CASE STUDY: $26 MILLION SETTLEMENT

By Kenneth Berger

Over Memorial Day Weekend 2020, Heather Douglas and her family went on vacation to Myrtle Beach, SC. The family stayed at The Caribbean Resort & Villas. Heather’s 3 year-old son, Ashtyn, spent many hours in the resort’s lazy river.  On the drive home from their vacation, family members noticed Ashtyn was fussy - which was unusual for him - but thought he may just be tired. After getting home, Heather consoled him and got Ashtyn to fall asleep. Unfortunately, Ashtyn woke up a short time later. He began screaming and crying uncontrollably. Later that night, Heather discovered redness around his groin area and over the course of several hours it got worse and worse.  Ashtyn was taken to his pediatrician the following morning. The next day he was sent to the regional ER and eventually to the UNC burn center where he was diagnosed and treated for chemical burns.  He was admitted and treated at UNC for 7 days.  After discharge, his family had to clean his wounds 3-4 times a day. This was torture for him and it took several family members to hold him down so he could be scrubbed. Grown men had to look away.

 

While Ashtyn was at the burn center, his family called the South Carolina Department of Health and Environmental Control (DHEC) to complain. Two days later, DHEC came to the resort to check chemical levels. South Carolina law requires chlorine levels to be kept under 8ppm on the high side.  (This is one of the most liberal chlorine allowances in the Country). When DHEC tested, the levels exceeded the testing kit's ability to measure, meaning the levels were somewhere higher than 10ppm. How much higher, we'll never know.  DHEC shut the pool down that day and went home. What we discovered over the next three years shocked us almost every day.

 

Every public pool operator is required by South Carolina law to maintain safe chemical levels and to document daily testing in a log book. The resort's log book showed normal and acceptable levels on both the day that Ashtyn got burned and on the day that DHEC measured chlorine off the charts.  In discovery, we requested the log books as well as personnel records.  We discovered that the resort's designated Certified Pool Operator had been filling in log entries on days he wasn't even working, including the day Ashtyn got burned.

 

In deposition, he was confronted with his fraud and admitted it.  He further admitted to us that he had been doing it for a year prior to Ashtyn's injury and kept doing it for two years after.  We asked when he stopped faking the logs and he told us he stopped when he got our deposition notice.  We left the depo and waited 30 days to propound discovery asking whether he was still employed and if not, when he was terminated and why.  They didn't terminate him until after they received our supplemental discovery request.  At this point, we sent a RWTB letter for what we believed the full policy limits were at the time, $11M.  They offered $400k.

 

Since they did not seem to be taking us seriously, we sent the deposition transcript of the forgery confession to DHEC's enforcement unit.  The pool operator was subsequently arrested, charged with forgery and convicted.

 

We then started taking depositions up the chain of command.  The Pool Operator's direct supervisor testified, "I don't really care," when asked if he wanted to know how many times Juan Rivera falsified the logs leading up to Ashtyn's burns. The Department Head plead the Fifth over 20 times during his deposition. 

 

We sent our pool expert for a site inspection and he was so horrified about the dangers he witnessed that he suggested we call DHEC to report the ongoing danger.  The next day 10 of 11 open pools were shut down due to illegally high or illegally low chlorine levels. Many of the pools tested close to 0 for chlorine during this inspection. It was like human soup. This was nearly 3 years after Ashtyn's burns. 

 

We found numerous customer complaints about the pools and specifically high chlorine levels across travel review websites.  During the deposition of the Corporate Rep we asked about whether she investigated any of the complaints made on the web, specifically one that also related to a chemical burn.  She testified there would be no way to investigate as she couldn't even verify if that person was an actual guest or just a troll.  We tracked that customer - a Marine - down immediately after the depo and took his statement related to burns his wife and son suffered.  He further told us that he reported the incident directly to the Corporate rep that denied ever hearing about it.

 

By this point, we had new defense counsel and magically another $15 million in coverage emerged.  At the end of 2023 we were focus grouping some issues and getting ready for trial. Since it was the end of the year and we would be forced into mediation in 2024, we sent an end of the year RWTB to ensure that either the case settled or we had appropriate reserves set for mediation.  The RWTB was set to expire on New Year's eve.  The third and final layer of coverage (15M) requested a 19 day extension and we granted it.  The next day the second layer asked for an extension to our mediation date in late February.  Nick said no and told them if we make it mediation, we're only negotiating over policy limits.

