Burns - Demand Letter - Page 4
Industrial Accident
Demand Letter
J. SPECIAL DAMAGES
| 1. Medical Expenses - Accrued | |
| Grace Medical Branch Physicians | $165,732.50 |
| Grace Medical Branch Hospital | $194,316.33 |
| HaloFlite | $ 5,132.70 |
| Cortez-Sparks Hospital | $ 1,326.06 |
| Canada: Hospital - converted to U.S.dollars: | $ 38,560.98 |
| TOTAL: | $405,068.57 |
2. Medical Expenses - Future |
$150,000.00 |
3. Damage to Wage Earning Capacity |
$754,228.88 |
Harry had the potential of two separate and distinct sources of income prior to the tragedy, design engineering and furniture-making.
First, Harry owned his own business, WidePine Inc. through which he performed his services as a design engineer. Obviously, the work of a design engineer involves the use of his hands in intricate handling of design tools for drawing.
The picture at the right illustrates why Harry can no longer use his hands to control the intricate instruments necessary to perform the usual tasks of a design engineer. He is totally and permanently disabled from ever working again as a design engineer. Needless to say he has completely lost his business, WidePine Inc., which had been growing steadily each year since its inception.
The chart below illustrates the steady growth of the company, stated in dollars, during the six years of operation before the tragedy ended the business.
As indicated, Harry's income from WidePine Inc. expressed in American dollars, increased from $56,426.00 in1993 to $81,559.00 in1998.
Applying the work life expectancy calculations of Dr. Dale Hortenski as attached in Exhibit A, Harry's damage to wage-earning capacity discounted to present value totals $754,228.88 (American). His Canadian damage to wage-earning capacity totals $1,108,013.00 which converts at the current exchange rate of .680704.
Harry's second potential source of income was the furniture manufacturing business which he planned to operate out of his shop at his home after he retired from the design engineering business. Harry looked forward to turning the furniture manufacturing into a business because building furniture was his avocation and favorite pastime. He now has neither the strength to handle the machinery nor the manual dexterity to do the fine work on the furniture. Thus, Harry has lost both his present and future business as a result of this tragedy.
K. GENERAL DAMAGES
1. Physical Pain and Suffering
The physical pain and suffering experienced by anyone who is burned over 78% of their total body surface is incalculable. It is very easy for a jury to identify with the simple pain of a match burn and very difficult to project the intense pain of such a small burn over the body as a whole. The result is that juries will generally award more money for intense burns than for any other type of injury.
a. Accrued - We will appear very reasonable to a jury if we ask them to award $500.00 per day for the accrued 428 days from the tragedy on March 3, 1999 to the mediation on May 4, 2000. There has not been a single day or night during which Harry has not experienced physical pain which constantly accompanies the horrible burns and scarring of his body. He is not able to bathe, sleep, change clothes or be in the sun without the constant painful reminders of the effects of the negligence of the Forosukas on his body. When the evidence of the multiple types of pain which Harry experiences daily is presented to the jury, they will feel that a request for an award of only $214,000.00 for accrued physical pain and suffering is very reasonable.
b. Future - Hopefully, Harry's physical pain will subside as more of his skin hardens into scar tissue and the incessant itching subsides. Harry will be left with the pain in his joints as he attempts to grip with his fingers or painfully walk with the pains in his knees and hips. We will ask the jury to award only two dollars per waking hour to compensate for Harry's painful existence in the future during the 154,494 hours remaining in his life expectancy. Thus, we will seek $308,988.00 in compensation for Harry's future physical pain and suffering.
2. Mental Anguish
In the worst nightmares of the uninjured it is difficult to imagine the mental anguish which accompanies burns, disfigurement, pain & constant itching over your entire body. While Harry's burns covered only 78% of his total body surface, that portion of the body which escaped the horrors of burning is left to serve as donor sites for the most severely burned portion of the body. Having been spared the pain of burning, the donor sites are exposed instead to the removal of the epidermis, through the use of the cheese slicer which slices away the top layer of skin to be used to rehabilitate the most severely burned areas. The end result is that there are very few inches of skin remaining on Harry's body which have not known the painful insult of either being burned or sliced.
