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This article is offered as a case study of a catastrophic personal injury case. The litigation, which was resolved in November 1998 for a total of $8,950,000.00, is notable for its many twists and turns. In the end, a number of lessons can be learned which are generally applicable to the practice of personal injury law in this state.
On May 7, 1994, Tom Shoemaker, a thirty year old remediation technician from Buffalo, New York, suffered a serious brain injury in a workplace accident at the Gas Street hazardous waste clean up project in Concord, New Hampshire. The site was formerly operated as a manufactured gas plant. During preparations for improvements to Interstate 93, the State determined that the plant was a likely source of pollution in the area. The owner of the property, EnergyNorth Natural Gas, Inc., hired an Amherst, New Hampshire firm, Environmental Science & Engineering, Inc. (ESE), to coordinate its investigation and response to the State. ESE discovered that a building on the site contained a large accumulation of hazardous waste in an underground tank. EnergyNorth asked ESE to manage the necessary clean up operations. ESE, in turn, hired OHM Remediation Services Corporation (OHMRS) to perform on site filtering of the hazardous material, with the hope that most of the material was water that could be filtered and discharged into the public sewer system. Tom Shoemaker was an employee of OHMRS.
ESE and OHMRS quickly learned that the equipment and processes they originally employed were not going to be sufficient to adequately filter the sludge that was actually in the relief holder tank. They suspended operations approximately one week after starting and returned two months later with a new set of equipment. Part of the process was the use of large carbon vessels which acted as filtration devices. It became evident that oily material was making its way through the process into these large vessels, contaminating the carbon they held. As a result, "mini" carbon cells were added to the process upstream from the large carbon cells. The mini cells, which are slightly larger than 55 gallon drums, were intended as sacrificial vessels to catch any oily material that would otherwise foul the large cells. The cost of replacing the contaminated carbon in the mini cells was much less than the cost of replacing the carbon in the large cells.
On the day of the accident, Tom Shoemaker was given the task of removing the contaminated carbon from one of the mini cells. When the mini cells were first introduced at the Gas Street site, they were cleaned by manually shoveling out the spent carbon. However, two to three weeks before the accident, site supervisors decided to remove the fouled carbon by hooking up a 100 psi air compressor to the cell and forcing the material out through a drain pipe in the bottom, through approximately fifty feet of hose, and into a container outside the building in which the cells were housed. The cells were not manufactured for this process and they contained no pressure relief device.
Tom was stationed at the mini cell while air was being introduced into it. Another employee was stationed outside the building at the compressor. At approximately 8:15 a.m. on May 7, 1994, a clog developed in the drain hose as air was being introduced to the mini cell causing the pressure in the cell to rise instantaneously. The cell's lid, weighing more than one hundred pounds and secured to the cell by six butterfly bolts, was separated from the cell and blown up through the roof of the building coming to rest on the roof some twenty feet away. No one witnessed the accident, so it is unknown what piece of the equipment, if any, actually struck Tom. However, he was found laying unconscious and bleeding profusely from the head. Co-workers decontaminated him and he was taken to Concord Hospital in a coma. He was later transferred to UMASS Medical Center some time later where he regained consciousness and then to The Greenery, a rehabilitation facility in Massachusetts.
Within a day after the accident, Tom's parents contacted Bill Royal, an attorney they knew in Boston. Bill went to the scene, inspected and photographed the equipment with a mechanical engineer, and interviewed witnesses. Realizing the substantial commitment of time and resources this case would require, he knew he would need help with this case. He contacted another Boston firm to act as co-counsel with him. They subsequently learned that OHMRS had a parent company, OHM Corporation. An attorney representing OHM/OHMRS made efforts early on to convince Bill Royal's co-counsel that OHM Corporation had no liability and that OHMRS was immune from direct suit by the Shoemakers. The attorney also attempted to steer the Shoemakers away from ESE because an indemnity clause in the contract between OHMRS and ESE would presumably place the ultimate loss on OHMRS. Counsel for OHM/OHMRS consequently suggested that the Shoemakers focus their efforts on EnergyNorth and the manufacturer of the helmet Tom was wearing.
