Dog Bite Law

Less obvious grounds for liability

Attorneys should always prepare a memorandum of law in dog bite cases. Start by reviewing your state dog bite statute (31 states and the District of Columbia have them). Most of these statutes impose strict liability on the owner of a dog that bites, without the need to prove negligence or that the dog has bitten someone before. Note, however, that in the field of dog bite law, "strict liability" usually means "almost strict liability" -- be sure to check out the exceptions for "provocation," trespass, signage, degree of injury, time of day, and more.

Most strict liability statutes apply just to the dog owners and do not mention the measure of damages, but some go further, extending strict liability to whoever had custody of the dog when the attack occurred and providing additional compensation if the dog previously bit a person. Several states have statutes that combine concepts of negligence, common law strict liability, and violations of local law.

Tip: One of the most overlooked grounds for liability is negligence per se based on violating a local public health and safety law such as a leash law, dog trespass law, or prohibition against dogs running at large. In states that do not have strict liability statutes, a violation of local law often is the only ground for liability. If you have to rely on this type of cause of action, research key terms such as "dog, bite, negligence, negligence per se, class" (the reason for "class" is that the court decision usually mentions the fact that the victim is a member of the class of persons intended to be protected under the animal control statute, which is an element of negligence per se liability).

Taking the Dog Owner's Deposition

There are three unique characteristics of dog bite defendants. They can be extremely helpful witnesses, they usually speculate about why the dog attacked, and they are in a unique position to reveal the true cause of the incident if the questioner knows what to ask. Each of these aspects of the deposition is discussed in this section.

The victim always has to prove why the dog attacked

Regardless of what the law says, the victim always has to prove why the dog attacked him. Even in a strict liability state, you have to prove that something other than the victim’s own conduct caused the dog to attack, because judges, juries and insurance adjusters tend to believe the cultural myth that all dogs are good dogs and that no good dog would maul a person without a good reason. Because dogs are regarded as “man’s best friend,” everyone (the witnesses, the adjuster, the judge and the jury) will put your client on the list of suspected causes. This is totally unfair to the victim because legal provocation only occurs in 6.5% of dog attacks:

Under principles of Common Law there is the assumption that dogs are harmless unless they have previously demonstrated a vicious propensity. This often leads to the related assumption that victims of dog attack have provoked or otherwise precipitated the attack. However, those studies which have attempted to document the context in which an attack has occurred generally show that bite victims are rarely engaging in activity that could legally be considered provocation (i.e., causing physical injury to the animal). In the non-fatal bites surveyed by Beck et al. (1975), the victims had no interaction with the dog, or were walking or sitting in 75% of the cases. In 9.6% the victim was playing with the dog and in only 6.5% could the victim's behavior be classified as provocative. (Lockwood, The Ethology and Epidemiology of Canine Aggression, in James Serpell (ed.) The Domestic Dog: Its Evolution, Behavior & Interactions with People, (Cambridge, U. K.: Cambridge Univ. Press), pp. 132-138.)

You cannot permit uninformed myths about the presumed friendliness of dogs to denigrate the value of your case. Therefore you always are tasked with proving the real reason why the dog bit the victim. 

There is another reason to get into the cause of the attack. You have heard the expression, “It’s a dog’s life.” While some people treat their dogs literally like kids, others habitually neglect them, even to the point of mistreatment. For example, many owners do not bring their sick dogs to the veterinarian. A dog with a painful hip may snap at anyone who touches the hip. Showing that the dog bit the victim because the owner neglected or mistreated it casts moral blame on the owner. This enhances both the liability and damages sides of your case regardless of whether your case is governed by a strict liability dog bite statute.

One of the most important goals of the dog owner’s deposition is to learn as much as possible about the dog. As you probe the dog owner, you often will learn that he neglected or mistreated his pet, that it was uncared for or sick, that it was often chained, or that he employed it for protection or even intimidation. With such evidence you eliminate the risk that a jury will reduce the victim’s compensation because of speculation about provocation, and you enhance both the liability and damages sides of your case.

