Chapter 20 - Think Inside the Box

As an attorney, you must not forget to think inside the box. All those academian musings back in law school were the real deal. Many lawyers like to think that practicing law is nothing like what they teach you in law school. They believe they have graduated beyond academia. They now think outside of the box. Wrong!

There are certainly things law school fails to teach. The big failing is how to run a law business. But all that theory…. that is not just for the professors. That is the law. It is the way law works. These worldly lawyers who left lofty academia for real life are occasionally missing some nice gems. I will share two real stories.

The first involved a situation where my friend's sister, an attorney, was appointed as an ad litem for a little boy whose foot was cut off in a riding mower incident. An insurance adjuster met directly with mom and dad to enter into a release whereby the carrier would pay about $70,000 into an annuity that would pay out quite a bit more when the boy reached adulthood. These are fairly rare cases out in the sticks outside of Houston, but they do happen once in a while.

My friend's sister, as an ad litem, was asked to approve the settlement and recommend it. Not having litigation experience in the civil arena, she wondered if my friend (her brother) could call me and run it by me real quick. So, we talked on the phone. It was a simple set of facts:

Dad was working on a ranch - do you know the J____ ranch?

No.

Oh, it's a huge ranch owned by the J_____ family. They're mega-rich.

Ok.

Anyway, dad was going to be receiving a load of lumber, and he thought it would be fun for his boy to see the big equipment unloading it. So, he took his son with him. When they got there, his boy was sleeping in the front seat. The lumber hadn't arrived yet, and it was a cool enough day. So, he rolled down the window and let the kid sleep. He was going to wake him up when the big trucks arrived. In the meantime, he thought he'd finish some mowing that he started earlier. While he was mowing in between a barn and a fence, he put the mower in reverse to back up, and he ran over his kid's foot. The kid woke up and walked up behind him. Dad never saw it coming.

Man! That's tragic.

Yeah. It mulched his foot, and so he's an amputee, now. The insurance adjuster came and talked to them. They are wanting to pay them about $70,000 to put into an annuity.

These folks don't have an attorney?

No. Well, actually, they tell me they did go to an attorney and get some advice about the insurance adjuster's offer. They said the attorney was being honest and saying that since dad did it, they should just take the money and feel lucky. He told them there was no point in them paying an attorney to help them get the money that was already on the table.

Well, I've never seen an insurance adjuster be charitable like that. There has to be something more to this. Was dad an employee of the ranch?

Yeah. I think so. I'd have to double-check. But I'm pretty sure.

Okay. See if he was on the clock when this happened and let me know.

Okay. I'll call you back in a few minutes.

(ring)

Yes. Dad was an employee and he was on the clock.

Don't approve it, yet. Tell them hold off on the deal. Let me research it.

Respondeat superior, baby! How on earth did that other attorney miss that? Maybe he figured the liability all went away because dad did it. Maybe he figured that dad could get sued for subrogation if the carrier had to pay. A wash.

Nope! Digging into those murky areas of law where only the spiders go, there can be found a couple of interesting doctrines. The first is parental immunity. A parent is immune from a claim of negligence by a child. No claim against dad.

The second is vicarious immunity. Can dad's immunity inure to the carrier since the covered event resulted from dad's negligence? Nope again! The cases - and there are fewer in the entire history of the state than you can count on the fingers of one hand - hold clearly something very simple…. "Screw the carrier. That's what insurance is there for."

Was it brilliance on my part to come up with this answer? You bet it was! I was brilliant enough to know not to assume I had the law all in my head. I was brilliant enough to go dig until I found my answers and was confident in them. This took some hours. Not minutes. It was work.

That was a hell of a nice fee at 1/3 of the settlement amount! I remember my initial phone call to the carrier's attorney to introduce myself and tell him the deal was dead. He was cordial but thrown-off a bit. I remember him telling me, "Well, that number might be a little low and you might get it up a little higher." Yeah, right. A little higher. Not to mention it was one of those tippy-toe cases to litigate. The carrier could not pound dad. It would only bolster our case! It settled quickly.

The second example involves a case of defective roofing shingles. My clients were referred to me by another attorney who told them they did not have a case but should get a second opinion. They came to me. I am leery of any case another attorney rejects, but I will give them a listen.

So, the client comes to me. I ask him to tell the story.

