Litigation

There were no "besos" for plaintiff Yanisse Adrian, from United States District Court judge Francisco Besosa as he granted the defendants' summary judgment motion an dismissed her case against Mesirow Structured Settlements, LLC, et al. The result of the case, in which it appears neither the plaintiff nor her attorney had settlement planning representation underscores why EVERY plaintiff, directly, or through their attorney, should seek out the services of a credentialed settlement planner INDEPENDENT OF THE DEFENSE.

During the pendency of the case the tax laws in Puerto Rico changed. On July 4, 2006, new Act No. 117:

1. Categorized payments for mental anguish as taxable income. ( P.R. Laws Ann., Tit. 13, § 8422(b)(5) and later Administrative Determination 07-01, which clarified that such payments are subject to withholding
2. Payments for physical injury were not categorized as income.

Yanisse Adrian had contended that she only accepted a structured settlement as a result of her reliance on numerous representations made to her by defendant Mesirow Financial Structured Settlements, LLC ("Mesirow"), a structured settlement broker. Adrian further alleged that she would not have agreed to the terms of the April 17, 2007 settlement were it not for her reliance on Mesirow's advice and promises regarding Adrian's tax immunity. Adrian alleged that she relied on Mesirow to advice her regarding Puerto Rico's tax laws and the requirements of Puerto Rico's Treasury Department ("Hacienda"), and that Mesirow made representations to the effect that Adrian would not owe taxes to Puerto Rico (nor would any withholding occur) related to the settlement of her suit if she opted to rely on Mesirow's services. Mesirow was accused of (1) negligence; (2) negligent misrepresentation; (3) fraudulent inducement; (4) breach of fiduciary duty; (5) equitable estoppel; and (6) promissory estoppel.

Mesirow argued that it had no influence on the plaintiff's settlement decisions and that it had legitimate concerns not to be exposed to potential tax liability or regulatory action against their insurance licenses or criminal prosecution for failure to follow Puerto Rico law.

The conclusions of the Court have important implications for structured settlement and settlement planning practice.

A. Misrepresentation

According to Mesirow, Yanisse Adrian could not show that her reliance was reasonable because the alleged misrepresentation regarded a matter of law and regarded matters plaintiff could ascertain independently. "There is no liability for casual statements, representations as to matters of law, or matters which plaintiff could ascertain on his own in exercise of due diligence." Id. (citing AMA Management Corp., 309 S.C. at 874. A plaintiff's reliance is justified only if "the defendant occupies a superior position to the plaintiff with respect to knowledge of the truth of the statement made." O.C. Gruber v. Santee Frozen Foods, Inc., 309 S.C. 13 (Ct. App. 1992).

    What the "L"?

Adrian implied that "Klinger"**  (sic, above left, no relation to and much better looking than "Max Klinger" of Toledo Ohio, above right), as a licensed life insurance agent, a certified structured settlement consultant, and a member of the National Structured Settlements Trade Association, whom Adrian trusted to keep Adrian's best interests in mind, held herself out as someone occupying a superior position as to the tax matters as issue. Further, Adrian argues that Klinger's promises "were made without any qualification that Plaintiff get any tax advice." (Docket No. 147 at 19.) The court found this argument is without merit.  The Court went on to  state that Adrian cites no legal authority to support her contention that a plaintiff may rely upon a defendant's statements if those statements were unqualified by a suggestion to seek outside advice.

B. Duty of Care

The Court reasoned:

1. The primary broker-client or broker-buyer relationship here that would come closer to the sort of business relationship alluded to by Adrian's analogy was not between Mesirow and Adrian, but between Mesirow and Fireman's Fund, and perhaps with the other defendants.
2. Even though Adrian may have exhibited her trust in Klinger's (sic) judgment, and even though Klinger (sic) may have intended for Adrian to trust Klinger's (sic) judgment, the fact is that Klinger (sic) worked for the defense side of the underlying case, and she took direction ultimately from Fireman's Fund; she was not beholden to Adrian. 

Because Klinger's actions and efforts were more than reasonable in the circumstances, the Court finds that neither she nor Mesirow breached any duty. The Court stated that the record shows that Klinger (sic) acted diligently to research both the possible tax consequences of a structured settlement by reading a translated version of the Puerto Rico tax code and discussing the tax issue. It reasoned that although Klinger's efforts may not have been successful, the record shows that those efforts were made.

D. Promissory Estoppel

The Court claim of promissory estoppel was dismissed on summary judgment because the Court had already concluded that Adrian's reliance on Klinger's alleged statements was unreasonable. The Court had already concluded that Adrian had independent knowledge regarding the facts in question.

Source: Excerpts from the Opinion and Order

ADRIAN v. MESIROW FINANCIAL STRUCTURED SETTLEMENTS, LLC

YANISSE ADRIAN, Plaintiff,
v.
MESIROW FINANCIAL STRUCTURED SETTLEMENTS, LLC, et al., Defendants.

Civil No. 08-1180 (FAB).

United States District Court, D. Puerto Rico.

July 9, 2010.

Notes **Connie Klinger is the misspelled name of an insurance agent whose name is Connie Klingler

Comments

Unlike the facts and circumstances involved with a 2001 decision Lyons v MMIA 730 N.Y.S. 2d 345, privity did not come into play.

Plaintiffs counsel, here is another example of why you and/or your client need their own settlement specialist.  It need not matter that the specialist is plaintiff exclusive. It does matter that:

(1) you have you have your own expert;

(2) The settlement expert is properly credentialed;

(3) you retain the settlement expert early enough to have an impact