Recently, the topic of the Erin Andrews Nashville lawsuit against Michael David Barrett, West End Hotel Partners and Capital Group (hotel owner and operator franchisees), and Marriott International has been in the news. On March 7, 2016, a jury found that Mr. Barrett was 51% liable to Ms. Andrews and that West End Hotel Partners/Capital Group were 49% liable to Ms. Andrews for Mr. Barrett's actions in surreptitiously filming Ms. Andrews nude in her hotel room. The jury awarded $55M as the total amount of damages. Earlier in the year, the Judge dismissed Marriott International, finding that the franchisee, not the franchisor, was responsible for security at the hotel.
This case is interesting on several levels. However, for brevity, we'll look at the damages here. First, how does Tennessee's adoption of comparative fault affect the numbers? Presuming the verdict stands as it is now (uncertain as an appeal is likely), then Ms. Andrews can recover 49% of the total award from the hotel franchisees and 51% of the total award from Mr. Barrett. But, let's make a few reasonable assumptions. First, Ms. Andrews likely owes her attorneys anywhere from 33% to 50% of the total award, which comes off the top. So, using the lower percentage, about $18 Million is allocated to the attorneys, leaving about $37M. Second, Mr. Barrett is in prison and is likely broke. Thus, the approximate $28M he owed, will be uncollectible. What about the franchisees? They still owe about $27 Million and likely are collectible. But, remember, the attorneys get paid first ($18M), which leaves about $11M for Ms. Andrews.
Second, where does the franchisees' money come from? Insurance? Bank accounts? Assets? There is likely insurance, but, let's assume that the policy is a general commercial liability policy capped at $10M (this would be a large policy as many businesses carry lower amounts). Let's also assume that the carrier doesn't raise any policy defenses to payment. So, the carrier pays $10M and the franchisees need to scrape up the remaining $17M. Presuming this amount isn't sitting in their bank accounts, the franchisees will need to find other ways to pay this debt or Ms. Andrews's legal team may begin aggressive collection efforts.
Third, what about an appeal? If the franchisees appeal, Ms. Andrews's legal team presumably will insist upon the franchisees obtaining an appeal bond securing their portion of the judgment. Anyone want to underwrite that $27M bond?
All of this is important, but usually omitted from the headlines. But, in reality, getting paid on your judgment is the part that is most near and dear to the client's heart. Working with competent counsel enables one to understand the nuances of this process and to be fully informed about making crucial decisions.