 

On the last day and at the last minute, the third carrier accepted and the case resolved for $26M.  This case had a lot of bells and whistles and we felt that every day that went by our case only got stronger.  That confidence and knowing that RWTB techniques work set us up to either hit big on settlement or nail them at trial.  This might have been one of the best punitive damages cases I've seen so it was easy to have a "don't give a shit" attitude about whether they settled or not.  Along with our last RWTB we sent them the following video that we had made as well as some recent photos to show how Ashtyn was growing.

 

What challenges did you encounter during the legal process, and how did you navigate them to achieve a favorable outcome for your client? 

The Defendants refused to produce relevant log books and timesheets that showed the scale and duration of the fraud. They also refused to produce their financial information, despite punitive damages clearly being in play. We obtained a court order requiring production of this information. We also traced their financial interests – and the real payors – all the way to Madison Avenue in New York. 

How does this settlement compare to similar cases in terms of size and complexity? 

We believe this is the largest settlement or verdict for a pool chemical injury in recorded history.

Can you discuss the significance of this settlement within the context of personal injury law? How does it set a precedent or contribute to legal precedents in this area? 

This settlement sets a new standard not only for pool injury cases, but for resort and hospitality industry cases as a whole. It demonstrates that the more you dig into “why” the danger existed, the more evidence you will uncover. When a resort voluntarily pays 26mm to settle a case with only $200,000 in medical bills, the resort industry takes notice. Our hope is that other resorts will learn from Caribbean’s recklessness, and that they will realize cutting corners and endangering families is a bad business decision. 

 What impact do you hope this settlement will have on the plaintiff's future quality of life, medical care, and financial security?

 Ashtyn should never have to worry about money. He should also be able to get the best medical and psychological care in the world throughout his lifetime. 

Can you share a bit about the young boy and his family's journey throughout this challenging ordeal? How have they shown resilience and strength in the face of adversity, and what impact has their story had on you personally as their advocate? 

Heather is a Nurse Practitioner with a master’s degree who approached Ashtyn’s care clinically. She was the only one with the strength and fortitude to push past his screams and care for Ashtyn’s wound once they got out of the hospital. 

Heather never asked about the money or sought any gain for herself. Her sole focus was on getting Ashtyn the care he needed and to help prevent this harm from ever happening to another child. 

Ashtyn’s screams are hopefully a thing of the past. Hitting himself in the head to distract from the pain near his privates is hopefully forgotten. Ashtyn is now a big brother and recently went to his first school dance. Our hope is that with the financial resources provided by this settlement, life will not only get back to normal, but better than it ever was. 

The Douglas family showed that in the face of pain and adversity, you keep going; you keep showing up, caring for one another, and remaining grateful for what you have.  

My wife and I had our first child while this case was being prepared for trial. When I looked at Ashtyn, I thought of my baby. I never thought of Ashtyn as my own child, but I did seek full justice for him as if he was. This case allowed me to “golden rule” myself not as if I were in the shoes of my client, but in the shoes of a parent. That mindset created a relentlessness that I believe was apparent to the defense and helped achieve this result. 

 What are some moments or interactions with the young boy and his family that have stood out to you during the course of representing them? How have these experiences shaped your perspective on the importance of seeking justice and providing support for those who have been harmed? 

When I first saw the photos of Ashtyn’s burns, I was disturbed. When I saw the video of him from the hospital, screaming and punching himself in the head, I was horrified. It motivated our whole team to go to any length to secure full justice for this little boy. 

Another moment that stands out is visiting with Heather and Ashtyn at their home. We learned Heather’s human story; her real story going back long before Ashtyn ever got hurt. The more we got to know Heather, the more we understood why she had to be so strong.

 We also got on the floor and played “dinosaurs” with Ashtyn. We got to know him not simply as a child who got hurt, but about all the beautiful parts of his personality that made him Heather’s little “wild man.”

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