Dealing with the defense of assumption of the risk

For some reason, one of the favorite defenses is assumption of the risk. This defense is based upon the proposition that there was something dangerous about the dog which the victim perceived prior to the accident. This defense can easily backfire upon the dog owner, however, because if the dog was that dangerous, the dog owner should have realized it and guarded or warned against it.

Experience has shown that this defense is raised by the insurance adjuster, and can be dealt with in discussions with him or the defense attorney. One begins by stating the obvious principal that assumption of the risk requires that a risk exists, and that the victim appreciated it. In other words, a victim would not be able to assume a risk that did not exist as a matter of fact, or one that he did not know of or, in the case of a little child, one that he did not appreciate. There are many cases that establish this principle. So you have to ask the adjuster or defense attorney whether a risk actually existed, and whether the dog owners themselves knew about it. Ninety-nine times out of a hundred, they will deny that there was any risk, or knowledge of it, and the defense evaporates.

If this goes to deposition, you use reverse psychology with the dog owners. You make it look like you are trying to get them to admit that their dog was dangerous and that they knew all about it. They will tell you many reasons why their dog could not have possibly been considered to be dangerous. When you give them examples of things that could have made the dog vicious, like illnesses or accidents, they deny them all. By the time you complete this line of questioning, they have convincingly ruled out the possibility that the dog was dangerous, or that they, as the owners of the dog, had any reason to think that the dog was dangerous.

You then begin asking questions about knowledge on the part of victim. The first one is how much contact the victim had with the dog in the past. It is always the case that the victim had less contact than the dog owner, implying that there was less opportunity to learn about the dog. You then ask them whether the victim had some kind of special contacts with the dog or with people from the dog's past, which would have given the victim knowledge superior to that of the owners themselves. Inevitably, the answer is that there were few or no contacts, and no special knowledge on the part of the victim. You then ask, "In view of the fact that even you didn't know that your dog was dangerous, can you explain to me how my client could have learned that the dog was dangerous before this accident happened?"

This is basically a win-win line of questioning, because either they admit that the dog was dangerous and put themselves into liability that way, or they destroy the defense of assumption of the risk.

Getting records from Animal Control

Even if you are in a strict liability state, it always is useful to prove that the dog bit someone before it bit your client. One of the best ways of proving it is the official record of the agency or organization that enforces the animal control laws where the dog lived prior to your accident. Here's how to get that evidence.

• Send the interrogatories that are included in Dog Bite Litigation Forms for Plaintiffs' Attorneys. At least send the ones that ask for the age of the dog, all places where the dog has lived, all places where the defendants have lived, and the contact information for all prior owners of the dog.

• The answers will provide you with addresses. Find out who does animal control for each of those addresses -- city agencies or humane societies. Get the phone number for each. Call each and speak with a supervisor. Ask him or her whether there are any records on the dog, and to whom a subpoena should be directed. Ask whether they require anything with the subpoena, such as a check for copy charges.

• If he or she tells you that there are records on the dog, ask whether they indicate a history of aggression toward people. Should the answer be yes, find out who can testify to that (i.e., was it a single officer who wrote the reports). Find out what the arrangements should be to take that officer's deposition. Also ask to speak with that officer, right away or at least prior to the deposition, so that you can further evaluate whether to depose him or her.

Remember that you should never stop with the animal control records. There are a lot of other people who always know as much or more than the law enforcement authorities. The interrogatories included in Dog Bite Litigation Forms for Plaintiffs' Attorneys force the defendants to give you those names and addresses. The litigation forms also include a handy list of potential witnesses in every case, which you can use as a checklist.

Evidence in dog bite cases

There are particular issues in the field of evidence that arise in dog bite cases. Here are tips and tricks on some of those issues.

Photographs

Without a doubt, a photo is worth 1000 words when the victim has lacerated, avulsed and bruised skin. You must be assured that your photographic evidence is admissible. Pay strict attention to not only the rules of evidence, but also the state and local court rules, and the pretrial order.

