Poulson v. Ofack (CA1 3/17/09)

When is a good result a bad result?

This was a motor-vehicle accident case. Plaintiff’s medical bills were $17,000; the arbitrator awarded her $39,000; Defendant appealed. Four days before trial, Plaintiff disclosed additional medical bills of $5,000; over objection, the trial court let them in. The jury awarded $30,000 – on $22,000 in medical bills, not bad work by the defense.

Because the verdict was not twenty-five percent more favorable than the award, though, Plaintiff moved for statutory sanctions (including almost $24,000 in attorneys fees). The trial court denied them. The possibility of sanctions had come up during the argument about the newly-disclosed bills and the court indicated, then and in denying Plaintiff’s motion, that it would not be fair to sanction the Defendant when it had allowed Plaintiff to increase the amount of the claim.

The Court of Appeals reversed. Under the statute (12-133), sanctions are mandatory unless they would cause “substantial economic hardship.” There was none of that here since Defendant’s insurance carrier was paying.

The language of the statute is clear. The problem with the opinion is its implication (paragraph 13) that the legislature intended this result. We think it highly unlikely that legislators foresaw courts allowing plaintiffs to add new things to a claim yet holding defendants to the standard of the old claim. It would be more correct to say that the statutory language allows this and that the legislature, which could change the statute if it wished, has not done so.

Its easy to suggest in retrospect,  especially since we don’t know the facts of the case, that the arbitration award wasn’t really bad enough to warrant appeal, particularly with a claimant who was still treating, and that the defendant should have moved for new trial and appealed the evidentiary ruling in response to the claim for sanctions. But trial judges should know that a statute that says “shall” is going to be held to mean “shall” unless it gives a clear exception. The idea of balancing the unfairness is of course a favorite of trial courts but it shouldn’t take retrospect to know that they can’t do so using discretion they don’t have.  If the plaintiff’s attorney nearly tripled his fee by sandbagging the defense, CA1 isn’t the court to blame.