New Mexico Injury Attorney Blog

Sitting on a non-profit board can be very rewarding with significant contributions to the community and to causes close to your heart. However, there are a number of potentially very serious financial risks associated with non-profit board participation.

Non-profit does not mean non-accountability. Non-profit board members are largely held to the same levels of responsibility and accountability as other board members. And just like other boards, a board member's private assets may be placed at risk in case of many lawsuits.

So what kind of lawsuits do non-profit board members face? They are the same types of claims that we have all become far too familiar with in the age of Enron, WorldCom, Tyco, Arthur Andersen, and the more recent calamities in the financial industries. They include claims for financial mismanagement, fraud and tax evasion. Though not entirely unique to non-profits, there is particularly acute financial exposure for malfeasance related to fundraising and grant activities.

Perhaps the greatest, but least anticipated hazard for non-profit board members is exposure for employment discrimination lawsuits. When entering a non-profit board, one typically does not consider this risk. However, when you think about it, these types of claims are perhaps more likely in the non-profit world than in the for-profit world. Unlike for-profit institutions, non-profits often have very narrow causes with very precise visions and mission statements with which they expect their employees to agree. Unfortunately, these expectations do not always mesh well with the laws regarding employment discrimination.

A lawsuit does not necessarily mean liability in any of these areas. However, defense of these suits can be astronomically expensive. It is not uncommon for the legal costs associated with an employment case to go well above $100,000. So even if you win in the end, it may be a very hollow and costly victory in the absence of protections.

There are a number of protections that can be put in place in case you are considering going down this road. First of all, the non-profit should have D&O (Directors and Officers) insurance coverage for board members. If it doesn't, you would be wise to think long and hard about sitting on that board. Due to the high number of employment discrimination claims with over 99,000 filed against employers (profit and non-profit) in 2010 alone, you would be wise is at all within the financial means of the organization to insist on Employment Practices Insurance (EPL) as well. In the event, they don't have it or can't afford it, proceed with the greatest of caution.

In addition to D&O and EPL coverage, you might want to also look into PLUP coverage (Personal Liability Umbrella Policy). If you already have a PLUP, you might want to sit down with your agent to evaluate the adequacy of protection for non-profit board activities. A PLUP will under certain circumstances provide some protection for liability while sitting on a non-profit board. Typically, the coverage is available only if the position is unpaid. Again, this is something you would need to discuss with your insurance agent along with additional or alternative coverage.

In addition to the insurance coverages which are a must for anyone embarking on non-profit board participation, you would be wise to look closely at the operations of the non-profit to determine the potential risks. Like any company, some non-profits are just poorly managed. On the one hand, the board may be able to assist in correcting the mismanagement. On the other, there are some levels of mismanagement and/or impropriety that suggest finding another opportunity for non-profit and community service. This is something that you may need to discuss with your CPA, your lawyer, your insurance agent, your financial advisors, and anyone else that may have reservations about participation with a poorly managed non-profit.

Again, keep in mind that employment discrimination suits are a significant risk. So just looking at the books may not be enough to determine your financial risks. You may also need to take a look at the employment and personnel policies and procedures that are in place. If there are none, or they have not been reviewed of late, or they simply are not followed, this again is something you must take into consideration before sitting on that board.

In short, though it is admirable to give back through non-profit board participation, it is a serious commitment with serious potential financial considerations. It should not be taken lightly prior to or after the decision to sit on the board. Gone are the days where board membership is simply a symbol of status, or an exercise in networking or client development. If you are thinking of simply throwing your hat in the ring, you might consider that in this case your hat may contain all your worldly possessions.

Collins & Collins, P.C.
Albuquerque Attorneys

Insurance products are intended to help manage risks individuals face from certain unforeseen circumstances. When an insured person is found responsible for damages or injuries caused to another person, a standard homeowners policy or auto liability policy can provide some protection. However, this coverage can be woefully inadequate in case of serious injuries.

For homeowners insurance, there is often only$100,000 worth of liability coverage. For auto liability insurance, the legally required amount is only $25,000. Many will carry coverages well in excess of this coverage but even these larger amounts may be insufficient to cover serious injuries.

When the liability limit is reached, an insured could find themselves personally responsible for the remaining costs. In the face of catastrophic injury, even coverage of $100,000 may not cut it when one considers medical bills, future medical care, rehabilitation and even the loss of a career due to an accident-induced disability.

To help prevent an accident or injury from consuming one's hard-earned financial resources, additional protection can be purchased in the form of a personal liability umbrella policy (PLUP), also known as an excess liability policy. An umbrella policy will take effect once liability coverage has been exhausted. Rates for an umbrella policy can range from $150 to $300 per year for a $1 million policy, which is just a fraction of the premium charged for standard homeowners or auto coverage. Each additional million can range from $50 to $75 per year.