When disclosing trial exhibits, be sure to show the defense the enlargements you plan to use at trial, not just the 4x6 prints. It was held in one case that the plaintiff was restricted to the smaller prints because those were the ones that had been filed pursuant to a pretrial order, and had been stipulated to by the defense. Mills v. Smith, 9 Kan. App. 2d 80, 84 (1983). The Mills court reasoned as follows:

[I]t is contended that the trial court abused its discretion in excluding enlargements of certain photographs. The pretrial order required the parties to file all exhibits no later than fourteen days before the trial date. Before trial the defendants stipulated that the 4" x 6" prints were admissible. On the day of the trial the plaintiff offered the enlargements. The trial court sustained the defendants' objection on the ground that the plaintiff had not shown the enlargements to the defendants, but admitted the smaller prints into evidence.

A pretrial order controls the course of the action unless modified to prevent manifest injustice. Sieben v. Sieben, 231 Kan. 372, 376, 646 P.2d 1036 (1982); K.S.A. 60-216. Moreover, the trial court noted that the enlargements showed nothing more than the smaller prints and there is nothing to indicate that the plaintiff's rights were prejudiced. We conclude that the trial court did not abuse its discretion in denying plaintiff's request to admit the enlargements.

Breed characteristics

The characteristics of a breed, as opposed to the defendant's own dog, might be admissible at trial because of their probative value as to particular issues, provided that some evidence exists that the dog itself had behaved or possessed those same characteristics.

The most famous example of the successful use of breed evidence is the Diane Whipple case (People v. Knoller), which Attorney Kenneth Phillips has described as a "breed specific prosecution." In that trial, the jury heard evidence that the defendants were associates of a prison gang that was establishing a business to breed and sell the most dangerous dog they knew of, the Presa Canario; the defendants knew the dangerous characteristics of the breed, and the dogs involved in the killing of Diane Whipple had those characteristics. The judge and jury specifically disbelieved the defendant, Marjorie Knoller, when she testified that her dogs were safe. Attorney Phillips' interview of the jury foreman after the trial revealed that the jury's general feeling about Knoller and her attorney was that they were untruthful. The verdict was guilty on all counts, including second degree murder (reckless homicide) which carried a possible sentence of 20 years in prison.

However, there are many cases in which the courts have excluded evidence of the characteristics of a breed. The common element in these cases is that the offered evidence consisted of a general characteristic to engage in aggressive behavior against humans, plus an absence of evidence that the particular dog ever exhibited the same propensity. Applying a rule similar to the prohibition against using character evidence to prove specific conduct, the courts often refuse to admit evidence about breed characteristics under these circumstances.

Attorneys who represent victims therefore are advised to base their cases not upon breed evidence but on specific acts by the dog that attacked the plaintiff.

Viciousness against animals

The propensity of the defendant's dog to attack other domestic and feral animals might be admissible at trial on a particular issue, but should not be relied upon to prove that the dog was vicious toward people. Courts repeatedly have ruled that there is no value to evidence that the dog in question chased and killed animals, when such behavior was offered to show that the dog was dangerous to people.

However, the propensity to attack animals can be very relevant in particular cases. A good example would be a dog that is hyper vigilant in its own backyard, attacking anything that moves within the yard, in a case where a neighbor of the dog owner was bitten by the dog as the neighbor stood on his own side of the common fence separating his backyard from the defendant's backyard. Evidence of the dog's propensity to attack animals in the owner's backyard would be relevant to proving that the cause of the accident was the dog's propensity and not the victim's alleged negligence.

Another example would be the propensity of an "at large" pit bull to attack other dogs, in a case where the victim was attacked by the pit bull while she was walking her dog in a rural area that did not have a leash law or a law prohibiting dogs from being at large. It is commonly known that all pit bulls without exception have the propensity to fight other dogs. For that reason, it can always be contended in such a case that permitting a pit bull to go at large is negligent, because of the breed's tendency to attack other dogs and the human tendency to protect one's pet. (The tendency to rescue one's own dog when it is under attack is discussed at Legal Rights of Rescuers Who Incur Dog Bites.)

Admissibility of statement that "the dog bit me"

In many dog attacks, only the victim is present. When he is a child of tender years, defense attorneys sometimes attack his compentence to testify. There are several ways to handle this, depending on the circumstances.

