“Trick or Treat”

The not-so-funny reality of American jurisprudence unfolds in tragic tort claim against Ford Motors

By Micheal F. Lamb for The Montana Lawyer

It was Halloween evening.  It was dark.  Fred Patton was doing his fatherly duty as chauffeur for his two youngest daughters, who were costumed as a princess and a witch.  Chattering gaily, they climbed out of the family station wagon and ran up the sidewalk to the home of a neighbor.

Fred, seeing his friend come to the door, put the station wagon in park and stepped out to say hello.  He walked to the rear of the Ford Gran Torino.  His daughters erupted in thanks for the treats.

There was another sound.  It was a sound not unlike one Fred had known as a young man in the military police, the sound of someone chambering a round in a service sidearm.  What he heard was the transmission of his car drop from false park into reverse, although no one was in the car.  The back-up lights came on.  At the same instant Fred was knocked off balance.  He fell to the ground.  His car was backing over him.  He grabbed the bumper and scrambled frantically to regain his feet.  He reached the rear door handle and was able to bring himself to his knees.

Patton could hear his daughters screaming in terror.  Stumbling once, he was almost dragged underneath the car.  He desperately grabbed the roof rack with one hand and held on with a strength born of necessity.  All the while, the car kept backing up, gaining momentum on the slight downhill grade.

Fred regained his feet.  At that instant, the car smashed into a tree trunk.  He was caught between the car and the tree, his hips and legs crushed.  When the car rebounded, Fred’s broken body was dumped down the bank beside the road.  His daughters knelt beside the car, crying into the blackness, begging their father to answer them.

Fred spent the next couple months in the hospital.  A hospital bed was set up in the living room of their home and Fred recuperated for another six months, his wife, Val, as his nurse.  It was more than a year after the accident before he could walk again, and then only with a walker.

Up until the accident happened, Fred Patton was living the American dream.  He had a good job and was happily married.  Their three children were doing well in school.  Val had primary responsibility for their home and children and did not work outside the home.

What happened to Fred Patton was not unique.  The design defect exists in thousands of older model Fords on the road today.  Perhaps 100 or more people have been killed in similar incidents and thousands more disabled or injured.  Ford has had several verdicts against it in cases arising out of the defect and has paid millions of dollars in settlements.

Of course, Fred Patton was just happy to be alive.  He had no way of knowing that Ford had left a car on the road that could suddenly back up without warning.  It was only through a chance conversation with a friend that he learned he wasn’t the only one whose car tried to kill him.  He decided to see an attorney.

The Lawsuit

Ford had never admitted in any forum the existence of the defect or liability for it.  It aggressively defended itself at every turn with help from the best experts and engineering design specialists money could buy.  It had expensive, experienced defense lawyers.  It had specialized trial counsel who would handle the case if forced to trial.  And it had the plaintiff disabled and at a disadvantage.

We prepared our case:  we consulted with several of the small group of attorneys who had tried and won this type of case against Ford; we located and retained those engineers who had become Ford’s arch enemies with respect to the design issues presented by the case; we accessed the American Trial Lawyers Association and other groups dealing with these types of cases.  We studied the engineering technology, the human factors authority, the medicine and the law; we documented the treatment provided by all of the doctors; we retained both economist and rehabilitation specialists.

Money flowed like water:  travel expenses, doctors’ fees, expert fees, discovery costs, and more.  We soon had tens of thousands of dollars tied up in prosecuting the case.  These were expenses advanced by us; the Pattons could not have initiated the case otherwise.

Everyone involved was making a fine living off the Pattons’ case except the Pattons.  The doctors, hospitals, clinics and therapists were being paid.  The lion’s share of the medical bills were paid by Fred’s health insurance.  The doctors charged several thousand dollars just to talk to the attorneys and document the nature and extent of the injuries. They charged hundreds of dollars for the medical records.  The economic evaluation was expensive, as was that of the rehabilitation specialist.  The engineering and design experts charged thousands upon thousands of dollars for their time and efforts.  The work done by these professionals was of the highest quality, well worth the expense.  And, of course, the team of defense lawyers and their experts and consultants were making a good living aggressively defending their client.

