Source: http://www.kcmotriallawyer.com/personal-injury-settlements-knowing-where-to-start-and-planning-your-strategy-for-effective-settlement-drafting/
Timestamp: 2019-04-24 17:47:47+00:00

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A cases value will greatly depend upon whether the Plaintiff is a good person, who the jury and/or insurance adjuster will like and care about. If you do not like the Plaintiff during your initial meeting, you should strongly consider staying away from the case. Juries will not give money to Plaintiffs whom they do not like and/or care about.
If suit has been filed, an agreement to Dismiss with Prejudice.
In a case where each party has a claim, or a potential claim, the parties may execute a Mutual Release. This is very similar to a Standard Release, except that it includes language releasing both parties to the accident. Getting a Mutual Release is a good idea when there is contested liability because it prevents the other driver from ever coming back against your client.
With a structured settlement, plaintiff agrees to receive at least a portion of the settlement in the form of periodic payments. A structured settlement can provide for payment in pretty much any schedule the parties choose. For example, the settlement may be paid in monthly installments for life, in annual installments over a number of years, or it may be paid in periodic lump sums every few years.
Structured settlements have pros and cons that should be considered before advising your client. On the plus side, the miracle of compounding interest may allow a plaintiff to parlay a small sum of money into a much larger payout. There are also tax advantages to structuring at least a portion of a settlement (i.e. the structured portion grows tax free).
The best reason to advise in favor of a structure, however, may be to protect the client from himself. Plaintiffs receiving lump-sum settlements often spend everything within five years. A structure can protect a plaintiff from having settlement funds dissipated when they are necessary to pay for future needs. In addition, some people aren’t good with money or can’t say no to family members who want to “share the wealth.” Because the plaintiff can’t get to the structure, he can’t whittle away at the money he may need down the road.
Minors may benefit from a structured settlement as well. A structure for a minor could provide for certain costs during their youth, disbursements for college or other educational expenses, and/or disbursements in adulthood. Setting up a structure for a minor may also do away with the need to set up a conservatorship (see below).
On the other hand, some people who enter into structured settlements feel trapped by the periodic payments. They may wish to purchase a new home, or other expensive items, yet be unable to muster the resources because they can’t borrow against future payments under their settlement. In addition, structured settlements generally accrue interest at a very low rate. That’s the trade-off that is made for virtually guaranteed payments. Because of that low interest rate, some people will do better by accepting a lump sum settlement, and investing it themselves. Many standard investments will give a greater long-term return than the annuities used in structured settlements.
The High-Low Settlement is similar to a typical settlement, with a couple twists. With a High-Low, the defendant agrees to pay a minimum amount (the “low”) regardless of the size of the verdict and the plaintiff agrees not to collect that portion of a judgment in excess of a certain amount (the “high”). If the verdict falls between the high and the low, the plaintiff recovers the amount of the verdict. The High-Low settlement insures both sides against an excessive verdict (either excessively high or excessively low). It can be a useful tool when both parties agree on liability, but have a drastically different view on damages. Keep in mind that judicial approval of the High-Low agreement will be necessary in wrongful death or minor-plaintiff case. That approval should be obtained before trial.
A Mary Carter agreement is an agreement between plaintiff and some, but not all defendants, to limit the financial responsibility of the settling defendants. The agreement does not act as a release, so the settling defendant remains in the case. The agreement gives the settling defendants a financial incentive to help plaintiff’s case against the other defendants. For example, defendant agrees to pay plaintiff $50,000.00 and remain in the case. If, however, the total judgment against all other defendants exceeds $150,000, the settling defendant’s liability is decreased on a dollar for dollar basis for every dollar over $150,000 that is awarded. If the jury awards $200,000 or more against the non-settling defendants, the settling defendant’s liability to plaintiff is completely extinguished.
The classic Mary Carter agreement is kept secret from the other defendants and the judge. Most courts that have examined true Mary Carter agreements have found problems with them. Especially when the agreement is kept secret.
