Going behind the scenes on large-scale settlements

Personal-injury and wrongful death cases typically come to the public's awareness at two points: When an accident or tragedy occurs and when lawyers reach a settlement or verdict on the lawsuit the party filed.

But the majority of the plaintiff lawyers' work on those cases happens in between those two events.

This year, Chicago Lawyer took a behind-the-scenes approach from the plaintiff lawyer's perspective to report what legal work occurred in the years between the life-altering events and settlements for six of the larger injury or wrongful death cases in Cook County or outside Cook County that the firms reported to the Jury Verdict Reporter or the Chicago Daily Law Bulletin.

Each case portrays aspects of the plaintiff lawyer's job: Investigating an accident, proving fault, navigating courts and laws, arguing damages claims and a bit of the gamesmanship that sometimes induces settlements.

Joseph A. Power Jr. and Larry R. Rogers Sr. of Power Rogers & Smith; and Steven E. Garstki of Stoller & Garstki earned a $25 million settlement for their client, Juan Diaz, after a rear-end collision rendered him a quadraplegic.

*****

Joseph A. Power Jr.

Photo by Lisa Predko.

To Joe Power, what happened seemed simple: A semitrailer truck driver took his eyes off a portion of Interstate 94 in Northbrook and hit the back of Juan Diaz's car at upward of 60 miles an hour. The June 2008 incident left the 47-year-old a quadriplegic, he said.

But to the jury that heard Diaz's case, what happened to him remained a mystery.

After months of fighting over what caused the accident and who to blame, the defense admitted liability on the eve of trial, Power said. That meant the facts played a back-seat role to arguments around damages, creating a trial centered on the jury's perception of Diaz's $102 million damages request.

"Strategically and psychologically, that becomes a hurdle for the plaintiff," Power said. "(The jury) thinks the defendants now went from the guys in the black hats to the guys in the white hats."

To jurors, the defense may appear to want to take responsibility and pay for Diaz's well-being, while the plaintiff may ask for too much money, Power said.

That perception belies the years leading up to the trial where Power said the defense sued the tollway operator, a signmaker and two construction companies looking to place blame with them for the accident.

But Power said he could not bring up what Stephen E. Gartski, Power's co-counsel, called "pretrial finger-pointing" in court.

He couldn't get into details of the accident, either. The jury didn't know Diaz's vehicle got rear-ended; they heard arguments relating only to damages, he said.

"It's not the easiest thing in the world, when someone admits liability," Power said.

"We prefer to get into the facts. The jury prefers to hear the facts about how this occurred. And, in a way, I think they kind of feel cheated when they're never told how this happened."

Despite focusing the majority of their pretrial work on proving the defense's liability, Power and Larry Rogers Sr. of Power Rogers & Smith, along with Garstki of Stoller & Garstki, said their work as plaintiff lawyers shifted at trial to proving the reasonableness of their $102 million damages request.

They said they faced two obstacles: An obstinate defense team and bits of Diaz's life story that could make a jury wary to award him such a high damages claim.

In a mediation session before trial, the defense offered a settlement of $2 million or $3 million, Garstki said. He said that number grew to $10 million before trial — a mere 10 percent of the final damages request.

Contributing to the plaintiff's difficulty in winning over the minds of the jurors, Power said, "There were some warts on the case."

For instance, Power said Diaz could not make a claim for lost wages; he never married the wife of his 19-year-old daughter; and the defense knocked the only Latino person off the jury.

Despite the extent of Diaz's injury, Rogers said all of these personal characteristics can affect a jury verdict.

The way the trial played out — "we beat them up pretty well at trial," Power said — provoked another round of settlement talks.

This time, the two sides agreed on a high-low settlement that created a $25 million floor and $50 million ceiling, Power said.

When the jury came back below the negotiated floor with a $23 million award, the case moved from a jury award to settlement of $25 million.

"The case had gone in so well on our side that the defense did panic and that's why we got the offer," Garstki said.

David J. Pritchard and Patrick A. Salvi II of Salvi, Schostok & Pritchard earned $22.66 million for the family of Christian Arroyo, a newborn who suffered severe brain damage as the result of an untreated infection at birth.