Where the defense suggests that there is insufficient evidence to prove that the dog actually bit the victim, the child's physician may be called to testify that the wounds were made by a dog. The opinion can be based upon the spacing of the punctures or lacerations, the depth of the wounds, or the type of infection that developed.

If the child immediately exclaimed that "the dog bit me," his statement may be admissible under the excited utterance exception or, in Federal Court, the exception for statements made in aid of medical treatment or, in state court, the exception for statements about the declarant's prior physical condition.

Some states use the res gestae exception to admit facts, statements or things done which form the basis or gravamen for a legal action. For example, where a state dog bite statute might apply only to a bite by a dog, then a child's exclamation that "the dog bit me" may be admissible as res gestae.

Expert testimony by canine professionals

The topic of expert testimony by canine professionals is explored in some depth at The Use of Experts In Dog Bite Cases. Several tips are offered here.

Courts have excluded or given little weight to an expert's opinion testimony that the defendant must have known about the dangerous propensity of a dog, when the facts upon which the opinion is based consist of general characteristics of the breed as opposed to specific instances of behavior by the dog that attacked the plaintiff. In other words, expert testimony about what the defendant knew should not be relied upon as the cornerstone of a dog bite case.

Generally, the presence of a canine expert at trial can be distracting and misleading if handled incorrectly. The jury might get the incorrect impression that the trial is about the dog's "state of mind," or that the owner lacked the necessary expertise to predict that his dog would attack the plaintiff. Therefore, the attorney for the victim should use canine expert testimony on very narrow, very specific issues, and only when expertise is really necessary to prove an aspect of the case.

Avoiding structured settlement traps for the unwary

Constructive receipt of the purchase money for the annuity

Properly established, a structured settlement provides a stream of payments that is entirely free of tax, meaning that both the original settlement amount as well as the gain on the investment are 100% tax free. However, the structured settlement has to be properly established. Even if documented correctly, the settlement will lose its tax benefits if there is constructive receipt of the purchase money for the annuity.

An attorney representing State Farm Insurance Co. wrote to Attorney Phillips, saying: If your client wishes to obtain an annuity through [a structured settlement professional], State Farm will make the settlement draft out to your client's parents, after which they may purchase the annuity.

This was a veiled threat that, unless the annuity was purchased from State Farm Life Insurance Co., State Farm would see to it that the tax benefits of the settlement were destroyed.

If plaintiff's side were deemed to be in constructive receipt of the portion of the settlement funds used to purchase the annuity, the plaintiff would receive no tax benefits which otherwise would be provided under the laws pertaining to structured settlements.

To encourage victims to agree to receive periodic payments rather than lump sums, Congress provided an incentive in the form of a "tax break." Specifically, Congress passed Public Law 97-473, which made the gain on a personal injury settlement excludable from income (i.e., tax free) if certain conditions are met. (See P.L. 97-473, Jan. 14, 1983 (97th Cong., 2d Sess.))

It is essential, however, that the funds not pass through the hands of the plaintiff or his or her attorney. This was addressed in Rev. Rul. 79-220, 1979-2 C.B. 74, which concludes that a right to receive certain periodic payments under the facts of the ruling does not confer an economic benefit on the recipient.

In Rev. Rul. 79-220, a taxpayer entered into a settlement with an insurance company for the periodic payment of nontaxable damages for an agreed period. The taxpayer was given no immediate right to a lump sum amount and no control of the investment of the amount set aside to fund the insurance company's obligation. The insurance company funded its obligation with an annuity payable directly to the taxpayer. The insurance company, as owner of the annuity, had all rights to the annuity and the annuity was subject to the claims of the general creditors of the insurance company. The ruling concludes that all of the periodic payments are excluded from the taxpayer’s gross income under § 104(a)(2) because the taxpayer did not receive, or have the economic benefit of, the lump sum amount used to fund the annuity.

