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Three jury awards in New Jersey were among the 100 largest in the country last year, but defendant-friendly laws or lack of coverage have taken their toll on these once-glittering victories. A defendant with a $20 million exposure in a Camden County case has coverage of only $1 million. A losing defendant in Bergen County may have as little as $982,000 in insurance for an $18 million exposure. And all three cases illustrate what every trial attorney knows: A headline trumpeting an elephantine jury award looks good on an office wall, but it isn’t negotiable at the bank. The three New Jersey awards of $23.5 million in Bergen County, $22 million in Atlantic County and $20 million in federal court in Camden, ranked 77th, 83rd and 93rd among jury awards of all kinds in 2003 compiled by American Lawyer Media. Commercial verdicts top the list, headed by an $11 billion fraud award against Exxon Corp. in Alabama. Around the nation, punitive damages pushed a few personal injury awards beyond the $100 million mark, but in the New Jersey cases, all the verdicts were strictly compensatory. Here’s why the three New Jersey cases show that a jury verdict is rarely the bottom line. In Hayes v. Cha, decided Dec. 8, a federal court jury in Camden awarded $20 million to Mary Hayes of Philadelphia, who claimed that Woodbury plastic surgeon Yong Cha botched her facelift. Hayes developed disfiguring sores diagnosed later as mycobacteria fortuitum, akin to leprosy and necrosis. The evidence included before-and-after photographs that left no doubt about the changes in Hayes’ appearance and the jury awarded her $15 million. Then it added another $5 million for her husband’s loss of consortium. Hurdles to collecting anywhere near those sums remain for the plaintiffs’ lawyer, Frank Allen, a partner in Haddonfield’s Archer & Greiner. First, there’s a $1 million policy limit on Cha’s coverage with Princeton Insurance Co. To get more, Allen would have to prove that the carrier demonstrated bad faith in refusing to settle for the full amount as permitted by Rova Farms Resort Inc. v. Investors Ins. Co. of America, 65 N.J. 474 (1974) Allen says the doctor has agreed to assign the claim to Hayes, but Allen says he has concerns beyond any ability to prove a Rova Farms case. He says he wonders about Princeton Insurance Co.’s health. Last summer, after reporting losses for 2002, the company announced it would accept no new customers and insurance services lowered their rating of the company. Princeton’s current AM Best rating is “fair.” Princeton and the state Insurance Department have said the setbacks seem temporary. But when a liability carrier cannot meet its obligations and is subject to liquidation — as happened with malpractice carrier PHICO Insurance Co. of Philadelphia in 2001 — the state’s Property-Liability Guaranty Association pays no more than $300,000. Defense counsel Robert Donnelly Jr., a partner in Cranford’s Dughi, Hewitt & Palatucci, declines to concede there was a demand that meets Rova Farms‘ requirements. He says he is readying the usual array of post-trial motions but it is too early to say what grounds he will argue for a new trial or a reduction in the award. To questions about Princeton, Donnelly’s answer is “no comment.” IMMUNITY In Gomez v. Daneshvar, an Atlantic County jury awarded $22 million on May 9 to Phyllis Gomez of Absecon, who was permanently disabled because the blood bank at an Atlantic City Medical Center branch took 70 minutes — not the usual 20 — to deliver blood to her when she started bleeding after she gave birth. The $22 million was ephemeral from the start. The jury assigned 65 percent of the blame to the hospital, whose liability was limited to $250,000 under the Charitable Immunity Act. Blood bank director Ali Daneshvar was liable for the remaining 35 percent, worth $7.7 million. The good news for Gomez: There is enough coverage by Princeton and the carrier has deposited a bond for the full amount with the court, says the plaintiff’s lawyer, Robert Ross, a partner in Philadelphia’s Kline & Specter. In addition, the obstetrician in the case, who was covered by PHICO, settled at trial for the $300,000 PLIGA limit. Ross says pre-judgment and post-judgment interest will bring the total recovery to more than $9 million. The verdict survived post-trial motions, but the defense is taking the case to the Appellate Division, arguing that Superior Court Judge Carol Higbee permitted opinions by unqualified experts. Ross says he is confident the verdict will remain undisturbed. Defense counsel Yves Veenstra, a partner in Marlton’s Parker, McCay & Criscuolo, did not return a call on Friday. GRAVY ON GRISTLE Neither of the medical malpractice awards approaches the other 2003 New Jersey case, Bastek v. Sabeil, when it comes to the discrepancy between the headline and the small print. The plaintiff is in jeopardy of collecting only $3.38 million of the $23.5 million verdict because of coverage limits. On the other side of the ledger, pre-trial settlements that were not reported at the time of the verdict are worth more than $16 million to the plaintiffs, according to one of their lawyers, Raymond Carroll, an associate in the Montvale firm of Richard Weiner. The plaintiffs were the estates of James Bastek and his mother-in-law, Viola Potryala, who were killed in May 1998 when a tractor-trailer struck the rear of their sports utility vehicle. Bastek, 52, was an eye surgeon with years of productive earning cut short by the accident, his children were badly hurt and his wife had a claim for bystander suffering. Weiner and Carroll, armed with evidence that the brakes on the trailer were defective, sued the driver and individuals that had owned, maintained or driven the vehicle at the time of the accident or in the previous nine months. Carroll says seven of those defendants settled before trial for $16.8 million. The $22.3 million verdict was gravy but not much meat. Here’s why: The jury assessed 10 percent of the liability to one of the settling defendants, Bay Container Corp. In rough percentages, of the three defendants that went to trial, Maersk Equipment Service of Madison was liable for 10 percent, the driver for 61 percent and his employer, Inter-Coast Trucking, for 19 percent. Carroll says Maersk settled for $2.3 million after trial, but that the only undisputed coverage for the remaining 79 percent of the verdict is a policy on the driver worth $982,000, which insurer AIG of New York deposited with the court. Carroll says the plaintiff takes the position that an additional $1 million in coverage is available from an AIG comprehensive general liability policy on the truck owner, but the defense does not agree. John Sawicki, a partner in Stevens & Schwab in Secaucus, says that policy covers the owners’ premises, not its vehicles. Given AIG’s maximum exposure, it’s not surprising that Sawicki says there are no plans to appeal the verdict. The case appears to demonstrate the value of accepting reasonable settlements. As it turns out, the largest award in New Jersey last year was not any of the three jury cases. In a Bergen County case settled in June, Schleifman v. P.C. Hotel Managements, a New York investment broker accepted $25 million from a resort hotel he blamed for a paralyzing boat accident.

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