Stephen F.

Meyerkord*
Peter B. Hoffman**
2
2009 Cumulative Supplement to
Chapter 2

EVALUATION AND SETTLEMENT

OF PERSONAL INJURY CLAIMS

Supplemented:
§§2.5
2.7
2.9
2.11
2.11A (New Section) Focus Groups
2.11B (New Section) Mock Trials
2.13
2.16A (New Section) Negotiation Using Mediation
2.22

______
*Mr. Meyerkord received his A.B., 1971, from Drury College and J.D., 1974, from
Washington University. He is a partner in the St. Louis firm of Meyerkord,
Rineberg, and Graham, L.L.C. Mr. Meyerkord wishes to acknowledge the substantial
assistance of Brian D. Kurth in the preparation of this supplement. Mr. Kurth is an
associate at Meyerkord, Rineberg, and Graham. He received his B.B.A., 1996, from
the University of Wisconsin-Madison and J.D., 2007, from The John Marshall
School of Law.
**Mr. Hoffman received his B.A., 1973, from Washington University and J.D., 1976,
from the University of Missouri-Columbia . He is a partner in the St. Louis office
of Baker Sterchi Cowden & Rice, L.L.C. Mr. Hoffman wishes to acknowledge the
substantial assistance of Laura Bettenhausen in the preparation of this supplement.
Ms. Bettenhausen is an associate at Baker Sterchi. She received her Bachelor of
Music, 2005, and J.D., 2008, from the University of Missouri-Columbia.

2009 2 Supp.–1
§2.5 EVALUATION AND SETTLEMENT OF PERSONAL INJURY CLAIMS

II. Evaluation of Personal Injury Claims

From Plaintiff’s Perspective

C. (§2.5) Liability

Add the following example to the bulleted list of examples in the

original section:

 any case in which the defendant’s conduct is exacerbated by

factors such as intoxication, prior criminal convictions, etc.

E. (§2.7) Damages

In medical malpractice cases, the 2005 litigation reform legislation

(also known as the 2005 tort reform legislation) provides a cap on
non-economic damages of $350,000 per occurrence. Section 538.210.1,
RSMo Supp. 2008. Non-economic damages in personal injury cases
include pain, discomfort, suffering, disability, and disfigurement.

In wrongful death cases, non-economic damages include the

reasonable value of the decedent’s services, consortium,
companionship, comfort, instruction, guidance, counsel, training, and
support. Section 537.090, RSMo Supp. 2008.

The litigation reform legislation also adds two areas of damages

previously not recognized in Missouri law:

1. Damages for the death of a caregiver

2. Damages resulting from the death of a minor

Id. The plaintiff’s counsel should be familiar with these additions to

Missouri law.

The litigation reform legislation also provides a cap on punitive

damages. Under § 510.265.1, RSMo Supp. 2008:

No award of punitive damages against any defendant shall exceed the greater
of:
(1) Five hundred thousand dollars; or
(2) Five times the net amount of the judgment awarded to the plaintiff
against the defendant.
Such limits shall not apply if the state of Missouri is the plaintiff requesting
the award of punitive damages, or the defendant pleads guilty to or is
convicted of a felony arising out of the acts or omissions pled by the plaintiff.

2 Supp.–2 2009
EVALUATION AND SETTLEMENT OF PERSONAL INJURY CLAIMS §2.11A

III. Negotiation of Personal Injury Claims

From Plaintiff’s Standpoint

A. (§2.9) Basic Philosophy 2

Replace the first sentence with the following sentence:

Statistics from a number of different sources indicate that about 90%

of all personal injury cases are settled before trial.

C. (§2.11) Understanding the Case

In a complex case, understanding the case often involves consultation

with expert witnesses such as physicians or engineers. The plaintiff’s
counsel should always master the medicine or science of the case and
not rely solely on the expert to explain the intricacies of the case.