The triggering of either constructive receipt or economic benefit by a claimant precludes the ability of an obligor to make periodic payments under a 26 U.S.C. § 130 “qualified assignment” and preserve the tax benefits. References to constructive receipt and economic benefit are not included in either section 104 or 130. However, Congress stated that: "The periodic payments of personal injury damages are still excludable from income only if the recipient taxpayer is not in constructive receipt of or does not have the current economic benefit of the sum required to produce the periodic payments." S. Rep. No. 97-646, at 4 (1982).

Consequently, there is a certain procedure that has developed with regard to these structured settlements. The plaintiff's attorney and the adjuster for the homeowners insurance company (or the liability insurer for the dog owner) form an agreement as to whether to purchase an annuity from any company or from a company related to or approved by the homeowners insurance company. At that point, the plaintiff's attorney engages a structured settlement specialist to arrange for the purchase of the annuity. The parents of the minor select a payment schedule from several proposals obtained by the structured settlement specialist. The plaintiff's lawyer then does a master accounting and, based on that, the attorney obtains court approval of the settlement. The court order covers a number of issues, one of which is the purchase of the annuity. The plaintiff's lawyer sends the order to the liability insurer, which purchases the annuity. In this way, the money for the annuity never passes through the hands of the victim or his attorney, and consequently there is no constructive receipt of those funds.

Farmers Insurance Co. allows victims to purchase the best annuity available from any company; State Farm Insurance Co., on the other hand, insists on selling victims an annuity from its related company, State Farm Life Insurance Co. -- and the price of this annuity is always significantly higher than other companies.

There are at least two stratgies for dealing with State Farm Insurance Co. and other companies that attempt to coerce victims into purchasing annuities at inflated prices. See "Counter-measures available to plaintiffs," below.

Fraudulent practices by liability insurers

The complexity of a structured settlement makes it not only difficult to understand, but provides unscrupulous insurance companies with the ability to defraud accident victims. Attorney Richard Risk, one of the nation's leading practitioners in the field of structured settlements, has chronicled the many ways that insurance companies skim proceeds, take kick-backs, cheat their policy holders, defraud the courts, and routinely engage in unethical, tortious and even criminal conduct. See History of Abuse Tarnishes Structured Image and the many other informative offerings to the legal profession at his excellent website, Risk Law Firm.

Consider this example from the files of Attorney Kenneth Phillips:

In 2002, Attorney Phillips represented a very young child named Tyler V whose nose had been amputated by a dog bite, then re-attached, resulting in scars. Phillips negotiated a settlement of the dog bite claim from the dog owner's homeowners insurance company. Because of the tender age of the victim, a structured settlement was necessary. Knowing this, the homeowners insurance company offered an annuity that provided a series of payments over the course of Tyler's life which would total $1.1 million. A lifetime stream of payments was the first choice of Tyler's parents.

Nevertheless, after receiving that offer, Phillips engaged an independent broker who specialized in handling victims as opposed to representing insurance companies. That broker did a market survey and notified Phillips that other companies were offering payment streams that totaled $2.2 million. In other words, Tyler's settlement would purchase not just a $1.1 million annuity, but a $2.2 million annuity. Someone was planning on keeping that other $1.1 million which Tyler's money was going to earn. That "someone" was the homeowners insurance company.

There was another nasty feature that the homeowners insurance company had slipped into Tyler's offer, which the broker uncovered. The annuity from the homeowners insurance had only a 15-year guarantee. In other words, it contained a clause saying that if Tyler died any time after the age of 32, all of the remaining payments would stop. To put it another way, if Tyler died at or after age 32, married with children, the homeowners insurance company was planning on keeping the money that his widow and children would have inherited. The other companies, which were offering $2.2 million, were offering a 50-year guarantee -- in other words, they were agreeing to make the payments until Tyler turned 68 even if he died while still a child.

To put it in plain English , the homeowners insurance company was planning to (a) skim $1.1 million from Tyler's settlement and (b) steal as much of the remaining $1.1 as they could in the event of his untimely death. This was not only a bad offer, but an unjust, immoral attempt to defraud Tyler -- a child who had been injured.

