deal with a cosmetically disfigured 4 year old. The child will live for eighty years with the disfigurement. Here the parties, weighing the cost versus benefit risks, were able to "control" the outcome and produce a settlement reasonably related to the injuries. The point is that serious cases producing large loss verdicts or settlements inevitably involve serious injuries and liability problems for the responsible parties and their insurers. Yes, on occasion, we hear of weird cases, but those represent but a small portion of all claims. Developments: Workplace Violence The August 25, 1996 issue of the Press Enterprise reported on a case that seems to be causing a stir lately. That case also needs to be considered in conjunction with the California Supreme Court’s recent hearing of the Kentucky Fried Chicken v. Brown case. Interestingly, both cases involve "workplace violence", but from different perspectives. The Press Enterprise report focuses on a Tampa case involving the widows of three men all of whom were employed at Fireman’s Fund Insurance. The wrongful death lawsuits were being prosecuted against Allstate Insurance Company. All of the widows’ husbands were gunned down by a disgruntled co-employee who had previously worked at Allstate. It turns out that when Fireman’s Fund made inquiry for reference purposes about the criminal employee, Allstate reported his termination was related to "reasons of restructuring". The real reason was for bringing a gun to work and threatening employees. The case never went to trial and was settled out of court in 1995. The widows were prevented from suing Fireman’s Fund because the only remedy available, generally, against the employer for workplace injury is the state’s worker’s compensation laws. The lawsuit uniquely used the theory of "negligent hiring"---which is more often thought of as a concept which applies to an employer having to answer to a injured third party for wrongs committed by existing employees who turn out to be unfit, unlicensed, or unqualified for their position. In Kentucky Fried, customer Brown sued for damages related to injuries and emotional distress associated with violent acts inflicted by a robber when a cashier employee of the fast food store failed, delayed or refused to respond to the robber’s demands. Traditionally, the law has held that one placed in imminent peril (such as the cashier) has greater leeway in their conduct. This is especially true where the imminent peril is legally caused by intentional violence of a third party criminal. Given such a background of competing interests, it is amazing that the Supreme Court is even hearing the case. Reports on the recent hearing, however, are suggesting the Justices are actively interested in fashioning a ruling which might attempt to deal with the ability of victims to recover from businesses. The final outcome remains to be seen, and I will be following this case closely. My further updates will follow. With best regards,
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