In addition to the obvious mental anguish which accompanies the physical pain, Harry is also confronted every hour with the realization that he has lost his business, his avocation which was to be his future business and his ability to earn a living. The burn injuries to Harry's hands will prevent him from ever working again either in his business as a design engineer or in his avocation as a furniture builder. Being self employed was a source of great pleasure to Harry but his true work passion was for his furniture building which he planned to do for a living when he retired from the engineering business. Harry has lost his design engineering business and his ability to build furniture.
Another factor which impacts Harry's ability to work as a design engineer is that he suffers from monocular diplopia, another classic symptom associated with brain trauma. Monocular diplopia causes Harry to see two images with one eye. He also suffers from blurred vision in the left eye and diplopia in the left visual field. This means that he sees double images with both eyes as he looks to the left.
Harry has been examined by Dr. John A. McWhae, an ophthalmic specialist in Calgary who advises him that his blurry vision is due to corneal scarring and that he can expect this situation to be permanent unless Harry is a candidate for excimer laser treatment of the scar. It will not be difficult for a jury to understand why these eye problems are major hindrances to a design engineer for whom precision in drawing is crucial to his work product.
Another source of considerable mental anguish to Harry is that he is confronted with grossly inadequate medical care under the Canadian medical system and is not receiving either the rehabilitation or the additional surgeries which he needs.
Harry also suffered a traumatic brain injury in this accident and is not receiving the type of opportunity to learn compensatory strategies which he would be receiving in the United States. He is constantly frustrated by the short term memory loss, emotional ability, lack of organizational skills and multiple other annoying symptoms which result from the head trauma which he experienced when he fell down the steps and was knocked unconscious as he was trying to escape the fire.
Another source of mental anguish is the constant hissing in his ears as a result of tinnitus, another product of the head trauma. Harry endures two different types of tinnitus, a constant hissing in his head and an occasional dull, droning sound. Harry is unable to sleep without the use of a masking noise to drown out the hissing. This is generally soft music to drown out the hissing sound. However, the music combines with the constant itching to cause him to awaken after each hour of sleep. Harry seldom sleeps more than one consecutive hour or more than four hours total per night.
Tinnitus has been known to be so frustrating to its victims as to drive them to suicide. However, in the big picture of Harry's frustration and mental anguish, tinnitus is only one more annoying and exacerbating factor in what has become his daily struggle to achieve some semblance of the normalcy and happiness which he experienced before this tragedy.
The best evidence of mental anguish will be the testimony of neuropsychologist, Dr. Kit Harrison who found on testing that Harry is in the 95th percentile of depressed people in the world.
The MMPI 2 score showed Harry to be among the top 5% of most depressed people on the planet.
We will present several hours of testimony as to the mental anguish in all of its disastrous forms which plagues Harry Hunter every waking moment and which will plague him for the rest of his life. At the conclusion of a substantial body of proof, we will ask the jury to award damages as follows:
a. Accrued Mental Anguish - We will ask the jury to award $100.00 per hour to begin to compensate for the accrued mental anguish. Since 7,704 hours have accrued to date, our evaluation at the time of mediation is $770,400.00.
b. Future Mental Anguish - Since mental anguish will be Harry's lifetime companion, we will ask for an award of $20.00 per hour for this life expectancy of 154,494 hours for a total of $3,089,880.00.
