Insurer Takes Money from Beaten Giants Fan

ERISA liens can be a big problem for liability plaintiffs and their lawyers. What can be done, and how, are the subjects of this report by Speaking of Settlements host Mark Wahlstrom the president of Wahlstrom & Associates.

Mark Wahlstrom

Mark Wahlstrom

Wahlstrom explains that an ERISA lien is a lien put on an injury award by an ERISA-approved health plan. “The majority of corporate-owned or corporate-managed plans are ERISA plans.” Because of some court rulings in the last several years, ERISA lien claimants have almost the same ability to avoid negotiation as one would find with a Medicare or Medicaid lien. This is important because it changes how trial lawyers need to proceed with the settlement of cases. In the past, liens by health care providers were ripe for settlement. That, says Wahlstrom, is no longer the case.

The educational case on ERISA liens is a matter written about by David Armstrong in Bloomberg Business, “How an Insurer Is Taking Money From the Fan Beaten at Dodger Stadium.” The case began in 2011 when Giants fan Bryan Stow was beaten nearly to death because he wore Giants gear to a Dodgers home opening game. Stow was represented by eminent trial lawyer Thomas Girardi, who got a great verdict in the case. However, the complication is that ACE Property & Casualty Insurance bought the ERISA lien (ACE was the insurer for the Dodgers organization). This happened with any knowledge by Mr. Girardi or anyone else on the plaintiff’s side involved in negotiations. ACE bought the $3.4 million lien at a discounted price of $1.8 million.

It was only when the case closed and a check was written for the amount of the award that $3.4 was deducted from the award, and ACE revealed that it owned the lien. The maneuver allowed the insurer for the Dodgers to earn $1.6 million on the deal. There are other lienholders in the case, and all of them want to be paid out of the award to Stow.

The issue that concerns Wahlstrom is the acquisition of the ERISA liens by the defense in a lawsuit, thus cutting out plaintiffs’ counsel from any ability to negotiate down the amount of the lien and thus preserve more of the money awarded to plaintiffs. Wahlstrom’s firm, Wahlstrom & Associates, encounters this problem frequently in liability cases they work on. Wahlstrom’s approach is for plaintiffs’ lawyers to take control of the situation. First, it is necessary to identify the ERISA liens that will fall under the newer lien protecting standards. The second step is to determine how much of each such medical bill is legitimate. This requires a close look at the bills. Wahlstrom points out that there are firms who do an excellent job at appraising such bills. The audit of the bills permits plaintiffs’ lawyers to argue that the bills should be reduced, sometimes substantially.

A third step Wahlstrom suggests has to do with the insurance companies’ tactic of buying these ERISA liens. “What if the trial lawyer could do the same thing?” The idea is to get a third party to provide the money to buy the lien, thus giving the plaintiff’s lawyer control over the situation. Wahlstrom says this is very much possible. There are companies ready to make those purchases. Wahlstrom’s company can help plaintiff’s lawyers with these problems.

Mark Wahlstrom, President of Wahlstrom & Associates, founded of one of the nation's first plaintiff-only structured settlement firms in 1983 and is a renowned specialist in settlement planning, structured settlement annuities, structured legal fees, and the administration of large, complex multi-claimant settlements using qualified settlement funds and trusts. Located in Scottsdale, AZ he manages a national practice with clients in every part of the country. He is also the founder and CEO of the Sequence Media Group. The Settlement Channel is a featured network of Sequence Media Group.

Posted on December 10, 2015 .