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When Patrick A. Salvi II and David J. Pritchard learned the federal government employed the doctors at Northwestern Memorial Hospital who delivered Christian Arroyo, their entire medical malpractice claim changed.

As federal employees, the doctors who Salvi and Pritchard said failed to treat Christian with antibiotics at birth, leading to severe brain damage and quadriplegia, could only be sued in federal court under the Federal Tort Claims Act.

"You've probably heard the expression growing up, 'Don't make a federal case out of it,' " Pritchard said. "That's because it's very complicated and you better know what you're doing when you get into federal court."

A series of "stumbling blocks" litter federal cases for plaintiff lawyers, Pritchard said. Seemingly simple tasks like filing a case under the Federal Tort Claims Act can even prove tricky.

"You have to dot every 'i' and cross every 't' and follow all the regulations or you're going to be thrown out of court," he said.

The list goes on: Instead of a jury, a federal judge heard the trial. Claims must get filed under a much stricter statute of limitations deadline. And the federal government's settlement calculus proves entirely different, Pritchard said.

Many lawyers assume federal judges don't give large awards, but Pritchard said he disagrees. In this case, U.S. District Judge Amy St. Eve awarded a $29.1 million verdict in April 2010, subject to a set off for a prior $6.5 million settlement with the hospital.

Convincing the government to settle after the judge's award proved the more difficult part, Pritchard said. In a mandatory mediation after the verdict, the government offered a $1 million settlement, he said.

"This was a good case," Pritchard said. "The hospital settled out. The federal government just would not settle."

Rather than settle, the government tried its hand in the 7th U.S. Circuit Court of Appeals. Salvi said the government liked its chances on appeal, arguing that the Arroyo family missed its chance to file a lawsuit because of a strict statute of limitations to file a federal tort claim within two years of the alleged malpractice. Born in May 2003, Christian's claim missed that two-year limit when filed in December 2005.

But Salvi said an exception exists. The "discovery exception" resets the statute of limitations to the time the injured or their representative discovered the government caused the injury, he said.

The government argued that the discovery exception should not apply. The plaintiff should have known the government deserved blame immediately when Christian was born.

But Salvi said the hospital never told the Arroyos that treating the mother with an antibiotic during labor could prevent the brain damage Christian suffered. The Arroyos did not discover they could file a claim until Christian's mother gave birth to her second son, healthy due to an antibiotic treatment, in July 2004, he said.

In a concurring opinion in favor of the plaintiff, Judge Richard A. Posner wrote, "Had someone informed the Arroyos that it was 'highly possible' that the injuries to their child had been caused by the failure to administer antibiotics to Mrs. Arroyo, the statute of limitations would have begun to run then."

Salvi said the ruling marked an important decision for federal statue of limitations law.

"You don't get to have it both ways," he said. "You don't get to not tell the family what happened and then have them time barred by the statute of limitations. If you want to use the statute of limitations as a sword, you tell the family what happened."

Despite the verdict being upheld by the 7th Circuit, the plaintiff agreed to settle for $22.66 million to avoid any possibility of the case moving to the U.S. Supreme Court, Salvi said.

Robert J. Bingle and Philip H. Corboy Jr. of Corboy & Demetrio secured a $22.5 million settlement for Jose Adan Tellez after a train derailment killed Tellez's wife and he suffered third-degree burns.

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Philip H. "Flip" Corboy Jr.

Photo by Lisa Predko.

After months of investigation, Philip H. Corboy Jr. and Robert J. Bingle discovered the train derailment that tore apart the roots of a family occurred because of a massive communication breakdown.

A train that derailed in a rainstorm, killing Zoila Tellez, severely burning her husband and causing her pregnant daughter to lose her child, never should have been running in the first place, they said. What's more, the railroad company knew that.

"Our approach was something must have gone wrong and indeed many things did go wrong," Bingle said.

Bingle and Corboy called their work on the case "a building block exercise" where they uncovered one fundamental flaw after another in the railroad company's emergency communication system.

