Florida Negotiation & Settlement Planning Seminar Bernard F. Pettingill, Jr., PhD Palm Beach Gardens, FL Aug 21, 2009 Orlando, FL.

Florida Negotiation & Settlement Planning Seminar Bernard F. Pettingill, Jr., PhDPalm Beach Gardens, FL

Aug 21, 2009Orlando, FL

•Questions – Direct Examination / Answers•Background•Contact Points•Terms of Art•Presentation – Short / Long•Future of Depositions…..

OutlineOutline

CapitalismCapitalism

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• WHY LEARN ECONOMICS – JOAN ROBINSON – TO KEEP FROM GETTING DUPED BY ECONOMISTS

• KEYNES vs. FRIEDMAN

OverviewOverview

•Line Up•Short / Long Version•Color / Black – White

JurorsJurors

•Reception – Stand Up / Sit Down•Pipe Smoker•Engineer•Nurse Practitioner•Sleeper•Alternate Jurors•Arms Crossed / Legs•Age Factor (Examples)•Note Takers•Questions asked by Jurors•Number(s) of Persons

EmpathyEmpathy

•Never Drink H2O•Ask to Step Down•Ask if Judge Needs a Copy of Charts•Ask if Judge can See•Ask if Court Reporter can Hear•Ask for Permission

MeterBathroomBreak

•Testify Before or After Lunch

Resume – Hooks / TagsResume – Hooks / Tags

•New Orleans•Military HS•Catholic / Ivy League College / Ph.D.•England•Professor (Medical School - 4 yrs)•Hobbies / Human•Four Kids – Teacher / Empathy•Articles Published•Organizations•Experience 22 Years•Testimony – Congress / Court TV

CharacteristicsCharacteristics

•Demeanor•Posture / Clothes / Watch / Car•Body Language – Roger Clemens•Confidence•Out of the Box•Time of Day to Testify – AM / PM•Cross Examination•Video Clip – Life Expectancy - Link

•Work Life Expectancy / Life Expectancy•Medflation•Interest Rates (IRR)•Inflation Measures – (Local News Stories)•Consumption Expense•Permanent Income Hypothesis•Unemployment (Types)

Economic TermsEconomic Terms

•TAXES (Federal vs. State)•Discounting to Present Value•Savings / Dissavings•Life Cycle Hypothesis•PRN, BID, TID / QD (Titrate Medication)•The “I” Word

Economic Terms – cont.Economic Terms – cont.

GIGO

PRN

QD / BID / TID

DUCES TECUM

CETERIS PARIBUS

SWAG

PMS

AbbreviationsAbbreviations

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12

CPICPI

• Typical Market Basket• 95 Locations• Two Times / Month• 211 Consumer Goods• Average Prices

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CPI – cont.CPI – cont.

1. Food & Beverages2. Housing3. Apparel4. Transportation5. Medical Care6. Recreation7. Education & Communication8. Other Goods & Services

OLD INDICATORS

• AUTO

• HOUSING STARTS

• RETAIL

ForecastingForecasting

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NEW INDICATORS

• WAL-MART

• STARBUCKS

• APPLE

• NETFLIX

• TARGET

• COSTCO

• PAWN SHOP

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Forecasting – cont.Forecasting – cont.

TestimonyTestimony

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• Long Version / Short Version

• Question / Answer

• Charts / ELMO / Overhead

• Power Point

• Recent Life Expectancy Tables

• Medical vs. General Inflation

• Sample - Goods / Services1940, 50, 60, 70, 80, 90’s

• Recent Life Expectancy Tables

• Medical vs. General Inflation

• Sample - Goods / Services1940, 50, 60, 70, 80, 90’s

Trial ChartsTrial Charts

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18

19

20

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JudgeJudge

•Home Cooking•Age / Experience / Deference•Background•Fairness•Discrimination•Bench Trial (All of Above)

• ENGLAND, CANADA & SWEDEN (Michael Moore)

• NURSING SHORTAGE – ARTICLE FORBES.COM

•NO PhD EDUCATORS / INTERNSHIPS (AVAILABLE)

•ULAP100 – UNIVERSAL HEALTH COVERAGE - (ARTICLE)

• INSURE 47 MILLION PEOPLE

• COMPUTERIZE ALL MEDICAL RECORDS

• ATLAS SHRUGGED – MEN OF MIND GO ON STRIKE

Nationalized Health CareNationalized Health Care

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• WAITING LIST – HERNIA REPAIR

• ELECTIVE SURGERY

• RENAL DIALYSIS

• 55+ YEAR OLD IN GREAT BRITAIN – DENIED..DEAD

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Health Care – Health Care – DILEMMADILEMMA

A. SIXTY YEAR OLD MALE POSTAL WORKER

B. SINGLE MOTHER OF FOUR CHILDREN

C. EIGHTEEN YEAR OLD NEVER WORKED

D. RETIRED FEMALE IN PALM BEACH

Organ Replacement – Organ Replacement – DILEMMADILEMMA

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• IMPLOSION OF ECONOMY – Housing / Banking / Mfg / Services

• 75% OF ECONOMY (GDP) CONSUMER DRIVEN

• ON THE TAKE ……..

Selling Out?Selling Out?

