Learn why you may not be as well protected as you think.

What Can Go Wrong?
There are so many things owners are liable for. It is not a matter of if you will be sued but when. The ways the laws on liability are written you will often be liable even when you did everything right. After reviewing thousands of cases involving business owners, the following are a few of the items that can develop into a lawsuit. As you will see in one of the cases, you can even be held liable for hundreds of thousands of dollars if you have sex with a married person for destroying a marriage.

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Sources of Lawsuits:

Premise Liability
Ranch Employee Accidentally Shot &
Killed Trespasser While Hunting, $20 Million Awarded
The family of an illegal immigrant who was accidentally shot while traversing a private ranch was awarded $20 million by a Texas jury. However, the defendants settled for $15 million before the damages assessment. Jesus Barrera Vazquez, 24, a Mexican national, along with three others, crossed the border into Texas, and was on the Hurd-Villegas Ranch when employee Juan Garza Mendoza, who was hunting wild hogs, saw a shadow and fired his gun, killing Vazquez. Vazquez’s family sued Mendoza for negligence and the ranch owner for negligent entrustment, claiming it gave a gun to someone who was neither trained to use it nor licensed to hunt. The ranch denied giving the gun to Mendoza and maintained that it was not used in furtherance of his employment. (Olmos v. Mendoza)

Boy Electrocuted by Vending Machine at Motel.
Motel Owner Required to Pay $7 Million and
Vending Machine Owner Required to Pay $4 Million
This tragic case illustrates the fact that there are many hidden and unexpected hazards in the hospitality industry. Shawn Ramanauskas, age ten, was staying in the Williams Motel with his family, while attending a family reunion. Young Shawn died after being electrocuted while attempting to purchase a snack from an ungrounded electric vending machine on the motel premises. Apparently the vending machine had been negligently installed years before by a handyman that worked for the motel. Shawn’s family sued the motel and other defendants, including the owner of the vending machine. The motel settled, prior to trial, for an amount of $7 million dollars (and another defendant settled for $3 million dollars). The jury returned a verdict against the remaining defendant, the owner of the vending machine, for an amount of $13 million dollars. The appellate court reduced the amount to $4 million, however, even with the reduction, the total amount paid by the various defendants amounted to $14 million dollars. (Lance, Inc. v. Ramanauskas, 731 So.2d 1204; 1999 Ala. LEXIS 66 (Sup. Ct. Ala. 1999))

Patron Falls in Parking Lot, Restaurant
Owner Joseph Fix Held liable for $243,750
Joseph Fix owned and operated a McDonald’s fast-food franchise in Charlotte, Michigan. The franchise was placed in a corporation (C.H.A.D. Enterprises, Inc.) of which he was the sole shareholder. However, when a patron fell in the parking lot, this did not stop the injured party from suing Mr. Fix individually. The fall occurred when the patron got out of his truck and walked to the front of the truck to check his radiator. The patron did not notice a change in grade between the lot on which the McDonald’s parking lot was situated and the neighboring lot. The patron fell a short distance off of a retaining wall and injured his knee, requiring surgery and some rehabilitation time. As a result of the accident, the patron, who was employed as a U.S. postal worker, missed five months of work. The postal worker sued several defendants, including Mr. Fix individually. Some of the defendants were released from the suit, but Mr. Fix was not. The plaintiff at one point offered to settle for $90,000, but the defendants refused to settle. The case went to trial and the jury returned a verdict against Mr. Fix and his franchise in an amount of $243,750, plus court costs and attorney fees. That’s a lot of burgers! (Hunt v. C.H.A.D. Enterprises, Inc., 183 Mich. App. 59; 454 N.W.2d 188 (Ct. App. Mich. 1990))

Water Park Owner Loses $1.1 Million in
Lawsuit When Man Slipped on Wet Steps
In the case of a man who sustained a herniated lumbar disc when he slipped on steps at a water park, a Florida jury found $1.1 million in damages. Brad Sirmans, 40, was carrying his 2 year old son down stairs adjacent to a water slide at Adventure Landings in Jacksonville Beach, Fla., when he fell. He sued the park, asserting that negligent upkeep resulted in the growth of black algae, which made the steps slippery, and that the steps themselves were not safe because their non-skid strips were in the middle of the steps, as opposed to on the edge. The park argued that there was no algae and that Sirmans slipped because he was carrying his son and couldn’t see the steps. The jury found the park 95% at fault and Sirmans 5% at fault. (Sirmans v. Adventure Landings Inc.)

Motel Owner Held Liable for Off-Duty Employees
Husband Who Seriously Injures Two Individuals in the Motel Lobby
This case involved a small motel, owned and operated by an individual. In this case the motel owner was held liable for the intentional criminal acts of a third party. The facts were that one of the off-duty female employees was on the motel premises just prior to her shift. Her drunken and domestically violent husband showed up enraged at his wife. The wife did not call the police, but enlisted the help of individuals (including an off-duty officer) who were on the motel premises. Meanwhile, the abusive husband went to his car and returned with a shotgun. Rather than directing his violence towards his wife, he unexpectedly shot and seriously injured two unrelated individuals who were in the motel lobby. The court held Mr. Catlett, the owner of the motel, liable under the theory of vicarious liability. In other words, he was held vicariously liable for his off-duty employee’s failure to protect those in the motel lobby against her husband’s intentional and criminal acts. The case does not record the amount of damages that were awarded by the jury, but in any case, the appellate court upheld the jury verdict and Mr. Catlett, the motel owner, was held liable for the damages. (S.G. Catlett, d/b/a King’s Inn. V. Stewart, 304 Ark. 637; 804 S.W.2d 699 (1991))

Pool drain held boy underwater for 15 minutes, Pool Company
and Apartment Complex Owner Settled for $7 Million.
Manufacturer of Drain Pump loses $104.4 million in Jury Award.
A child who was left brain damaged after he was held on the bottom of a pool by a drain’s suction was awarded $104.4 million in compensatory damages by a Florida jury August 1, 2004. Lorenzo Peterson, 14, was in the pool at his mother’s apartment complex in Miami. He removed the cover of a drain on the pool’s bottom and had his arm sucked into it. Six adults unsuccessfully tried to free him for 15 minutes, until a police officer broke into the pool’s equipment room and turned off the pump. Peterson, who was left in a vegetative state, sued the maker of the pump, Sta-Rite Industries Inc., Delavan, Wisc. Punitives will be decided later in August. The complex and the company that maintained the pool settled in 2001 for $7 million. (Peterson v. Sta-Rite Industries Inc.)