Those flaws caused 20 minutes of fatal paralysis, they said. Railroad employees in Montreal, Canada, scrambled to respond to a police officer in Rockford's warning that a piece of tracks could cause a derailment, but they couldn't stop the train in time, Bingle said.

A train carrying ethanol, a flammable ingredient in gasoline, derailed at the spot the officer warned the company about, setting aflame a van carrying the Tellez family.

The incident left the father, Jose Tellez, and his daughter, Adriana, badly burned. Jose's wife and Adriana's mother, Zoila, died after being engulfed in flames, Bingle said. Adriana, who was pregnant at the time of the incident, went into premature labor. Her baby died 19 hours after birth.

To start their investigation, Bingle and Corboy requested all the company's documents relating to its emergency communication system.

Digging through the documents, they found complaints from employees that they often missed emergency weather warnings because they got held up in the company's e-mail system. Those complaints got filed a year before the accident, Bingle said.

"And that's exactly what happened this night," Bingle said. "A weather warning came up, and he saw that first one, but he did not see the next one."

That next one would tell the operator to alert a maintenance crew to a dangerous area of the tracks, Bingle said.

"And if that had happened, they would have been in front of this train, and this derailment doesn't happen."

That represents only one of the communication failures Bingle and Corboy said they found.

In railroad parlance, a "washout" occurs when water flushes away the ground underneath a section of tracks. The shifting earth leaves a portion of the tracks unsupported — laying a booby trap for oncoming trains that often leads to derailments, Bingle said.

"When you hear the word washout, you have to stop all trains, it's an absolute emergency situation, and it should take no longer than one to two minutes," he said.

But Bingle said call logs showed that 20 minutes of inaction went by after a Rockford police officer called the railroad's dispatcher in Montreal to report the washout.

The dispatcher "claimed he had no idea what a washout meant," Bingle said.

In addition, Bingle said the company's plan to respond to emergencies proved far too complicated to react to the situation.

For instance, Montreal's outpost needed to call a dispatcher in Homewood in order to stop the train headed for Rockford. That call didn't happen in time, Bingle said.

Bingle and Corboy filed lawsuits on behalf of Jose and the estate of Zoila against Chicago Central & Pacific Railroad Co., Illinois Central Railroad Co. and Canadian National Railway Co. Their case eventually settled for $22.5 million.

Corboy said once they pieced together the communication breakdown, he and Bingle made the case priority No. 1 because Tellez, now a single father of four daughters, could not work.

"We put a team together and we sort of made an informal arrangement amongst ourselves (that) we were not going to be responsible for any continuances," he said.

They kept true to their agreement, they didn't ask for a single continuance in the case and settled the case about a week before the docket called for the trial to start, Corboy said.

"I think we kind of shocked everybody with how quickly we got this case to a settlement," Corboy said.

Todd A. Smith and Brian LaCien of Power Rogers & Smith received a $18.5 million settlement for Gabriela Cedillo, who suffered permanent brain damage while working as an extra on the set of "Transformers: Dark of the Moon."

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Attorney Todd A. Smith stood next to photos involving his case representing Gabriela Cedillo, a 26-year-old extra who suffered brain damage from a stunt-gone-wrong on the set of "Transformers: Dark of the Moon."

Photo by David Durochik.

Watching the stunt-gone-wrong that inflicted life-changing brain damage on 26-year-old Gabriela Cedillo would cause anyone's stomach to drop.

A car exploded upward and a metal hook slammed through Cedillo's windshield, traveling 150 feet a second, as it scraped off a piece of the top of her skull.

But the challenge for Todd A. Smith and Brian LaCien of Power Rogers & Smith came in trying to portray the effect that graphic scene had on Cedillo's life, despite her recovery that allows her to walk, talk and feed herself.

"It's a bit of an unusual damage case, because it's all in here," Smith said, pointing to his head.

"She was interested in being an actress, just a course or two short of getting her associate's degree. Her life is big-time different now."

As Cedillo drove on the opposite side of a highway barrier in a stunt scene for the movie "Transformers: Dark of the Moon," a cable ripped off a truck pulling an exploding car at upward of 50 miles an hour. The hook scraped through the hood of her car, smashed through the windshield and severed a piece of her skull, Smith said.