When Phillips confronted the homeowners insurance company with this information, it initially replied that this was a "take it or leave it" offer. The homeowners insurance representatives, including its attorneys, knew that they had leverage over Tyler because they could make the gain on his settlement taxable by refusing to cooperate in the purchase of a tax-free annuity from another company. They told Phillips that he had no choice other than to buy from them, because otherwise Tyler would have to pay at least $500,000 in income taxes.

In response, Phillips contacted two national magazines whose names are well known to the public. Both magazines agreed to publish the story of the Tyler V. case and this insurance company if Phillips would write it. Upon learning about this development from Phillips, the homeowners insurance company did an about-face, for obvious reasons, informing Phillips that they would cooperate fully in the purchase of the annuity from the other company that would pay Tyler $2.2 million instead of $1.1 million, and would guarantee his payments for 50 years instead of 15. Today, this insurance company is the defendant in a class action lawsuit which alleges that it has persisted in using this exact same tactic against thousands of other injured children, skimming from their settlements, defrauding them.

This particular company is one of many who have been engaging in this practice since structured settlements became tax-free in the mid-1980s. In other words, for more than 20 years a segment of the insurance industry has been taking money which otherwise would have been paid to injured victims, including innocent children, by exploiting a loophole in the complex legal construct known as the structured settlement. Incredibly, the majorities of both the legal community and the judiciary appear to be entirely oblivious to this 20-year-old crime spree by major American liability insurance companies.

It should be noted that not all insurance companies engage in such practices. The more cautious companies do not offer to sell anything to victims or their attorneys. This avoids both the appearance of and opportunity for fraud. Some companies offer annuities that give market rate benefits to the victims, but at the expense of the brokers who represent them. This is less morally blameworthy but nevertheless can deprive victims of the benefit of full representation by the most competent brokers.

Harassment of victims and their lawyers

Some of the most difficult and time consuming tasks in a dog bite case take place after settlement has been achieved.

At that point, one must select an annuity and obtain court approval of the minor's compromise. The liability insurer usually offers to sell the victim the annuity, or demands that the sale be made through a specific broker or from a specific life insurance company. With few exceptions, such offers or demands work to the detriment of the victim because the annuity being offered is either over-priced or lacking important features, the broker pays kick-backs to the liability company, and the life insurance company is commonly owned or pays kick-backs -- meaning that the victim will not receive all that he would be entitled in an arms-length, free market transaction.

As the victim's lawyer, should you choose to simply go along with these practices, you face the real possibility of a malpractice claim at some point in the future, perhaps when you are retired and without errors and omissions insurance. If you refuse to succumb to the industry's tactics, a battle ensues which can take longer and be more stressful to resolve than the underlying case. You are interfering with a segment of the insurance business that was bringing insurers up to $8 billion in annual profits in the recent past, until more plaintiffs' lawyers, state attorneys general, and state legislatures began taking action to stop these schemes. In response to your challenge, the liability insurer will refuse to settle the underlying claim, refuse to obey the court's order approving the settlement, refuse to issue the settlement funds, refuse to issue your court-ordered fees, refuse to write the check out to the annuity issuer chosen by you, refuse to sign the settlement agreement, and/or refuse to sign the qualified assignment. They have been known to employ each of these tactics in sequence, carrying on for months, only to do exactly what you requested, and the court ordered, at the very last minute. From time to time, litigation has ensued, including class actions.

Fraud upon the courts

One of the strangest aspects of the structured settlement field is the bold fraud that has been committed upon the courts. When minors are injured, their settlements have to be confirmed by state court judges. It is in this confirmation that the child's rights are waived in exchange for the settlement funds. The segment of the insurance industry that engages in these illegal, immoral and unethical practices depends upon the courts to make these settlements binding upon the children. Without the approval of the judges who are required to supervise minors' compromises, these settlements could not take place. This is not meant to imply that judges conspire with insurance companies, but rather to suggest that attorneys who represent minors have the duty to fight the corrupt practices of this segment of the insurance industry, and then to bring them to the attention of the judiciary as well as Congress.

