The Daily Herald has run two articles in the past week about how payday loan lawsuits are clogging the courts.  Here is the first link and here is the second.

Startlingly, a recent study shows that payday loans constitute 62% of all cases filed in Utah County.

So why are they so high?  Two Utah laws contribute to the problem.

First, Utah has no usury law.  Any interest rate is legal.  This lets payday lenders charge any rate they want and that rate is enforceable in court.  Lenders sometimes charge up to 500% interest on those loans.

Second, Utah recently passed a law allowing employees of corporations to represent the corporation in small claims court.  In other words, payday lenders can avoid the expense of an attorney in their cases.  I’ve been in small claims court and seen a young person, obviously not law trained, handling dozens of payday lending cases for a corporate plaintiff.  This keeps costs down and makes it more economical for payday lenders to operate and file court cases.

Modifying either or both of those laws would slow down payday lending in Utah.

Lois A. Snowe-Mello, a Republican in the Maine Senate, recently sponsored a bill to limit a doctor’s liability when that doctor committed malpractice.  To her surprise, the doctor’s lobby asked her to withdraw the bill.

The New York Time argues that this is because doctors are becoming more liberal.  According to the New York Times, conservatives support tort reforms and liberals oppose it.  The logic continues, conservatives are traditionally business owners  while shift workers are traditionally liberal.  The New York Times caps off this reasoning by arguing that because doctors are leaving private practice and becoming employees, they are becoming more liberal and hence are opposing tort reform.

The problem with the New York Times’ reasoning is that it simply labels people without analyzing their motivation.  It is true that over the past 30 years or so, Republicans have supported tort reform while democrats have opposed it.  Republicans have supported the chamber of commerce while Democrats have supported labor unions.  Those labels assume that Republicans are conservative while democrats are liberal.  In the real world, many Republicans are not conservative and many Democrats are not liberal.  Unfortunately, in the real world, many politicians simply support themselves and effectively give their votes to whomever gives them the most support.

So what makes someone conservative or liberal?  Conservatives believe in not changing the law to pander to the wishes of a minority, conservatives believe in self responsibility and conservatives believe in trial by jury.  Tort reform is not a conservative ideal.  Tort reform seeks to change laws that have existed for hundreds of years by giving doctors and businesses carte -blanche permission to hurt other people through their own carelessness because juries can’t be trusted to make good decisions.

So how did the Republican party (the conservative party) end up supporting such an unconservative movement?

Numerous polls have been done on tort reform.  Interestingly, the polls show that the phrasing of the question is the most important indicator of what people believe.  If people are asked, ”should doctors be responsible to help those that they carelessly hurt” the vast majority of conservatives answer yes.  On the other hand, if a poll asks, “who do you support more, doctors or trial lawyers” the overwhelming majority support doctors.

Recently, the Utah State legislature passed a tort reform bill.  It gives hospitals immunity for hiring and retaining bad doctors, even when the hospital knows the doctor has hurt numerous patients in the past.  In speaking with Utah legislators, I discovered that the bill was pushed through by leadership with no real debate.  Senator Adams, who also serves on a hospital board, sponsored the bill by claiming that the bill was meant to overturn a recent Supreme Court decision made by activist judges.  The bill was never debated on its mertis.  President Lockhart, a rigistered nurse, never allowed any real debate on the bill.  Instead, in a closed Republican Caucus meeting, Republican leadership reiterated Senator Adams argument that the bill was meant solely to reign in activist judges.

Senator Adams understands the art of rhetoric.  By pushing a bill through as a bill to restrain activist judges, he was able to get the support from the Republican legislature.  If he had argued that the bill was necessary to protect the hospital, on whose board he served, because hospitals don’t trust the citizens of Utah to serve on juries and hold his hospital responsible when it knowningly hires and retains doctors with a track record of hurting people, I expect the bill would not have passed.

So why did the Maine doctors recently oppose tort reform?  Perhaps because they are still conservative but looked at more than the surface of the argument.  Why is it good for some doctors when bad doctors are held responsible for carelessly hurting patients?  Well, I think its rather obvious, that good doctors might realize it is in their best interest, and the best interest of their patients, to hold bad doctors responsible.  First, keeping bad doctors in the practice of medicine, increases competition faced by the good doctors.  I have a relative who is a doctor.  He is increasing frustrated by the pressure he is under to move from patient to patient.  He believes the quality of care goes down when the amount of time spent with the patient goes down.  Good doctors end up looking bad in the eyes of their employers when they can’t see as many patients in a day as a bad doctor.  At least the threat of malpractice liability gives good doctors some cover to hold the line against their employers.  Second, tort reform hurts patients who end up with bad results because bad doctors are not forced out of the profession.  I believe that most doctors want to practice good medicine and they care deeply for their patients.  It can be frustrating to good doctors to repeatedly see a bad doctor hurt patients yet continue to practice in the community because tort reform protects bad doctors.  Third, giving doctors immunity for carelessly hurting others, brings the entire profession into disrepute.