Resort Owner Pays $8.3 Million to
Skier Who Collided with Snow Groomer
A 17 year old girl who sustained frontal lobe damage as a result of colliding with a snow groomer while skiing was awarded $8.3 million by a Virginia jury on her premises liability claims against a resort owner, but was unsuccessful on her negligence claims against two employees. Jessica Grigg was skiing at Wintergreen Resort in Nelson County, Va., when she swerved to avoid a snowmobile driven by Wintergreen manager Brett Henyon, fell, then slid into the path of the groomer, operated by Jeffrey Eimutus. Grigg claimed Wintergreen should not have operated a snow groomer on an open slope. The defense argued that the groomer was an open and obvious hazard and that Grigg was skiing too fast. (Grigg v. Wintergreen Partners Inc.)

Company Owner Settles Suit for $850,000 when
Trespasser was Bitten by Dog After Walking Through “Keep Out” Door
A computer repairman who was bitten on the hand and arm by a 144 pound dog upon entering a job site settled his suit for $850,000. Stephen Berman, then 52, was hired by Green Oasis Landscaping, Somerset, N.J., to work on its computer system. He entered through a door with a ‘Keep Out’ sign on it, whereupon he was attacked by the dog, which was owned by Franco DeMeglio, Green Oasis’ owner. Berman sued DeMeglio trading as Green Oasis, contending that he was a business invitee and was lawfully on the premises. The defense claimed that when Berman entered the door with the ‘Keep Out’ sign on it, he was a trespasser, not a business invitee. (Alston v. Warble)

Man Breaks Neck Diving into 3 ½ Feet Deep Pool. Hotel
Responsible for $500,000 Even Though No Diving Signs Were Posted
The family of a man who fractured his neck diving into a hotel pool settled their premises liability claim for $500,000. In 1998, Grant Chapman Sr., 39, his wife, Laura, 45, and their two children, Grant Jr., 17, and Paige, 14, were guests at the Renaissance Esmeralda Resort & Spa in Indian Wells, Calif. Chapman dove into the middle of the hotel pool and struck his head on the bottom. The Chapmans sued the resort, contending that it failed to provide adequate signage about the pool depth, which was a mere 3.5 feet where Chapman dove in. The defense contended that the pool warnings complied with applicable codes. (Chapman v. Renaissance Esmeralda Resort & Spa)

Employee Gets in Car Accident
Employee in Car Accident and Business Owner Held Liable for $4,190,000
A jury awarded Patricia Marcoux, a fifty-year old woman, $4,190,000 for her injuries sustained in a car accident. The accident occurred when the back wheels of a tractor-trailer truck, owned by Farm Service and Supplies, Inc., skidded into her lane and clipped her car. It was determined that the truck driver, an employee for Farm Service and Supplies, Inc., was negligent in that he was driving too fast under the adverse weather conditions and was unable to properly control the truck on the wet and slick pavement. Ms. Marcoux’s injuries included a severe breaking of her leg and wrist, requiring several surgeries and leaving her somewhat disabled. The employer, Farm Service and Supplies, Inc. was found vicariously liable for the negligent acts of its employee. The court acknowledged that the jury award was on the high end for the type of injuries sustained, however held that it was not so high as to deviate materially from other awards that had been given. Hence, with only some minor adjustments, the jury award was affirmed on appeal. (Marcoux v. Farm Service and Supplies, Inc., 290 F.Supp.2d 457 (S.D. N.Y. 2003))

Domino’s Franchisee Settles with Struck Pedestrian for $1.2 Million
A man who was left brain-damaged after being struck by a Domino’s Pizza delivery man will receive $1.2 million in settlement of his action. Gerard Talarick, 37, was standing in Bustleton Road in Burlington, N.J., tending to his dog, which had just been hit by a vehicle, when the Domino’s van hit him. Talarick sued the franchisee, Sam and Bubba’s Pizza; its owner, Randy Eisenhower; and driver Mehmet Aydin, for negligent operation of a vehicle and respondeat superior. The defense denied the plaintiff’s claim that the driver was speeding, and blamed Talarick for wearing dark clothing and a dark ski cap while standing on the side of the road at night. (Talarick v. Sam and Bubba’s Pizza)

Employee Hits Pedestrian While Driving Company
Vehicle, Company Held Liable for $6.6 Million Judgment
A van operator at an airport terminal drop-off area who was struck by a bus and thrown 40 feet was awarded $6.6 million by a Pennsylvania jury. Kia Smack transported parking patrons to and from the terminal. After being waved by an officer toward the third lane from the curb due to double-parked traffic, Smack did as told, exited the van from the driver-side door and then headed for the rear to remove some baggage. While walking alongside the van, she was hit by the bus, which was driven by Eric Brown for Progressive Transportation Services. Smack sustained severe leg injuries and sued Brown and Progressive, which conceded negligence, but argued contributory fault, contending that Smack should have walked around the front of the van and up the other side, where traffic was not moving. (Smack v. Progressive Transportation Services Inc.)

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Product Liability
Table Manufacturer Liable for $8.6 Million
When Folded-up Cafeteria Table Fell on Schoolchild
A 9 year old girl who was struck by a folded cafeteria table that toppled over was awarded $8.6 million against the manufacturer by an Alaska jury. Taryn Andrew was playing near the 274 pound table when it fell over. She sustained a concussion and later developed seizures. Underwriter’s Laboratories had warned manufacturer Midwest Folding Products, Chicago, that the table when folded was top-heavy and prone to tip. Yet, Midwest continued to sell it while it undertook a redesign. Nevertheless, at trial, it maintained that the table was not as prone to tipping as claimed, and contended that if it was negligent, the school district, which settled prior to trial for $360,000, and Taryn were contributorily negligent. The award included $5 million in punitives. (Andrew v. Lower Kuskokwim School District)

Door of Porch Lift Flew Open, Teen Ejected, $1.1 Million Settlement
A teenager who fell 14 feet from her grandmother’s porch lift settled her products liability suit for $1.1 million. Melinda Engelman and her friend entered the lift from the top landing. Engelman positioned herself in the rear corner, leaning against the exit door. Her girlfriend activated the “down” switch. When the lift began its descent, the door flew open and Engelman fell out. She sustained a lumbar compression and tibia fracture. The plaintiff claimed the mechanical interlock failed. Manufacturer Access Industries Inc. paid $200,000, and retailer/installer Horsnyder Pharmacy Inc. paid $900,000. (Engelman v. Access Industries Inc.)

