Blog

• posted: May 05, 2016
• Hemmer DeFrank Wessels PLLC
• Uncategorized

Written By: Scott R. Thomas

You met with the patient.  You explained all the risks of the procedure.  The risks were later spelled out in the consent form and you went over it all again with the patient.  The patient accepted the risks and wanted you to perform the procedure.  You performed the procedure but the results were less than you and the patient hoped for.  Being a stand-up doctor, you explained what happened with the patient.  Genuinely sorry that it didn’t work out as planned, you expressed your sympathy to the patient and the family.  Then you got the summons and Complaint in the mail.  You’ve been sued.  They’ve even quoted—or should I say, misquoted—your apology.  Your colleagues are upset.  Your malpractice carrier is asking questions to see whether your apology affects coverage, given your duty to put them on notice and cooperate.  How can this be happening?

When something bad happens to someone we know, we express compassion.  When a person does something wrong, the natural inclination is to apologize.  You may feel it’s the right thing to do.  You may feel pressure to disclose the facts because of your personal beliefs, the ethical guidance of the American Medical Association, or the requirements of a hospital at which you have privileges.  However natural these feelings are, these statements may have legal repercussions.  Plaintiff lawyers know the power those statements have.  Although these apologies are hearsay, lawyers for patients get them into evidence with the “statement against interest” exception.  They tell the jury, “Why would Dr. Smith apologize if she did nothing wrong?”

In reaction to this, about three out of four states have enacted so-called “Apology Statutes.”  Only a handful of states, however, provide blanket protection for the doctor’s remarks and brand them inadmissible.  Most states try to make a distinction between a statement that is an admission of fault and a statement which is merely an expression of condolence.  Under Ohio Revised Code §2317.43(A), “all statements . . . expressing apology, sympathy, commiseration, condolence, compassion, or a general sense of benevolence . . .  are inadmissible as evidence of an admission of liability or as evidence of an admission against interest.”

Legislatures enact these laws because they believe that a rule protecting a doctor’s expression of sympathy promotes the physician-patient relationship after a negative outcome.  Proponents also argue that patients who sue their doctors often say that they didn’t think the physician was candid or honest about what happened, if it was explained at all.  These are all reasonable theories but no study, anywhere, concludes that patients will refrain from suing if a doctor apologizes.

Apologies of the kind protected by statute don’t deter suits.  As Apology Statutes are written by politicians, it comes as no surprise that protected statements have the ring of apologies you hear politicians make: “If anyone was offended by remarks about my opponent’s race, creed, gender, orientation, or ethnic origin, I sincerely apologize.”  These kinds of “apologies” sound hollow because the speaker doesn’t claim responsibility.

This is precisely why protected apologies are problematic in a health-care setting.  The kind of apology envisioned by the statute doesn’t get you very far.  You meet with the patient and the patient’s family and express your heartfelt sympathy.  Fine.  Now come the questions.  “What went wrong?”  “What caused the bleeding?”  “Why did her blood pressure drop?”  “Why did he lapse into a coma?”  People are grateful for the sympathy but they want the details.  In many cases, the details are not an admission of negligence.  No physician is perfect.  Many things can go wrong in a medical procedure that is performed with care that is state-of-the-art.  An adverse outcome is not synonymous with negligence.  If we didn’t acknowledge the possibility of bad outcomes despite superior care, doctors would be forced to perform only risk-free procedures.  Even so, the line between a bad result with proficient care and a bad result caused by substandard care can be a fine one and may be blurred by circumstances.  Be prepared for the possibility that you and your patient’s lawyer will draw that line differently.

In addition, keep in mind where you are.  Your group may have satellite offices throughout the tri-state area.  You may be in Kenwood one day and Covington the next.  Unlike Ohio and Indiana, Kentucky has not enacted any statute to protect a doctor’s expressions of sympathy.  Anything you say to a patient or the family is up for grabs.

Being a doctor doesn’t yet mean “never having to say you’re sorry.”  When your patient has an outcome other than what you intended, however, it pays to be cautious in your explanation about what happened.

If you would like more information about these issues, please contact Scott Thomas.   He welcomes the opportunity to help you navigate these waters.  Scott’s direct line is 859.578.3862.  You can email him at [email protected].  If there is a particular topic you would like to see addressed in a blog, please send Scott an email with your ideas.