In the meantime, the Pattons were starving.  Long before he was out of the hospital, Fred Patton had exhausted all his accumulated vacation and sick leave pay.  Then co-workers donated their sick leave and vacation pay, and when that too was depleted, the Pattons’ church congregation helped out with groceries and rent payments.  That too played out.  Then relatives and friends stepped up to provide support, food, and a few dollars.

While we were free to spend hundreds of thousands of dollars chasing the defendant into a courtroom, we were powerless to keep our clients from starving or losing their home while we waited to bring the case to a jury.

The house was kept cold to keep the heating bill down; the proverbial cupboard was bare; the children cried themselves to sleep with worry and so did their parents.  The kids didn’t participate in sports or extracurricular activities or go to the mall with their friends or even accept invitations to birthday parties because they couldn’t afford presents.  Their good life was over.  Fear was their constant companion.

Then came the worst news of all – the doctor’s advice that Fred would always be disabled.  Hard on the heels of that determination was the news that there was no position of any kind Fred would be able to hold with his employer.  No financial institution would lend Fred a dime.  All the family had left was prayer.

As I sat in defense counsel’s beautifully appointed offices overlooking Puget Sound, I was struck by the absurdity of the situation our justice system had created.  Defense counsel, with great gravity, passed along what was described as the defendant’s “first, final and best” offer of settlement.  Having just deposed the plaintiff, the attorneys knew the financial horror story the Pattons were living.  They knew the emotional holocaust the family was enduring.  They knew Fred would never work at his job again and that he was clinically depressed.  They knew that he was at risk of losing his home, his family and perhaps even his life.  They knew their product had disabled him and that they had the advantage.  Trial was months if not years away.  From where I sat, they were smugly trying to capitalize on this reality.  More objectively they were just doing their job.

And they had a weapon even more horrible than any of those occasioned by the injury.  They had ethical rules that forbade Fred’s lawyers from providing financial assistance to him during the pendency of his case. So while we were free to spend hundreds of thousands of dollars chasing the defendant into a courtroom, and to support any number of “professionals” and “experts” who were living off our clients’ despair, we were powerless to keep our clients from starving or losing their home while we waited to bring the Pattons’ case to a jury. Under the Rules, we couldn’t give or lend the Pattons money without violating our “ethical” obligations.  What criminal irony.

I conveyed the defendant’s offer to my clients.  I explained that the defendant was taking advantage of the situation, my powerlessness to do anything about it, my conviction that we would prevail in their case and my promise to do everything I could to ensure that would happen.  At the same time, there could be no guarantees.  Evidencing tremendous courage and faith, they rejected the offer.

I advised opposing counsel he was free to keep his money.  He made his position clear:  the offer was a “take it or leave it” situation.  The case would now be handed over to Ford’s specialized defense trial lawyers.  We’d made a terrible mistake.

Months later, he called back and said they’d like to mediate the case, try to resolve it without the expense of a trial.  A retired judge mediated the case.  At the end of the day, the case was settled on terms which, while not reflective of its value, my clients could not afford to pass up.

This story has a happier ending than many, but nevertheless, Fred will be in chronic pain for the rest of his life.  He will never again provide for his family.  The family will never forget the emotional terror of being held captive by the justice system.  But if they watch their spending and plan for the future, the taxpayers won’t be supporting Fred Patton and his family; the corporation whose product disabled him will be.  That is precisely as it should be.

The Problem

Fred Patton’s is just one of hundreds of such financial horror stories that unfold every year in our state and across the country, brought about by negligence, defective products, or otherwise.  With the time lines necessarily built into our civil justice system, how can disabled tort victims survive to make it into the courtroom?

The subject has received at least some scholarly attention.  See Dawn S. Garret, “Lending A Helping Hand:  Professional Responsibility and Attorney-Client Financing Prohibitions,” 80 U.DaytonL. Rev. 221 (1990); John J. Vassen, “The Case for Allowing Lawyers to Advance Client Living Expense,” 80IllB.J. 16 (1992) and Strelow, “Loans to Clients for Living Expenses,” 55Cal.L. Rev. 1419, 1421-23 (1967).

In Montana, Professor David J. Patterson of the University of Montana School of Law discussed the issue in his CLE presentation at the 1994 Montana Trial Lawyers Association seminar, “The Court House Door is Open:  Can the Plaintiff Afford to Stay Around?”  