Workers Whose Hands were Mashed by a Ram Settle for $1.55 Million
Two operators of a rubber-making machine who sustained hand injuries when a ram came down on them settled their suit against the manufacturer and the facility for $1.55 million. At separate times, Rafael Ferrer and Carlos Parada were working at Monmouth [N.J.] Rubber & Plastics when the ingredient masher came down on their dominant hands while they were still in the vat. Three of Ferrer’s fingers were torn off and Parada suffered a crush injury. Against Technical Machine Products Corp., they claimed that a cylinder malfunction caused the ram’s unexpected descent, and that the guard wasn’t adequate. They also claimed that Monmouth may have removed a guard. Technical claimed that the cylinder malfunctioned because Monmouth failed to properly maintain it. Technical paid $1.2 million; Monmouth paid $350,000. Ferrer got $1.05 million; Parada $500,000. (Ferrer v. Technical Machine Products Corp.)

Jury Awards $750,000 to Hunter for Defective Hooks on Tree Stand
A hunter who was injured when his tree stand collapsed recovered against the manufacturer. A Missouri jury found $750,000 in damages, reduced to $487,500 due to his own negligence. In 1999, Mark Rarrick, a 46 year old archery shop owner, purchased the tree stand–a platform anchored by hooks to keep hunter’s elevated–and extra hooks from Buckfinder Hunting Products, Kerkhoven, Minn. Buckfinder then issued a hook recall and sent different hooks that perform better under stress. Rarrick received them but thought that the defective hooks were only those that came with the stand, not the extras, which he continued to use. In 2001, a hook broke and he fell 15 feet. He sued, claiming that the hooks were defective and the product should have come with a safety strap. (Rarrick v. Buckfinder Hunting Products Inc.)

Demolition Contractor Loses Eye, Sued Manufacturer of
Explosives for Having Dangerous Product and is Awarded $900,000
The estate of a demolition contractor left blind in one eye after a product he was using exploded in his face was awarded $900,000 by a federal jury in Nevada. Richard Mandeville, 39, was trying to break apart large rocks at a work site in Reno, NV. He drilled five holes in a large boulder and poured “Super BriStar 2000” into them. A chemical reaction occurred in one of the holes causing a blowout that knocked him off his feet. Unable to find work, he became depressed and killed himself. His estate sued the product’s manufacturer, Onodo Cement Co., claiming that the product was unreasonable dangerous and did not warn users, in English, to cover the holes. Onodo argued the packaging advisers users to wear face protection. (Estate of Mandeville v. Onodo Cement Company Ltd.)

Driver Who Crashes Truck is Awarded $15.5 Million at a Result of Lawsuit Against Truck Manufacturer for Producing an Unsafe Product
A trucker who lost his left arm when his tractor-trailer rolled over was awarded $15.5 million by a Pennsylvania jury. H. Ryan Hutchinson was driving a Freightliner FLD 120 truck when, while negotiating a curve on an on-ramp, he struck the guide rail, went down an embankment and plowed into a stand of trees. His left arm had to be amputated above the elbow and he now wears a mechanical prosthetic. He sued Freightliner LLC, Portland, Ore., for products liability, claiming that the cruise control system was poorly designed because it failed to disengage when he applied the brakes, and that the cab was not crash worthy. Freightliner argued that the truck was safe and that Hutchinson was driving recklessly. (Hutchinson v. Freightliner LLC)

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Negligent Security
Mall Manager Hit with $6.6 Million Verdict
for Shooting Death in Front of Movie House
The wife and estate of a man who was shot and killed in front of a movie house were awarded $6.6 million against the management company responsible for providing security at the mall. Luis Robert Gutierrez and his wife were leaving a movie when he was gunned down. The plaintiffs sued Trammell Crow Central Texas Ltd., claiming that it failed to provide visible security, which would have a “scarecrow” effect on criminals, and had only one off-duty officer patrolling the entire premises. Trammell argued that although no security presence was visible, the security was adequate for the area. (Gutierrez v. Trammell Crow Central Texas Ltd.)

Grocery Store Owner Held Liable for Death
of Woman Abducted from Parking Lot
This case documents how even unforeseen injuries caused by the criminal acts of an unrelated third party can create premise liability for the business owner. In this case, a seventy-nine year old woman was abducted from the parking lot of a grocery store. As a result of the abduction and attempted robbery, the woman died of asphyxiation due to the duct tape that was placed over her nose and mouth by her abductor. The woman’s family brought a wrongful death suit against the corporate owner of the grocery store. Both the trial court and the initial court of appeals (see 293 N.J. Super. 217, 679 A.2d 1230 (App. Div. 1996) found that the crime was unforeseeable and thus the store owner could not be held liable. These lower courts noted that no crime of this sort had ever occurred in the area. However, on appeal to the state’s highest court, the result was reversed and the store owner was held to be liable for the damages that resulted from the third-party attack upon one of its customers in the parking lot. The Supreme Court of New Jersey held that because there had been other crimes in the area (though unrelated) that the store owner should have patrolled the parking lot or at least warned its customers of danger in the parking lot. Thus, although the damage amount is not reported, the store owner was held liable for the wrongful death damages in this case. Based upon the egregious facts in this case (which might well rouse the sympathies of a jury), the damages would likely be substantial. (Clohesy v. Food Circus Supermarkets, Inc., 149 N.J. 496; 694 A.2d 1017 (Sup. Ct. N.J. 1997))