Kansas allows Mary Carter agreements, with certain restrictions. Ratterree v. Bartlett, 238 Kan. 11, 707 P.2d 1063 (1985). In Ratterree, the Court held that the terms and existence of a settlement between some, but not all, parties to a case must be disclosed to the Court and other parties. Id. at 29, 707 P.2d at 1076. If a settling defendant is going to testify, the existence and content of the settlement must be disclosed to the jury, unless such disclosure would cause undue prejudice or confusion. The disclosure to the jury should be no more than is necessary to apprise the jury of the nature of the agreement and the possibility that it may bias the testimony of the settling parties. The jury is not to be informed of the amount of the settlement, except that it shall be apprised in general terms of the financial interest in the outcome of the case of any defendant who is a party to such an agreement. Id. at 30, 707 P.2d at 1076.
Confidentiality clauses in personal injury settlement agreements are becoming increasingly more common. Many defendants and their insurers frequently insist upon such clauses. Many defense lawyers, especially in medical malpractice, consider confidentiality to be a standard term in a settlement agreement. Some will even add such a clause to the settlement papers even though it had not been discussed during negotiations.
There are many reasons to criticize confidentiality in settlements. To be fair, I assume there might even be some reasons to support confidentiality. Regardless of your position on it, though, confidentiality is often a term that is hotly negotiated.
In some situations, confidentiality will be a deal-breaker. When that happens, the only recourse for a plaintiff is to negotiate the least restrictive clause possible. Some clauses go so far as to make even the “fact” of settlement confidential. A more typical confidentiality clause will restrict disclosure of either the amount of the settlement or the terms of the settlement agreement. Generally, such clauses are not too onerous and can even protect a plaintiff by giving them an out when greedy family members ask about the settlement.
As discussed below, there may be some tax implications when confidentiality is included in a settlement.
A relatively recent Tax Court decision may impact the taxability of settlements containing confidentiality clauses. Amos v. Commissioner of Internal Revenue, 86 T.C.M. (CCH) 663, T.C.M. (RIA) 2003-329, 2003 RIA TC Memo 2003-329, 2003 WL 22839795 (U.S. Tax Ct.). Amos deals with an incident between Dennis Rodman of the Chicago Bulls and a cameraman.
In 1997, Rodman fell on a group of courtside cameramen and twisted his ankle. As he untangled himself from the fall, he kicked one of the cameramen, Eugene Amos, in the groin. Mr. Amos went to the hospital but did not seek additional treatment for the groin injury.
Mr. Amos retained counsel and negotiated a $200,000 settlement with Rodman. The settlement agreement contained broad confidentiality language, but did not state what amount of the settlement, if any, was paid for confidentiality.
Mr. Amos did not include any of the settlement on his tax return and the IRS investigated. Initially, the Commissioner of Internal Revenue determined that Amos owed income taxes on the entire $200,000. On appeal, the United States Tax Court held that $120,000 of the settlement was properly excludable from gross income as the ordinary proceeds of a bodily injury settlement. It also held, however, that the remaining $80,000 was paid for the confidentiality provisions and was subject to income taxes.
To protect your client and yourself after Amos, you should carefully consider the impact a confidentiality provision could have on your client’s tax liability before agreeing to such a provision. If you are forced to agree to confidentiality, you should insist that the amount paid for that confidentiality be set forth in the Settlement Agreement.
Court approval is necessary to bind a minor to a settlement. Railway Co. v. Lasca, 79 Kan. 311, 316, 99 Pac. 616 (1909). The rationale behind this rule is the protection of both the minor and the defendant. The court protects the minor by determining whether the settlement is in the minor’s best interests. 79 Kan. at 317-18; In re Estate of Wise, 20 Kan. App. 2d 624, 632-33, 890 P.2d 744 (1995). Because a minor can disavow a contract within a reasonable time after reaching majority (under KSA 38-102), reducing a minor’s settlement to a judgment makes it binding and protects the defendant. Childs v. Williams, 243 Kan. 441, 441, 757 P.2d 302 (1988).