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• MUNIS DOWN 5%

• CORPORATE DOWN 8%

• JUNK DOWN 26%

• TREASURIES

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Risk Return Triangle

Rates

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• Discounting to PV - Recent Historic Rate

• Alaskan - Total Offset

• Nominal Rate / Average Rate - 25 yrs

InvestmentsInvestments

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Lose Your Shirt……

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Life Exp. - US 20080 77.81 77.45 73.5

10 68.515 63.620 58.825 54.030 49.335 44.540 39.945 35.350 30.955 26.660 22.565 18.770 15.175 11.980 9.185 6.890 5.095 3.6

100 2.6 32

Life ExpectancyLife Expectancy

• Financial Records - 5 yrs

• Tax Returns (5 yrs) - same date, printer, alignment, etc.

• Past meds minuscule

• Darden - (location of doc - G drive) - CSI

WarningsWarnings

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1. Treating M.D.’s2. Therapists / Nurses3. Care Planner / Rehab Expert4. Economist

1. Treating M.D.’s2. Therapists / Nurses3. Care Planner / Rehab Expert4. Economist

Sequence of ExpertsSequence of Experts

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•Routine M.D. Visits•Therapies•ADL’s•Diagnostics•Orthopedic Equipment•Supplies

•Attendant CareAttendant Care

•Routine M.D. Visits•Therapies•ADL’s•Diagnostics•Orthopedic Equipment•Supplies

•Attendant CareAttendant Care

Categories of NeedCategories of Need

• White Female• White Female• Age 2.0• Age 2.0• Life Expectancy = 79.7 years• Life Expectancy = 79.7 years• 24 Hour Nursing Care (HOME)• 24 Hour Nursing Care (HOME)• $30.50/Hour/LPN• $30.50/Hour/LPN• Discount Factor = 4.25%• Discount Factor = 4.25%

ExampleExample

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YEAR

1977

1980

1982

1986

1990

YEAR

1977

1980

1982

1986

1990

MEDICAL

9.9%

11.3%

11.8%

7.7%

9.3%

MEDICAL

9.9%

11.3%

11.8%

7.7%

9.3%

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Annual Inc. Med Costs

YEAR

1995

2000

2002

2004

2006

2008

YEAR

1995

2000

2002

2004

2006

2008

MEDICAL

5.1%

4.3%

4.4%

4.6%

4.7%

4.6%

MEDICAL

5.1%

4.3%

4.4%

4.6%

4.7%

4.6% 39

Annual Inc. Med Costs – cont.

Model 1: Growth Rate = 2.4%Present Value = $12.1m

Model 1: Growth Rate = 2.4%Present Value = $12.1m

Model 2: Growth Rate = Discount RatePresent Value = $21.2m

Model 2: Growth Rate = Discount RatePresent Value = $21.2m

Model 3: Growth Rate = 4.5% (25 yrs)

Present Value = $25.7MModel 3: Growth Rate = 4.5% (25 yrs)

Present Value = $25.7M

ModelsModels

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Verdict

Bartow

3/18/2009

$65M$65M

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Verdict

Orange County

2/12/2009

$12.5 M$12.5 M

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VerdictBroward Court - Paralyzed Trucker $14.6 M

Florida

6/2009

$14.6 M$14.6 M

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Verdict

California

10/30/2008

$14.9 M$14.9 M

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Verdict

Miami

3/20/2009

$4.6 M$4.6 M

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$25.0 M$25.0 M

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$28.0 M$28.0 M

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$50.0 M$50.0 M

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$51.6 M$51.6 M

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$63 M$63 M

50

$500 M$500 M

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FeedbackFeedback

•Poll Jurors

•Ask Calculators / Charts

•Deliberations / Pictures 6 weeks later

•Never Discuss Case

PresentationPresentation

•Earning Capacity - Cistern

•Present Value – ‘Car Loan’

•Court Reporter Interruptions

•9-11 – Security

•Jack Pot Justice

•Earning Capacity - Cistern

•Present Value – ‘Car Loan’

•Court Reporter Interruptions

•9-11 – Security

•Jack Pot Justice

•Blow-Up Printer•Laminator•Small Projector•Hand held•Pay Now Links•Printer•Slides / Overheads•MSV

•Blow-Up Printer•Laminator•Small Projector•Hand held•Pay Now Links•Printer•Slides / Overheads•MSV

EquipmentEquipment

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Future TestimonyFuture Testimony

•TRAVEL COSTLY •Clip MSV / Slides •Benefits / Costs

MSVMSV

CONSULTING ECONOMIST

PHONE (561) 622-0330CELL (561) 346-7828FAX (561) 624-2854TOLL FREE (800) 662-0330

CONSULTING ECONOMIST

PHONE (561) 622-0330CELL (561) 346-7828FAX (561) 624-2854TOLL FREE (800) 662-0330

BERNARD F. PETTINGILL, PH.D.BERNARD F. PETTINGILL, PH.D.

#93 Sandbourne LaneP.G.A. NATIONALPALM BEACH GARDENS, FL 33418E-mail: [email protected]

#93 Sandbourne LaneP.G.A. NATIONALPALM BEACH GARDENS, FL 33418E-mail: [email protected]

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• A VELSHI – B.A. RELIGIOUS STUDIES

• M BARTIROMO – B.A. JOURNALISM

• L KUDLOW – B.A. HISTORY

• L DOBBS – B.A. GENERAL BUSINESS

• S ORMAN – B.A. SOCIAL WORK

• E BURNETT – B.A. POLITICAL SCIENCE

• N CAVUTO – M.A. JOURNALISM

Commentators / CredibilityCommentators / Credibility

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StoriesStories

•Homeless Borrowing $$$Mutual Funds

•Brooklyn Tunnel Syndrome•Bill Port Hole to Port Hole•DUCES TECUM•Economically Illiterate•Nine 0’s in a BILLION DOLLAR Practice•Target Verdicts – 7 States Especially California