In order to obtain PLUP coverage, an individual must have minimum prior coverage limits. For instance, to qualify for PLUP coverage, a driver must have minimum auto liability coverage limits of $250,000 per person/$500,000 per incident. Assuming one meets these threshold requirements, an umbrella policy should be considered by those who have personal assets higher than their homeowner's liability or auto liability limits. Without this additional coverage, an individual may be forced to liquidate their assets or even have their wages garnished to cover legal judgments.

For those who already have a personal umbrella policy, it might be wise to occasionally reconsider the policy limits to avoid being underinsured. As one's assets grow over time, it is easy to forget that insurance needs grow as well. Personal umbrella coverage can truly live up to its name; providing an extra layer of protection on a day when circumstances not only rain, they pour.

Collins & Collins, P.C.
Albuquerque Attorneys

A recent New Mexico Supreme Court case once again addresses loss of consortium claims. Specifically, the Court in Wachocki v. Bernalillo County Sheriff addresses a claim for loss of consortium by a sibling.

The case involved the death of 22 year old Jason Wachocki which was caused by a speeding Metropolitan Detention Center van. A successful wrongful death claim was brought on behalf of Jason's estate. However, the loss of consortium claim brought by Jason's brother, Bill Wachocki, was denied by both the district court and the New Mexico Court of Appeals.

The basis for the loss of consortium claim was the very close relationship shared by the brother. Growing up, they had shared a bedroom and at the time of Jason's death, they had been sharing an apartment for 8 months for which they shared expenses. Bill had a close relationship sharing many activities together. Bill looked up to Jason as a role model confidante.

The Court relied upon the 2003 New Mexico Supreme Court case of Lozoya v. Sanchez.. Lozoya set forth several factors for consideration of a loss of consortium claim:

"the duration of the relationship, the degree of mutual dependence, the extent of common contributions to a life together, the extent and quality of shared experience, and . . . whether the plaintiff and the injured person were members of the same household, their emotional reliance on each other, the particulars of their day to day relationship, and the manner in which they related to each other in attending to life's mundane requirements."

The Court of Appeals determined that the brothers did not share a sufficiently close relationship as required under Lozoya. Bill's attorneys argued that the Court of Appeals improperly applied the "mutual dependence" factors set forth in Lozoya. He argued that this factor should not be applied to a sibling relationship since it was intended for spousal type relationships.

The Supreme Court disagreed with Bill's position refusing to alter the Lozoya test to fit the sibling relationship. The Court believed altering the factors would result in countless future permutations to fit an indeterminate variety of relationships in the future. The Court suggested that this would cause undue confusion on the lower courts perhaps spawning lawsuits for all manners of relationships.

Instead, the Court determined to simplify the Lozoya factors to accommodate varying relationships. Though Bill's loss of consortium claim was denied, the Court made clear that its decision was not an absolute bar to sibling loss of consortium claims. The Court held, consistent with the Court of Appeals, that the key to the analysis of loss of consortium claims is "mutual dependence" factor set forth in Lozoya.

The Court suggested that the level of mutual dependence might exist between siblings noting that unmarried cohabitants and grandparents had shown the necessary mutual dependence in past cases. Interestingly, the Court noted that most other states do not recognize sibling loss of consortium claims. The Court seemed to suggest that in New Mexico, though it is not entirely clear from the opinion, that not only might siblings meet this standard but other relationships as well.

In any event, the Court determined that though the brothers were very close, they were not mutually dependent as required under Lozoya. Unlike spouses, unmarried cohabitants, grandparents, though they had a close emotional attachment and shared expenses, this did not meet the level of mutual dependence to support a loss of consortium claim

Collins & Collins, P.C.
Albuquerque Attorneys

One headline last week seemed pretty outrageous. The headlines from the New York Daily read, "Admitted Drug Dealer Sues Doctor Who Prescribed Painkillers." However, the article brings up some very interesting issues.

That case involved a convicted drug dealer, Lionel Sease, who was sentenced to 6 to 16 years for possession with intent to distribute. Sease led investigators to his doctor who had over-prescribed various painkillers to Sease which were the drugs for which Mr. Sease was charged and convicted. The doctor was charged and convicted for Medicaid fraud and illegally dispensing drugs. Sease has now filed a personal injury suit against the doctor for $35 million in punitive damages and $8 million in compensatory damages for the over-prescription of Vicodin, Percocet and Oxycontin which led to Sease's addiction.

This at first may seem outrageous and frivolous. On the other hand, abuse of painkillers such as those prescribed to Sease has reached near epidemic levels. The problem is particularly acute among teenagers and young adults. The courts are overrun with these cases. So too are rehab facilities and the morgues.

How much responsibility should be placed on the medical professionals that over-prescribe these drugs? These drugs clearly have therapeutic benefits. They are necessary for pain management in many cases including injuries or other conditions causing chronic pain. When does the responsibility pass from the patient to the doctor? Certainly, the patient must share responsibility for overuse and consequent over-prescription of these powerful painkillers.

On the other hand, isn't this the essence of addiction, an inability to moderate use of these drugs? In the case of Mr. Sease, there may be little sympathy from a jury. But one does not need to look far to see the catastrophic consequences of the over-prescription of painkillers. Where should the line is drawn on causation which is a necessary element to any personal injury lawsuit?