We bought a house. As part of the deal, the lender required a new roof. So, the new roof was put on, and we closed on the house. It was a few months later, when it started raining a lot, I was going to bed one night, and I was kind of drowsy. It was quiet. I heard this "tick… tick… tick…" I figured it was like the second hand on a clock. But as I kept hearing it, "tick… tick… tick…," it suddenly dawned on me. We only have digital clocks. So, I grab a flashlight and go up into the attic. I shine it around, and the roof was leaking bad.

Okay. Where was it leaking?

Everywhere.

("Smart a___," I thought to myself). No really. I need you to be more specific. Was it over the living room, the bed room, the kitchen? Where was the leaking?

Everywhere. I mean everywhere.

You mean literally everywhere?

Yes. Everywhere. So, I got a video camera….

You got a video of this?

Oh, yeah. You wanna...

... of it leaking everywhere?

Yep.

Let's see it.

Here you go.

(Popping the video in and waiting a few seconds) Holy crap! I didn't think this was possible. It's leaking everywhere!

That's what I told you. You should have been in my shoes when I discovered this in my own house!

The house was messed up pretty bad. The conversation turned to the warranty. Surely, the manufacture has a warranty. Yes, they did. In fact, the attorney who rejected the case did his research. He found and printed the warranty, and he gave it to my clients along with his sincere condolences.

The warranty was limited to replacement of the defective shingles and the pro-rata cost of labor to replace them. The manufacturer had already replaced the roof. No claim was left there. But the manufacturer denied the cost of having to gut the house and get rid of the water damage, mold and mildew. It expressly excluded in big, bold, upper case letters, "THIS WARRANTY EXCLUDES ALL INCIDENTAL AND CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING BUT NOT LIMITED TO DAMAGE OR LOSS TO THE STRUCTURE OR DWELLING AND ALL PERSONAL PROPERTY LOCATED THEREIN. THIS WARRANTY IS THE EXCLUSIVE WARRANTY, AND ____ HEREBY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE."

As soon as he saw this, the prior attorney forgot to think. "Clearly, the disclaimer is conspicuous and disclaims all the damages. You can look right in the U.C.C. and see how the warranty of merchantability is disclaimed."

I considered this a bit differently. This was a case screaming for a remedy. A hundred doctrines started racing through my mind like flash cards. Next, next, next, next, stop! Unconscionability!

How can this warranty be conspicuous? Did my client ever see it? No, he never saw anything. Where was this warranty language printed? On the packages of shingles. There is no way a typical homeowner could be expected to ever see those packages. Contractors pick them up, install them, and throw the paper in the garbage. BIG SHINGLE, INC. has a problem!

I scour the U.C.C. and find the provisions on disclaimers and unconscionability. I spend probably four hours researching all the cases. I was happy with the legal principles I found in the statutes and cases so far. I made up my mind at this point that I was going to file suit. But you never know…. Do not just quit researching because you found enough to justify suing. Research and find out just how badly you can crush your opponent. You never know what you might find.

So, I dig, dig, dig some more after that. BIG SHINGLE has been sued before somewhere. Yes, it has. A hefty handful of times. A good several hours was spent reading cases that were not directly on point and were not really helpful. I needed my case.

It so happened I finally came to Pennsylvania. My case! The issues were on all fours. There, the Pennsylvania court of appeals held that the warranty disclaimer was ineffective because it was inconspicuous and unconscionable.

More flash cards. Next, next, stop! A freaking knowing violation of the Texas Deceptive Trade Practices Act. Treble damages. The Pennsylvania court of appeals has told them, in no uncertain terms, their warranty is unconscionable and unenforceable. Yet, they ignore it and continue to act like they have the upper hand on my despairing clients. My clients' case is a knowing violation. How can BIG SHINGLE possibly deny knowledge? It is right there in a public, published opinion by the court of appeals.

That was another case that paid a nice chunk and was easy to litigate.

Fish stories are fun. But nobody enjoys these incessant stories as much as the guy who caught the fish. So, I will stop with the stories here (but more to come later). On a final note, I ask you to try to imagine how much research I have done on cases I have rejected or initially signed up but decided to abandon. If I could get paid for all that, too, I would be a very rich person. Do not be afraid that your research will lead you to bad news. It is not time wasted. That research sticks with you. You will use it somewhere else. You will also use it to avoid spinning your wheels on lost causes.

The point of this chapter is that law school is for real. It taught you hoards of doctrine in the first-year contracts course. You learned hoards of doctrine in those other courses, too. Do not forget those. Do not start thinking, like many lawyers, that law school was just some fantasy that should remain boxed inside the sphere of inexperienced academicians. These doctrines are for real, and they will come back and reward you. But you have to research.


© 2015, Jeff M