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Proving Economic Damages: Client, Expert or Both?

Modesett Williams - Friday, February 12, 2016

Jury trials in commercial litigation offer business owners the opportunity not only to tell their story, but also to describe their damages. Because owners know more about their business and market than anyone else, they are well-suited to make this calculation and support it with historic information and future projections based on their experience in the real world. With proper preparation, this can be compelling testimony.

But should you hire a damage expert as well? Probably so, for at least three reasons. First, jurors like to create their own damage models and reach their own conclusions on a plaintiff's damages. Multiple damage options give jurors the formulas and raw data they need to calculate their own number and still survive a JOV. Second, having a bit of tension between the expert's typically lower number and the owner's more optimistic figure makes both witnesses' calculation truly independent. Third, multiple calculations could give you additional support on appeal.

In one case, this strategy worked out well. The jury heard both the owner's number and the expert's. The numbers were about 30 percent different. The jury went with the expert, with a small twist in our client's favor. We were fine with that. In fact, I suspect the defendants used the expert's appraisal to get a loan to pay our judgment! Our takeaway: Empower the jury by giving them options on damages. They are going to make their own calculation anyway.

Focus Groups: How We Use Them

Modesett Williams - Monday, February 01, 2016

Our firm conducts focus groups on every significant case in our office. But we typically do not hire outside trial consultants and instead conduct the focus groups ourselves. We have a pretty deep database on juror attitudes on common litigation issues.

Over the past year, we have disclosed the data from focus groups in two cases, resulting in the successful resolution of both cases. Colleagues warn we are giving away a significant strategic advantage. Maybe so, but the positive results from the two recent cases inspired us to go a step further. Depending on the case, we now invite opposing counsel to our focus group sessions. The risk is opposing counsel sees too much of your case and picks up helpful hints on how to attack. The reward may be the other side sees a balanced presentation, as well as risks of a large verdict. If we do it right, our credibility is established as is some good will. After all, the point of the focus group isn't to win the case, but to see where the pitfalls are and to discover the communities' attitude and language about your case. If all sides see this before too much blood has spilled and positions have hardened, maybe a fair resolution can be had.

Collecting from the "Asset-Free" Defendant

Modesett Williams - Monday, November 09, 2015

We represented a family in a nursing home case. The liability was clear, but the defendant claimed to be without collectable assets and on the verge of financial ruin. Settlement discussions stalled and the trial date loomed. We dug a little deeper into the defendant's financial reporting to the State and found hundreds of thousands of dollars paid to related parties for horse stall rental, private jet leasing and redundant and exorbitant "consulting" fees. We wrote the defendant a new demand letter pointing out this remarkable inconsistency and pointing to corporate veil piercing law, which introduced fraud concepts into the case. The case settled for the new demand within 72 hours.

Our take-away: There is often more than meets the eye with the "single-asset, bankruptcy remote entity." Though designed to limit ownership liability, these entities often indirectly fund related entities with ridiculous "expenses."

Removing the Mystery From Trial

Modesett Williams - Wednesday, November 04, 2015

I had a client who performed terribly in his deposition (before he hired our firm). Well in advance of the scheduled trial, we coached him, told him to let go of his anger and did detailed direct and cross examination work so that he could perform better at trial. But he was petrified. To help ease his concern (and mine), I took him to watch a trial. It was a case with similar facts. We watched for most of a day. The plaintiff's counsel had earlier told me that his client had given a bad deposition.

My client learned several things:

1. Trials are boring - there is little mystery to it

2. Follow the rules for testifying - answer the questions calmly and directly and without anger, no matter who is asking the questions

3. Opposing counsel would likely treat him with respect if he did the same to them

Our take-away: Find a case like your client's and have them watch it for a few hours. Try to time it so he can watch the opening statements and the direct and cross examination of the plaintiff.

Deposition Preparation - "The" Question

Modesett Williams - Monday, November 02, 2015

Years ago, we represented a landlord that had built a 40,000 addition to its downtown office building especially for a single tenant, who had signed a 10 year lease. The tenant never occupied the space and then claimed the entity signing the lease had no assets. Collecting on any judgment depended on piercing the corporate veil to get to the well-financed parent company. When it came time to take the CEO's deposition, we spent a lot of time thinking of "the" question to help our piercing claim. The question needed to be one where the answer didn't matter. The answer either made our point or would be shown to be a fabrication. The question: "Who do you work for?" The answer: "I don't know. There's not a simple answer." Remarkably, at trial, he still did not know! We spoke to our juror after a favorable verdict, who said, "They should have funded their shell companies."

Our take-away: Establishing important facts indirectly through an apex deposition can have a game-changing effect.

Nursing Homes Combining with Hospital Districts - Crony Capitalism at Its Worst

Modesett Williams - Wednesday, October 28, 2015

For those who keep abreast of developments in the world of nursing home care in Texas, a recent Dallas Morning News article should cause outrage. Nursing homes have entered into sham arrangements with rural hospital districts (which are governmental entities). The stated purpose of the arrangement is to give the nursing home access to additional federal dollars and improve the care of nursing home patients (Texas ranks last - 50 out of 50). But the law permitting this arrangement does not compel nursing homes to use this new money to improve care. Nor does it give the hospital districts any authority on how to improve care. So, what could be the real purpose of these arrangements? Money. The hospital districts receive a little money, the nursing homes receive a lot. A second purpose, unstated in the article, is to potentially further lower the statutory cap on damages. If your mother needlessly dies of malnutrition because the staff did not feed her, her damages may be capped at $100,000 under certain circumstances. Stay tuned.

