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What happens in a Georgia case if the plaintiff settles with one or more defendants before trial?

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O.C.G.A. § 51-12-33 (d) (1) states that the “negligence or fault of a nonparty shall be considered if the plaintiff entered into a settlement agreement with the nonparty.”  The statute does not address whether the amount of any settlement is admissible or whether the remaining defendants get any credit for settlement funds paid by a settling nonparty.  Prior to the 2005 “tort reform” bill, which amended O.C.G.A. § 51-12-33, adopted apportionment of damages in all tort cases and abolished joint and several liability, it was the law in Georgia that, “[a] plaintiff is entitled to a full, but single, satisfaction of his total harm. Consequently, where one or more tortfeasors enter a settlement with a plaintiff, a remaining tortfeasor may be entitled to a set off of payments previously made, to prevent double recovery,” Brewer v. Insight Tech., Inc., 301 Ga. App. 694, 700-701 (2009).

It is extremely doubtful whether this long-standing principal of law in Georgia has survived the “tort reform” legislation. Surprisingly, there has been no appellate decision yet directly overruling this line of cases.  The Court of Appeals came close, however, in Union Carbide Corp. v. Fields, 315 Ga. App. 554 (2012), where one of the issues was whether the defendant had to produce evidence of negligence and causation on the part of a nonparty before the jury can even consider apportioning fault to that nonparty under O.C.G.A. § 51-12-33(d)(1).  The Court held that:

“ . . . the fault of a nonparty cannot be considered for the purposes of apportioning damages without some competent evidence that the nonparty in fact ‘contributed to the alleged injury or damages’” (Emphasis supplied)  315 Ga. App. at 559.

“Thus, under this State’s statutory scheme, the effect of a successful nonparty defense is the reduction of the plaintiff’s potential award and the defendant’s possible liability.  As with other affirmative defenses, Defendants have the burden at trial to prove the defense of nonparty fault. Cf. Hodge v. SADA Enterprises, 217 Ga. App. 688, 691 (2) (458 SE2d 876) (1995) (indicating that a defendant has the burden at trial to prove affirmative defenses of contributory and comparative negligence).”  315 Ga. App. at 556.

Then the Court considered whether defendants who settled with the plaintiff before trial should automatically be included on the verdict form for purposes of apportioning fault, and concluded that:

“ . . . when OCGA § 51-12-33 (d) (1) is read together with OCGA § 51-12-33 (c), a defending party still must show that a settled entity “contributed to the alleged injury or damages” before its fault can be assessed by a trier of fact. Otherwise, there would be no basis for the apportionment of fault between the settled entity and the defendant. See McReynolds v. Krebs, 307 Ga. App. 330, 334 (1), 335 (3) (705 SE2d 214) (2010) (rejecting defendant’s contention that trier of fact should have apportioned damages between her and a settled party where the defendant presented no evidence on which apportionment of liability could be based and thus waived any issue with regard to the verdict form). We therefore decline to interpret OCGA § 51-12-33 (d) (1) as requiring a trier of fact to automatically consider the potential fault of a settled entity.”  315 Ga. at 558-559.

Under the statutory scheme created by OCGA § 51-12-33, and following the logic of Union Carbide Corp., neither fact of settlement nor the amount of any settlement should be admissible at trial in Georgia, nor should the remaining defendant or defendants get any credit for settlement money the plaintiff was fortunate enough to obtain from a settling nonparty prior to trial. 

Apportionment of Damages in Georgia – The Good, The Bad & the Ugly

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Trial lawyers in Tennessee have now had over twenty years of experience with allocation of fault and the resulting apportionment of damages in tort cases since McIntyre v. Balentine, 833 S.W.2d 52 (1992).   The lessons learned can be helpful to in Georgia where the courts are struggling with interpretation and implementation of O.C.G.A. § 51-12-33, which was radically amended in 2005.  It has taken years for the Tennessee appellate courts to work through the plethora of issues raised by allocation of fault, and it will take years for Georgia courts to do likewise.

Hubert Hamilton recently presented a paper on apportionment of damages under O.C.G.A. § 51-12-33 at the Georgia Trial Lawyers Annual Convention and Seminar, in Atlanta, during the trucking session on May 17, 2013, entitled Apportionment of Damages – The Good, the Bad and the Ugly (A Conversation with an Empty Chair).