3. Physical Disability
Physical disability is the inability to do those things of a physical nature which Harry could do before the tragedy that do not relate to income production. Another appropriate term is loss of enjoyment of life. Harry was a very active man before this tragedy ended life as he knew it. Harry's favorite pastime was building furniture in the workshop behind his home. Harry was also an avid golfer and liked to cycle for exercise. As indicated in the photos below, Harry also loved the adventures of scuba diving and sailing. . All of those activities along with gardening and many others are no longer possible for him, since he can no longer endure exposure to the sun. Life has changed. Even the simple pleasures of lifting a grandchild are denied to Harry forever.
a. Accrued Physical Disability - We will ask the jury to replace Harry's enjoyment of life before the tragedy with an award of $50.00 per hour for the 7,704 hours which have accrued. Thus, our evaluation for settlement purposes is $385,200.00.
b. Future Physical Disability - For Harry's lifetime loss of enjoyment of life, we will ask for an award of fifteen dollars per hour for a total of $2,317,410.00.
4. Disfigurement
Harry is grossly disfigured over almost all of his body as a combined result of the burns and the surgeries which further disfigured the donor sites. Prior to the tragedy, Harry and Charlott loved
to socialize with friends and dine in restaurants. Now they do neither because Harry is so self conscious about his disfigured body. He also has the problem that he cannot tolerate exposure to the sun which precludes his going out extensively in the daytime. His life has become a very reclusive one since the negligence of the Forosukas destroyed his freedom to move around and enjoy his friends and his life in public.
a. Accrued Disfigurement -When the jury sees the disfigurement such as illustrated in the photos appended hereto, they will not hesitate to award at least $100.00 per hour for accrued damages over the 7,704 hours to date. Thus, we are evaluating the accrued disfigurement damages at $770,400.00.
b. Future Disfigurement - Despite the future surgeries which are necessary, there is little that can be done to improve Harry's appearance or restore his self - confidence concerning his appearance. We will ask the jury to award a figure which none of us would accept to swap places with Harry: $20.00 per hour for the remaining154,494 hours of disfigurement over Harry's future life expectancy- for a total of $3,089,880.00.
VI. EVIDENCE OF DAMAGES - Charlott Hunter
A. LOSS OF HOUSEHOLD SERVICES
Charlott is entitled to recover for the lost value of Harry's household and domestic duties resulting from his personal injuries.
B. LOSS OF CONSORTIUM
Charlott is entitled to recover for loss of consortium which, as recognized by Texas law, is "the mutual right of the husband and wife to that affection, solace, comfort, companionship and sexual relations necessary to a successful marriage." Whittlesey v. Miller, 572 S.W.2d 665 (Tex. 1978). Loss of consortium emphasizes the emotional or intangible elements of the marital relationship.
VII. JURY VERDICT POTENTIAL
| A. Harry Hunter | |
1. Accrued Damages |
|
| a. Physical Pain and Suffering: | $214,000.00 |
| b. Mental Anguish: | $770,400.00 |
| c. Physical Disability: | $385,200.00 |
| d. Disfigurement: | $770,400.00 |
| e. Medical Expenses | $405,068.00 |
| Total Accrued Damages | $2,545,068.00 |
2. Future Damages |
|
| a. Physical Pain and Suffering: | $308,988.00 |
| b. Mental Anguish: | $3,089,880.00 |
| c. Physical Disability: | $2,317,410.00 |
| d. Disfigurement: | $3,089,880.00 |
| e. Life Care Plan: | $150,000.00 |
| f. Damage to Wage Earning Capacity: | $754,228.00 |
| Total Future Damages | $9,710,386.00 |
TOTAL DAMAGES - Harry Hunter |
$12,255,454.00 |
B. Charlott Hunter |
|
1. Accrued Damages |
|
| a. Loss of Household Services: | $10,000.00 |
| b. Loss of Consortium: | $50,000.00 |
| c. Reasonable Value of Nursing Services: | $50,000.00 |
| Total Accrued Damages: | $110,000.00 |
2. Future Damages |
|
| a. Loss of Household Services: | $50,000.00 |
| b. Loss of Consortium: | $250,000.00 |
| c Reasonable Value of Nursing Services: | $50,000.00 |
| Total Future Damages: | $350,000.00 |
TOTAL DAMAGES -Charlott Hunter: |
$460,000.00 |
C. TOTAL VERDICT POTENTIAL |
$12,715,454.00 |
VIII. STRUCTURED SETTLEMENT FRAMEWORK
A. STRUCTURE
We propose to negotiate this case on the basis of a structured settlement in two component parts: (1) the initial cash outlay; and (2) the purchase of a 20 year certain and life annuity.
