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-   -   Slum lords: Better keep that umbrella policy in force! (http://www.early-retirement.org/forums/f28/slum-lords-better-keep-that-umbrella-policy-in-force-62214.html)

MooreBonds 07-16-2012 08:41 PM

Slum lords: Better keep that umbrella policy in force!
 
A terrible thing to befall the family....but also a sad sign of the society of blame and litigation that we live in today.


Property owner of apartment building in high-crime area lost judgment of $1,000,000 for "failing to provide security at apartment complex".

"The family of a woman killed in a drug-related shooting will receive $1 million from the property owner for a wrongful death claim."

kumquat 07-16-2012 09:55 PM

Quote:

Originally Posted by MooreBonds (Post 1213490)
A terrible thing to befall the family....but also a sad sign of the society of blame and litigation that we live in today.


Property owner of apartment building in high-crime area lost judgment of $1,000,000 for "failing to provide security at apartment complex".

"The family of a woman killed in a drug-related shooting will receive $1 million from the property owner for a wrongful death claim."

When I first read it I might have said WTFC. Now I'll say IIMP (is it my problem)? Really, That means I sell all my REITs

marko 07-17-2012 05:38 AM

I think this is not limited to 'slumlords'! Anyone with property/money is a target. As my lawyer always says: "anyone with ten bucks can sue you for no good reason".

It's been open season on 'the rich' lately (from several angles) and being rich seems to be defined now as anyone with a house or $50K in the bank. We're evil, doncha know and deserve to have it taken away because well, its not fair.

donheff 07-17-2012 06:13 AM

This was a settlement, undoubtedly with an insurance company. No telling what would have happened if this was some Joe Blow being sued without insurance. The reality is that the huge awards you read about are outliers (which is why they make the news) and frequently reduced on appeal. And often big settlements and awards involve egregious conduct that isn't evident from the brief news headlines. Witness the notorious McDonald's coffee case where the reality is the coffee was so hot that when accidentally spilled it badly burned the crotch and thighs of an elderly woman who was not the driver as widely reported and was not holding it in her lap as also reported.

I'm not ready to sell my REITs over this and am not worried that there is a war on evil rich people like me. This is like the allegation that tort reform is the only thing standing between us and medical costs aligned with the rest of the developed world. Yet the CBO calculates that the costs of malpractice amounts to less than 2% of the costs of our medical system.

Nevertheless, it is wise to carry an umbrella policy if you have anything to lose.

marko 07-17-2012 06:25 AM

Quote:

Originally Posted by donheff (Post 1213523)
Yet the CBO calculates that the costs of malpractice amounts to less than 2% of the costs of our medical system.

This is a question, not a challenge: is the 2% the cost of malpractice per se, or does it include the CYA tests, double tests, second opionions, MRIs etc etc. in order to avoid a suit?

donheff 07-17-2012 06:50 AM

Quote:

Originally Posted by marko (Post 1213527)
Quote:

Originally Posted by donheff (Post 1213523)
Yet the CBO calculates that the costs of malpractice amounts to less than 2% of the costs of our medical system.

This is a question, not a challenge: is the 2% the cost of malpractice per se, or does it include the CYA tests, double tests, second opionions, MRIs etc etc. in order to avoid a suit?

Reasonable question and I don't know the answer. Defensive medicine undoubtedly raises costs significantly but I wonder how much of this is defensive, how much is piece rate pay (al la Medicare), and how much is simply our doctors' and predilection to use every test available for everything and our desire to get those tests (e.g. continuing wide use of PSA test)?

donheff 07-17-2012 07:11 AM

Quote:

Originally Posted by marko (Post 1213527)
This is a question, not a challenge: is the 2% the cost of malpractice per se, or does it include the CYA tests, double tests, second opionions, MRIs etc etc. in order to avoid a suit?

Quote:

Originally Posted by donheff (Post 1213534)
Reasonable question and I don't know the answer. Defensive medicine undoubtedly raises costs significantly but I wonder how much of this is defensive, how much is piece rate pay (al la Medicare), and how much is simply our doctors' and predilection to use every test available for everything and our desire to get those tests (e.g. continuing wide use of PSA test)?

