A Michigan trucking company has agreed to pay $18 million to the families of three victims killed in a tragic highway accident. The settlement came shortly after a federal court jury in Missouri returned a $15 million verdict. Deliberations on punitives were underway when the trucking company agreed to settle the case. The case revealed a practice which has developed in the trucking industry. The different functions of one company are split up so the company can claim the assets of the entire enterprise are not at risk because of a fatality. Every department is divided into a separate company. For example, there may be one company that qualifies the drivers, a separate company that monitors their logs, a separate company that leases the tractors and trailers, and a separate company that leases the drivers. This has become a fairly common practice and makes handling claims against trucking companies much more challenging.
During the trial, it was proved in this case that half a dozen corporate Defendants named in the wrongful death suit were all subsidiaries or affiliates of CenTra, a Warren, Michigan holding company. The accident occurred on an interstate highway in Missouri in June 2006 when the truck driver fell asleep at the wheel. The tractor trailer he was driving slammed into the rear of a car driven by Beverly Garrett, a local municipal union official. Ms. Garrett and three female relatives – all on their way to a wedding – were killed in the crash.
The three-week trial involved wrongful death claims filed by Garrett’s children on behalf of Garrett, their grandmother and an aunt. A separate trial is expected to be held this fall on claims filed by the husband of Garrett’s niece, who also died in the crash. The truck driver is facing four counts of second-degree involuntary manslaughter. In an unusual development, the judge in the civil trial entered a default judgment against one of CenTra’s subsidiaries, called Central Transport. Also, an executive from another subsidiary, Pro Logistics, admitted liability during the trial.
The Plaintiffs’ lawyers undertook aggressive discovery to unmask CenTra as the alter-ego of its various subsidiaries and affiliates. Over the course of a year, some 60 depositions were taken and four corporate headquarters were inspected. In addition, the Plaintiffs’ lawyers conducted computer forensic examinations of dozens of company computers. Missing log books and a truck satellite tracking device compounded discovery challenges. The judge allowed the jury to receive spoliation instructions so it could consider the missing evidence, which suggested the driver lied about having slept for ten hours before getting behind the wheel prior to the accident.
The jurors heard testimony and saw documents from the very beginning on how these companies were interrelated, how they were set up, and the manner in which each operated. This truck driver, who had a very bad driving history, should never have been hired in the first place. The driver, who had a history of heart attack and stroke, had been rejected by one of CenTra’s subsidiaries because of his health problems, but was hired by one of CenTra’s other firms. He was on a variety of medications, including Valium, at the time of the accident. It was proved at trial that CenTra failed to properly screen its drivers and ensure they received sufficient rest.
The jurors found CenTra and three subsidiaries liable for negligence and awarded $15 million in compensatory damages. Two days later, the companies agreed to settle the case for $18 million. Plaintiffs’ lawyers, Kenneth B. McClain and Daniel A. Thomas of Humphrey, Farrington, McClain located in Independence, Missouri, did an outstanding job for their clients. This case is a great example of how important discovery is in preparing a case for trial.
Source: Lawyers Weekly
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