I firmly believe that true conservatives would not support tort reform if they sit back and think about it.  I was brought up being taught that if I carelessly break my neighbor’s window with a baseball, I’ve got to walk on over, fess

I’m sure you’ve seen the perp walk on T.V.  A prisoner is shown, being escorted by police, usually handcuffed and waring prison garb, often times trying to shield their face from the camera.  Michael Jackson did it several times.  Lee Harvey Oswald did it several times before he was shot by Jack Ruby during a perp walk.

Recently, the U.S. has come under criticism from some in France over the perp walk of the head of the IMF, Dominique Strauss-Kahn.

Why should we care.  Well, if it turns out he is guilty then I guess neither myself, nor anyone else, will have much sympathy for him.  He deserved a perp walk and a whole lot more.  But what if he is acquitted?

We claim to believe that the accused are innocent until proven guilty.  In 2000, in France, they went one step further.  They outlawed the perp walk until after someone is convicted.

We should do the same thing in the U.S.  The danger of the perp walk is that if someone is innocent, the images of the scruffy defendant in handcuffs and prison garb is forever in the imagery of the American public.  In the internet age, those pictures are never more than a few clicks away.

Someone who is wronfully accused is forced not only to defend themselves in court, but to also live the rest of their lives reminding people that they were wronfully accused.  The perp walk makes it that much harder.

So, why should we keep the perp walk?  There aren’t any good reasons.  Sheriff Joe Arpaio, from Arizona, has used the perp walk to embarrass those already convicted by forcing a string a inmates to walk in front of cameras. He is obviously doing so for political purposes.  While that situation is different, because the prisoners were already convicted, it does show the only reason that police do it now.  To create early pretrial publicity.  Doing so serves two purposes.  It creates political support for the police and prosecutors and it taints the jury pool against the suspect, making a conviction more likely.  Neither of these purposes are legitimate.

With no good reasons to keep it and some rather compelling reasons to get rid of it, the perp walk needs to go.  It’s time

A Payson woman must pay attorneys fees to the defendant for filing a frivlous lawsuit.

Kim Bowers filed a lawsuit against John Call regarding a boundary line dispute.  The case was assigned to Judge McDade in Provo.  Call hired an attorney and filed a motion for summary judgment.  When Bowers could not show any evidence to support her claim, Judge McDade granted summary judgment in favor of Call.

Judge McDade She lost the case on summary judgment.  In other words,

Late last week, the Court of Appeals threw out an appeal because the notice of appeal had not been filed in a timely manner.  Here is what happened.

A judge signed a final judgment and dated it.  Because the case was in juvenile court, the losing party had 15 days to file the notice of appeal.  The notice of appeal is merely a piece of paper, usually one page, that is filed with the court.  It simply says that the party is going to appeal the case.  Unfortunately, the losing party did not file the paper on time, the appeal was untimely, so the Court of Appeals threw it out.  The poor guy gets no appeal.

Several attorneys have expressed concern to me recently about inefficiency in the court system depriving litigants of their right to file an appeal.  Here is one recent story from an attorney in Salt Lake County.

The Judge signed the judgment on February 25, 2011.  The judgment is a piece of paper.  The Judge put the piece of paper on his clerk’s desk.  She was supposed to make an entry into the court computer system and then mail a copy of the judgment to all of the attorneys involved.  Unfortunately, the clerk didn’t do that.  The paper sat on the clerk’s desk until April 1 when the clerk entered it into the computer system.  The clerk never mailed a copy.

The attorney was worried about a judgment being entered and checked the court computer system every couple of days during the entire month of March.  The computer system showed no judgment until April 1.  Now the attorney wants to file an appeal but faces a very real possibility that the appeal will be thrown out because it was not filed timely.

I’ve talked to other attorneys who say this is happening in Salt Lake County, Utah County and Washington County on a regular basis.

I can only speculate to what is happening.  (1) the courts have been operating short staffed under tight budgets for the last few years and the clerks may simply be overworked.  (2) the court has been upgrading to a scanned document system and it may take extra work to enter documents into the court computer system.

I haven’t personally experienced a problem of judgments sitting on the clerk’s desk for a long period of time.  If true, it is a huge problem.  The courts need to get their act together.

The Court of Appeals issued a decision today that I am particularly interested in.  I represented the plaintiffs in the case.  Here is a link to the decision.  http://www.utcourts.gov/opinions/appopin/timothy033111.pdf

My clients loaned money to the defendants.  The defendants did not repay the loan.  My clients sued and the defendants filed bankruptcy.

Normally, this type of debt would be discharged in bankruptcy and my clients would get nothing.  If, however, my clients could prove fraud on the part of the defendants, the debt would be non-dischargeable.

