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RAYMOND D. SCHWEITZER. CITY ADMINISTRATOR ^Ai~
E. M. LIGHT. DIRECTOR OF RISK MANAGEMENT (I. IV
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INTEROFFICE MEMORANDUM
8705-1501
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TO:
FROM:
SUBJECT: MANZER VS. CITY OF SAN BERNARDINO
DATE:
May 4. 1987
(7064)
COPIES:
-------------------------------------------------------------
CONFIDENTiAL.
On June 16. 1982. a part-time employee. hired just two months
previously. sustained serious injuries when he somehow ended
up in the packing mechanism of a rear loader refuse truck.
One leg had to be amputated at the knee; and his other knee
was crushed, causing serious incapacity to his remaining leg.
Since that time. Mr. Manzer has been in and out of the
hospital due to subsequent complications, specifically per-
taining to repeated infections in the stump of the amputated
leg. As of March 13, 1987. total workers' compensation
expenditures by the City amounted to $163.771.48. This
doesn't include any expenditures for permanent disability,
except for a $1,250 advance. since Mr. Manzer's condition had
not yet become permanent and stationary.
Mr. Manzer's only recourse against the City was through the
workers' compensation system: however. he did file a civil
action against Pac Mor. the manufacturer of the hopper, and
also an action against Ray Gaskin, who purchased the hopper
from Pac Mor and installed it on the International truck. His
civil action was predicated on the allegation of product
liability. The City intervened in this civil action in an
attempt to recover some or all of its workers' compensation
expenditures: however. on the contrary. due to the following
reasons, it does not appear likely that the City will be
successfu 1 in its endeavor.
1.
Certain safety
not ordered by
vehicle.
devices available from Pac Mor were
the City when purchasing the
2. The City maintained very poor maintenance records.
Specifically, there were no records regarding a
"pop-et" screw. The failure of this screw al-
legedly caused a malfunction in the packing mech-
anism. contributing to the seriousness of this
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INTEROFFICE MEMORANDUM: 8705-1501
MANZER VS. CITY OF SAN BERNARDINO
May 4, 1987
Page 2
fnjury. There was no scheduled perfodfc mafnten-
ance on this device.
3. A City employee operated the compaction device the
day before the incident and noticed that the device
did not work. It was either not reported; or ff it
was, nothing was done.
4. Other employees noticed the malfunction several
days before the incident and reported it to their
leadman, who made it known to a mechanic. Here
again, evidently nothing was done to correct the
situation.
5. There was a lack of training complicated by Mr.
Manzer's inability to read the training manual. He
suffers from dyslexia. There was no oral or
wrftten test given, although he did spend a whole
day at the Orange Show Grounds and was shown how
the unit operated.
6. Thfs vehfcle was outdated and used as a backup.
Normally, another vehicle was used, and ft is not
even known if Mr. Manzer was trained on the
specific vehicle involved in this incfdent.
As fndfcated prevfously, a permanent disabflity rating has
yet to be determined; however, the attorney representing the
City, Philip Mark, feels that that a workers' compensation
judge would probably find 100 percent permanent disability.
Assumfng a normal life expectancy, this would cost the Cfty
approxfmately an additional $350,000. There is a slim chance
that a workers' compensation judge might only find 80 percent
disabflfty. Even in this case, the total fncremental
expenditure to the Cfty would be approximately $150,000.
Fortunately, ft appears that we now have a rather unexpected
but most desirous alternatfve. I met last Wednesday wfth
Gary Carpenter, the attorney representing the City in the
fnterventfon complaint, and Philfp Mark, the City's workers'
compensation attorney. The insurance companies representing
Pak Mor and Ray Gaskin are attempting to settle the product
liabflfty case wfth Mr. Manzer. However, they are falling
somewhat short fn what they are able to offer under their
polfcy limits insofar as Manzer's demand. This opens the
opportunity for the Cfty to attempt to put forth some money
toward the settlement package in return for a "Third Party
Compromise and Release." which is a complete release for any
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INTEROFFICE MEMORANDUM: 8705-1501
MANZER VS. CITY OF SAN BERNARDINO
May 4, 1987
Page 3
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future permanent disability, medical, and any and all other
workers' compensation items.
Due to a rather apparent aura of urgency by the other parties
and the fear of having them settle around us, I instructed
Mr. Carpenter to attempt to negotiate a settlement with Mr.
Manzer's attorney. Even though we initially thought it might
take as much as $40,000, Mr. Carpenter initially suggested
$10,000; and Mr. Manzer's attorney came back with a request
for $20,000. In further conversation, it was agreed that the
City could obtain a Third Party Compromise and Release
(complete release) for a $15,000 contribution to the total
settlement package. This is to be compared to the alternative
potential payment under the workers' compensation system of
$150,000 to $350,000. Incidently, Mr. Gaskin's insurance
carrier is tendering its policy limits of $300,000 toward the
settlement, and it is anticipated that Pak Mor is tendering
somewhere between $75,000 and $150,000 toward this package.
BE.QMMENDATION:
Settle all aspects of the Arthur D. Manzer
Bernardino workers' compensation lawsuit
Party Compromise and Release for the sum of
vs. City of San
through a Third
$15,000.
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E. M. L1 g ht
Director of Risk Management
EL/sf
cc: Gary Carpenter, Attorney at Law,
Middlebrook & kaiser
Philip A. Mark, Attorney at Law
Mark & Bolson