Montanans are guaranteed the right to full legal redress under Article II of the Montana Constitution.  I elect to believe that whatever other liability and damage issues exist in a given case, no individual or corporate entity would morally or ethically wish to take unfair advantage of the financial condition of a dead or disabled victim.

The applicable provision in Montana relating to permissible financial arrangements between lawyers and their clients is ABA Model Rule 1.8(e).  It specifically provides for advancing all litigation expenses and makes repayment of those costs contingent upon the outcome of the litigation.  However, it does not permit an attorney to advance necessary living expenses to a client.

The Solution

More recently, the American Law Institute, In Counsel Draft No. 11, Vol. 1 (Sept 28, 1995)considered a new §48 of the Restatement of the Law, Third, that would allow lawyers to make or guarantee loans to clients in connection with pending or contemplated litigation.  This would be allowed only in those cases where the loan is needed to enable the client to withstand delay in litigation that otherwise might unjustly induce the client to settle or dismiss the case because of financial hardship rather than on the merits and where the lawyer does not promise or offer the loan before being retained.  See Restatement of the Law, Third, The Law Governing Lawyers, Counsel Draft No. 11, Vol. 1 (Sept. 28, 1995).  By way of explanation for the proposal, Counsel notes that while loans going beyond litigation expenses are forbidden in most jurisdictions, the ban is not supportable on the argument that it protects lawyers from client requests for financial assistance or that it protects lawyers from competition with each other.

It is supportable on the ground that lawyers should not attempt to solicit clients to retain the lawyer by offering such loans or similar financial assistance.  Nevertheless, financial assistance to a client beyond litigation expenses is justified when needed to help a financially depressed client proceed with a suit rather than accepting whatever settlement might be offered.  A fortiori, a lawyer’s unconditional gift assistance to a client should be permissible. A client whose resources have been depleted, for example by an injury giving rise to a suit, might have difficulty obtaining food, clothing, shelter and medical treatment during protracted litigation.  Banks and other in the business of lending will usually be unwilling to lend on the security of a lawsuit because assessing a claim’s probable worth is often difficult. Champerty law in most jurisdictions prohibits acquiring an interest in the cause of action as security.  On balance, it is better for the loan to be permitted than for the client to be saved from conflicts of interest but forced to abandon the suit. 

The size of the loan permitted is limited by its justification – to cover basic living, business, medical and other and similar expenses during the litigation.  The terms must be fair.  The lawyer may not promise or offer the loan before being retained.

Id.at §48, Page 3-24.  (Emphasis added.)  On Oct. 18, 1995, this proposed modification to the Restatement was approved by Council for the American Law Institute and will be presented at the ALI’s 1996 annual meeting.

The financial hardship created by the present rule often makes it impossible for financially distressed litigants with legitimate, substantial claims to weather the delays which naturally attend the civil justice litigation process.  In those cases fair resolution of claims, the purpose for which the system exists, is no longer a driving force behind the litigation.  The question instead becomes whether claimants can survive long enough to obtain the full legal redress guaranteed to them.  It is incongruous that a system developed to serve justice, in an over-zealous attempt to address largely speculative and unquantified terrors, serves to visit horrors of a much more real and devastating nature on the public whom the members of the bar association and the entire justice system itself are dedicated to serve.

The Montana Supreme Court has on three occasions recognized the necessity for such humanitarian support under extreme circumstances.  In a petition filed before it in the action of David Whitford v. Burlington Northern, Cause No. ADV 94-943, the plaintiff, the victim of a disabling injury, responsible for the support of his wife and young children and left with no financial resources or alternatives, found himself through no fault of his own in a desperate financial situation.  He stood to lose everything that he had acquired through a lifetime of work.  In addition, the stress placed tremendous pressures on the family relationships.

The Montana Supreme Court, reviewing all the circumstances, granted the plaintiff’s petition and allowed his counsel to provide specific, limited financial support necessary for the plaintiff for living expenses during the pendency of his litigation.  The relief was necessary and appropriate.