We received permission from the bankruptcy court to proceed and we held a trial.  The judge agreed with us and found that the defendants had lied to get the loan.

The defendants appealed.  Today, the Court of Appeals affirmed the trial court.  In other words, my clients won.

If the defendants are reading this, all I have to say is “pay up, it’s about time.”

The Utah Supreme Court, today, ruled that Parker Jensen and his parents have no legal claim against the State, its employees and the doctors who turned him into the State.

In 2003, Parker was diagnosed with a rare and aggressive form of cancer at Primary Children’s Medical Center.  PCMC recommended surgery and chemotherapy.  The chemotherapy was very aggressive and ran the risk of making Parker sterile.  The parent’s refused treatment at PCMC. Instead, they sought second and third opinions and even considered alternative treatments.

In a regularly scheduled meeting between the staff at PCMC and the Utah Division of Child and Family Services, Parker’s case was discussed.  It was decided that DCFS would file a juvenile court case against Parker’s parents and obtain a court order requiring chemotherapy.

The juvenile court judge agreed.  Parker’s parents violated the order and took Parker to Idaho.  The juvenile court issued a warrant for their arrest.  The Salt Lake prosecutor’s office filed charges of kidnapping against Parker’s parents.

They were arrested in Idaho and Parker’s dad spent four days in jail.  He was also fired from his job.

When political pressure was brought to bear on DCFS, they dropped the juvenile court case.  Parker never got chemotherapy and it turned out the doctors were wrong.  He did not have cancer.  He is currently serving an LDS mission in Chile.

The Supreme Court threw out the case because under Utah law, people can only sue for money for the violation of a constitutional right if the violation is flagrant.  The Court held that the violations were not flagrant.

Parker’s case did contribute to some good changes in DCFS and the juvenile courts.  Shortly after Parker’s case, the legislature allowed some public access to juvenile court cases.  This is important because prior to that, everything in juvenile court was done in complete secrecy.

Hopefully, a case like Parker’s won’t happen again.  At the time, the State made several untruthful statements to the press to pain Parker’s parents in a bad light.  Because the proceedings were held in secret, the press had no ability to verify the accuracy of the statements.

Shortly before Parker’s case, I handled a somewhat similar case in juvenile court.  My client was accused of having a mental illness that caused her to pretend that her son was constantly sick.  I brought in a doctor who testified that the son had real illnesses and the mother wasn’t imagining them.

The juvenile court judge ignored the doctor who said the child was sick and followed the suggestion of the caseworker, DCFS and their doctor.  The son was put into foster care.

Putting him in foster care, much to the surprise of DCFS, did not cure him.  Over the next several months the son grew more and more ill.  Eventually, the son was returned to his mother.

The sad thing was that a mother-child relationship was unnecessarily interfered with.  It makes one wonder how many more times DCFS has made this type of tragic mistake.

Opening the juvenile courts to scrutiny by the press and public is a good thing.

In almost every personal injury claim I’ve handled, the defense argues one or more of the following: (1) the plaintiff is lazy, (2) the plaintiff is a malingerer, and/or (3) the plaintiff is exaggerating his injuries.

Now, I’m not so naive to believe that plaintiff’s are never guilty of any of these things.  However, when I see any of that in my client’s I cut them loose.  I don’t want to use my time and skills to help those types of people.  Further, I don’t believe that all injured people do that.

Most of my clients try their best to go back to work on their own.  Usually, they don’t ask me, they just go back to work as soon as they can.  When they do ask me, I tell them they should get back to work as soon as their doctor tells them it is safe.

The danger of going back to work is that the defense will inevitably argue that the plaintiff wasn’t really hurt.  If they were really hurt, they would not have returned to work.

For a plaintiff it is a no win situation.  No matter what they do, the defense has an argument. If they return to work they’re not hurt.  If they don’t return to work they’re a malingerer.

Juries are smart and they can see through that.

I’ve just lost confidence in administrative law judges.

In a decision out of the Court of Appeals a few days ago, a panel of administrative law judges denied permanent disability to a man because he returned to work.

George Olsen was injured on the job.  Because of that, his case didn’t go to a jury.  Instead it went to a panel of administrative law judges.  His injury was quite severe.  His right arm was amputated just below the elbow.  To make matters worse, George was right handed.

Within seven days, George returned to work.  Not only that, he kept working.

The judges found that because he returned to work, the amputation of his right arm was not a permanent total disability.

I don’t do worker’s compensation so maybe it’s just my naivety.  But I don’t think people should be rewarded for staying home when they can work.  Likewise, they shouldn’t be punished for working when others cannot.

The Utah Court of Appeals has sustained a trial court decision throwing out a wrongful death lawsuit against the Utah Department of Transportation.  The full opinion can be found here.

