Published by Claims Resolution Management Corporation, a wholly-owned subsidiary
February, 2000
In October, the Trustees announced the resignation of Patricia G. Houser, President of the Claims Resolution Management Corporation ("CRMC"), effective January 1, 2000. Ms. Houser joined the Manville Trust in 1987 as its Director of Administration, became the Acting Executive Director in 1991, and was appointed Executive Director in 1992. Upon the formation of the CRMC to handle Trust claims processing in 1999, she became President of CRMC.
During her nine-year tenure as executive director, Ms. Houser was instrumental in negotiating and implementing the Trust Distribution Process (TDP) and in settling almost 250,000 claims at a liquidated value of $11.1 B under its terms.
Ms. Houser was strongly committed to the goals and mission of the Trust and infused that philosophy throughout the Trust/CRMC organization. Excerpts from her parting words to the staff illustrate how she felt. "The Trust has a worthy goal of providing compensation as quickly and efficiently as possible to those who have been injured by the asbestos tragedy. I believe we have been successful, though it certainly has not been easy and our many constituents have not always agreed on the best way to proceed. Finding a middle ground between the many interests that affect the Trust has been a continuing challenge. It has been a privilege to work with the Trustees and the staff, and I wish them, the Trust’s beneficiaries and their dedicated representatives, all the best for the future."
The Trustees and staff wish Pat the best of luck and happiness as she leaves the Trust to complete her doctorate in Public Administration at George Washington University.
The recruitment firm of Heidrick & Struggles is conducting a search to fill the vacancy.
CRMC Sets Offer Schedule for 2000
The staff of CRMC estimated that 39,600 new claims will be received during 2000. Under the Adams Settlement, the claim population was divided into Retrospective claims (claims received on or before April 9, 1999) and Prospective claims (claims received after April 9, 1999). In general, claims with a FIFO number under 374,075 and/or a POC number under 486,895 are Retrospective claims. Claims in this group that are eligible have received at least one offer/check or denial notice.
Beginning in February 2000, CRMC expects to begin making offers on Prospective claims. Each month thereafter, the FIFO range will be extended and new offers made. By year end, it is anticipated claims with FIFO numbers under 415,000 will be eligible for and will have received a first offer/denial notice. By the end of 2000 (provided no unexpected surge in new claim filings occurs) the CRMC expects to be making an offer on a new claim within 120 days of initial filing.
1999 Settlements Exceed 80,000 Claims
The CRMC settled 82,700 Manville Trust claims in 1999, paying out in excess of $300 million. The Trust began 2000 with over 428,000 claims filed, approximately 277,000 settlements, and approximately $2.16 billion paid to claimants. The Trust has approximately 114,000 unsettled claims, over 32,000 of which constitute expired claims or have been deactivated due to claimant’s failure to respond to an offer or denial notice, leaving 82,000 active, unsettled claims.
The 82,000 active, unsettled claims include 30,000 outstanding payment offers and 13,000 outstanding denial notices. Because of the large volume of recategorization requests received during the past several months (currently averaging 3,000 per month), the CRMC staff have been concentrating its efforts on reviewing those requests rather than on making new offers. Once the surge of recategorization requests has diminished, the staff will switch their focus to the categorization of new filings and making new offers.
In the course of the Trust’s ongoing tobacco litigation, an updated estimate of 514,000 future claims was projected. Based on this estimate, total claim filings over the life of the Trust are now estimated at over 900,000.
As of the end of 1999, the Trust’s total Net Claimant’s Equity was approximately $2.2 billion, about 45% of which is held in cash and marketable securities and is available to pay claims, and about 55% of which is in the common stock of the Johns Manville Corporation.
Under the Adams Settlement, the Trust modified the PFT documentation requirements implemented on December 2, 1996. The requirements will be applied based on when the test was performed, rather than when the test results were received by the Trust. Therefore, the documentation requirements announced in the October 28, 1996 Newsletter and further outlined in the March 14, 1997 Newsletter apply to tests performed on or after December 2, 1996. Copies of the Adams Settlement and Trust Newsletter can be found on the Trust’s website, www.mantrust.org.
Standards for Certain Medical Reports
For Category III and some Category II claims, the Trust Distribution Process (the "TDP") states that "the claimant must submit a medical report stating that a causal relationship exists between asbestos exposure and the bilateral interstitial lung disease." While it would be inappropriate for the Trust or the CRMC to tell claimants’ physicians what words they should use in a medical report, everyone should keep in mind that the authors of the TDP intentionally used the phrase "bilateral interstitial lung disease," rather than "asbestosis", because "asbestosis" is sometimes used by medical professionals to describe conditions other than bilateral interstitial lung disease. Stated differently, asbestosis is not an acceptable surrogate for bilateral interstitial lung disease. When a claim is reviewed by the CRMC staff, the reviewer will try to determine if, taken as a whole and fairly read, the medical reports reflect a diagnosis of bilateral interstitial lung disease.
In addition, a physician’s report must, when fairly read, provide a diagnosis that the bilateral interstitial lung disease is caused at least in part by that claimant’s asbestos exposure. (See Causation Statement below.) Please note that statements which are generic in nature, e.g., "in an individual with sufficient latency and appropriate work history, these findings would be compatible with asbestos-exposure" do not provide such a diagnosis and will be rejected. The presentation of an ILO report with a statement which reads "consistent with asbestos exposure" is equally insufficient.