More recently, in In re:  Tim Grant, Petitioner, Cause No. 95-087, the Court, facing similar circumstances, granted substantially identical relief to an injured worker disabled from his employment.  The court allowed Plaintiff’s counsel to “assist Grant in obtaining financial assistance by co-signing a bank loan to Grant for basic living expenses during the pendency of the resolution of his claim, said loan to be repaid at the time of recovery for his injuries.”  See order, supra, dated Nov. 21, 1995.  In reaching its decision, the Court found that the attorney/client relationship was established “not as a result of, in consideration for or in contemplation of {the} offer of financially assist {the} client.”  The Court further concluded:

Moreover, under {the} facts and circumstances of this case, we conclude that the criteria set forth in our Order Re:  Rule 1.8(e), Rules of Professional Conduct, dated November 21, 1995, are satisfied, to wit:  the loan to Grant is needed to enable him to withstand delay in litigation that otherwise might unjustly induce him to settle or dismiss his case because of financial hardship rather than on the merits; that Grant’s loan will be used only for basic living expenses; that Grant faces demonstrable financial hardship that relates to, and arises out of, the injuries and claims for which {his attorney} is representing him; and that {his attorney} did not promise, offer, or advertise the loan before being retained by Grant.

Id, at 4.  (Emphasis added.)

Most recently, In re:  Sharon McKnight, Petitioner, No. 96-047, the Supreme Court granted similar relief to a young woman prosecuting medical malpractice claims arising out of medical care which she contends has left her partially paralyzed and disabled.

Contemporaneously with entering its order in Grant, supra, the Montana Supreme Court, In the Matter of Rule 1.8(e), Rules of Professional Conduct, (Nov. 21, 1995) referenced above, has proposed an amended version of Rule 1.8(e) for comment by the Ethics Committee, the members of the Bar and other interested persons (See box on page 6.)  Specifically, the Court has temporarily suspended Rule 1.8(e) and replaced it with what is in substance the existing rule, supplemented by a procedure whereby:

On a case-by-case basis, on good cause shown by application under Rule 17 M.R.App.P, and only on further order of this Court, the lawyer may make or guarantee a loan to the client on fair terms, the repayment of which to the lawyer may be contingent on the outcome of the matter, provided that the lawyer’s application to the Court demonstrates that:  (i) the loan is needed to enable the client to withstand delay in litigation that otherwise might unjustly induce the client to settle or dismiss a case because of financial hardship rather than on the merits; (ii) the loan is used for only basic living expenses; (iii) the client faces demonstrable financial hardship that relates to and arises out of the injuries and claims for which the lawyer is representing the client; and (iv) the lawyer has not promised, offered or advertised the loan before being retained by the client;…

At the end of a 150-day period provided for by the Order during which the Supreme Court will entertain comment and such petitions as are presented in accordance with the proposed Rule, the Court will take whatever action it considers appropriate.

In cases involving the death of or disabling injury to a family provider, or even in those cases where a prolonged period of rehabilitation or retraining will be involved, the humanitarian goals served by providing nominal support by way of living expenses is a realistic necessity given the fact of court delays which are inherent in existing civil justice procedures and protocols.  No greater conflict exists between clients and their attorneys when all other costs may be advanced except necessary living expenses, and the conflict which exists in those cases where that is allowed.  And in the context of major litigation involving death, disability or crippling injury to a client, the additional financial burden on the attorneys is a minimalistic consideration.

The number of persons applying for such relief during the comment period will hopefully be very small; but that is not a reflection of the need for and the appropriateness of amendment to the existing rule.  For in those cases where such assistance is appropriate, reasonable and necessary, it is the lifeline that tort victims and their families need to survive.

If we truly are a profession dedicated to service objectives, such assistance should not be the exception to the rule, but in appropriate cases where the Montana Supreme Court’s proposed criteria are met, should be the rule.  Five states allow an attorney to either advance or guarantee loans “to clients for living expenses during pending litigation.”  See Patterson, supra, at 7. (Citations omitted.)  The American Law Institute recently added its impetus to the need for change to the existing rule.  It is time to add Montana to the list.

If disabled victims are not compensated for their injuries by those responsible for them, then they will be supported and living in the only way that they can, at the largess of the state.

When inefficiencies in the justice system make it impossible for litigants to survive long enough for the court and a jury to determine the issues before them, victims are placed in the unenviable position of accepting a fraction of the reasonable value of their claim and worrying about what the future will bring, rather than making the appropriate parties responsible for their defective products or negligent acts.

It isn’t just the victim who suffers, but every taxpayer – all of society.  For as surely as victims reach the end of their financial rope, they will become the responsibility of society at large.  And the responsible party will “trick or cheat” justice once again.

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