While her symptoms may not elicit the immediate response from a jury that other double-figure settlement cases can involve, Smith said the brain damage Cedillo suffered forever changed her personality and ability to live on her own.

Cedillo's list of symptoms include mistaking her own thoughts for "hearing voices in her head," hallucinations and blindness in her left eye, Smith said.

Relating those injuries to a jury can prove challenging, Smith said. He sought medical witnesses on the cutting edge of neuropsychiatry, a still-developing area of medicine that studies mental disorders resulting from brain damage or disease.

He went to neuropsychiatrist Michael Schrift at the University of Illinois and Robert Cantu, co-director of the Center for the Study of Traumatic Encephalopathy, who deals with the NFL's brain-injured players.

"These doctors can explain that it was this part of the brain that was lost, this part of the brain that was damaged and that's why it's causing these specific problems," LaCien said. "And that this other area of the brain wasn't damaged, so she can walk and eat on her own."

Smith and LaCien fought a protracted battle over liability with Paramount Pictures that eventually brought Smith to the brink of filing an "ultrahazardous activity" claim against director Michael Bay.

That claim, which Smith called rare but sometimes filed in accidents at demolition sites, means Bay would be held strictly liable, rather than Smith needing to prove Bay's negligence.

Smith said he preferred not to file that claim and never figured the case would get to that point after it started on a cordial note. Paramount planned a press conference the day after the accident to announce its plans to take care of Cedillo's medical bills, Smith said.

But that plan and Paramount's tone quickly changed, leading to the possibility of naming Bay in the lawsuit. Paramount called off its press conference when Cedillo's family retained a lawyer. She eventually found herself on public aid as she struggled through an extended recovery, Smith said.

"To me, they did everything they could to try to avoid taking care of her," he said.

Paramount contested the lawsuit's filing in Cook County, a move Smith said seemed outrageous, considering Cedillo lived here, got hired here and they shot a major portion of the film here.

The defense removed the case to federal court, where it sat for eight months in the Northern District of Illinois as the defense tried moving it to their home turf in California, Smith said.

Cedillo's injuries only worsened during the venue wrestling, Smith said.

And despite Smith's view that he could win the factual arguments around liability, Paramount seemed insistent against settling.

That seemed to change when Smith drafted an amended claim, adding the ultrahazardous activity charge against Bay and his production company. Settlement talks loosened up and the sides agreed to a $18.5 million settlement, Smith said.

"I feel like we did well for her beyond the economic portion," Smith said. "That was important to me because that's the nature of her case. It's more about this — her head."

Stephen D. Phillips and Jill M. Webb of Phillips Law Offices and Patrick S. O'Shaughnessy of Janssen Law Center secured a $17.5 million settlement for Terry Nichols after he suffered long-term disablement resulting from a hernia surgery.

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Stephen D. Philips

Photo by Lisa Predko.

Stephen D. Phillips said he took on Terry Nichols' case only after two other plaintiff personal-injury law firms turned it down.

From one perspective, the life-altering damage Nichols suffered as a result of a 2004 hernia operation could be tough to prove, Phillips said.

Nichols suffered a basketball-sized hernia, where a part of the bowel slips between the abdominal wall and ends up in the scrotum. The size of the hernia could possibly be used as a defense: It made the surgery more likely to end up in failure, Phillips said.

"When you initially look at a case, you look at it from what you think jurors might think of it without hearing any evidence," he said. "Then, as you investigate the case, you find out that the facts as you initially perceived them are not true."

In this case, he said he learned that the size of the hernia did not predict the difficulty of the surgery.

Through research, Phillips said he found a doctor in Nigeria that in 1984 operated on 52 "giant hernias," using only local anesthesia in an outpatient setting. Fifty-one of those patients fully recovered and one died 10 days later of unrelated complications, he said.

"Twenty-five years before this, in a country with limited resources, they did these procedures the same way my expert said should have occurred here," Phillips said.

With that argument seemingly locked down, he sought to make his case for malpractice, which centered on what he called an inexperienced doctor.