When done correctly, focus groups and mock trials can be beneficial
tools in evaluating a case. Both allow counsel to gain valuable
insights on liability as well as damages issues.

1. (§2.11A) Focus Groups (New Section)

Focus groups are essentially organized group discussions

revolving around certain issues in the case. Focus groups are
typically done earlier in the discovery process but can be done
later as well. The moderator of the focus group makes an initial
presentation to the participants tailored around the specific
issues. In many cases, the moderator will show the participants
selected evidence such as certain documents or videotaped
deposition testimony. Following the presentation, there is a group
discussion between the attorneys and the participants.

The effectiveness of a focus group is heavily dependent on the

moderator and the corresponding presentation. The presentation
must be narrowly focused around the issues in the case and must
be presented in a balanced manner showing both sides of the
case. Finally, the participants must be representative of the
potential jurors from the venue where the case is being tried.

2009 2 Supp.–3
§2.11B EVALUATION AND SETTLEMENT OF PERSONAL INJURY CLAIMS

2. (§2.11B) Mock Trials (New Section)

In a mock trial, a trial is put on in front of the juror participants.

As with a regular trial, there is a judge and opposing counsel. A
mock trial is generally done after discovery has been completed
but enough in advance of trial so that counsel can modify trial
strategy before the real trial begins. As with focus groups, only a
balanced presentation will yield realistic results. Thus, counsel
must do a good job in presenting the opposing position. Again, the
juror participants must be representative of the potential jurors
from the venue where the case is being tried.

E. (§2.13) Insurance Company Adjuster

Delete the original section and replace it with the following text:

Insurance company adjusters should be treated with the same

respect and courtesy that counsel would treat an attorney during
settlement negotiations. It is important that settlement negotiations
with the adjuster do not become personal to the point that tempers
are lost. Counsel will probably be dealing with the same insurance
adjuster again—or at least with someone from the adjuster’s
company—and it is important not to burn any bridges during any
particular settlement negotiations.

Counsel should keep in mind the limited settlement authority of the

insurance adjuster. The adjuster’s supervisor or “claims committee”
has given specific instructions about the amount to offer, and the
adjustor may not go above that designated authority.

Insurance company adjusters, like everyone else, are fighting the

battle of the paper war. They are very appreciative if a case is
presented to them for negotiation purposes in an organized, easy-to-
understand manner. It is suggested that the demand letter include a
clear and concise itemization and a total of the medical expenses.

The sooner the adjuster can gather and digest the information, the
sooner the adjuster will be able to respond with a settlement offer.

During the handling of the case and before the case is ready for
settlement negotiations, it is wise to periodically advise the insurance
adjuster of the status of the client’s medical treatment. Counsel
should offer to provide the adjuster with the medical records and
reports gathered up to that point.

2 Supp.–4 2009
EVALUATION AND SETTLEMENT OF PERSONAL INJURY CLAIMS §2.13

Documentation is the most important thing to the insurance company

adjuster. Every medical bill must be supported by a medical record or
report; every wage loss claim must be supported with a statement
from the employer and income tax records if requested. 2
When the case is ready for final settlement negotiations, counsel
should initiate the negotiations with a settlement demand letter. The
demand should be in the highest range of an expected jury verdict.
Counsel should not make the demand unrealistically high, or the
insurance company may react with a closed door to further negotiations.

Counsel should request that the insurance company make all

settlement offers in writing, making sure that it is understood exactly
what claims are being settled. For example, if a married person
makes a consortium claim in connection with the injury to the spouse,
it must be made clear whether all claims are being settled or only
those of the injured spouse.