 

• posted: May 03, 2016
• Hemmer DeFrank Wessels PLLC
• Uncategorized

Written By: Todd V. McMurtry

Today most courts require that litigants attempt to mediate a resolution to their dispute before the court will set the matter for trial. For this reason, it is critical that the parties evaluate a number of key variables before they go to mediation.  Here is starting point for the process.

• What is the relationship between the two businesses? Is there the potential to preserve the existing business relationship so that the parties can continue to do business with each other after the dispute is resolved? Or, is this a one-time deal after which the parties will likely have no future business relationship? If there is a possibility that the parties might have a future business relationship, this potential opens up new opportunities to find a business solution to the dispute. Perhaps, as a portion of a settlement, one party can offer a discount on future business? If a future business relationship is unlikely, the negotiation will more likely focus on a financial solution.

• What is the relationship between the principals? Do they get along? Has the situation become emotional in any way? Does the person participating in the mediation have knowledge of the events? Oftentimes, the principals have a long history. Sometimes, they are friends and would prefer to maintain that relationship. The opposite can also be true. No matter, in many situations, the principals will be living in the same industry for years to come.

• What is the best outcome? Is it just about money? Sometimes a successful mediation requires an affirmative act by one of the parties. For example, if one construction company has multiple ongoing projects with one general contractor, the solution to the current problem may involve modifications to all of the existing business. Does a subcontract need to be revised? Does a particular project manager need to be removed? It is always important to discuss potential outcomes with your client before start of mediation. Both of you need to have established parameters to define what is an acceptable outcome.

• When is the time right? Too often, mediation comes too early or too late. If it’s too early the parties may still be ready to fight. All lawyers know that litigation is hard on the client. But, if mediation comes too early, the client may not have experienced some of the negative reinforcement (legal fees and aggravation) that would encourage a resolution. Instead, the client may still have visions of a smashing victory in court. On the opposite end, if the client has already invested a significant sum in the litigation process, it may be forced to go to trial to have any hope of breaking even. So, think carefully about when you should suggest mediation.

• Who is opposing counsel? As we all know, some attorneys just can’t help themselves. A win-win settlement is just not part of their vocabulary. When an attorney like this is on the other side, you should advise your client that mediation may not be productive.

It is always a good idea to reflect carefully on the questions presented in this this blog and those developed from your own experiences before deciding if and when to mediate. Once you make that decision, discuss these issues with your client to improve your chances for successful outcome.

Todd V. McMurtry is a Member at Hemmer DeFrank Wessels, PLLC.  He is a commercial trial attorney and Harvard trained mediator.  Todd has been married to his wife, Maria C. Garriga, for 28 years.  They have three adult children. If you have questions or comments, contact me at [email protected].

 

• posted: Apr. 21, 2016
• Hemmer DeFrank Wessels PLLC
• Uncategorized

Written By: Scott R. Thomas

You did everything right.  You negotiated a good deal.  You reduced it to a written agreement so both sides knew their obligations.  You held up your end of the bargain and delivered the goods and services you promised on time.  But now you’re not getting paid.  You call them but get no answer.  Your emails bounce back.  You drive by their office and you find they’ve gone out of business.  Finally, you catch up with one of the principals who cavalierly tells you: “Your contract was with the corporation, not with me.”  You drive home wondering how you’re going to pay for your labor and material costs.  Don’t give up hope yet.

People create corporations for a variety of reasons.  One of those reasons is to permit the owners to limit their liability to the amount of their investment.  A corporation is a separate “person” in the eyes of the law.  Typically, a shareholder of a corporation or member of a limited liability company is not held liable for the debts of the company.  Typically . . . but not always.

A court may permit a creditor to enforce a debt against the shareholders of a corporation in certain circumstances.  Courts call this “piercing the veil” of the corporation.  This is an equitable remedy that invokes the Court’s powers to do justice to the parties.  While each state has its own tests, the principles applied are similar.  The Court will look at the facts to determine whether the owners so dominate the corporation as to deem it their “alter ego.”  In such instances, courts rule that the domination by the shareholders has destroyed the separate character of the corporation, i.e., that the company was a “mere instrumentality” of the shareholders.  In addition, the Court will require evidence that allowing the corporate liability shield to stand would be to promote fraud or injustice.