Pharmacy Settles Suit for $750,000 for Criminal
Acts of One Customer Against Other Customer.
Walgreens settled a negligent-security claim brought against it for $750,000. Arthur Fendelander, then 42, entered a Walgreens in Linden, N.J., and bumped into an unidentified male customer. Fendelander said, “Excuse you” and proceeded to the pharmacy section. Less than 10 minutes later, the customer tracked him down and beat him unconscious. He was in a coma for four days before he died. His estate and wife sued Walgreens, claiming more security was required because of previous crimes nearby and that employees should have promptly called the police. Walgreens maintained that it had no duty to provide security guards and that even if police had been called immediately, there was insufficient time for them to respond and prevent the incident. (Estate of Fendelander v. Walgreens Pharmacy)

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Negligent Maintenance
Maintenance Company Liable for $13.78
Million When Bus Driver Ejected Due to Loose Seat
The family of a 34 year old woman who was ejected from the bus she was driving and then run over by a semi was awarded $13.78 million on their wrongful death claim against the company that maintained the bus. LaShaun Clemmons was driving the bus, which she owned and used in her business, near Valencia, Calif., when she hit ice and crashed into the median. Her seat became detached and went hurtling through the windshield with her still strapped in. Her family sued the maintenance company, Four Winds Inc., claiming that it should have used four half-inch, grade 8 bolts to secure the chair pedestal to the floor of the bus, rather than the three bolts (one ungraded, one grade 3 and one grade 5) that it used. California Judge Michael Farrell found Four Winds Inc. liable. (Baker v. Four Winds Inc.)

Elevator Maintenance Company Pays $750,000 for
Elevator’s Sudden Stop as a Result of a Power Outage
An elevator maintenance company agreed to pay $750,000 for injuries sustained by a Union County, N.J., corrections officer as the result of an elevator accident. During a power outage at the county jail, the elevator in which James Sporer was riding came to an abrupt halt while descending. Sporer, who hurt his knee and lumbar area, and his wife sued Global Elevator Technologies, Totowa, N.J., which had a contract to maintain the elevators, claiming that properly maintained brakes would not have stopped so suddenly, and Public Service Electric & Gas, because its transformer that serviced the jail exploded, causing the outage. Public Service was let out of the case. (Sporer v. Global Elevator Technologies)

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Employee Mistakes
Employer Held Liable for $55 Million for the Mistake of its Employee
As this case clearly demonstrates, an employee’s mistake can create a substantial cost for the employer - who, through the application of the master-servant doctrine or vicarious liability, becomes liable for such mistakes. In this case, the honest mistake of an employee truck driver, who injured a man while backing a tractor, cost his employer $55 million dollars! The facts of the case involved a trucking company and its subsidiary. The plaintiff in this case, Jerry Stanton, was a forty-eight year old truck driver for the subsidiary company, Gateway Freightline Corporation. At the time of the accident Mr. Stanton had just parked his rig and was walking around it when another trucker, who was employed by the parent company, The Kroger Co., was backing his tractor in the same vicinity. The driver for the Kroger Co. did not see Mr. Stanton and temporarily pinned him between the tractor he was driving and Mr. Stanton’s tractor and trailer. As a result of the accident Mr. Stanton was severely injured and suffered permanent disabilities. The jury awarded an unprecedented amount of $55 million dollars in compensatory damages (no punitive damages were awarded). On appeal the award was upheld as non-excessive, in spite of the fact that prior to this case all similar injuries had resulted in jury awards of between $3 to $7.5 million dollars. Other defenses raised on appeal were also heard and rejected. In the end, the employer was held liable for the $55 million dollar mistake of its employee. (Ritter v. Stanton, 745 N.E.2d 828 (Ct. App. Ind. 2001))

Restaurant Liable for $4 Million for Bloody Bandage in Chinese Food
A teenager was awarded $4 million by a Pennsylvania jury against a Chinese restaurant that served her a sweet potato ball containing a bloody, pus-filled bandage. Anastasia Roberts, then 14, claimed that after biting into it, she immediately ran outside Philadelphia’s Grand King Buffet restaurant and vomited repeatedly. She subsequently developed post-traumatic stress disorder resulting in gastrointestinal problems. She and her parents sued the restaurant for negligence, negligent infliction of emotional distress, strict products liability and breach of warranty of merchantability. The defense argued that there was no connection between the post-traumatic stress and her gastrointestinal problems. (Roberts v. Grand King Buffet)

Church Hit With $1.2 Million Verdict for Negligent Mowing by Employee
The Church of Jesus Christ of Latter-Day Saints was hit with a $1.2 million verdict for negligent mowing. Lamoni Riordan, age 5, was playing on the lawn in front of the Kansas City, Mo., church when his father, a church employee, ran over his right foot with a riding lawn mower. The father claimed that the mower was difficult to shift and stop, and that as he backed up around a tree, he saw his son and could not stop in time. Lamoni sustained a traumatic amputation of his right forefoot and sued the church, claiming that its employee failed to exercise adequate care in mowing the church’s lawn. The church claimed that Lamoni’s injuries were caused by his father’s failure to properly supervise his son. (Riordan v. Corporation of the Presiding Bishop of the Church of Jesus Christ of Latter-Day Saints)

Loading Company Pays $20 Million in
Punitives for Overloading Coal Truck
After settling before trial with the driver of a coal truck and his employer for $600,000, the estate of a driver killed in a car accident received $20 million in punitives from an Alabama jury against the company that loaded the truck. Jimmie Bogue, 53, was driving his SUV over a Bessemer, Ala., bridge when a tractor-trailer coming from the opposite direction and rounding a curve, lost its trailer, which flipped over, slid along the bridge and hit Bogue’s SUV head-on, killing him instantly. Bogue’s estate sued Black Warrior Minerals, Brookwood, Ala., claiming that it loaded the trailer with 2,000 more pounds of coal than the law allowed. (Estate of Bogue v. Black Warrior Minerals)

