Rules are rules, but Wal-Mart once again ignores the one about being tone deaf

Just the other day, I blogged about my health insurer's letting me know that if I received a settlement for last fall's fall (and attendant broken arm), I would have to reimburse them for all their medical costs before a) paying off my lawyer, b) recouping my co-pay costs, and - way down on the list - c) anything for my pain, suffering, temporary loss of my arm, expense for pull on comfy clothes, wireless keyboard, etc. (Link to post here.)

Well, if I'd been planning on suing, this sure would have given me pause.

Apparently the Shanks of Jackson, Missouri, went ahead and sued the bastards who'd caused the 2000 accident and put a brain-damaged Debbie Shank in a nursing home while still in her forties.

Debbie had been working at Wal-Mart at the time of her accident, and was an employee - "associate", in W-M's parlance - who happened to have medical insurance through them. W-M insurance covered the medical costs - to the tune of nearly half a million bucks - but the Shanks were looking for help with long term care, so they sued the trucking company that had caused the accident.

The were awarded $1 million, which after legal fees dwindled down to $417K. (Nearly 60% went to the lawyers! I definitely chose the wrong profession.)

In come the Boys from Bentonville, looking for their money - all of it. Fortunately - I guess - the courts told them they could only get their mitts on what remained in the family trust ($277K) after a number of years already spent in the nursing home. The Shanks family has been appealing, but The Supremes refused to take the case.

Meanwhile, the Shanks' attorney thinks that Wal-Mart should settle for $100K. (Not clear he's the same one who scored the big award in the suit against the trucking company, but if he did, all I can say it's easy for him to say W-M should take the $100K.) In any case, they apparently want it all.

It's hard to imagine an All-American hard-luck case that can top the Shanks' in the hard-luck category.

Not enough that Debbie Shank - who held the ultra-glam position as a shelf-stocker when she was working at W-M, so we're probably not talking about a supremely well-off family here - has sustained breathtakingly terrible brain damage that, among other things, has destroyed her short term memory.

As unimaginably hard-luck would have it, the Shanks' 18 year old son was killed in Iraq and every time Debbie asks about him, and re-hears the news, she weeps as if hearing it for the first time.

Naturally, the combo package of the notoriously rapacious Wal-Mart and the fallen hero son - with prostate cancer on the husband's plate, by the way, not to mention a quickie divorce so that Debbie could qualify for Medicaid - has the chattering class (which I guess I'm at least an auxiliary member) going out of their minds.

The truth is that, as Debbie Shank's husband concedes, Wal-Mart is within their rights to get back their money - rules are rules, and it's all there in the fine print.

But given how this poor family has been absolutely whipsawed by life, wouldn't you think that a company that has taken so many image blows - and seems to resent it - would have looked up the rule about tone deafness. Which is, if image and reputation matter to you, try to avoid doing things that will make you look really, really bad. Easy to see the word "Shanked" finding its way into the vocabulary used to describe the evils of Wal-Mart.

It seems to me that, from a PR standpoint alone, Wal-Mart could have taken a smaller amount. Or, given the circumstances of this one, taken a pass.

Of course, this is their rule, and they don't want to give the Shanks' a pass. Because when the next time it happens, the hard-luck case might be a little less grim (i.e., minus the son killed in Iraq) and media-perfect, but the outcome the same: someone in need of long-term care and losing their opportunity to pay for it.

It seems to me that this could have been avoided in several ways.

• Wal-Mart could have made it clear earlier on that they would be entitled to their piece of the pie. Maybe the Shanks could have struck a better deal for themselves, expand the pie a bit. (My insurer only took a couple of months to jump on my picayune little case - less than $10K in total medical costs, counting PT (a total, by the way, which is quite a bit less)than the annual premium my husband and I pay. But they did take a few months, during which time I could have been merrily on my way to settling for, say $10K, then having to go out of pocket to pay the lawyer off. Maybe when they receive the first reimbursement request for anything associated with the word "accident" they should pick up the phone.)
• Wal-Mart could have joined forces with the family - and all those in similar wretched, no-win circumstances - to mount a suit, ensuring that they got theirs, as did the victims and - oh, but of course - the lawyers. Why should the burden have been so fully on the victim to do all the heavy legal lifting, given that another party stood to gain the biggest benefit. (Is there something illegal about this approach? It sure seems to me to make one whole hell of a lot of sense.)
• Wouldn't you think that lawyer in this case might have mentioned to the Shanks that this could happen to them. Surely, the lawyer had seen this before. It can't just be my health insurer and Wal-Mart who practice this payback rule.

This is truly a terrible story.

But it's really not a big, bad Wal-Mart story.

If and when we get around to "tort reform", it might be a good idea to throw in some reform around this issue.

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Information used in this post came from a CNN story. And thanks to my friend Peter for telling me about it.