Well, this memo from the CBO to Orin Hatch in 2009 seems to cover it.
"CBO estimates that the direct costs that providers will incur in 2009 for medical malpractice liability—which consist of malpractice insurance premiums together with settlements, awards, and administrative costs not covered by insurance—will total approximately $35 billion, or about 2 percent of total health care expenditures."
The 2% involves direct costs. They then go on to acknowledge that the estimate does not cover indirect costs of testing, et al. As near as I can tell (the numbers in the memo are confusing since they talk about 2% in some areas but appear to be addressing the same thing as " a reduction of .2 percent" in others -- I think their intent was to talk about 2% and .02 reduction). In any event, they revise their estimate the impact tort reform on national expenditures as .2 for direct costs and .3 for indirect. So it appears to me that they estimate the indirect costs (including defensive tests) as amounting to 3% of total costs.

travelover 07-17-2012 08:28 AM

Good post. I'm always looking for fresh reasons for outrage and resentment.

MichaelB 07-17-2012 08:33 AM

Quote:

Originally Posted by travelover (Post 1213569)
Good post. I'm always looking for fresh reasons for outrage and resentment.

:):)

sunsnow 07-17-2012 11:08 AM

As a landlord (not slumlord), this kind of thing does make me nervous. I have LLC's and also liability policies for them. After reading the article, I did a little internet research into the "failure to provide adequate security" law in Florida. I'm not a lawyer, so might be confused about all this, but it looks to me like there are ways in which it would be reasonable for someone to be awarded damages under this law: for example, if the landlord rented to people known to be dangerous, like people with murder convictions and known gang ties. Of course, it may be that the lawsuit is based on something that is not reasonable -- the article doesn't provide enough information to know. I just wanted to let people know that this judgment might not signal the decay of western society in the way it at first appears.

eridanus 07-17-2012 11:54 AM

The source is the "Insurance Journal," which is a mouthpiece of the insurance industry. Where's the rest of the story?

As far as medical malpractice insurance and the 2% direct costs -- we've seen in Texas that a cap on damages does not reduce consumer medical costs even as premiums decline.

Htown Harry 07-17-2012 10:16 PM

So....loving a mystery, I wasted some time this evening playing detective with Google.

These landlords are not innocent saints when it comes to real estate.

While the insurance company and the landlord may have had some law on their side, the facts don't look so good.

Quote:

Originally Posted by eridanus (Post 1213631)
The source is the "Insurance Journal," which is a mouthpiece of the insurance industry. Where's the rest of the story?

The Insurance Journal posted an AP piece that was only a "summary" of a the Times-Union story on the settlement.

Interesting that AP decided this portion of the original article was not relevant for the summary version they put on the wire with a sensational headline...

Quote:

Attorney Fred Tromberg, who represents Melton's estate, said the property owner failed to provide any kind of security at the 30-unit complex despite it being in a crime-ridden neighborhood.

Tromberg said the owner, New York-based CLA South LLC, had a duty to provide reasonable safety to prevent a crime he called foreseeable. Tromberg said police responded to 45 calls of mostly violent crimes on the property and more than 100 within 500 feet of the property line in the three years prior to the triple killing.

The owner also was at fault for employing a property management company prohibited from practicing in Florida, Tromberg said.
Full story: $1 million paid by property owner in Jacksonville woman's death | jacksonville.com

The apartment complex:
http://jax-cdn.com/sites/default/fil...lton%20Apt.jpg



Chris formed the LLC in 2004:
http://sunbiz.org/pdf/H0254718.pdf

That document comes from here, which shows the LLC is still in the family:
www.sunbiz.org - Department of State

Digging a little deeper, I found out Chris got into a bit of trouble along the way in his career. Somehow he and a bunch of LLC names similar to this one got their names added to the HUD "excluded parties list".
https://www.epls.gov/epls/search.do (search on the surname from above, and check out the address, which matches CLA South LLC's)

Quote:

CT Code
R Cause
Debarment by any Federal agency pursuant to Executive Order 12549 and the agency implementing regulations for one or more of the following causes: (a) conviction or a civil judgment for fraud, violation of antitrust laws, embezzlement, theft, forgery, bribery, false statements, false claims, or other offense indicating a lack of business integrity or honesty; (b) violation of the terms of a public agreement or transaction so serious as to affect the integrity of an agency program; or (c) other causes specified in the agency implementing regulations, or such other cause of a serious or compelling nature affecting responsibility.
I was then able to find that Chris got in his bind while working as an appraiser using a pseudonym, several years before he formed this particular LLC:
9 More Are Charged in Scheme to Defraud HUD Program - NYTimes.com

Here Chris parties with celebrities here in undated photos. The photos also show his wife Laura, who is now managing the LLC.
Press | Palms Hotel Fire Island

In the cold calculus of trial law, it seems to me the insurance company probably decided to pay off to the $1 million policy limit and be done with it. I can only imagine the challenges of trying to defend this customer to a jury.


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