The problem and consequences of pain killer addiction has taken on added interest and urgency across the country, including Albuquerque, with a growing trend of pain killer abuse and addiction among youth and young adults. Often, painkiller abuse begins with legitimate usage even among high school and college aged kids.

Youth and young adults are generally more susceptible to injury from a variety of youthful activities,. High school athletes are particularly prone to injury sometimes very serious requiring painkillers. Who then is responsible for over prescription, unnecessary duration, and unjustified refills? Is it the parents, the doctor, the kid? These are very difficult questions and these questions haunt many parents who have seen their children go down this road.

Perhaps most troubling of all is the rising use of heroin among youth and young adults. The headlines in Albuquerque have tragically reported a number of heroin related deaths of high school kids and recent graduates over the last year. Why is this of interest here? As opioids, the physical effects of oxycodone and oxycontin mimic that of heroin. There appears to be a relationship between addiction to these drugs and later heroin use. The problem is likely to grow worse since heroin is now cheaper, and apparently easier to get for high school and college kids than these painkillers.

There is an indisputable relationship between drug addiction and crime. There is a clear relationship between drug addiction and criminal convictions. The overcrowded prisons are a testament to that relationship. In the case of painkiller addiction that begins with a doctor's negligent, reckless or willful over-prescription, is it so hard to draw the line of causation.

Is Mr. Sease's lawsuit really all that outrageous? And what of the high school athletes or other young people who have seen their futures ruined as a result of painkiller addiction? What should a jury say to a parent who has lost a child to overdose from painkillers (the death rate from opioid use tripled from 1999 to 2007 according to the Center for Disease Control). And what of the parent who has lost a child to heroin, jail or prison arising out of an addiction developed initially through an over-prescription of painkillers?

Responsibility is an elusive question in these cases but it seems there is plenty to go around. Mr. Sease's suit will put a spotlight on how much of the responsibility the doctor should bear.

Collins & Collins, P.C.
Albuquerque Attorneys

The law regarding a failed tubal ligation continues to evolve in New Mexico with the recent case new Mexico Supreme Court case of Provencio v. Wenrich. New Mexico was among the earliest, and remains among the few states, that recognize a claim for wrongful birth of a child following a failed sterilization procedure.

New Mexico first recognized the claim in the 1991 New Mexico Supreme Court Case of Lovelace v. Mendez. In that case, the sterilization procedure failed as a result of medical negligence. The negligence was magnified by the doctor's deliberate failure to notify the patient of the failure. As a result, the patient believed that she was infertile and took no measure to protect against unwanted pregnancy. She became pregnant giving birth to a healthy child.

The plaintiff in Mendez brought a wrongful conception claim against the doctor requesting a number of damages most significant of which was the future costs of raising the child. New Mexico recognized the claim for wrongful conception for the failed sterilization procedure. However, the duties and causal connections were much more straightforward in that case than in Provencio v. Wenrich.

Provencio involved a failed tubal ligation surgery following the birth of the plaintiff's fourth child. However, unlike the Mendez case, the doctor immediately informed the plaintiff at the first follow-up appointment that the procedure had failed. The plaintiff chose not to have a corrective procedure. The plaintiff later became pregnant and gave birth to a healthy child. The plaintiff then sued for wrongful conception and battery. Though other damages such as the costs of the corrective procedure along with pain and suffering were available, the plaintiff chose only to pursue the costs of raising the child along with punitive damages.

Again, it was undisputed at trial or throughout the appellate process that the plaintiff was aware of the failed sterilization and chose not to take corrective action. On the one hand, the Supreme Court found that the New Mexico Court of Appeals properly rejected the defendants argument of independent intervening cause, "Because the independent intervening-cause doctrine does not apply to a plaintiff's own negligence." On the other hand, the Supreme Court disagreed with the New Mexico Court of Appeals finding that the doctor's notice to the plaintiff was merely a factor to be considered by the jury in the apportionment of fault.

The Court of Appeals saw the case as a comparative negligence case while the Supreme Court viewed it strictly in terms of legal duty. The Court in Mendez did not have to address the issue of legal duty since it was undisputed that the doctor failed to notify the patient of the failed procedure. In Provencio, the Court found that the doctor though negligent fully met his duty to inform.

The failure to inform was the basis for holding the doctor in Mendez responsible for the full costs of future care of the child. The Supreme Court in Provencio refused to allow these extraordinary damages on public policy grounds. The Court set forth a hypothetical where a patient knew of the failed procedure yet gave birth to multiple children over time, each time seeking damages for the costs of raising each child as a result based upon the original failed procedure.

The Court refused to there. This was not a comparative negligence case for the Court but more akin to an assumption of the responsibility. Though other damages were available, the plaintiff assumed the responsibility for raising the child when she knowingly failed to correct the failed sterilization.

Collins & Collins, P.C.
Albuquerque Attorneys