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Injury in the Workplace
Convenience Store Owner Held Liable for $1,875,000
Judgment for the Death of Employee During a Robbery
In this case, a corporate owner of a small convenience store in New Jersey was held liable for the death of one of its employees who was shot to death during a robbery of its convenience store. The robbery occurred during the middle of the day in an area that apparently was not considered a high crime area. Additionally, it appears that the store had never been robbed before. Nonetheless, the court upheld a jury verdict that found the robbery foreseeable - thus making the owner liable for damages. The jury awarded $300,000 for lost wages, $75,000 for pain and suffering, and $1.5 million for the loss of the decedent’s services to her husband and children. This verdict was upheld on appeal. Additionally, the court held that the convenience store owner was not immune or protected by workers compensation coverage. Hence, the corporate owner was liable for the entire judgment of $1,875,000. (Morris v. Krauszer’s Food Stores, Inc., 300 N.J. Super. 529; 693 A.2d 510 (Super. Ct. N.J. 1997))

General Contractor Liable for $2.21 Million
When Bricklayer Fell Through Gap in Scaffolding
A bricklayer who injured his knee when he fell through a gap in scaffolding was awarded $2.55 million by an Illinois jury. The award was reduced to $2.21 million due to his 13% contributory negligence. In 1997, Kryzstof Kulasik, 28, was working as an apprentice bricklayer when he fell through the 2 or 3 foot gap, falling eight feet and sustaining various soft-tissue injuries. Kulasik sued the project’s general contractor, Boller Construction Corp., for failing to provide a safe workplace. Boller contended that no gap existed; that if it did, Kulasik should have been on notice of it; and that his employer was responsible for ensuring safe scaffolding. (Kulasik v. Boller Construction Corporation Inc.)

Horizon Plumbing Liable for $621,545 when Employee Injured on a Job
In the case of a plumber’s helper injured in a trench collapse, a Florida jury found $621,545 in damages. Harry Ballard, 40, was employed by Horizon Plumbing and was performing work in a trench dug by Chuck’s Backhoe Service Inc. of Pompano Beach, Fla. As a result of the collapse, he sustained pelvic fractures and a torn urethra. Horizon was immune from suit by workers’ compensation regulations so Ballard sued Chuck’s, which claimed immunity under workers’ compensation “borrowed servant” doctrine. Chuck’s also argued that Horizon approved of Chuck’s work when it was completed. The jury found Chuck’s only 20% negligent, attributing the remainder of liability to Horizon. (Ballard v. Chuck’s Backhoe Service Inc.)

Jury Awards $17 Million to Estate of
Employee Killed by Milk Crate Pusher
The estate of a loading dock worker who suffocated after being trapped between two plates of an automated milk crate pusher at a Borden Milk plant in Austin, Texas, was awarded $17 million, but a high/low agreement reduced the recovery to $1.3 million. Faye Martinez, then 40, was trapped inside the machine, which pushed empty crates from one conveyor belt to another. She ordinarily worked on the dock and was not trained on the machine. The supervisor, rather than press the hidden “off” button, left to find a maintenance worker. The machine was not turned off for 15 minutes. Borden claimed Martinez died a minute after being trapped. The Texas jury’s verdict included $10 million for pain and suffering and $7 million in punitives. (Martinez v. Milk Products L.P.)

Ironworker Injured on Jobsite, Developer and
Contractors Will Pay $7.5 Million as Result of Lawsuit
The Port Authority of New York and New Jersey, and one of its contractors, will pay $7.5 million to an ironworker who fell off a scaffold during construction of New York’s John F. Kennedy International Airport Light Rail System. Plaintiff James Brooks was working on a crane-hoisted platform when the platform dislodged, causing Brooks to fall 20 feet. He sustained three herniated discs and is totally disabled. He sued the Port Authority, which commissioned the construction site, and the builder, the Air Rail Transit Consortium. Brooks was granted summary judgment on liability, and the New York jury awarded him $16.33 million, but a $7.5 million/$3 million high/low agreement reduced his recovery. (Brooks v. Port Authority of New York and New Jersey)

$20 Million Awarded to Worker Injured by Popcorn Butter Fumes
A factory worker who developed a lung condition as a result of working near a chemical used in giving popcorn a buttery flavor was awarded $18 million, and his wife $2 million, by a Missouri jury. Eric Peoples began working in the mixing room of the Gilster Mary Lee popcorn manufacturing plant in Jasper, Mo. He claimed that the chemical in the butter flavor–diacetyl–gave him bronchiolitis obliterans. Peoples and his wife sued the manufacturer of the butter flavoring, Bush Boake Allen Inc., and its parent, International Flavors and Fragrances Inc., for making an unreasonably dangerous product, and for failing to warn. The defense maintained that the chemical is safe for handling by workers and that the non-party factory lacked proper ventilation. (Peoples v. International Flavors and Fragrances Inc.)

Construction Company Ordered to Pay $86.7 Million to Injured Worker
A New York construction company was ordered to pay more than $86 million to a worker who was severely injured on a job site. Frank Miraglia was navigating some parts on the site by walking on wooden planks. One of the planks collapsed, causing him to fall into a trench and land on a steel bar, which impaled his body and severed his spinal cord. He suffers from complete paralysis at and below the L2 level. Miraglia brought a N.Y. Labor Law §240 action against the site owner, H&L Holding Corp. The court found the planks constituted a labor law violation and granted Miraglia summary judgment. The New York jury on Feb. 13 awarded him $86.7 million, which included $55 million for pain and suffering. H&L was indemnified by Miraglia’s employer, Lane & Sons Construction Corp. The New York jury awarded him $86,735,134, which included $55 million for future pain and suffering. (Miraglia v. H & L Holding Corp.)

Alcohol Related Lawsuit
Restaurant Owner Loses $820,000 in Lawsuit for Serving Alcohol
The estates of a couple who were killed by a drunk driver agreed to settle for $20,000 with the driver and for $820,000 with the restaurant they claimed served him beer and shots. In 2000, Kenneth and Patricia Ordway, both 37, were driving through Abington, Mass., when Andre Castaneda ran a stop sign and struck their car. Officers found part of a joint and a near-empty bottle of grain alcohol in Castaneda’s car. The Ordways’ estate sued Bowser’s Seafood Restaurant, claiming that it allowed an obviously intoxicated Castaneda to have beer and Jell-o shots shortly before he hit the road. The restaurant argued that he did not consume alcohol at the bar, and that he indulged in the pot and grain alcohol after leaving. (Estate of Ordway v. Bowser’s Inc.)

