Litigation Process

September 24, 2010

Should I Sell My Structured Settlement?

I was hurt in a personal injury case about six years ago. As part of the settlement I received an annuity that pays me $3000 per month for the rest of my life (I am 35) or at least for another 25 years.. I have found myself in some financial trouble and I need some money now. There are companies that advertise on television that indicate that they will buy my annuity and give me case now. Should I do that?

You almost certainly should not do that and, before you do, you should seek the advice of a financial counselor who can guide you through your decision-making process.

I have no respect for the companies that purchase structured settlements. The price paid for them is ridiculously low – often 40 cents on the dollar or even less. Your structured settlement will pay you a guaranteed $900,000 in the next 25 years – tax fee – and if you live a normal life expectancy you will receive another $500,000 or even more. You should not throw that away for pennies on the dollar.

September 21, 2010

Do I Have to Pay Income Taxes on My Personal Injury Settlement?

by The Law Offices of John Day, P.C.

I am a Tennessean. I was received some broken bones in a car wreck earlier this year. I spent a couple days in the hospital and missed six weeks of work. The case was just settled and I received a check for a significant amount of money. Do I have to pay income taxes on the money I received?

No, you do not have to pay federal income tax on the money you received

As of today (and for many, many years) there is a special federal law that permits people who receive money in personal injury cases where there has been physical harm to exclude the monies received in a settlement or lawsuit from their income for federal income tax purposes. You do not need to report it to the government and you do not need to report it.

September 17, 2010

Why Didn’t My Lawyer Give Me My Money?

by The Law Offices of John Day, P.C.

My personal injury case settled three days ago. I signed the check and gave it to my lawyer. I still haven’t got any money. What is going on?

When a personal injury case is settled, the insurance company sends a check and a release to the claimant’s lawyer. The lawyer asks the claimant to sign the release and endorse the check. When the check is endorsed, it is deposited into the lawyer’s trust account. The lawyer cannot immediately write the client a check because the insurance company’s bank has not yet paid the check. It can take as many as 10 business days for a check to "clear." As soon as the check clears the lawyer’s bank the lawyer will be able to write you a check.

The lawyer may not be able to write you a check for all of the money to which you are eventually entitled. For example, if you received Medicare benefits in connection with your personal injury, Medicare must be re-paid from the proceeds of the settlement. Medicare is horribly slow about getting settlement figures to lawyers in these cases, so the prudent lawyer holds out more money than is probably required so that he or she can be assured that there will be enough money to repay Medicare. Thus, the lawyer may write you one check now and another check after the Medicare issue has been worked out.

September 14, 2010

Why Was I Charged $5432 for Court Reporter Fees?

by The Law Offices of John Day, P.C.

I just settled my personal injury case. We were a week away from trial when we settled. When I got my money there was $5432 deducted for court reporter fees. What are they and why did I have to pay it?

The typical fee agreement in personal injury and wrongful death cases requires that the client reimburse the lawyer for out-of-pocket litigation-related expenses. Many times, the most significant of these expenses are fees paid to court reporters.

Court reporters don’t just write down and transcribe testimony in court. They also write down and transcribe the testimony of witnesses and parties during the discovery phase of a lawsuit. There is usually a court reporter at each deposition, and they charge not only for being present but also for writing down and transcribing testimony. In Nashville, a court reporter charges about $2000 for one day of deposition testimony.

September 13, 2010

What is Demonstrative Evidence?

by The Law Offices of John Day, P.C.

My lawyer said that he needed to spend money on demonstrative evidence to help us win the case. What is demonstrative evidence?

Demonstrative evidence are things that demonstrate or show information to the jury. Demonstrative evidence may be an enlargement of an x-ray showing a fracture in a bone, a metal fixation device removed from a broken bone, a model of the scene of the accident, or a video that depicts a day-in-the-life of someone that suffered a catastrophic injury. Demonstrative evidence also includes computer animations.

Demonstrative evidence tends to educate jurors by allowing them to see or touch something, as opposed to just hearing the spoken word.

September 11, 2010

What Happens If the Person That Hurt Me Dies?

by The Law Offices of John Day, P.C.

I was hurt in a head-on automobile accident. The driver that crossed the centerline and hit me died in the wreck. Do I have legal rights against him even if he is dead?

Yes. Although you can’t sue someone who is dead, you can sue his estate. If an estate is not opened for him, you (through your lawyer) can petition the court to have an estate opened so that you can sue it and collect the monies you are entitled to recover.

The fact that the person who hit you died does not relieve his insurance company of the obligation to defend the case and pay the monies to you that you are entitled to receive under the law (up to the liability insurance policy limits).

September 11, 2010

What is A Structured Settlement?

by The Law Offices of John Day, P.C.

My neighbor mentioned that he settled his personal injury case and received a structured settlement. What is that?

When personal injury and wrongful death cases are settled, money is often paid in a lump sum. In other words, a check is made payable to the claimant and the claimant’s lawyer. The claimant’s lawyer deposits the check in his or her checking account and, when the check has "cleared," the lawyer writes a check to the client. The amount of the check to the client is reduced by attorneys’ fees and expenses, and is often reduced by monies needed to pay off subrogation interests or medical liens.

In a structured settlement, the claimant receives sufficient up-front money to pay attorneys’ fees and expenses, subrogation interests, and liens and some amount of money for the claimant the claimant also receives a contractual right to receive payments in the future. This right is in the form of annuity. Payments can be monthly, quarterly, annually or every 5 years. Indeed, there is virtually no limit to how the annuity can be structured.

September 3, 2010

I Got Hurt on the Job and Then My Employer Fired Me!

by The Law Offices of John Day, P.C.

I hurt my back at work. I told my boss about it and he told me to go to the doctor. The doctor said I needed to take off work for at least one week. When I told my boss that he got angry and fired me. What are my rights?

First, you still have a right to worker’s compensation benefits (assuming your employer has five or more employees and thus is covered by the worker’s compensation program.)

Second, you may have a claim for retaliatory discharge. An employer cannot fire you for seeking or obtaining the benefits you are entitled to receive under the worker’s compensation law.

September 1, 2010

Should I Give A Statement to the Insurance Company?

by The Law Offices of John Day, P.C.

I was in a car wreck last week. I spent five days in the hospital and am now recovering at home. I am getting a couple calls a day from the insurance adjuster for the driver that hit me. The message he left for me is that he wants to take a statement from me about how the wreck happened. Should I talk to him and give him a statement?

We do not recommend that our clients give a statement to the other driver’s insurance company. There are several exceptions to this general rule, but even then we do not permit our clients to give a statement without adequate preparation for the interview.

We do not prepare our clients by telling them what to say or encouraging them to lie. In fact, just the opposite is true: we encourage our clients to tell the truth about the circumstances giving rise to the wreck, the nature and extent of their injuries, and everything else. Preparation is necessary because insurance adjusters are trained in asking questions, and may ask questions in such a way that the unprepared witness will make mistakes. These statements are almost always tape-recorded and can be used against the person in court.

August 31, 2010

Why Does Medicare Get A Piece of My Settlement?

by The Law Offices of John Day, P.C.

We just reached a settlement of my truck wreck case. Medicare is going to get a check for over $20,000? My lawyer says we have to pay Medicare this money because Medicare paid most of my medical bills. Is that right?

Yes. Medicare has a legal right to be re-paid from the money you receive. Medicare reduces the amount of money it is owed by a pro rata share of the attorneys fees and expenses incurred in obtaining the settlement. Under extraordinary circumstances Medicare will reduce the amount it is owed by an even greater amount..