A husband and wife settled a medical malpractice case for $1.5 million, and how that money gets divvied up delves into choice of law doctrine that those involved say merits the attention of the legal community.
Arthur Juenger hurt his back while working in October 1999. That December, he went to the Microsurgery and Brain Research Institute for a medical exam and treatment of his injuries. In January 2000, Dr. Parley Madsen performed surgery on Juenger to ease his lower back pain and relieve pressure on his spinal cord.
The medical malpractice lawsuit by
Juenger alleges the surgery was unnecessary, and Juenger was not a good candidate for it. According to the suit, his condition worsened with pain in his legs increasing after the surgery, and he could no longer do his job. He wound up with permanent injuries to his back and legs, including problems with using the bathroom and having
sex. Juenger’s wife, Betty, also brought a loss of consortium claim in the case.
The Juengers settled with the instituteand Madsen for $1.5 million. But then Juenger’s former employer, Yellow Transportation, tried to collect most of that award to be reimbursed
for the workers’ compensation payment the company already made.
Juenger’s attorney, Noel Sevastianos, of St. Louis-based Sevastianos & Associates PC, said this is a case other attorneys should read up on because of novel issues involved. Sevastianos also said he could not comment further on thecase without his client’s permission.
According to the court’s March ruling, the Illinois company sought to be repaid $1.17 million. The judge had to determine whether Illinois or Missouri law applied in determining how much of the settlement was due to Arthur and Betty Juenger. He also had to rule on how attorneys’ fees would be awarded.
The attorney for Yellow Transportation wanted Illinois law to apply in figuring out how much
of the total to allocate to each person. Richard Day cited the Missouri case Langston v. Hayden, in which a workers’ compensation carrier sought
through a Missouri court, using the worker’s name, to get reimbursed for a workers’ comp payment in Kansas.
Missouri law wouldn’t allow that, but Kansas law did. The Langston court ruled that the Kansas law should apply, citing the general rule that workers’ comp reimbursement rights are governed by the law of the state where the person received benefits.
But the couple’s attorneys, Sevastianos, countered that the choice of law should be dictated by the state with the most significant contact in the case, pointing out Farmers Insurance Co. v. McFarland. They argue Missouri had the most contact as the alleged medical malpractice occurred in Missouri, and the original parties in the lawsuit were Missouri residents.
At the least, they said, Illinois law should not govern Betty Juenger’s portion of the settlement, and Circuit Judge Michael David agreed.
“This court finds that there is no basis to impose the application of Illinois law to plaintiff Betty Juenger,” he wrote.
Attorney Kevin Tuining a recently wrote an article published in the Journal of The Missouri Bar about choice of law doctrine, summarizing several standards that appear to have emerged in Missouri caselaw. He wrote that one general principle in efforts to get reimbursed for workers’ compensation payments is that the law of the state where the employer paid the injured person controls. He also referred to the Langston decision.
Upon request, Tuininga reviewed the decision in the Juenger case and said it appeared to buck that trend. But as he also pointed out in the article, “choice of law rules with regard
to workers’ compensation issues are far from a settled matter.
“Before this case, Missouri law has been, ‘Apply the law of the state where the employee was compensated,’” said Tuininga, who is working as a clerk for a federal judge.
“They just say Illinois has no connection here, but that seems to me like a little bit sleight of hand,” he said. “It’s not so cut and dried as parts of the opinion seem to make it.”
“This is an issue for appeal. The trial court had to decide the case,” he said but added that if the appeals court upholds the ruling, it may signal a shift in Missouri law.
Day, Yellow Transportation’s attorney, declined to comment on the case other than to say his client is considering an appeal.
The judge also had to determine how much of the settlement to allocate to Arthur Juenger’s injuries and how much to his wife. The court examined the case of Bridges v Van Enterprises, which also involved a large loss of consortium claim. In that case, the court approved allocating 93 percent of a $178,000 settlement, after attorneys’ fees, to a woman’s loss of consortium claim from before her husband died, a breakdown upheld by the Court of Appeals. The court then allocated $10,000 for the man’s estate and $2,000 for the wrongful death claim.
In this case, the plaintiffs wanted the court to allocate 80 percent of the settlement amount to Juenger’s wife, arguing he was already compensated through the workers’ comp payment. Yellow Transportation wanted to make him the beneficiary for 87 percent of the total, arguing he had economic losses as well as pain and health problems.
The company argued that the Bridges case was different because there the injured man was in a coma for two and a half years before dying, and his wife kept watch over him while also raising a child and facing financial worries from quitting her job.
But the court ultimately sided with the Juengers, awarding Betty Juenger 75 percent of the settlement.
“Plaintiffs point out that the actual impact of Mr. Juenger’s injuries exert a greater loss and hardship on Mrs. Juenger,” the judge wrote, because the man could no longer help out financially, and caring for him left the
woman socially isolated.
The court also said Arthur can take pain medications to ease his suffering, but “Mrs. Juenger does not have that ‘luxury.’”
The court also had to answer choice of law questions to set attorneys’ fees. Yellow argued that because the underlying workers’ comp claim was in Illinois, that state’s law should control,
limiting attorneys’ fees to 25 percent.
But the plaintiffs reached a contingency fee contract with their Missouri attorneys to set the fees at 40 percent of any award.
The judge said Illinois law at least would not apply to Betty’s share of the total settlement. Again noting the competing principles with choice of law doctrine, the judge cited the case of Cervantes v Ryan, a case that Yellow said should not apply but Juenger supported.
That case involved an Illinois worker injured during an accident in Missouri. That attorney filed a workers’ comp claim and a personal injury claim and had a contract for a 40 percent attorney fee. That employer also tried to limit attorney fees to 25 percent. The trial court rejected the claim for a 40 percent fee, saying there was no contract between the lawyer and the employer, but the Court of Appeals reversed. The appellate court found that the promise to pay attorney’s fees is implied even when there’s no contract in writing if a client accepts that legal representation.
In the Juenger case there also was no express contract between Yellow Transportation and Juenger’s attorneys, but the judge found the company did well by that legal work and hence
must help cover the costs.
“Plaintiffs’ counsel has certainly protected (and furthered) the rights of YT,” the judge wrote.
He allowed for a 40 percent quantum meruit fee to be taken from Arthur Juenger’s portion, reducing the amount signed over to Yellow to cover its $1.17 million lien to $214,706. The end result was that Betty and Arthur Juenger ended up with a net of $644,117, and the attorneys were awarded $572,548.