Counsel should be prepared to provide the insurance company with

favorable evidence of liability. If liability is an issue, the settlement
demand letter should include the following:

 A narrative statement of the plaintiff’s claim

 The accident report prepared by the police

 Statements of witnesses

 Photographs of the damaged vehicles and of the injured plaintiff

 The plaintiff’s medical records and bills

 A statement of the plaintiff’s loss of income with wage verification

 Income tax records and other pertinent data (in some cases)

In major cases, the plaintiff’s settlement demand may best be

submitted in the form of a settlement brochure or videotape. In a
settlement brochure or videotape, counsel can present to the
insurance carrier much of the evidence as it will be seen and heard by
the jury. The presentation of the evidence by the plaintiff’s counsel in
a videotape will likely be better organized and more forcefully
presented to the insurance carrier than it would be by the insurance
company’s own lawyer. Settlement brochures and videotapes often

2009 2 Supp.–5
§2.13 EVALUATION AND SETTLEMENT OF PERSONAL INJURY CLAIMS

provide the insurance company with a more realistic view of how the
evidence will be received by the jury, which, in theory, should result
in more realistic appraisals by the carrier of the case’s settlement
value.

Section 408.040.2, RSMo Supp. 2008, allows a plaintiff in a tort case

to recover prejudgment interest if:

 the party makes a demand for payment or an offer of

settlement to the opposing party or the opposing party’s
representative; and

 any subsequent judgment in the case exceeds the amount

specified in the settlement offer.

The demand for payment or settlement offer must be:

 made in writing; and

 sent by certified mail return receipt requested.

The 2005 litigation reform law made the following changes to

§ 408.040.2:

 The claimant must also make the demand for payment or the
offer of settlement to the opposing party’s liability insurer, if
known to the claimant.

 The settlement offer must be accompanied by an affidavit

that describes the nature of the claim and any injuries claimed
and a general computation of any category of damages sought
by the claimant with supporting documentation.

 For wrongful death, personal injury, and bodily injury claims,

the settlement offer must be accompanied by a list of the
names and addresses of the medical providers who provided
treatment to the claimant for the claimed injuries, “copies of
medical bills, a list of employers if the claimant is seeking
damages for lost wages, and written authorizations sufficient
to allow the party, its representatives, and liability insurer if
known to the claimant to obtain records from all employers
and medical care providers.”

2 Supp.–6 2009
EVALUATION AND SETTLEMENT OF PERSONAL INJURY CLAIMS §2.13

 The settlement offer must refer to § 408.040.2 and must be

left open for 90 days.

Before tort reform, the demand for payment or settlement offer

had to be left open for 60 days. Emery v. Wal-Mart Stores, Inc.,
2
976 S.W.2d 439, 449 (Mo. banc 1998). Concerning the 60-day
requirement, the Court in Emery stated that, “Offers seeking to
comply with section 408.040.2 should state clearly whether the offer
is open for at least sixty days.” Id. An offer of settlement extended for
less than 60 days breaches the statutory requirement. Boehm v. Reed,
14 S.W.3d 149, 151 (Mo. App. W.D. 2000). While Emery and Boehm
were decided before the 2005 tort reform legislation, presumably the
above discussion can be applied to the current version of § 408.040.2.
Therefore, a settlement offer should clearly state whether it is open
for 90 days. An offer that is extended for less than 90 days breaches
the statutory requirement.

The additional requirements that the claimant must:

 make the settlement offer to the opposing party’s liability

insurer;

 include an affidavit describing the claim; and

 provide a list of medical providers and copies of medical bills,

should encourage the plaintiff’s counsel to think critically about the

strengths and weaknesses of the case before making a demand for
payment. Conversely, the additional information required by the
statute enables the insurance adjuster or defense counsel to more
fully assess the plaintiff’s case before negotiations. The defendant
and its liability insurer are more likely to make an informed decision
regarding the merits of the plaintiff’s settlement demand.

The pre-2005 tort reform procedure could be and sometimes was

used to tack prejudgment interest on large claims before the
defendant had the opportunity to evaluate its potential exposure. The
new requirement for provision of more information to the defendant,
while making it less likely for a defendant to be trapped into
prejudgment interest exposure, may also increase the frequency of
early settlements because representatives of both the plaintiff and
the defendant will have an opportunity to analyze the case.