Read the full Dallas Morning News article here:


Low-rated Texas nursing homes strike deals with public hospitals for federal cash

Modesett Williams - Monday, October 26, 2015

A recently published article in the Dallas Morning News tells the story of good intentions and bad results. Nursing homes have reached agreements with local hospital districts that provide more federal dollars for the nursing home, but there is no requirement that the nursing home use that money to improve care. Consequently, a majority of this money will go directly into the nursing home operator's pocket and not towards patient care, no matter how poor a nursing home's record. An additional outcome is that patients harmed by the nursing home's poor care may be subject to even lower caps on their damages.

Read the entire article here: http://www.dallasnews.com/news/metro/20150530-public-hospitals-help-nursing-home-operators-get-federal-funds.ece

Winning Before Trial - Plaintiff's Dispositive Motions

Modesett Williams - Wednesday, October 21, 2015

We recently received a partial summary judgment, as a plaintiff, on a breach of fiduciary duty claim in a hotly contested case involving borrowers, lenders, lawyers and title companies. We accepted the burden of proof, even though it probably wasn't ours, so we could manage the evidence and presentation during the hearing.

We filed the motion because we thought we had a shot. If we prevailed, we knew the focus of the case would change from liability to damages. It worked.

Defendants later filed motions challenging some of our damage model, which we anticipated, but the conversation changed from whether the defendants did it to how much it was going to cost them. Fortunately, a year earlier we had upgraded previous counsel's damage model of less than $100,000 to over $2,000,000 and had some room to negotiate. Ultimately, defendants got into a range acceptable to our clients and we resolved the case 45 days from our trial date for well over our direct damages calculation.

Our take away from this experience: don't be afraid to be aggressive in your dispositive motion practice as a plaintiff. Defendants freely file dispositive motions with little hope of prevailing, but are sometimes less adept at fending off a plaintiff's efforts. Any time you can narrow the issues and tell a jury you've already won, it's a good place to be.

Winning Before Trial - Employees as Witnesses

Modesett Williams - Monday, October 19, 2015

In July, we tried a nursing home abuse case where four former and one current employee testified that Bastrop Lost Pines Nursing and Rehabilitation Center was chronically understaffed and unable to turn and reposition their patients, causing infected, fatal bed sores. This contradicted the payroll records the nursing home offered to show it was appropriately staffed. The jury believed the five live witnesses. Prior to trial, we spent a large amount of time compelling the Defendant to provide former employee contact information, tracking them down and talking to them. Their stories were consistent, as was their desire to help our clients tell their story.

Our take-away: Former employees know how organizations really run, are usually willing to testify and are not always disgruntled. Credible live witnesses often outweigh the cold documents. This is particularly true when the witnesses have nothing to gain by their testimony and may have placed themselves at risk when they want to continue to work in the industry.

Bastrop County, Texas, July 17, 2015

Modesett Williams - Monday, October 12, 2015

After a five day jury trial, Jack Modesett obtained a $240,000 verdict against Regency Nursing Center Partners of Bastrop, Ltd d/b/a Bastrop Lost Pines Nursing and Rehabilitation Center based in Victoria, Texas. Mr. Modesett was assisted by his partner, Walter Williams.

The jury found Bastrop Lost Pines to be negligent in its care of Margaret Haywood, who was a resident from late August through mid-December of 2013 after suffering a stroke in her home.

The evidence included the testimony of four former and one current employee that Bastrop Lost Pines could not provide adequate care and follow doctor’s orders to turn and reposition Ms. Haywood every 2 hours because of chronic understaffing. Bastrop Lost Pines’ failure resulted in Ms. Haywood developing a Stage 4 bed sore on her coccyx.

Bastrop Lost Pines attempted to rebut this evidence with unsigned time cards, which the jury found not to be credible, particularly given Bastrop Lost Pines’ written misrepresentations to the federal government concerning the very same bed sore and the treating physician’s testimony that substandard care caused Ms. Haywood’s bed sore.

Lying in her own waste, not being turned or changed for hours at a time, day after day, caused Ms. Haywood’s Stage 4 bed sore to become infected, infected her bones and played a substantial role in her premature death.

The jury found for the Estate of Margaret Haywood and her surviving children, Jerry Haywood, Lillie Piper, Geneva McMarion, Hulisher Haywood, James Haywood and Dorothy Haywood- Dockery.

Modesett Williams, PLLC is a firm of board certified trial lawyers, based in Austin, Texas. Jack Modesett is Board Certified in Personal Injury Trial Law by the Texas Board of Legal Specialization. Walter Williams is Board Certified in Civil Trial Law by the Texas board of Legal Specialization. They have tried cases in dozens of Texas counties and throughout the United States.

Modesett Williams represents a broad range of litigation clients throughout Texas and the United States. For additional information, please call Jack Modesett at 512.472.6097. 

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