After careful analysis we have determined that the structured portion of this case would require a 20 year certain and life annuity compounded annually at 3% throughout the term of the annuity.
Any annuities utilized as part of the structured settlement herein must be purchased through an A. M. Best Rated A+ Superior XV company. We fully intend to shop the structure exhaustively in order to achieve the best possible rate of return, the largest affordable minimum guarantee, the greatest security and the best terms available in order to meet every conceivable need which each of these Plaintiffs will experience in the future as a result of this tragic event.
B. INDEPENDENT SPECIALIST
An independent structured settlement specialist will be present at the settlement conference, and he is currently shopping the market for the best available structure within these parameters. If you choose to use your own structured settlement specialist, all brokers involved in this claim should be apprized in advance that the annuity will be placed with the company which provides the best benefits for the money for the Plaintiffs.
C. CONSTRUCTIVE RECEIPT
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 the PLR 8333035 in which the Internal Revenue Service ruled that knowledge of the cost of the package does not constitute constructive receipt, as follows:
PRIVATE LETTER RULING
The following is a Private Letter Ruling from the I.R.S. on the subject of structured settlements received LTR 8333035, May 16, 1983:
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 Forosuka 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.
***
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.
***
Based on the language in § 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.
***
Based on the information submitted in the original ruling request, we conclude that disclosure by Forosuka of the existence, cost or 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.
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.
D. MINIMUM REQUIREMENTS
If you are agreeable to the following conditions, we will proceed with negotiation of a structured settlement herein:
- Plaintiff reserves the right to approve the life insurance company from which the annuity is purchased. This must be an A+ (Superior) XV A.M. Best rated company.
- We agree to use a §130(c) Qualified Assignment; however, Plaintiffs reserve 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.
- We will consider a guaranteed 10 or 20-year certain and life annuity in this particular case.
- We will alternatively consider annual inflationary increases of 3% versus a level annuity and compare the increases in cost in order to determine the best overall utilization of funds for the Plaintiffs' benefit.
- The cost to the liability insurance carrier of the Forosuka's proposed package must be disclosed to the independent structured settlement specialist utilized by the Plaintiffs herein in order to provide a basis for comparative shopping of the structure so that the maximum benefits may be achieved for the Plaintiff.
If you have any question with respect to any of these prerequisites to negotiation of the structured settlement, please feel free to call on us 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 our experience that if we can have a clear understanding in the beginning as to what the Plaintiffs' 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. PUNITIVE DAMAGES
It is our opinion from our detailed review of the facts which led to this tragedy that there is a distinct possibility of raising an issue of malice which would support the award of punitive damages in this case. As you are aware, pursuant to Texas law, malice is required to sustain an award of punitive damages. We will be pursuing such a finding under the following portion of the definition in the Texas Civil Practices and Remedies Code:
§41.001 (7) Malice means:
..(B) an act or omission:
(i) which when viewed objectively from the standpoint of the actor at the time of its occurrence involves an extreme degree of risk, considering the probability and magnitude of the potential harm to others; and
(ii) of which the actor has actual, subjective awareness of the risk involved, but nevertheless proceeds with conscious indifference to the rights, safety or welfare of others.
Numerous documents including correspondence from Forosuka to Danniko during the design and construction phases of the ProfitInc plant establish that Forosuka had actual knowledge of the extreme degree of the exact risk which caused Harry's injuries. (Exhibit E) Forosuka was consciously aware of at least three clear indicators of the extreme degree of risk and the probability and magnitude of the potential harm to others such as Harry Hunter prior to the tragedy.
First, if Forosuka had installed the load cells on the coolers, as contemplated, it would have been obvious immediately prior to the tragedy that the level of product inside the cooler was dropping to dangerously low levels. Properly functioning load cells with logic transmitting the load cell data to the control room would have allowed the weigh belt conveyor (feeder) to be timely shut off when the extreme degree of risk to those in the pit developed.
