Amputation Demand Letter
VII. JURY VERDICT POTENTIAL
A. ACCRUED DAMAGES
We will discuss the specific numbers with respect to each element of damage in our presentation at the mediation. However, it is our position that considering the extensive nature of the injury, which Dr. Judith Jenson, a highly experienced vascular surgeon describes as "it was ghastly. I've never seen an injury approaching this severity before. She was in horrific pain. I think her fear was probably equal to her pain." And further considering that she has incurred $364,690.34 in medical bills to date, with a potential of an equal amount of medical expenses in the future; and further considering that Dr. Gordon has given a prognosis of the possibility of a future above-the-knee amputation; and further considering the nature and extent of the traumatic brain injury which is carefully detailed and documented by several psychiatrists and psychologists, we feel that the verdict potential in this case certainly exceeds $5,000,000.00. However, Lindsey is very interested in achieving cloture of this phase of her tragedy in order to attempt to achieve some semblance of her life prior to Jane Gingerstein's negligence. Therefore, we are certainly amenable to attempting to mediate a combination cash and structured settlement which will allow Lindsey to at least put aside the financial aspects of her current problems, leaving her to deal with the mental and physical aspects to the best of her abilities.
VIII. STRUCTURED SETTLEMENT DEMAND
We have discussed the possibility of settling the case on the basis of a structured settlement. In order to be certain that we have a clear understanding prior to attempting to negotiate a structured settlement, we feel that it is important for you and your clients to be fully aware, that in addition to the foregoing provisions, we will only consider a structured settlement which includes the following provisions:
1. Plaintiff reserves the right to approve the life insurance company from which the annuity is purchased. This must be an A+ Superior XIV-XV, A.M. Best rated company.
2. We agree to use a § 130 Qualified Assignment, however, Plaintiff reserves the right to approve the assignee. It is our usual position not to approve a mere shell company as an assignee. However, this may be subject to approval based upon the strength of the annuity company.
3. Any annuity used as a qualified funding asset must be at least a 30 year certain and life with the claimant as the annuitant.
4. We will consider at least a 3% annual increase in the structure so as to hedge against inflation.
5. The cost to the liability insurance carrier of the Defendant's proposed package must be disclosed to the independent structured settlement specialist utilized by the Plaintiff herein in order to provide a basis for the comparative shopping of the structure so that the maximum benefits may be achieved for the Plaintiff.
Our independent structured settlement specialist is Marie Danner of Individualized Structured Settlements, 5555 Merry Way, Suite 555, Houston, Texas, 77555. All brokers involved in this claim should be apprised in advance that the annuity will be placed with the company which provides the best benefit package structured in the manner most cost effective for the Plaintiff.
In order to expedite the negotiation of this settlement on a structured basis, it is probably well to advise your structured settlement specialist that we are fully aware of PLR 8333035 in which the Internal Revenue Service ruled as follows:
PRIVATE LETTER RULING
The following is a Private Letter Ruling from the I.R.S. on the subject of structured settlements received on May 16, 1983.LTR 8333035, May 16, 1983
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This is in reply to a letter of April 5, 1983, submitted on your behalf by your authorized representative, requesting a supplemental ruling that disclosure by defendant of the cost or present value of annuity to be purchased to fund its monthly settlement obligation will not cause you to be in constructive receipt of the present value of the amount invested in the annuity.
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You have asked for a clarification of the above ruling because of your concern that your knowledge of the existence or cost of the annuity might cause you to be in constructive receipt of that annuity.
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Based on the language in section 1.451-2(a) of the regulations, the Service has consistently taken the position that knowledge is not determinative in deciding a question of constructive receipt, but that unqualified availability is decisive. Rev. Rul. 68-126, 1968-1 C.B. 194; Rev. Rul. 73-99, 1973-1 C.B. 412; Rev. Rul. 74-37, 1974-1 C.B. 112 and Rev. Rul. 76-3, 1976-1 C.B. 114; all set forth conclusions consistent with this position.
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Based on the information submitted in the original ruling request, we conclude that disclosure by defendant of the existence, cost of present value of the annuity will not cause you to be in constructive receipt of the present value of the amount invested in the annuity.
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Thus, we can save a lot of each other's time by eliminating all of the usual verbiage concerning constructive receipt which generally transpires in a structured settlement negotiation.
Please advise your structured settlement specialist that we have these minimum requirements so that he will not waste time shopping the annuity market for anything that will be summarily rejected by the Plaintiff.
If you have any questions with respect to any of these prerequisites to negotiation of the structured settlement, please feel free to call on me and we will attempt to reach a mutual understanding so that the insurance carrier's structured settlement specialist and the independent specialist utilized by the Plaintiff will be shopping for the same type of structured settlement. It has been my experience that if we can have a clear understanding in the beginning as to what the Plaintiff's minimum requirements are with respect to a structure, this will save a considerable amount of wasted effort by your structured settlement specialist shopping for the wrong type of annuity and will also expedite the resolution of this claim.
IX. CONCLUSION
Our view of the case is that we will prevail on the issue of liability and be entitled to the entire amount of Lindsey’s actual damages in excess of $5,000,000.00. However, factoring in the uncertainty of litigation and the time element involved in obtaining and collecting damage awards against large corporations, our client has authorized this firm to settle her claim for $5,000,000.00.
Lindsey has authorized this firm to leave this offer open until May 29, 1995, after which our instructions are to withdraw the offer and file suit. Accordingly, if you wish to accept this offer, please advise us within this time.
Considering that it has been one year since the accident, you have had sufficient time to investigate thoroughly and educate yourself fully with respect to the Plaintiff's claims herein. Considering further that we have provided you with full documentation of all of our damages, we see no necessity of extending the time frame of our settlement demand past the mediation on May 29, 1995.
Our settlement demand is based on the potential for a jury verdict considerably in excess of $5,000,000.00 which we feel is attainable, considering the devastating nature of the injury, and the extensive future lifetime of mental anguish, physical disability, disfigurement, damage to wage earning capacity, medical and rehabilitative needs and the total inability of medical science to correct Lindsey’s condition.
This case is set for mediated settlement conference on May 28, 1995, at which time we will offer additional evidence as to the devastating injuries which currently plague Lindsey Wong as a result of the negligence of the defendants. As is my customary practice, we will make every reasonable effort to reach a fair and equitable settlement of this case at the mediated settlement conference. If we are unable to settle the case on May 29, 1995, we are perfectly agreeable to taking our chances before a jury.
In order to prepare this case fully for trial, we will all have to spend considerable sums of money and expend a lot of time, effort and energy in trial preparation. This we are certainly willing to do. However, what we are not willing to do is to expend large sums of money and effort on trial preparation and then settle the case on the courthouse steps. Since this is no more in your interest than in ours, we should agree that if we are not able to settle the case by May 29, 1995, we should terminate the settlement negotiations and ask a jury of fine citizens to resolve our dispute.
If any further information is needed prior to mediation, please call on us immediately, and we will provide any information to you which is in our possession or which is available to us. We look forward to the opportunity to enter into good faith settlement negotiations in this case on May 28, 1995.
With kindness personal regards, I remain
Yours very truly,
Howard L. Nations
HLN:as
c: Honorable John E. Smith
555 Sunny Boulevard
Any City, CA 5555
555-555-5555