The major problem faced in Georgia is the lack of any equivalent to T.C.A. § 20-1-119 which allows a plaintiff 90 days to either amend and add to the lawsuit a nonparty alleged to have been at fault, or to institute a separate lawsuit against such person, even if the statute of limitations has run, after the defendant “alleges in an answer or amended answer to the original or amended complaint that a person not a party to the suit caused or contributed to the injury or damage for which the plaintiff seeks recovery”

In cases filed in Georgia, however, “negligence or fault of a nonparty shall be considered if the plaintiff entered into a settlement agreement with the nonparty or if a defending party gives notice not later than 120 days prior to the date of trial that a nonparty was wholly or partially at fault,” O.C.G.A. § 51-12-33(d) (1), even if the statute of limitations has run, and there is no provision in the statute for adding the nonparty to the lawsuit. 

This presents plaintiffs and their attorneys with a number of problems, particularly if suit is not filed early enough to identify any nonparties alleged to be at fault before the statute of limitations runs.   Then decisions have to be made as to whether to add such nonparties to the lawsuit (or to file a separate lawsuit).  Discovery must be pursued aggressively.  Scheduling orders can help, as well as motions for summary judgment seeking to eliminate allocation of fault to nonparties for which there is no competent evidence of fault.  See Union Carbide Corp. v. Fields, 315 Ga. App. 554, 559 (2012), where the Court held that:

“ . . . the fault of a nonparty cannot be considered for the purposes of apportioning damages without some competent evidence that the nonparty in fact ‘contributed to the alleged injury or damages’”

The jury must be told that if they find the plaintiff 50% or more at fault, the plaintiff will recover nothing, Bailey v. Annistown Road Baptist Church, 301 Ga. App. 677 (2009).  Fault be allocated to a nonparty who is immune from suit, Barnett v. Farmer, 308 Ga. App. 358 (2011).   An admission against interest is admissible to prove nonparty fault, Woods v. Allied Van Lines, Inc., 316 Ga. App. 548 (2012).  But O.C.G.A. § 51-12-33 does not affect vicarious liability situations, PN Express, Inc. v. Zegel, 304 Ga. App. 672 (2010).

The Hamilton Firm: Recent Awards

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We are honored to have been listed in the Bar Register of Preeminent Lawyers by Martindale-Hubbell for the last few years based upon peer review ratings. We have also received the Client Distinction Award for the last three years. Less than 1% of the more than 900,000 attorneys listed on and have been awarded this honor.

Supreme Court Rules on Reimbursement Rights by ERISA Plans

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U.S. Airways, Inc. v McCutchen, ____ U.S. ____ (4/16/13) holds that in an ERISA action under §502(a)(3) by the plan administrators to obtain “appropriate equitable relief . . . to enforce . . . the terms of the plan,” the plan’s terms govern and override any doctrines designed to prevent unjust enrichment.  The plan paid $66,866 in medical expenses to McCutchen due to a car wreck.  A settlement of $110,000 was reached and McCutchen received $66,000 after attorneys’ fees were deducted.  The plan sued and demanded reimbursement of the entire $66,866 it had paid on McCutchen’s behalf.  The Supreme Court held that the plan could obtain the funds its beneficiary had promised to turn over under the terms of the plan.  However, the Court also held that while equitable rules would not trump a reimbursement provision in the ERISA plan, they may aid in properly construing it, and as to allocation of attorneys’ fees this particular plan was silent.  This plan did not address cost of recovery, so the Court applied the common fund doctrine, which governs in the absence of a contrary agreement.  The Court pointed out that without the common fund rule, the insurer would get a free ride on the beneficiary’s efforts, and the beneficiary, as in this case, could be made worse off by having procured a recovery from a third party.  This decision leave the door open for appropriate allocation of attorneys’ fees and litigation costs when an ERISA plan seeks reimbursement from its beneficiary, but it does little to benefit the injured beneficiary. 

 For the complete opinion, click here.

New law governing settlement demands in motor vehicle cases take effect in Georgia on July 1, 2013

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A new Code Section, O.C.G.A. § 9-11-67.1, provides a minimum of 30 days for a defendant (or his liability insurance company) to respond to a settlement offer made before suit is filed, in case arising from the use of a motor vehicle.  The new law allow the insurance adjuster “to seek clarification regarding terms, liens, subrogation claims, standing to release claims, medical bills, medical records, and other relevant facts,” without that being deemed a counteroffer.  The demand should be sent by “certified mail or statutory overnight delivery, return receipt requested” and shall specifically reference the new Code section.  This statute was meant to give insurance companies adequate but not unreasonable time to respond to a settlement demand without being subjected to a subsequent bad faith claim for failing to settle the case within policy limits. 

Click here to review the complete text of the new law.

Tennessee Farmers Mutual Finally Held Accountable for Denial of Coverage!