Drunken Driver Only 35% Responsible for his Actions; Outback Steakhouse Restaurant Held 65% Liable ($39 Million) for Serving Alcohol
On July 21, 1997, William J. Whitaker attended a party at the Muncie, Ind., Outback Steakhouse to celebrate the restaurant’s grand opening. Whitaker stayed for more than three hours, drinking either free or ten-cent cocktails while he was there. After leaving in his car, Whitaker crossed the center line on Delaware County Road 500-N in Indiana and collided nearly head-on with a motorcycle being driven by David Markley, a 37 year old welder. Markley’s wife, Lisa, 31 and unemployed at the time, was riding on the back of the motorcycle. Both plaintiffs were injured in the accident. Whitaker did not stop at the scene, but was later apprehended. He was sentenced to one year of home detention and two years of probation. The Markleys sued Outback Steakhouse under the state Dram Shop Act. The jury found Outback 65% at fault and non-party Whitaker 35% at fault. They found combined damages to the Markleys of $60 million. Outback will pay $39 million.

Franchise Owner Loses $1 Million in Lawsuit when Drunken Patron Wanders from Restaurant onto Interstate and is Hit by Semi
The estate of a minor who was struck by a semi-trailer after drinking at a local Hooters settled its wrongful death suit against the establishment for $1 million. Daniel Loux, a wilderness firefighter, and a group of other firefighters went to Hooters in Ocala, Fla. Loux and two other firefighters were served about 22 pints of beer. When he got rowdy, Loux was asked to leave. He stumbled out and wandered onto I-75, where a semi-trailer struck him. Loux’s estate sued Ocala Wings LLC, the franchise owner, and Hooters of America, the franchisor. The defense argued contributory negligence in Loux’s supervisor bringing him, and in Loux wandering onto the interstate. Ocala Wings paid the settlement. (Estate of Loux v. Hooters of America Inc.)

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Landlord Liability
Family of Toddler Burned on Apartment Radiator Settles for $1.33 Million
The parents of a 2 year old boy who sustained second- and third-degree burns after coming into contact with the radiator in their Kearny, N.J., apartment settled with the landlord and rental agent for $1.33 million. Benjamin Judkiewicz’s mother found him trapped between the love seat and the radiator, which had no cover. The plaintiffs sued WHS Realty Management Co. and Goldberg Realty, claiming that the absence of a radiator cover was negligent, breached the implied warranty of habitability and violated the New Jersey administrative code. They also argued that the defendants had notice of the hazard, claiming that Benjamin had been burned by the same radiator 16 months earlier and his mother had complained about it then. The settlement will be paid by both defendants’ insurers. (Judkiewicz v. WHS Realty Management Co. LLC)

Property Manager Held Liable for Death of Mother and Son
The court in this case held that a property manager could be held liable for the deaths of a mother and her son, who died in an apartment fire. The property manager, upon checking the smoke detector, failed to determine that it was not in working order. Although Texas had a smoke detector statute which in this case limited the liability of the landlord, such statute specifically excluded the property manager. Under the statute, the landlord could be held liable only if the tenant had requested repair of a faulty smoke alarm and the landlord failed to make such repair. The tenant in this case made no such request. Hence, if the property manager took it upon himself to check the smoke detectors, any negligence on his part in failing to detect a defective smoke alarm would create tort liability. (Rao v. Rodriguez, 923 S.W.2d 176; 1996 Tex. App. LEXIS 1995 (Ct. App. Tex. 1996))

Property Manger Held Liable for Over
$13 Million for Criminal Acts of Employee
Property manager, Maria Caruthers was held liable for the strangulation death of tenant, Danielle Jennings, inflicted by maintenance worker, Calvin Oliver. Ms. Caruthers failed to do a background check on Calvin Oliver who had a criminal history. Mr. Oliver entered Ms. Jennings apartment with the keys that he had been supplied and strangled her in her own apartment. The jury entered a judgment against the defendants - including Ms. Caruthers as the property manager - in an amount in excess of $13 million for wrongful death and pain and suffering. The jury also awarded punitive damages of $2.5 million; however, the punitive damages were later reduced to $250,000. (TGM Ashley Lakes, Inc. v. Jennings, 2003 Ga. App. LEXIS 1494; 2003 Fulton County D. Rep. 3699 (Ct. App. Ga. 2003))

Apartment Owner Liable for $590,000 When
Unsupervised Toddler is Burned in Sink
The owner and manager of a Bronx, N.Y. apartment building will pay $540,000 to a girl who was scalded by hot water while using her bathroom sink. The girl’s mother received an additional $50,000. Eighteen-month-old Jennifer Martinez climbed into the sink while unsupervised. She turned on the hot water, which quickly reached a scalding temperature. She sustained second-degree burns to her legs, buttocks and left hand. Her mother sued the building’s owner, Marcy Place Realty Corp., and its manager, Charles Fried, claiming that the water temperature regularly exceeded the 120 degree standard. The defendants argued that the temperature was maintained at the proper level. The matter settled prior to trial. (Martinez v. Marcy Place Realty Corp.)

Apartment Owner Pays $600,000 for
Death of Tenant Blamed on Lack of Security
The estate and parents of a woman who was abducted from an apartment complex and later killed settled their negligent security claim against the complex and its owner for $600,000. Chia Yen Hsu, then 30, was abducted, sexually assaulted, placed in the trunk of a car and drowned in a river by Rodney Bullock, who was arrested while driving Hsu’s car and pleaded guilty to the crimes. Hsu’s estate and parents then sued the complex, Cooper River Manor Apartments, and the complex’s owner, Metropolitan Management Corp., Bala Cynwyd, Pa., claiming that the murderer was aided by untrimmed shrubs, inadequate lighting and a lack of security patrols. The defense denied having any notice of criminal activity in the area. (Estate of Hsu v. Metropolitan Management Corp.)