For this reason as well as the duty to represent their clients, attorneys need to be familiar with the practices of the industry as well as the technical requirements of the structured settlement, because this knowledge will help to spot any attempt to manipulate or skim from a settlement, and will enable the lawyer to educate the judiciary. One of the most important educational tools for lawyers is Attorney Richard Risk's Structured Settlements: The Definitive Guide. See also his article, Common Mistakes in Documents Create Risks. His article Doing What's Right and Avoiding What's Wrong presents a catalog of insurance company abuses, as well as counter-measures. Attorney Risk is one of the nation's leading legal authorities in structured settlements, and his website is one of the best places for other lawyers to learn about this treacherous area of practice. Mr. Risk also is available to serve as trustee when the victim's attorney employs the "qualified settlement fund" to avoid many of the pitfalls discussed herein.

Counter-measures available to plaintiffs

A number of counter-measures are available to combat attempts by insurers to manipulate settlements.

Many homeowners insurance companies will "match the market" if the attorney representing the victim so demands. The word "match" is in quotes because insurance companies have ways of manipulating the pricing of annuities that still give them a little bit of the victim's settlement money even if they pay what an unrelated company has agreed to pay. For example, because the homeowners company merely has to shift funds from one account to another, it can use today's price for the annuity rather than the higher price associated with a later purchase date. Keeping the "lock-in fee" can put $1000 in future funds into the pocket of the homeowners company at the expense of the victim.

In an appropriate case, the victim's attorney can make an "end run" around the homeowners insurance company by employing the device known as the "qualified settlement fund." First, he must obtain an order from a state judge which establishes a settlement trust, appoints a trustee, and dismisses the claim against the homeowners insurance company and dog owners. The trust then can receive the settlement funds from the homeowners insurance company, and obtain the court's approval to purchase the annuity for the child and make other disbursements such as payments to lien holders, parents and the lawyer. This method entails additional expense and can be difficult because it needs to be carefully explained to the court while kept out of the sight of the insurance company, which will do everything possible to delay or thwart it. When the victim is a minor, as many as three court appearances are necessary: first, to establish the trust, second, to dismiss the defendants, and third, to approve the disbursements to the annuity issuer and others. See Richard Risk, Qualified Settlement Fund Sequence. Hardly any judges in the USA have experience with the qualified settlement fund, making it difficult on the victim's attorney. The advantages of the qualified settlement fund, however, are that it provides full tax advantages to the victim, while depriving the homeowners insurance company of the ability to manipulate or retain part of the settlement.

As a last resort, the courts are available to restore a moral, ethical and just balance to the otherwise very unequal and difficult relationship of victim and liability insurer. For one example of a current class action against insurance companies, see Attorney Richard Risk's summary of the class actions against State Farm and Allstate for their alleged practices of forcing victims to purchase annuities at inflated prices. Also see his summary of the class action against Hartford for shortchanging.

Another example of a suit that alleges such practices is Macomber v. Travelers Property & Casualty Corp., 804 A.2d 180 (Conn. 2002), also 277 Conn. 617 (2006)(the latter decision pertains to the class action certification and is interlocutory in nature). The Macomber case alleges that Travelers has engaged in two schemes to fraudulently deprive victims of a portion of their settlements. These schemes are referred to as "rebating" and "shortchanging." Rebating is the practice of funneling victims through brokers who pay kickbacks to the liability insurance companies. Shortchanging is the practice of agreeing to settle a claim for a certain amount but then, by rebating and selling overpriced annuities, expending less than the amount that was promised in the settlement.

The courts have the ability to level the playing field by making appropriate orders. For example, in the case known as Pacheco, et al., v Clark, Case No. D0101 CV 2002 00855, the First Judicial District Court in Santa Fe County, New Mexico, issued in Order on Emergency Motion to Enforce Settlement on August 4, 2003, requiring insurance company CNA to allow the plaintiff to purchase an annuity from any company he chose. The plaintiff had alleged that CNA breached the settlement agreement reached at mediation by unilaterally requiring the plaintiff to use CNA to structure his settlement. The court awarded the plaintiff $2183.88 (the amount of interest lost during the period of this dispute), fees and costs to his attorney, an expert witness fee to the broker who testified as to the practice of CNA, and ordered CNA to pay the annuity costs as directed by the plaintiff.