2009 2 Supp.–7
§2.13 EVALUATION AND SETTLEMENT OF PERSONAL INJURY CLAIMS

Under § 408.040.2, unless the parties agree in writing to a longer

period of time, the plaintiff must file suit in circuit court within
120 days after the demand or offer is received, or the court will not
award prejudgment interest. This provision encourages plaintiffs to
file suit in a timely fashion. For example, if the plaintiff makes a
settlement offer on March 1, the offer must stay open for 90 days,
until May 30. Following the expiration of the 90-day period (May 30),
the plaintiff has an additional 30 days to file suit. Therefore, if the
plaintiff does not file suit by June 29, the court will not award
prejudgment interest to the plaintiff. Section 408.040 may be
triggered by a demand made before or after a suit has been filed.
Smith v. Shaw, 159 S.W.3d 830, 834 (Mo. banc 2005).

The prejudgment interest statute contains no pleading requirement.

Call v. Heard, 925 S.W.2d 840, 854 (Mo. banc 1996). As a result, “an
open-ended prayer for relief will suffice,” and it provides a sufficient
basis for awarding prejudgment interest. Id. at 854. Specifically, in
Call, the prayers for each count of the petition called for damages
“and for such other and further relief as this court deems just and
proper under the circumstances.” Id. The Court found that this
language provided a sufficient basis for awarding prejudgment
interest. Id. The Court in Call also held that nothing in the statute
precludes a plaintiff, in a demand letter, from combining demands on
multiple claims into a single claim. Id. Hence, there is no
requirement that the plaintiff has to indicate within the letter how
the demand amount is to be allocated between the various claims.

In a 2008 case, Gaydos v. Imhoff, 245 S.W.3d 303 (Mo. App. W.D.
2008), the Western District summarily discussed the demand
requirement under § 408.040.2. In Gaydos, the defendant was found
liable for conversion of funds. Id. at 306. On appeal, the defendant
contended that “the trial court erred in awarding prejudgment
interest because the [plaintiff] failed to make a specific demand for
payment, as required by Section 408.040.2.” Id. at 307. The plaintiff
conceded that it failed to comply with the statutory prerequisites of
§ 408.040.2. Gaydos, 245 S.W.3d at 308. Therefore, the Western
District held that the award of prejudgment interest was improper
and reversed the award. Id.

Unfortunately, the court did not discuss what was required to make a
“specific demand.” While an open-ended prayer for relief is sufficient
under Call, it is advisable to carefully satisfy each prerequisite set
forth in § 408.040.2. A plaintiff who sends a demand letter including

2 Supp.–8 2009
EVALUATION AND SETTLEMENT OF PERSONAL INJURY CLAIMS §2.13

the information discussed above and an accompanying affidavit

should be able to recover prejudgment interest.

In Boggs ex rel. Boggs v. Lay, 164 S.W.3d 4, 24 (Mo. App. E.D. 2005),
the Eastern District stated that nothing in the plain language of
2
§ 408.040.2 precludes a plaintiff from serving a single, unapportioned
demand on multiple parties. The demand required under § 408.040
must be definite in its terms. To be sufficiently definite under the
statute, the amount due must be capable of ascertainment in terms of
a dollar amount. Boggs, 164 S.W.3d 24. In Boggs, the plaintiff’s
demand letter stated as follows: “Pursuant to section 408.040, RSMo.
(1994), please let this letter serve as a settlement demand in the sum
of $1 million, jointly and severally, to resolve the personal injury
action arising from this tragedy. This offer shall be left open for
60 days unless earlier rejected.” Id.

The court found that the plaintiff’s demand met the statutory
requirements. The plaintiff’s demand was clear; he demanded
$1 million, jointly and severally, to resolve his personal injury action.
The demand was directed to each of the potential defendants. The
liability that resulted was joint and several. Id. While Boggs
construed the 1994 version of § 408.040, the conclusion presumably
applies today. Specifically, the demand must be definite in its terms,
meaning that a dollar amount is ascertainable. Again, while an open-
ended prayer for relief is sufficient under Call, other caselaw
supports the conclusion that a specific settlement demand must be
made to recover prejudgment interest.