Condominium Owner Held Liable for $724,900 for
the Negligent Acts of Hired Independent Carpenter.
Carpenter Also Held Liable for Additional $724,900.
Both a carpenter and a trustee became liable when a railing on the third-floor porch of a condominium unit gave way, injuring two men who fell twenty feet. The facts of this case are relatively simple. Defendant Jon F. Christensen was the trustee for the City Point IV Condominium Trust. As such, in 1986, he hired Paul D. Bausemer, a carpenter, to make needed repairs on the third floor railings of a condominium unit, which building’s repairs were funded by the trust. Carpenter Bausemer, who was appropriately licensed, constructed a new railing - which, after completion, appeared in all respects to be proper and safe. Nothing in the case opinion suggests that Trustee Christensen should have been placed on any kind of notice that the property was unsafe. However, unbeknownst to anyone (other than Bausemer), until after the accident, Bausemer had completed the job using only one nail per upright post (a configuration that was below code and resulted in an inferior weight-bearing railing). Several years went by with no problem, until two men were apparently horsing around on the third-floor balcony of one of the condominium units. While one of the men was leaning on the railing, the other man slapped him on the back. The force broke the inferior railing and both men dropped nearly twenty feet, landing on the porch below them. Both men suffered fractures and other injuries. One of the men was more seriously injured and sustained a permanent injury to one of his shoulders. The injured men brought suit against not only the carpenter, but also the trustee of the condominiums. The jury found both liable and entered a judgment of $724,900 against each of them. On appeal, the appellate court, in a rather unprecedented finding, upheld the liability against the trustee. As the one dissenting judge argued: nothing in the record evidenced any negligence on the part of the trustee, hence “the court created a far-reaching and inappropriate exception” to the general rule that “in the absence of his own personal negligence, the employer of an independent contractor is not liable for the physical harm caused by the contractor’s negligence.” (Id. at 291-292. O’brien v. Christensen, 422 Mass. 281; 662 N.E.2d 205 (Sup. Ct. Mass. 1996))

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Wrongful Termination
Hotel Responsible for $4.08 Million Judgment for Wrongful Termination
Three employees who were fired for refusing to take a polygraph test or asking to talk to a lawyer first, were awarded a total of $4.08 million, including $2.98 million in punitives, by a federal jury in New Jersey. Flagship Resort Development Corporation Inc., Atlantic City, N.J., hired a private investigator to look into the theft of an employee’s money. The investigator requested that all employees take the polygraph test. However, Paulino Bonds, Gloria Gadson and Danielle Lyles hesitated and were fired. They sued Flagship for wrongful termination, claiming that the Employment Polygraph Protection Act protects employees from having to take such a test. (T Bonds v. Flagship Resort Development Corp. Inc.)

Employer Held Liable for $720,000 for Wrongful Termination
This case involved a jury award against an agri-business for violation of the Americans with Disabilities Act. The facts of the case were that a worker in a potato-starch processing plant in Maine developed carpal tunnel syndrome approximately one year after being hired. She was seen by her personal doctor as well as a doctor supplied by her employer. Not surprisingly the two doctors had differing views as to the treatment and change in work duties required to ameliorate the employee’s condition. For just over one year following the diagnosis, the employer tried various things to assist the employee (such as time off, lighter duties, bringing in an ergonomic specialist and changing certain conditions in the work place). At one point, the employer established an appointment for the employee to see a doctor. The employee failed to show up to the appointment. The employee also failed to show up to a scheduled appointment with the management to discuss the problem. Following these failures to cooperate with the employer, the employee was fired. The employee brought suit against the employer under the Americans with Disabilities Act, alleging that she had been wrongfully terminated because of her disability. The jury found in favor of the employee and awarded $300,000 in compensatory damages (apparently much of the award for emotional distress) and $420,000 in punitive damages, along with back pay (in spite of the fact that the employee had not even tried to find new employment). (Quint v. A.E. Staley Manufacturing Company, 172 F.3d 1; 1999 U.S. App. LEXIS 4145 (1st Cir. 1999))

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Sexual Harassment and Gender Bias
Employee Awarded $2.2 Million for Gender Bias and Sexual Harassment
A former broker in Merrill Lynch’s San Antonio office was awarded $2.2 million in arbitration for gender discrimination and sexual harassment that went on over a six-year period. Hydie Sumner alleged that the vice president in charge of the office, Steve McAnally, gave female brokers fewer accounts, offered them lower starting salaries and was less likely to promote them. He not only failed to punish or stop sexual harassment by male brokers, but participated himself, Sumner alleged. Merrill Lynch acknowledged that some of McAnally’s conduct was inappropriate, but denied the rest of the allegations. Sumner’s suit was sent to arbitration by the Illinois federal court. Sumner will seek costs and attorney fees. (Sumner v. Merrill Lynch, Pierce, Fenner & Smith Inc.)

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Mold Contamination
Seller of Condo Hit with $285,000 Judgment for Mold Contamination
A condo owner who claimed that she was forced to move as a result of mold contamination was awarded $285,000 by a Massachusetts jury. Katrine Stevens purchased her Gloucester, Mass., condominium from Pirates Lane Condominium Trust. Within days of moving in, her body started to itch, her face turned red and she had difficulty breathing. Her doctor advised her to move out. Testing on the condo showed that water had seeped into areas in and around her unit, causing mold. She had to discard most of her personal property and claimed medical and lost income. Pirates Lane argued that it cleaned up the mold and that Stevens’ asthma was preexisting. (Stevens v. Pirates Lane Condominium Trust)

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Exclusion in an Insurance Policy
Man Shot in Confrontation on Sidewalk in Front of Hotel.
Exclusion in Policy Require Hotel to Pay Judgment of $1 Million.
This case demonstrates the shockingly high standard of care to which all hotel and motel owners and operators are held. The same result could just as easily happen to any business owner. In this case, a patron of one of the Hyatt hotels was shot and killed on the street by some street thugs (with whom the victim had apparently been involved in a confrontation just prior to the shooting). The shooting took place on the street or sidewalk in front of the hotel, not on the hotel property. The court held that “innkeepers” by law “owe their guests a duty of care higher than ordinary or reasonable care.” Id. at 220. Hence, the hotel was held liable for not protecting its guest from the intentional shooting by a third party - even though the shooting did not even occur on the hotel property! The jury awarded damages just short of one million dollars. As a side note, it is certainly not difficult to envision that many (if not most) liability insurance contracts would exclude coverage for damages caused by the intentional criminal acts of an unrelated third party - particularly if such acts occurred off of the hotel premises. Hence, not only would the hotel owner or operator be liable, but it is also likely that their insurance carrier would not be required to protect them from such liability. (Banks v. Hyatt Corp., 722 F.2d 214 (5th Cir. 1984))