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For years the Tennessee appellate courts have been notoriously biased in favor of insurance companies, particularly Tennessee Farmers Mutual.  Finally, however, the Court of Appeals has let a jury take a big stick to their favorite son. 

In Leverette v. Tennessee Farmers Mutual, 2013 Tenn. App. LEXIS 177 (March 4, 2013), a woman was severely injured in a wreck on 12/21/08 with an automobile driven by an unlicensed minor.  The child’s parents’ were insured by Tennessee Farmers (TFM), and it denied coverage and refused to defend the suit on the basis of an exclusion in the insurance policy “for damages caused by a party driving without permission of the owner or a person “in lawful possession” of the vehicle.”  No defense was offered, and the injured woman obtained a $1 million default judgment against the minor driver.  The injured woman and the child’s parents then jointly filed suit against TFM for breach of contract, bad faith, violation of the Tennessee Consumer Protection Act (TCPA), and violation of the Unfair Claims Practices Act. The trial court ruled that, as a matter of law, the minor was entitled to insurance coverage under her parents’ policy at the time of the accident. The rest of the case was submitted to a jury, who found that TFM had violated T.C.A. § 47-18-104 (27) and awarded $1,000,000 in damages.  The trial court trebled the compensatory damages and awarded attorney fees under TCPA.  The jury also awarded compensatory and punitive damages on the “bad faith claim.” 

The Court of Appeals did not sustain the verdict on the bad faith claim under the circumstances, as the plaintiff did not plead a violation of T.C.A. § 56-7-105, but rather relied on a common law tort of bad faith, which the Court said is not recognized in Tennessee in lawsuits between the insured and insurer. 

As to TCPA, however, the jury was asked, “Do you find that the Defendant committed an unfair or deceptive act or practice under the Tennessee Consumer Protection Law that caused damage to Chad and Donna Sanders parents and guardians for Julia Claire Sanders, or Chad and Donna Sanders in their individual capacity?” The jury answered the question in the affirmative. 

Although the Court of Appeals let TFM off the hook for treble damages under TCPA, the Court clearly held that TFM was subject to liability, given the finding by the jury that TFM had committed “an unfair or deceptive act or practice”:

 “We affirm the verdict and judgment holding that TFM had committed unfair or deceptive act or practice under TCPA causing damages to Sanders. The trial court’s award of $1,000,000 in compensatory damages is affirmed.”

Unfortunately the Legislature, in 2011, moved in to protect the insurance industry and amended T.C.A. § 47-18-104 (27) to vest enforcement with the goverment in lieu of the citizens who have been wronged.  The Code section now provides:

“Engaging in any other act or practice which is deceptive to the consumer or to any other person; provided, however, that enforcement of this subdivision (b)(27) is vested exclusively in the office of the attorney general and reporter and the director of the division.”

Tennessee Workers’ Compensation Reform

By | Tennessee Workers' Compensation | No Comments

The following article is a disturbing glimpse into how Tennessee Workers’ Compensation is being reformed in our Legislature:

Open-Mic Gaffe: Powerful Chairman Vows to Ram Workers’ Comp Bill Through His Committee

Posted by Jeff Woods on Wed, Mar 6, 2013 at 1:47 PM

For embarrassing open-mic gaffes, it’s not exactly up there with Ronald Reagan joking about bombing Russia. But it’ll do until something worse comes along for state Rep. Jimmy Eldridge, the Republican chairman of the House Consumer and Human Resources Committee.

Eldridge was caught by the legislature’s streaming video equipment complaining to a couple of people who appear to be constituents about this letter to the editor in the Jackson Sun. The letter criticizes Gov. Bill Haslam’s workers’ compensation bill, which rigs the system for employers. After making a few disparaging remarks about the letter writer, Eldridge promises to ram the bill through his committee.

“I’m going to take care of that bill,” he says. “That freight train is going off …”

So much for fair hearings and the deliberative legislative process.

Eldridge also says the bill’s critics are only “trying to rouse employees …”

“Uneducated people,” the unidentified woman in the video interjects.

“… and scare them to death,” Eldridge continues.

“I can assure you of this,” he adds, “that bill is flying …” Then he stops himself and looks at the microphone.

“Let’s make sure that thing’s not on,” he says, a little late. “You gotta be careful. Let’s get away from it.”

We tried to ask Eldridge about his remarks, but he wouldn’t agree to talk to us. Mary Mancini of the pro-labor Tennessee Citizen Action watched the video and gave this reaction:

“This is a complicated issue that is going to affect tens of thousands of Tennesseans when they are at their most vulnerable. It shouldn’t be ‘freight-trained’ through any committee. It should be given the careful and thoughtful review that an issue if this magnitude deserves.”