The case arose on January 27, 2007 when Rayn Ewing was killed in a car accident.  Her parents hired Siegfried and Jensen to represent her (It’s not clear to me exactly what happened but it looks like Siegfried and Jensen may have associated with Parker & McConkie to litigate the case.  P & M frequently litigates cases that S & J doesn’t want to litigate).

Whenever a claim is brought against a governmental entity there are several hoops that must be jumped through.  First, the claimant must file a notice of claim.  The notice of claim must contain certain information and be addressed to the correct governmental entity.  This was done for the Ewings on December 11, 2007.  Because it was done within a year, it was timely.

The next step is that UDOT is supposed to respond to the notice of claim.  Because governmental entities rarely, if ever, respond to notices of claim, they are deemed to have denied the notice if no response is made by the governmental entity within 60 days.  A lawsuit must then be filed within one year of the denial.

In the Ewing case, that was done timely on June 10, 2008.  This is when things started to fall apart for the Ewings.  UDOT pointed out that the Ewings filed in the wrong court.  When the Ewing’s attorneys recognized this, they agreed to dismiss the case without prejudice (in other words, they were allowed to refile the case in another court).  The dismissal was filed on September 4, 2008.

The attorneys then refiled the case in the right court on February 12, 2009.  UDOT asked the judge to dismiss the lawsuit because the statute of limitations had run.  Judge Fratto, the trial court judge, agreed and dismissed the case.

The Court of Appeals agreed with Judge Fratto.  Here is their logic.

The statute of limitations on the case ran on February 9, 2009. That was exactly one year after the notice of claim was deemed denied or one year and 60 days after the notice of claim was made.  Because the statute of limitations ran on February 9, 2009, they were late when the filed on February 12, 2009.  With the statute of limitations, it doesn’t matter how late your are, even one day is fatal.

The attorneys for the Ewings pointed out that when a case is dismissed without prejudice, a statute, commonly referred to as the “savings clause,” allows it to be filed up to one year after the date of dismissal.  The Court of Appeals agreed, but pointed out that a long line of cases have held that the one year “savings clause” only comes into play if the original statute of limitations had run previous to the dismissal.

Let me explain that another way.  Because the statute of limitations ran on February 9, 2009, the statute of limitations was not affected by any dismissal prior to that date.  If the dismissal had occurred on February 9 2009 at 10:00 a.m., the statute of limitations would still run on February 9, 2009 at midnight.

If, however, the dismissal happened on February 10, 2009, the statute of limitations would be extended to February 10, 2010.

This is a very weird result and doesn’t make any sense from a public policy point of view.  It is the law, however, and attorneys must always be careful when a case is dismissed without prejudice.

I’m sorry that the Ewing’s lost their right to bring the case following the death of their daughter.

Arthur and Gail Benjamin sold a business in late 2003 and earned a $6,000,000 plus profit.  At the time, they lived in Sandy Utah.  Utah has a flat 5% tax rate.  If they were residents of Utah at the time of the sale, they would have owed more than $300,000 in taxes to Utah.

In order to reduce their tax liability, the Benjamin’s hired an attorney.  Mr. Benjamin asked the attorney if they could avoid paying taxes by moving to Nevada.  The attorney outlined what they needed to do to make it effective but cautioned them that even then it was a 50/50 chance of holding up in court.

Mr. Benjamin did not like the advice.  He criticized the attorney saying his advice was “by the book” and “very uncreative to boot.”  Mr. Benjamin then sought advice from an accountant.  The accountant told him to sell the Utah home, buy a Nevada home, and spend at least 183 days per year in Nevada.  Not liking that advice, Mr. Benjamin then sought advice from an investment adviser.  The investment adviser told him to set up a house in Nevada.

That is exactly what Mr. Benjamin did.  He bought a house in Nevada but continued to live mostly in his Utah home. When he didn’t pay income taxes in Utah, the Utah State Tax Commission ordered him to pay taxes on the income, plus a 10% penalty.

In a decision issued today, the Utah Supreme Court backed up the Utah State Tax Commission.

While I haven’t ever represented anyone involved in this lawsuit, as an attorney I’ve had several experiences similar to this.  One experience is very similar.

I had a young man come into my office looking for advice on investing in real estate.  He had a plan all set up.  I analyzed his plan and told him it was illegal.  He didn’t like that advice.  He told me that he learned the method at a seminar and that I was obviously wrong.  I didn’t know what I was talking about.  He told me he was rejecting my advice and would find another attorney who would agree with him.  He eventually did.

I never saw his name in the paper so I don’t know if he went forward with his plan.  I did hear about other people getting arrested for doing something similar.

My point is that when you go to an attorney or an accountant for advice and you don’t like it.  Don’t go shopping for someone who agrees with you.   That’s a good way to get into trouble.