Settlement saves cost, uncertainty of litigation

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The confidential Sept. 26 settlement of the personal injury lawsuit against J.M. Brennan Inc. provided some closure for 15 workers who were injured and the families of three workers who died in an explosion at the Falk Corp. plant less than one year ago.

Statements released on behalf of Brennan and Robert L. Habush, attorney for the plaintiffs, said a settlement was in the best interests of all parties involved, but both maintained that they would have succeeded had the case gone to trial. The amount of the settlement has not been disclosed.

Two veteran Milwaukee-area attorneys did not find the relatively timely settlement of the high-profile case particularly unusual. However, they did note factors that may have contributed to the compromise, including the uncertainties involved with a jury trial and parallels to the Big Blue crane collapse in 1999.

Playing the Percentages

Had the case gone to trial, legal costs would have likely accumulated quickly and Jeffrey Remsik, spokesman for Brennan, said that contributed to the compromise.

“J.M. Brennan looked at the cost benefit analysis and came up with the conclusion to settle now,” said Remsik. “It would have been hard to estimate how much litigation would have cost, because who knows how many experts would have been hired or how aggressively it would have been pursued.”

Plaintiff’s attorney Robert L. Habush expressed his satisfaction with the decision to settle in a released statement.

“I am pleased with it,” said Habush, who added that the agreement was “commensurate with what we would have gotten with a jury verdict.”

Attorney Timothy S. Trecek of Habush Habush & Rottier, S.C, declined to comment further on the settlement.

It’s unknown how a jury would have assessed liability among the defendants.

The suit named Brennan, a mechanical contracting firm, for improperly installing propane pipe, alleging it leaked and led to the explosion. Neither Falk, nor parent company Rexnord Industries, could be named in the suit because of an immunity provision in Wisconsin’s worker’s compensation law.

“For the workers, bodily injury claims are limited to worker’s compensation remedies, as opposed to lawsuit liabilities,” said attorney John J. Slein, past president of the Civil Trial Counsel of Wisconsin (CTCW). “In this case, because you have death cases, workers are limited against Falk and Rexnord, but not other parties.”

Slein was not involved in the settled cases.

A jury may have included Falk and Rexnord in the negligence assessment and it is unknown how much liability would have been placed on Brennan. Based on a 1995 change to Wis. Stat. 895.045, regarding contributory negligence, an assessment of more than 51 percent against Brennan could have left the company responsible for whatever percentage of the liability was not attached to the employees.
Philip Lehner, former president of the Wisconsin Association of Worker’s Compensation Attorneys (WAWCA), said that when an employee collects worker’s compensation benefits and then sues a third party for damages in a negligence action — in this case Brennan — the third party will try and minimize its own liability by arguing that the employee and the employer were more negligent.

After the settlement, Remsik maintained Brennan properly installed the piping and at press time, it was unknown whether Brennan would pursue legal action against Rexnord or Falk.

“There are all sorts of complications as to how this would play out with all of the parties,” said Lehner, who was not involved in the settled cases. “It’s quirky here because you have one party involved, Falk, which has complete immunity, so when it comes to applying percentages that complicates things substantially.”

Big Blue Parallels

In the 2000 lawsuit against Mitsubishi Heavy Industries of America following the deadly crane collapse at the Miller Park construction site, a jury awarded the victims’ families $94 million dollars. That figure was significantly reduced in a settlement that followed.

Slein said comparisons to the Falk case could be drawn out of the Mitsubishi case.

“As a defense attorney or defendant, when confronted with a spectacular accident like Big Blue, I think that could have been a motivator in getting the Falk case settled,” said Slein.

Widows of the three ironworkers killed in the 1999 crane collapse received a total of $57 million. A jury had initially awarded the women $94 million in punitive damages, but that figure was reduced in an out-of-court settlement.

Damages sought against Brennan were unspecified and the suit did not seek punitive damages.

Nevertheless, Slein said that if he were defending in the Falk case, he may have had the figures from the Mitsubishi case in the back of his mind.

Pending property damage matters involved with Falk may also have been a reason to not only settle the personal injury suit, but keep the agreement confidential.

“It’s likely that the property damage will be astronomical,” said Slein, who added that confidentiality agreements are not uncommon. “I would think that maybe these property damage defense attorneys could get the idea that a lot of money is being thrown around, and they didn’t want potential claimants to be emboldened.”

Slein also said that the attorneys in the Falk case likely took notice of the Sept. 27 jury verdict in the Quad/Graphics property damage case stemming from a July 2002 fire. The jury did not find Quad/Graphics liable for the collapse of automated shelving which ignited the fire.

The Associated Press contributed to this story.