In the meantime, OHMRS's attorney entered into negotiations with OSHA regarding an initial citation issued after the accident. Without objection from the Shoemaker's Boston firm, OHMRS convinced OSHA to withdraw its citation on the condition that OHMRS would make a presentation concerning the accident to an industry group. As a result, despite the patently unsafe process involved in the accident, OHMRS was not cited by OSHA. Neither ESE nor EnergyNorth was contacted by OSHA following the accident.
While Bill Royal was suspicious of the efforts of OHM/OHMRS to deflect liability, his co-counsel was ultimately convinced that OHM Corporation was not a viable defendant. As a result, he focused his efforts on ESE, EnergyNorth, and the helmet manufacturer. A year and a half after Tom's accident, suit had not yet been filed.
Unsatisfied with the services of the Boston law firm, Bill Royal and Tom Shoemaker's parents decided to find a New Hampshire firm to handle the case. We were fortunate enough to be chosen. We received the case in the fall of 1995. At the time, prior counsel had obtained two boxes of documents from OHMRS through a discovery action in Massachusetts state court. Although those materials were turned over to us, other portions of the Boston firm's file were withheld.
Having visited Tom at the Greenery in Boston, one of our first orders of business was to locate a more beneficial placement for him. With the assistance of Sandy Lowery, our life care planner, we were able to get Tom moved to Rose Meadow Farm, a small brain injury facility in New Boston. This turned out to be one of the most important things we did for Tom. The excellent care and family atmosphere at Rose Meadow really helped Tom's level of awareness and improved his quality of life dramatically.
By late 1996, we filed suit in Hillsborough County Superior Court, Northern District, against ESE and EnergyNorth. Venue was proper there because EnergyNorth's home office is in Manchester. The suit included claims of negligence, vicarious liability, and engineering malpractice. At this point, partially in reliance upon the conclusions of predecessor counsel, we had not found direct evidence of negligence on the part of OHM Corporation. Under New Hampshire case law, we needed to prove that the parent corporation had undertaken an independent duty for the safety of its subsidiary's employees.1 Shortly after suit was filed, we found such evidence.
Mingled within the two boxes of documents produced by OHMRS in the Massachusetts discovery action were two important documents. The first was a memorandum written two years before the Shoemaker accident in which a regional health and safety manager had notified others of a similar incident in which a carbon filter vessel had overpressurized. Although no one was injured in that case, the manager set out the lessons learned from the incident. Specifically, the memo mandated that pressure relief devices be in place on all carbon vessels and that site supervisors ensure that they are in place before putting a vessel into service. In closing, the memo noted the serious danger that overpressurization would pose to workers in the vicinity.
What was most significant about this memo for our purposes was that it was sent to OHM Corporation's Vice President of Health and Safety. We had been led to believe that OHM Corporation was merely a holding company. Now we had learned that it had a vice president for health and safety and that he had been made aware of the very dangers involved in this case two years earlier. The other document that led us to file suit against OHM Corporation was a post-accident memo written by the corporate vice president of health and safety on OHM Corporation letterhead setting forth a number of mandatory remedial measures to be taken at all OHM worksites. With these documents, we felt we had enough to sue OHM Corporation and sift through the corporate relationship through discovery. Accordingly, we moved to add OHM Corporation as a defendant to the pending suit against ESE and EnergyNorth.
In the meantime, ESE had filed an indemnity action against OHMRS and EnergyNorth had filed one against ESE and OHMRS. Our motion to add OHM Corporation as a defendant was granted and the court consolidated the indemnity actions with our suit. At the same time, Judge Groff was specially assigned to the case.
The first discovery issue in this case involved our request for documents from the post-accident investigation conducted by the liability carrier for EnergyNorth.2 Following in camera review of the documents, Judge Groff ordered EnergyNorth to produce a statement from EnergyNorth's vice president and project manager taken by the investigator, as well as photographs and diagrams.
The next discovery dispute arose when EnergyNorth and OHM Corporation failed to answer interrogatories and requests for production. Judge Groff ordered EnergyNorth to answer the discovery requests and provide a privilege log within ten days or face a $10,000.00 fine. Following the filing of a motion to compel against OHM, it provided incomplete responses. Judge Groff ordered it to provide responsive answers or face a $5,000.00 fine.