Courts have recognized that post-settlement arm-twisting on the part of insurance companies results in delay and therefore causes damages to victims who of course do not receive interest during that period. When that conduct consists of attempting to steer business toward the insurer or broker selected by the insurer, the insurance company can be made to pay damages and sanctions to the victim. See Richard Risk, Insurer Sanctioned for Delay.

Importance of settlement documentation

The documents that memorialize a structured settlement are of critical importance to the victim, as opposed to those that involve an ordinary lump-sum settlement. One of the most pernicious of the liability insurers' practices is the use of settlement documents that will deprive the victim of his expected tax benefits.

A structured settlement relies on the favorable tax treatment provided by Congress through the Internal Revenue Code. The annuity's internal rate of return might be four percent, but the taxable equivalent rate might be double that amount. In a lump-sum settlement, there are no tax nuances and the documentation is entirely for the benefit of the defendant, but in a structured settlement the paperwork must serve to protect the tax benefits intended by Congress and expected by your client.

One would think that the structured settlement documents promulgated by liability insurers would and should ensure that victims will receive these advantages, but in fact the opposite is usually the case: insurance company documents contain language that will enable the IRS to tax and penalize victims' structured settlements. For example, the forms currently used by State Farm contain the victim's acknowledgement that the consideration for the settlement has been received, a provision that triggers the doctrine of constructive receipt and makes the gain on the settlement fully taxable. That is only one of many examples.

If you accept these documents, you commit malpractice. Properly drafted settlement documents have been made available through this website (see below). These include a Petition for Approval of a Structured Settlement, an Order of Approval, and a checklist of necessary provisions for inclusion in the structured settlement agreement.

Dog Bite Litigation Forms and other helpful materials

Attorneys who represent plaintiffs can obtain a complete set of the litigation forms created by Kenneth Phillips, the author of Dog Bite Law. They include a complaint with multiple causes of action, Interrogatories (90), Demand for Inspection of Documents (40 categories of documents), Request for Admissions (38), Deposition Outline (29 pages covering 50 topics), Expert Witness Disclosure and other essential items for the plaintiff's lawyer. There also are alternate sets of Interrogatories and Admissions for use in states that limit the number to 30 of each.

Also included is a petition and order approving a minor's settlement which, by a combination of specific provisions that direct the actions of the liability insurer and describe the settlement in terms the IRS cannot misunderstand, will ensure receipt of expected tax benefits. The instructions for the petition include a concise checklist of terms to avoid and include in the structured settlement agreement.

These are the same forms that are used by Mr. Phillips and the lawyers who work with him on dog bite cases throughout the United States. These forms will save you hours of legal research and typing. The Deposition Outline, for example, will cut 90% off your preparation time. Most important, it will ensure a comprehensive approach to your dog bite case!

The Dog Bite Litigation Forms for Plaintiffs' Attorneys are downloaded to your computer and therefore available for you to use today, in just a couple of minutes! Find out more about them by clicking here.

To learn the most sophisticated tips, tricks, strategies and tactics for dog bite cases, get Mr. Phillips' video, Anatomy of a Dog Bite Case. This highly rated seminar provides 2-1/2 hours of case winning information that you will not find anywhere else. It plays on your computer, and you get a copy of the "speaker's script" to make your learning experience more powerful.

To find out more about this video, click here. The Dog Bite Law Bookstore's full catalogue of time-saving, case-winning offerings for attorneys includes:

www.dogbitelaw.com and each of its sections and products, including Dog Bite Law, The Dog Bite Law Adviser, Dog Bite Litigation Forms, What To Do If Your Dog Is Injured Or Killed, Avoiding Liability When You Train, Shelter or Adopt-Out, Anatomy of a Dog Bite Case, and the foregoing text, are (c) 1999-2009 Kenneth M. Phillips. All rights reserved. Reproduction in whole or part prohibited except where advance permission is granted in writing. Please read the disclaimer and our rules for linking and quoting. Reporters seeking interviews are welcome to contact us by clicking here.