The doctor, nine months out of his residency, previously operated on a hernia only 30 percent of the size of Nichols' and in that surgery he used a less-risky technique using his hands to put the intestine back in place, Phillips said.

For Nichols' surgery, the doctor operated laparoscopically — slipping tools Phillips likened to chopsticks through small incisions to pull the intestine back through the abdominal wall.

Questions existed, too, on whether the hospital authorized the doctor to perform such a surgery, Phillips said, resulting in a charge that the hospital failed to supervise the doctor.

"According to his surgical privilege sheet, he was only allowed to do a diagnostic laparoscopy, which is basically looking in the belly through the laparoscope," Phillips said. "He was not allowed to do an interventional laparoscopy, where he was manipulating tissue and doing procedures with the laparoscope.

"So, we asked, 'When he was pulling the bowel from the scrotum into the abdomen, what was he diagnosing?' He was doing surgery."

That surgery perforated Nichols' bowel, Phillips said, resulting in septic shock, multiorgan failure, cardiac arrest and blindness.

Instead of a two- or three-day hospital stay followed by brief rest, Phillips said Nichols needs 24-hour care for the remainder of his life, uses a wheelchair and cannot work.

"This settlement will help provide the care, therapy, assistance and medical equipment that (Nichols) needs throughout his lifetime," Phillips said, noting it all happened on a case other plaintiff lawyers might view as too risky to invest the years of time and research he put in to reach the settlement.

Patrick A. Salvi of Salvi, Schostok & Pritchard; David G. Pribyl of The Law Offices of David G. Pribyl; and solo practitioner Robert M. Owen secured $9 million for the families of two workers who died at a corn-processing plant as the result of carbon monoxide poisoning.

*****

Patrick A. Salvi

Photo by Lisa Predko.

When Patrick A. Salvi took on a case involving carbon monoxide poisoning from a heating and air-conditioning unit, he said he knew nothing about how those machines work.

He said he needed to construct a convincing argument that companies that made a carbon monoxide "scrubber" for a corn-processing plant in Decatur did a faulty job, resulting in the death of two factory workers.

The case would be scuttled if Salvi could only pin liability on the workers' employer, Archer Daniels Midland Co. (ADM), Salvi said.

"If your injury is solely the result of an on-the-job injury that's the fault of your employer, then your exclusive remedy is workers' (compensation)," Salvi said.

"You cannot sue your employer directly."

Salvi named a host of defendants outside ADM that in some way worked on the heating and air-conditioning units.

He said he found the company that designed the custom system "had little experience" with such complicated units and created a flawed design.

He argued the production company that built the units should have known the design proved faulty.

And Salvi said the maintenance company failed to recognize a fire had occurred within the units, causing the carbon monoxide emission.

To get to those arguments, Salvi said, "There was a substantial amount of discovery."

First, he needed to learn what might have gone wrong with the filtration system in the units.

"You go through your experts that are familiar with these types of filtration systems and they inspect it and explain how they work and how this one might have went bad," Salvi said.

Once he gathered his expert testimony, he said he took his depositions. He questioned the engineers who thought up the device: "Why didn't you do it this way?"

To the maintenance crew: "Didn't you know there was a fire? And didn't you have responsibility to do something?" he asked.

Once he felt the facts of the case proved solid, he faced another difficult task: Coordinating settlements.

Getting the case mediated as a whole — with all five defendants at once instead of in piecemeal fashion — took a lot of effort, Salvi said.

For one, he needed to convince ADM to waive its right to recover the cost of the medical care it provided as the case trekked on, he said. Because the plaintiff made a recovery against the third parties, ADM could try to recover the workers' compensation it had paid up to that point, he said.

But if ADM pursued that money, it could ultimately be held liable for all the plaintiff's future workers' compensation if a court found them solely responsible for the accident.

"It's a calculated risk on their part," Salvi said. "It gives them a little more certainty."

Once ADM waived its lien against the other defendants, the remaining defendants came to an agreement among themselves to match the plaintiffs' $9 million request.

"We thought that $9 million was a full and fair compensation when taking into account the risks of winning or losing, the venue is a conservative venue and most importantly, the clients thought it was a fair and reasonable amount," Salvi said.

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