Prejudgment interest is to be calculated “on the entire amount of

money due where this amount exceeds the settlement offer.” Lester v.
Sayles, 850 S.W.2d 858 (Mo. banc 1993). Under § 408.040.2,
calculation of prejudgment interest should not begin from the date of
the demand letter; rather, it should run from the point in time
occurring after the offer has been open for 90 days (or rejected
without counteroffer, whichever is earlier).

Section 408.040.2 provides that, “in tort actions, interest shall be

allowed on all money due upon any judgment or order of any court
from the date the judgment is entered by the trial court until
full satisfaction.” To calculate postjudgment interest, a per annum
interest rate equal to the intended federal funds rate, plus five percent,
is used. Section 408.040.3 provides that, in tort actions, an award for
prejudgment interest should bear interest at a per annum interest
rate equal to the intended federal funds rate, plus three percent.

2009 2 Supp.–9
§2.16A EVALUATION AND SETTLEMENT OF PERSONAL INJURY CLAIMS

Before tort reform, the statutory rate of interest on judgments in tort

cases was nine percent.

Frequently, the insurance adjuster will respond to the demand letter

with a telephone call. Counsel should always negotiate with the file
in hand. Sometimes the adjuster will begin negotiations with the
statement, “I have your letter and your demand but what do you
really want?” Attorneys should not bid against themselves. If an
initial demand has been made that can be justified, counsel should
stick with it and let the adjuster make the next move.

When the insurance company adjuster makes a settlement offer,

counsel should refrain from immediately commenting on the
inadequacy or adequacy of the offer. Counsel should always advise
the insurance company adjuster that the offer will be conveyed to the
client. Counsel should be willing to listen to the insurance company
adjuster’s views concerning the case and should try to elicit why the
adjuster believes that the case is not worth what the plaintiff is
asking. If there is information that can be provided to the adjuster in
the areas that the adjuster believes the claim is weak, counsel should
do so quickly. By listening to the adjuster, counsel will likely find
that the adjuster is more receptive to counsel’s views concerning the
case, and counsel may also learn important facts about the case,
which will be important if the case does not settle.

During negotiations, counsel should not make claims that cannot be

proven lest counsel’s credibility be undermined, which can only
impede negotiations. For example, if an element of damage is highly
questionable, it is best to leave it out of the settlement negotiations.

If settlement with the insurance adjuster cannot be reached, counsel

should never blame the adjuster for the failure of the negotiations.
Counsel should try to end negotiations on good terms.

H1. (§2.16A) Negotiation Using Mediation (New Section)

Frequently, personal injury and wrongful death cases are settled

using mediation. Chapter 15, Alternative Dispute Resolution, of this
deskbook discusses mediation. It should be required reading for any
attorney representing injured persons or the family of deceased
persons in the litigation.

2 Supp.–10 2009
EVALUATION AND SETTLEMENT OF PERSONAL INJURY CLAIMS §2.22

IV. Settlement of Personal Injury Claims

From Defendant’s Standpoint

C. Negotiating Techniques 2
2. (§2.22) Guidelines

As a result of the 2005 tort reform legislation, there may be a

change in what evidence is presented to the jury concerning
medical expenses. For new lawsuits, when a medical bill has
actually been partially written down for purposes of payment—
perhaps as a result of managed health care—the defendant may
move, outside the hearing of the jury, to establish the lesser
amount that was actually paid as the proper measure of damages.
Section 490.715.5, RSMo Supp. 2008.

Defense counsel must exercise diligence in obtaining information,

from either the plaintiff’s counsel or the health care providers, of
the actual amounts that satisfied those bills, when appropriate,
as distinguished from the bills.

2009 2 Supp.–11