This morning, the bill cleared the House Consumer and Human Resources Subcommittee whose chair, Rep. Susan Lynn, wouldn’t agree to hear from injured workers in attendance and hoping to testify. She said they could all speak once the bill is heard in Eldridge’s full committee. We hope they can talk fast.

Energy Drinks

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Everywhere you look these days you see energy drinks. At gas stations, grocery stores, and promoted on popular race cars, the bottom of snow boards, and the sides of motorcycle helmets.  Energy drinks are big business.  According to one source, in 2011, the sale of energy drinks accounted for nearly $9 billion in sales.  But are they safe?  And more specifically, are they safe for children and teenagers?

Energy drinks are obviously to young people. Should we be concerned?  What about kids playing sports and drinking energy drinks as a performance enhancer?

One problem with energy drinks is that they are considered “dietary supplements.” Dietary supplements are governed by specific legislation, which allows the drinks to escape scrutiny from the FDA. Because they are considered “dietary supplements”, the producers of these drinks are not required to disclose the ingredients.

Recent studies reveal that there are safety issues with energy drinks.  This should come as no surprise.  Keep in mind, products like “Ultimate Orange” and “Hydroxycut” were popular energy supplements with athletes and bodybuilders in years past, and some of those supplements allegedly resulted in serious health conditions, including death.  In fact, the primary ingredient used for years in stimulant supplements, ephedrine, contains essentially the same chemical structure as cyrstal meth.  Ephedrine is now regulated, and hence, OTC medications containing ephedrine or ephedra or pseudoephedrine are difficult to buy over the counter because the ingredients can be used to make crystal methamphetamine.

An example of the serious risks of some energy supplements is found in the following quote from the Los Angeles Times in 2001.

At least three football players who died this year–Devaughn Darling of Florida State, Rashidi Wheeler of Northwestern and Curtis Jones, who played for a Utah indoor team–were found to have traces of ephedrine in their systems when they died.

In September, the NFL added ephedrine to its list of banned substances, following the lead of the NCAA and International Olympic Committee.

The NFL bans the use or distribution of products that include ephedrine, unless they are prescribed for medical use by a team physician. Also, teams and players are banned from endorsing manufacturers or distributors of those substances.

The ingredients in energy drinks have the same effects and the same potential consequences as the energy supplements that have been linked to multiple deaths in athletes a decade ago.  For example, the literature suggests that energy drinks raise blood pressure, increase heart rate, and place individuals with pre-existing cardiovascular disease at increased risk for serious medical conditions.  In other words, the studies suggest that energy drinks could be harmful to certain individuals, especially younger individuals with undiagnosed heart conditions.

Note:  Some of the information contained in this blogpost came from an article written by Kevin I. Goldberg that appeared in the March 2013 issue of Trial magazine.


Employer’s Lien Against Recovery in Tort Case Does Not Extend To Future Medical Expense

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Today, in Joshua Cooper v. Logistics Insight Corp., (1/16/13), the Tennessee Supreme Court affirmed two prior rulings in which it held that an employer’s subrogation right against an employee’s recovery from a third party in a negligence case does not include the amount of future medical benefits to be provided to the employee.

Mr. Cooper was an employee of MasterStaff, Inc., which assigned him to work at ProLogistics, Inc. Mr. Cooper was using a towmotor to move pallets from a trailer parked at a loading dock into the ProLogistics warehouse. An employee of ProLogistics moved the truck away from the dock as Mr. Cooper was backing out of the truck, and the towmotor fell out of the trailer. Mr. Cooper sustained “significant, permanent injuries” to his back and spine.

Mr. Cooper sought workers’ compensation benefits from MasterStaff and also filed a negligence claim in Rutherford County Chancery Court against ProLogistics and Logistics Insight Corp. MasterStaff intervened in the negligence action, asserting a statutory subrogation claim, including recovery of the amount of future medical benefits that it may be required to provide under the Workers’ Compensation Law.

Mr. Cooper settled his negligence claim against the defendants in Chancery Court and reimbursed MasterStaff for medical expenses paid on his behalf.  MasterStaff asserted that the settlement did not dispose of all the claims regarding future medical expenses. The trial court disagreed and granted a motion to dismiss.  The Court of Appeals held that future medical expenses could be proven by MasterStaff and remanded to the trial court for a determination of the amount of future medical benefits.

Today, the Tennessee Supreme Court reversed the Court of Appeals and affirmed the trial court, unequivically holding that an employer’s lien against an employee’s recovery from a third party provided by Tennessee Code Annotated § 50-6-112 does not extend to the amount of future medical benefits to be provided by the employer.

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