The family of Ken Ellis, an Iraq war veteran who was shot by the Albuquerque police when he had placed a gun to his own head, agreed to settle the case with the City of Albuquerque for almost $8 million. This comes after the family prevailed before a jury to secure a verdict that topped $10 million last March. Why would the family, at the post-verdict juncture, agree to a settlement that was about 80 percent of the original award?
In this case, the city decided to appeal the verdict on the ground that it was excessive. Once such a decision is made, the calculus employed by the winning party can quickly shift. In this instance, Ellis’family members emphasized that they did not bring the action for the money, but rather to seek justice for the loss of their loved one. It may be easier for litigants who have such a sentiment to accept a reduced settlement for the sake of completing the litigation.
In other types of civil cases, such as business litigation or personal injury matters, where the recovery of a certain level of damages constitutes the primary goal of the effort, the plaintiff may adopt a different calculus about whether to accept a reduced settlement. When facing a possible reversal on appeal, a party that has already won a verdict has to determine if the chances of losing on appeal are so great that the wiser policy is to negotiate a settlement. Such a party will need to rely on the judgment of counsel as to whether the appeal has merit. Unfortunately, some appellate issues before certain judges do not always lend themselves to easy prognostication.
One consideration which litigants, like the Ellis family who sued the city, do not have to factor into their decision is the collection of any judgment after all appeals are exhausted. When suing a municipality, county or state, it is extremely unlikely that the municipality lacks the capacity to pay or would allow a judgment to sit unpaid. Likewise with insurance companies covering defendants, in those situations plaintiffs typically only have to be concerned about the limits of coverage within the contours of those limits.
But for many plaintiffs with sizable jury awards concern for the collection of a judgment often outweighs the risk of losing on appeal as the biggest inducement to seek a negotiated settlement even after winning a verdict. If a plaintiff with an award is concerned that the award cannot be collected via standard post-judgment collection methods, the plaintiff may take advantage of an earlier opportunity to negotiate a settlement for less than the jury award.
The attorneys at the Law Office of George “Dave”Giddens, P.C. represent individuals involved in various types of litigation in New Mexico including personal injury, civil rights and post-judgment collection. Giddens & Gatton Law, P.C. is located at 10400 Academy Road N.E., Suite 350 in Albuquerque, New Mexico. Call the office at (505) 633-6298 to set up an appointment or visit the firm’s website at giddenslaw.com for more information.