In the Trust’s October 28, 1996 Newsletter, it was stated, "As to the causation report, there must be a reference to a specific claimant’s x-ray findings, the claimant’s exposure to asbestos, and the connection between the two." This statement generated virtually no comment at the time, but staff have recently seen medical reports where the physician made no mention of the information necessary to form this conclusion. Please note that there must be specific mention of the claimant’s work history, asbestos exposure, medical history, latency, and CXR findings in the physician’s statement so that a claim reviewer can fairly determine that the physician made a diagnosis of bilateral interstitial lung disease caused at least in part by the claimant’s asbestos exposure.
As a service to your clients and the plaintiffs’ bar, the CRMC Claims staff will review sample causation statement formats. If you have any doubt as to the appropriateness of your formats, before having your physicians produce medical reports, we encourage you to avail yourself of this service.
The Trust Distribution Process (TDP) provides that claimants who have not signed a general release "may file a Second Injury Claim against the Trust for additional damages if the claimant subsequently develops an asbestos-related malignant disease." Section C.6.TDP.
When a second injury claim is filed it MUST meet the following three criteria:
1. The initial settlement must have been for a non-malignancy;
2. The alleged second injury must be a compensable asbestos-related malignancy; and
3. The initial diagnosis of the
malignancy must be made AFTER the date on
which the original non-malignancy claim was settled.
Before accepting a non-malignancy offer from the Trust, counsel should consult with their client to ensure, among other things, that their client’s disease has not progressed to a malignancy. If a claimant settles a non-malignancy claim when in fact the disease has progressed to a malignancy prior to settlement, the Trust will allow the claimant to settle a claim previously settled as a non-malignancy as a malignancy, if and only if:
1. CRMC is notified in writing of
the claimant’s desire to resettle the claim within
six months of settling the non-malignancy claim; and
2. The malignancy diagnosis was
made within the six-month period prior to
the settlement date.
To "resettle" the claim, the claimant/claimant’s counsel must reimburse the Trust for the settlement amount and submit medical records in support of a compensable asbestos-related malignancy. The Trust will then void the original settlement and reprocess the claim as an alleged malignancy.
Pursuant to the TDP, in some cases the amount of the second injury claim will be set-off by the amount of the previously settled non-malignancy claim. If the non-malignancy claim was settled on or BEFORE November 19, 1990, any amounts paid will be set-off against the liquidated value of the second injury claim. If the non-malignancy claim was settled AFTER November 19, 1990, no set-off is taken.
Claim Payment Audit Responses Due in January
Annually, CRMC audits Trust claim settlements for the twelve-month period ending in September. The purpose of the claim payment audit is to ensure that claimants are receiving timely and accurate settlement proceeds in accordance with the terms of the Trust Distribution Process and that the Trust is receiving appropriate releases from claimants for such payments.
During the twelve months ended September 30, 1999, there were over 52,000 accepted offers. From that population CRMC randomly selected 172 law firms and 1,188 settlements for audit. Each firm was requested to provide a copy of the settlement sheet showing the calculation of settlement proceeds to the claimant and a copy of both sides of the check used to pay the claimant. Claim payment audit requests were mailed on November 1st and responses were due no later than January 15, 2000.
On November 2, 1999, the Honorable Jack B. Weinstein dismissed the Trust’s suit against the Tobacco Manufacturers for lack of subject matter jurisdiction. The Trust has filed a Notice of Appeal of the dismissal. On November 11, 1999, the Trust filed a new action, which in addition to the state law claims previously alleged, asserts RICO violations by the defendants. Specifically, the Trust’s new suit alleges claims for contribution, indemnity, unfair competition and unjust enrichment for which it also seeks restitution and punitive damages and it alleges RICO violations for which it seeks treble damages and disgorgement. A copy of the Trust’s Amended Complaint can be found on the Trust’s website at www.mantrust.org.
Trial has been set for April 17th. The Trust is represented by Orrick Herrington & Sutcliffe; Ness, Motley, Loadholt, Richardson & Poole; Kazan, McClain, Edises, Simon & Abrams, and in-house counsel. The Trust is also being represented on its appeal by Carter Phillips, Esq. of Sidley & Austin’s Washington, D.C. office.
Feedback about the Trust’s Newsletter
The Trust introduced the Newsletter as a vehicle for communicating with the plaintiffs’ bar and their staffs about policy issues related to the settlement of Manville Trust claims. We would like to know whether our readers find it useful or would rather see it discontinued and replaced with an alternative communication device. On the back page of this Newsletter is a survey designed to solicit your opinions and suggestions. We would like each of our readers to photocopy this page, complete it, and return it to us. Multiple surveys may be submitted by the same firm if there are multiple readers of the Newsletter. You need not tell us your name, but we would like to know the name of the law firm you work for and the nature of your work so that we might have a better idea of topics to cover in the future.
The Newsletter is the
Source of Offical Trust Policy Statements
It is important for all Trust constituencies to note that the Manville Trust Newsletter
is the primary means by which official Trust policy is communicated to our constituencies.
Please review the Newsletter carefully, and note any policy statements
that impact the manner in which you process your claim(s). Trust Newsletters,
indexed by topic, are available on the Internet at mantrust.org, beginning with the
April 1, 1996 issue. any comments regarding the Trust's policies may be sent via
Internet e-mail to inquiry@claimsres.com, by
mail to P.O. Box 10415, Fairfax, VA 22031, by telephone (703) 204-9300 or by fax (703)
205-6249.
FEEDBACK ABOUT MANVILLE TRUST NEWSLETTER
2. Is it sent to the correct people in your organization? Yes No
Useful
Out of date
Irrelevant
Not published often enough
Understandable
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Timely
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Please return this survey to Karin Croft @ CRMC, PO Box 10415, Fairfax, VA 22031