The Case For Asset Protection

What Is Asset Protection? The subject of asset protection is receiving a lot of attention these days. Clients often read articles in newspapers and magazines about the need for asset protection and there are promoters selling various schemes for protecting assets from creditors. Usually, the "creditors" are plaintiffs who sue for astronomical damages as a result of negligence or wrongful death. We have implemented various strategies for clients with business exposures. Asset protection and these various strategies have been the subject of prior newsletters. A recent Massachusetts case carries the issue of personal liability to an extreme. Bad Facts. The case was a lawsuit against Dr. Roland Florio who had been treating a patient named Sacca for several years. Dr. Florio and other physicians prescribed cancer medications for Sacca. Dr. Florio advised Mr. Sacca that he could not drive while taking medications. When treatment was competed, Dr. Florio had informed Mr. Sacca that it was safe for him to drive again. Apparently, Mr. Sacca continued certain medications.
A couple of years after the cancer treatment had begun, Mr. Sacca passed out at the wheel and killed a ten year old boy on the sidewalk. The boy’s administratrix sued not only the estate of Mr. Sacca, who died a few months later, but Dr. Florio personally on grounds of negligence.
Dr. Florio’s response was that he only owed a duty to his patient, Sacca, and did not have any duty to any one else, including the ten year old pedestrian. Dr. Florio’s Motion for Summary Judgment was granted by the lower court.
The Massachusetts Supreme Court held that there was a duty to the young boy under the theory of common law negligence. That is, a doctor has a duty to warn a patient of the side effects of a drug, such as dizziness or fainting.
In other words, the Court stated that Dr. Florio’s duty was to warn his patient, Sacca, of potential side effects and the risks of driving while taking the medication. The case was sent back to the lower court for further proceedings. Those proceedings would establish what actions that were taken or not taken by Dr. Florio. In other words, the assumption in a Motion for Summary Judgment or Motion to Dismiss is that even if the Plaintiff’s allegations are correct, there is no potential liability.
Where Do We Go From Here? The broad expansion of the doctrine endorsed by the Massachusetts Supreme Court could lead to far reaching results, probably not intended by statute or case law. For example, would there be liability under Massachusetts law if the patient had consulted a doctor in Ohio? What about the usual side effect warnings that come with all prescriptions?
So far, Michigan Courts have been willing to limit liability to third parties, but no one can give assurances that liability won’t be expanded. Liability to third parties is well established, for example, in the case of automobiles where a third party is injured. That is, GM’s duty of care to the auto buyer/operator would probably extend in many states to the person injured by an exploding gas tank or faulty brakes.
These expansions of liability make Asset Protection a primary priority for many people who are in the manufacturing or service business. Unfortunately, clients don’t plan in advance for protection, but rather arrive at an attorney’s office after an accident or claim has arisen. That is usually too late!
If you, a client or friend wish to explore the parameters of this field and the various protective mechanisms, please call Jim Modrall or any of the attorneys listed below.
Donald A. Brandt, Joseph C. Fisher, Thomas R. Alward, Edgar Roy, III, Matthew D. Vermetten, Thomas A. Pezzetti, Jr., John M. Grogan, Susan Jill Rice, Gary D. Popovits, H. Douglas Shepherd, Laura E. Garneau and David H. Rowe at (231) 941-9660 ©BRANDT, FISHER, ALWARD & ROY, P.C.This newsletter is provided for informational purposes and should not be acted upon without professional advice.