Of significance in this order was Judge Groff's determination that OHM had to produce notes taken by its vice president of health and safety and its attorney during their investigation of the accident. He permitted OHM to redact any portions of the notes reflecting these individuals' mental impressions and litigation plans. However, he required both the redacted and non-redacted documents to be submitted to him for determination of the propriety of the redactions. Ruling that the work product doctrine in New Hampshire had been significantly restricted by recent case law3, he cautioned OHM that only a limited amount of redaction should be necessary if it acted in good faith. The importance of this ruling cannot be overstated. We now had candid notes from interviews conducted with OHMRS employees within days after the accident. Their stories were thus effectively locked in.
While we fought with OHM and EnergyNorth over discovery, we were able to obtain requested materials from ESE without substantial difficulty. In fact, we received seven banker's boxes full of documents -- more than seventeen thousand pages -- from ESE. We also obtained documents from each of the state and local agencies involved in the clean up project. In particular, documents from the Public Utilities Commission proved to be invaluable. At this point, although half of the lawyers in our firm were working on the case, we decided we needed more help. Through the Bar Association's resume bank, we were able to find Paul Heirtzler, a recent law school graduate who was a professional engineer with extensive hazardous waste remediation experience. We hired him to a one year contract to work exclusively on this case. Paul set to work organizing the documents and logging each page into a computer database.
In February of 1998, we received a telephone call from Bill Royal advising us that his former co-counsel had filed an ex parte suit against the Shoemakers in Massachusetts attaching the guardianship's bank accounts to pay the fees and expenses he felt he was owed. Neither the Shoemakers nor Bill Royal had heard a word from this attorney in nearly two years. He had made no effort to contact them before suing the Shoemakers and attaching their son's assets without notice. In order to free up the guardianship accounts, we agreed to permit the attorney to enter an attorney's lien in the New Hampshire civil suit in exchange for the dissolution of the attachments.
With the paper discovery well under way in our suit against OHM, ESE, and EnergyNorth, we scheduled the first round of depositions. First up were OHMRS employees. However, a few weeks before the depositions were to begin, ESE fired its lawyers and replaced them with another local firm. At this point, we were nine months from the trial date, no depositions had been taken, and Judge Groff had strongly indicated his intent to keep the trial date. As a result, the depositions of OHMRS employees went ahead as scheduled. Ten depositions were taken in four days. The second day of depositions brought the next discovery dispute.
During the deposition of OHMRS's regional director of health and safety, he was instructed not to answer questions regarding his discussions with OHMRS's attorneys in preparation for the deposition. ESE's new attorney stated that he, too, had no intention of allowing his witnesses to answer such questions. As a result, after the week of depositions was over, we filed a motion to compel asking Judge Groff to resolve this issue. Our position was that the attorneys in this case represented the corporate defendants, not the individual witnesses, and that any witness not in the corporate control group was not entitled to assert the attorney-client privilege.4
Depositions continued while the motion to compel was pending. We received Judge Groff's ruling during a break between two ESE depositions. He granted our motion and held that there was no justification for instructing non-control group employees not to answer questions regarding deposition preparation. Upon returning for the second deposition, we were told by ESE's attorney that he intended to seek reconsideration of the ruling and he would not, therefore, permit the witness to answer deposition preparation questions. By the time Judge Groff denied ESE's motion for reconsideration, only two non-control group employees were left to be deposed. ESE's attorney still would not let them answer the questions at issue, and instead, filed a motion to allow interlocutory appeal. By the time that motion was denied, twenty-three witnesses had been deposed, only one of whom could be considered to be within a corporate control group. Not one of the twenty-two non-control group witnesses had been allowed to answer perfectly permissible questions.
The depositions of fact witnesses went very well. As we prepared to depose OHM Corporation executives, we were contacted by their attorney who proposed a mediation session. We suggested using Mike Callahan from the Gallagher, Callahan & Gartrell firm as the mediator. We also suggested scheduling two days for the session. Both were accepted and we had one month to prepare our presentation.
We had determined early on that we would need a computer animation as a demonstrative aid at trial in this case. However, we decided that it might be worthwhile to have it prepared for the mediation. We quickly scheduled interviews with two animation firms and chose Animation Technologies out of Boston. Using photographs, videotapes, schematics, and even a visit to the site to look at the equipment, Animation Technologies prepared an animated view of the mini cell and all of the associated equipment. The still images were e-mailed to us as soon as they were completed, allowing us to better plan the sequence of moving images. A mechanical engineer from Animation Technologies worked with our engineering experts to authenticate the final product. We received the final version on a Super VHS cassette just a day or two before the mediation session.