Another wrinkle in a minor settlement is the possibility of having to set up a conservatorship. If a settlement to a minor exceeds $10,000, the money must be placed with a conservator. There is, however, a way to avoid the expense and hassle of setting up a conservatorship. Most courts will approve a minor settlement in excess of $10,000 when all the proceeds are placed in a structured settlement that names the minor as the beneficiary and pays out no money until the minor’s eighteenth birthday. This is an easy way to both comply with the law and to increase the ultimate payout to the minor.
A wrongful death suit can be instigated by any “heir-at-law” of the decedent and shall be for the exclusive benefit of all of the heirs. KSA 60-1902. An heir-at-law is “one who takes by intestate succession under the Kansas statutes.” Baugh v. Baugh, 25 Kan. App. 2d 871, 973 P.2d 202 (1999).
It is always advisable to get all the eligible heirs to agree to an apportionment well in advance of a hearing. The last thing you want to do is have a family blow-up that requires you to advise certain family members to retain their own counsel.
Occasionally, you will come across a claim where there are multiple injured claimants with combined damages in excess of defendant’s policy limits. For example, you may have 3 injured parties with individual claims in excess of $25,000, but an insurance policy with limits of $25,000 per person and $50,000 per accident.
The smart insurance adjuster will try to get all claimants to sit down together and come to an agreement on the division of the policy limits. If that fails, they might consider interpleading the limits into the court.
Some attorneys believe that, if they hold out long enough in such a case, the insurance company will either cave to their demand or put themselves in a bad-faith situation. Holding out, however, may not be the best idea under Kansas law.
An insurance company has an obligation to settle claims as they are presented within the policy limits. Farmers Ins. Exchange v. Shropp, 222 Kan. 612, 561 P.2d 789, 795 (1973). Paying claims as they are presented allows the insurer to faithfully pay each claim until the policy is exhausted. By doing this, the insurer meets its obligations to its insured. The holdout, however, may get nothing if the policy limits have been exhausted through settlements to more reasonable claimants.
To send a proper demand, you need to have all the relevant documents. You will need all medical records and bills for the injuries you are claiming. You may also want to include prior medical records to show that the injury you are claiming was not pre-existing. You will also want to provide any other documents that support your position. These could include the police report, a reconstruction report (so long as it is a report prepared by the state and not your expert), lost wage information, and photographs of the accident site, the vehicles and/or the injuries. You want to organize all this information in an easy to find manner and attach it to your demand.
Once you have your documents, simply write a letter setting forth your position. Start with liability and show why the wreck was the defendant’s fault. Also, never call the wreck an accident. Always be in the habit of calling it a wreck, collision, crash, etc. Research shows that these words connote a greater impact and lead to increased damages.
After you’ve shown why the accident is defendant’s fault, outline your client’s medical course. Although you will be submitting the records and bills, tell the adjuster exactly what your client had to go through and prioritize the injuries from the most serious down. Then itemize your damages. Show how much the medical bills were and how much the lost income was (and show your calculations, if necessary).
The next thing you should include is a discussion of potential problems with the case. Only do this, however, when you are absolutely confident that the potential problem is not a real problem. For example, if you think that the adjuster will argue a pre-existing injury, raise that issue at this point. Then go about proving why there is no pre-existing injury affecting this case.
Finally, make a demand. If you have prior jury verdicts or settlements that are comparable to your case, discuss them. If you have a rational basis for the number you are claiming, explain it. Do what you can at this point to show that you aren’t simply picking a number out of the air.
Once you’ve made your demand, inform the adjuster that it is only open for thirty (or sixty) days and that, if you haven’t heard anything, you will proceed as necessary. Once the time limit is up, file suit.

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