Secondly, if the temperature probes at the inlet and outlet of the cooler were linked to the control room, one of three actions could have avoided the disaster: a) the control room operator could shut off the feeder when the temperature probe at the inlet dropped; b) the control room operator could shut off the feeder when the temperature probe at the outlet registered temperatures in excess of 65 degrees centigrade; or c) ideally the logic connecting the data from the temperature probes to the control room would have been programmed to automatically shut off the Everlasting valve when certain temperatures were met or exceeded.
Third, the pressure transmitter in the discharge cone at the bottom of the product cooler is supposed to indicate zero psig under normal circumstances. On March 3, 1999, it clearly was not. If this had been recognized by a ProfitInc control room operator, the Everlasting valve would have been closed. Further, Forosuka should have programmed logic which would have automatically shut off the Everlasting valve under the adverse pressure circumstances which manifested on March 3,1999.
As the documents show, a choked feed was necessary to ensure safe operation. With no load cells and improper logic connecting the data from the temperature probes to the control room, safe operation was not ensured. Forosuka and ProfitInc were both aware that before starting the product feeder, it was necessary to open the valve to feed product from the fluid bed reactor to the cooler to ensure a choked feed. ProfitInc knew from the documentation that it was to ensure a choked feed either from the load cell input or from the temperature probes; however, with improper load cell input, the only way to ensure a choked feed was to evaluate the temperature probes at the inlet and outlet of the product cooler. Clearly this was not done on March 3, 1999. If the control room operator had been paying attention to the inlet and outlet temperature readouts, he would not have allowed anyone in the pit area under such circumstances. And to do so constituted malicious actions, even under the current conservative definition.
ProfitInc and Forosuka had actual awareness that they were never to open the Everlasting valve without the product feed from the fluid bed reactor open and flowing. The documentation clearly shows that if the product feed is lost or shut off, the feeder must be stopped to prevent the level of product from dropping below the top of the exchanger plates. On March 3, 1999, to the contrary, the product feed from the reactor was intentionally shut off by ProfitInc employees, the Everlasting valve was opened, and the feeder was running. This circumstance coupled with the lack of product in the cooler and the rat-hole effect allowed the process gases to escape, thus causing the conflagration. It was clearly explained in the Danniko documentation to Forosuka that this situation was to be avoided. ProfitInc knew this, yet proceeded on March 3, 1999, to create this malicious situation.
Thus, proper acknowledgment of either of the three hazard indicators would have signaled a ProfitInc employee that the weigh belt conveyor (feeder) should have been stopped pending resolution of the problem. Clearly, it was within Forosuka and ProfitInc's knowledge that if the process gases interacted with the open air of the pit, combustion could occur, thus severely injuring or killing those in the pit. In our opinion, these factors raise a fact issue for the jury as to whether the failure of Forosuka and ProfitInc to apply the knowledge which they had to protect Hunter and others from extreme risk of harm constitutes malice.
X. CONCLUSION
As should be clear from the information which we are providing and which we will supplement in the videotape which we are preparing for the mediation, we are taking an open disclosure policy in order to provide everyone sufficient information for evaluation of the case. It is our opinion from our knowledge of the facts surrounding liability.
Harry and Charlott Hunter have expressed two points to us as their attorneys which we are free to share with you. First, they would like to settle this case in order to get on with rebuilding their lives. Secondly, they have suffered extensively and will continue to suffer extensively as a result of the negligence of the Forosukas and they expect to be fully compensated for their unnecessary suffering. Therefore, we are instructed by our clients to make every reasonable effort to settle this case for its full settlement value but if the case cannot be settled at this mediation, we are instructed to withdraw from settlement negotiations and proceed to trial at the earliest possible setting.
If further information which is under our control is needed to help in the evaluation of the case, please notify us immediately and we will attempt to obtain it for you.
With kindest personal regards, I remain
Yours very truly