As the animation was being prepared, we worked hard to put together a computerized slide show for the mediation. Using the Power Point program and a scanner, we made slides out of deposition excerpts and even reproduced important documents, photographs, and CT scans. This allowed us to give an organized presentation on liability and damages. Interspersed with the slides and the animation were portions of videotapes of the site taken before and after the accident, and an abbreviated version of the day-in-the-life videotape we had prepared. Lastly, we had Sandy Lowery, one of Tom's life care planners, appear live at the mediation to speak briefly about his future needs.
We held the mediation at a local hotel. Present were attorneys and adjusters for the three defendants, as well as two adjusters for the workers' compensation carrier. Our client's parents were present. Both sides brought structured settlement experts. Total attendance for our presentation was approximately twenty-five. The slide show, video excerpts, and particularly the animation and the day-in-the-life, held everyone's attention for more than an hour in a way that would have been impossible otherwise. This allowed us to put forward our best case to the people who needed to hear and see it directly. It seemed to go very well. Mike Callahan gathered the defendants' attorneys after our presentation and they decided to waive their rebuttal. We then broke out into groups.
It became clear quite quickly that two of the defendants were interested in settling the case and one was not. ESE, the general contractor, took the position that it had no liability because of its indemnity agreement with OHMRS in the original subcontract. Consequently, it steadfastly refused to offer any money. The other two defendants, OHM Corporation and EnergyNorth, made legitimate offers and engaged in good-faith negotiations. At the same time, we met with the workers' compensation carrier and convinced it to waive its million dollar plus lien and contribute additional money to the settlement package.5 At the end of the two-day session, we were left with a very substantial offer without ESE participating at all. We rejected the offer and rescheduled the depositions we had canceled.
We had to decide at this point whether to settle with OHM Corporation and EnergyNorth and pursue ESE. We carefully analyzed the indemnity agreement upon which ESE was relying. The agreement itself was quite ambiguous, but that alone was not of any immediate help. During a brainstorming session, we remembered an earlier case we had in which a defendant architect had asserted an indemnity claim which we were able to defeat with a New Hampshire statute which prohibited architects from entering into indemnity agreements. We remembered that the statute included professionals other than architects and checked it for application in this case. The statute expressly prevented engineers from entering into indemnity agreements concerning liability for their own negligence.6 ESE was an engineering company and the vice president who executed the subcontract which included the indemnity provision was a registered professional engineer. We felt that ESE's reliance on the indemnity agreement was no longer valid.
We met with ESE's attorney to tell him about the statute and urge him to participate in settlement negotiations. To our surprise, he informed us that the indemnity agreement was no longer especially important since ESE felt it had no liability on the merits. At this point, we decided it was time to pursue settlement with the other two defendants and focus our efforts on trying the case against ESE. We held a settlement conference at our office with OHM's attorneys and adjuster, as well as the workers' compensation adjuster. After a day of negotiating in late October 1998, we agreed to settle our claims against OHM Corporation, EnergyNorth, and the workers' compensation carrier for $7,900,000.00. This left a month and a half until trial against ESE.
We quickly scheduled expert depositions. Our liability experts held up well while ESE's fell apart completely. Our medical and economic experts did well. Their's were scheduled to be deposed beginning the day before Thanksgiving and the week after. Two days before Thanksgiving we were presented with an offer of one million dollars from ESE. Faced with the prospect of trying a case to a New Hampshire jury with a nearly eight million dollar credit, and then litigating the enforceability of the indemnity agreement, we recommended to our clients that they accept the offer. They had already purchased an annuity with a portion of the first settlement which ensured the basic needs of their son for the rest of his life. These additional funds would be used to cover any emergency care or extraordinary treatment that arose later. They gave us authority to settle and we accepted ESE's final offer of $1,050,000.00, the morning before Thanksgiving.
Although the case was over, we still had to deal with the attorneys' lien asserted by our clients' former attorney. That issue remains pending.
We hope that others can learn from the many interesting issues that arose in this case. Fortunately, we are not prevented from discussing anything since the settlement did not include any confidentiality provisions. We would be happy to talk in more detail with anyone who is interested or has questions.