In considering whether to bring a claim against the owners, you should weigh the evidence you think you can be put before the Court.  Successful veil-piercers can point to various actions that show the line between the owners and the corporation has blurred or disappeared, including:

• The owners did not “capitalize” the corporation by investing enough money to sustain its operations;
• The corporation failed to issue stock;
• The corporation failed to observe “corporate formalities,” e.g., having meetings, taking minutes, etc.;
• The corporation failed to pay dividends;
• The corporation is insolvent;
• The officers or directors of the corporation did not perform the duties associated with their office;
• The corporation failed to maintain the kinds of records required by law or those that are customarily kept by a company in that industry;
• The funds of the corporation were “commingled” or kept in the same accounts as the private funds of the owners;
• The owners diverted assets of the corporation to an owner or third party for less than fair market value, often for little or no consideration;
• The corporation engaged in transactions at less than arm’s length with shareholders or third parties;
• Shareholders made personal guarantees of corporate debts;
• The corporation was created merely to mask the unlawful activities of the owners;

• The corporation is just a “dummy” corporation for a corporate parent who pays its employees and expenses;

• The corporation does business predominantly with its corporate parent (or grandparent); and

• The parent company uses the corporation’s property as its own.

As the debtor company circles the drain, the pressure on the owners may induce them to engage in some of these activities.  The mere fact that the company has collapsed and cannot pay your bill does not mean the Court will pierce the veil.  If you can demonstrate that justice requires the debt be passed to the shareholders, however, you can pursue your claim against them.  The owners, of course, would be allowed to assert any defenses that the company would have been entitled to raise.

About Finney Law Firm, LLC

Founded in 2014, FLF has grown to 15 attorneys located in offices in Eastgate and downtown Cincinnati with five major practice areas: Corporate Law, Real Estate Law, Employment Law, Commercial Litigation and Public Interest and Constitutional Litigation.  FLF has the unique claim to three 9-0 victories at the United States Supreme Court for its public interest practice along with breakthrough class action work.

FLF also has an affiliated title insurance company, Ivy Pointe Title, LLC, that closes and insures nearly a thousand commercial and residential real estate transactions annually.

For more information about Finney Law Firm, visit finneylawfirm.com.

Media Contact: Mickey McClanahan; [email protected]; 513.797.2850.

 

• posted: Apr. 05, 2016
• Todd McMurtry
• Uncategorized

Written By: Todd V. McMurtry

The Fair Labor Standards Act (“FLSA”) requires that most employees be paid at least the federal minimum wage for all hours worked and overtime pay at time and one-half the employee’s regular rate for hours worked over 40 in a workweek.

Section 13(a)(1) of the FLSA, however, provides an exemption from the minimum wage and overtime pay requirements for certain executive, administrative, and professional employees. This exemption is commonly referred to as the “white collar” exemption. In 2015, the Department of Labor (“DOL”) announced major changes to the “white collar” exemption in an effort to increase the number of employees who are eligible for overtime pay. These changes will significantly impact nearly every employer in Kentucky and across the country.

Currently, to qualify for the “white collar” exemption, an employee generally must (1) be salaried; (2) be paid at least $455 per week ($23,660 annually); and (3) primarily perform executive, administrative, or professional duties. The DOL’s proposed changes, however, include raising the minimum salary level to the 40th percentile of weekly earnings for full-time workers. This change would raise the salary threshold to qualify as “white collar” from $455 per week to $970 per week in 2016 ($23,660 to $50,440 annually).

The DOL sent the proposed changes to the White House Office of Management and Budget for final review in mid-March 2016. Experts expect the changes to take effect in just three months. With major changes expected in July, employers should begin to take action now.

Employers should perform internal FLSA audits to determine which employees will be affected by the “white collar” exemption changes. The DOL anticipates that the changes will bring nearly 4.7 million currently exempt employees within the scope of the FLSA’s overtime pay provisions. As part of the internal FLSA audits, employers should consider whether it is necessary to update job descriptions to ensure compliance.

About Finney Law Firm, LLC

Founded in 2014, FLF has grown to 15 attorneys located in offices in Eastgate and downtown Cincinnati with five major practice areas: Corporate Law, Real Estate Law, Employment Law, Commercial Litigation and Public Interest and Constitutional Litigation.  FLF has the unique claim to three 9-0 victories at the United States Supreme Court for its public interest practice along with breakthrough class action work.

FLF also has an affiliated title insurance company, Ivy Pointe Title, LLC, that closes and insures nearly a thousand commercial and residential real estate transactions annually.

For more information about Finney Law Firm, visit finneylawfirm.com.

Media Contact: Mickey McClanahan; [email protected]; 513.797.2850.