Exclusion in Two Insurance Policies Leaves Restaurant
Owner Personally Liable for Automobile Accident of Employee
In this case, a restaurant (owned under a partnership, of which Mr. Reinke was apparently one of the major owners) had not one, but two, liability insurance policies: a multi-peril and an umbrella insurance policy. Clearly, Mr. Reinke and the partnership had intended to be—and believed themselves to be - adequately covered under these two insurance policies. Mr. Reinke’s wife, who was also an employee of the restaurant, was involved in an automobile accident while making a delivery for the restaurant. The accident tragically took her life, along with the lives of two other individuals in the car that she struck. A child from the car that was struck by Mrs. Reinke was also seriously injured. Despite the broad sounding coverage, both insurance policies denied coverage, based on a rather technical and obscure exclusion that was included in each policy. The court, after its attempt to decipher the reach of the policy exclusions, found in favor of the insurance company. Thus, Mr. Reinke and the partnership were without coverage in this tragic accident. To add insult to injury, the court determined that Mr. Reinke and the partnership were also liable for reimbursing the insurance company for its costs and attorney fees. (Grinnell Mut. Reinsurance Co. v. Reinke, 1994 U.S. Dist. LEXIS 7590 (D.C. Ill. 1994))

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Judgment Exceeds Insurance Coverage
$1.5 Million Judgment Exceeds $300,000 Insurance Coverage
Leaving Apartment Owner Personally Liable for $1.2 Million
In this case, the individual owner of an apartment building was held liable for the serious injuries of a tenant’s daughter, which resulted from her falling into the pool on the apartment premises. The case resulted in a settlement amount of 1.5 million dollars. The apartment owner held a liability insurance policy, but the policy had a cap limit of $300,000. (Jones v. Grewe, 189 Cal. App. 3d 950; 234 Cal. Rptr. 717 (Ct. App. Cal. 1987))

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Racial Harassment
Racial Joke By Employee Costs Employer $1,035,612
Protecting against employee liability can be a daunting task, as this case well demonstrates. U.S. Mat, a company in Woodinville, Washington, which made cardboard matting used in picture frames, had about 140 employees. The opinion in this case opens with this warning: “This case should serve as a reminder to employers of their obligation to keep their workplace free of discriminatory harassment. Although much of what happened here was characterized as ‘jokes,’ neither the discrimination nor the jury verdict is a laughing matter.” Id. at 799. True enough, it is unlikely that U.S. Mat considered the jury verdict, which amounted to a total of $1,035,612 a “laughing matter.” Here is how what started as a joke turned into a serious liability for this company. In August of 1996, U.S. Mat hired Troy Swinton, a young African-American man, to work in their shipping department. Mr. Swinton, the only African-American at U.S. Mat, had used the name of his fiancee’s uncle, Jon Fosdick, as a reference on his application. Mr. Fosdick, who was a supervisor in another department, frequently came into the shipping area and told racially offensive jokes in front of Mr. Swinton and the other employees around him. For example, his jokes were of the following nature: “Why don’t black people like aspirin? Because they’re white, and they work.” There was testimony that Mr. Swinton laughed along with the rest of the employees, and at times may have even given some racial retorts. This went on for about one year, until Mr. Swinton quit. In collecting unemployment he gave as his reason for quitting that he was tired of the offensive racial slurs. Shortly thereafter Mr. Fosdick also quit. Mr. Swinton then brought suit against the company for discriminatory harassment and negligence on the part of management for allowing such discrimination. The jury found that the company was negligent in not stopping or not becoming aware of the harassing behavior of one of its supervisors. A review of the opinion actually shows that the company did much to prevent racial discrimination or harassment. For example, the company had a written policy against such, which every employee was notified of such through the employee manual. Additionally, employees who felt they were subjected to such behavior were instructed to report it to their supervisor or to the company president. Mr. Swinton did neither. And finally, a reading of the opinion also creates an impressive record of just how seriously the company responded to Mr. Fosdick’s behavior (once it was belatedly discovered by the president and human resources). For example, every manager was required to undergo training in eliminating and detecting such behavior. In spite of the company’s efforts, it was not enough for the jury or the appellate court. Damages awarded (and upheld on appeal) included an award of $5,612 in back pay, $30,000 for emotional distress, and $1,000,000 in punitive damages. (Swinton v. Potomac Corporation, 270 F.3d 794 (9th Cir. 2001))

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Violations of Americans with Disabilities Act
To Comply with the Americans with Disabilities Act
(ADA) Can Cost a Business Hundreds of Thousands of
Dollars and Lawsuits for Violation of ADA Can Cost Millions
Four individuals owned a lodge (Timber Cove) at Lake Tahoe. Timber Cove was built in 1973, prior to the passage of the ADA legislation. The plaintiff, Brenda Pickern, who was confined to a wheel chair, visited the Timber Cove in 1997, “where she allegedly encountered a number of barriers that made it difficult or impossible for her to use facilities such as the pool, laundry room, restaurant, ice machine, and restrooms.” At this point in describing the case, a cynic might add that her visit was so miserable that she returned again two years later, where she “allegedly encountered many of the same barriers to access.” As a result, Ms. Pickern sued the owners of Timber Cove for violations of the ADA. (Pickering v. Best Western Timber Cove Lodge Marina Resort, 2002 U.S. Dist. LEXIS 1709 (E.D. Cal. 2002))

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Miscellaneous
Family Owned Business Sues Discharged Employees for
Violation of Non-compete Agreement. Family Owned Business
Held Liable for $1,272,937 in Countersuit for Tortious Interference.
This case must have been especially galling for J & M Turner, Inc. [Turner], a family owned business, that had apparently become a successful company with a very unique product. The product that the Turner family business had developed was a type of exclusive large washer system, used in the construction industry with large metal bolts for steel framing. The company was thriving when the conflict arose. For reasons not publicized in the court opinion, Turner discharged two of its employees. These two employees - in spite of the fact that they had signed non-competition and non-disclosure of trade secret agreements as part of their employment - turned around and opened a business, Applied Bolting Technology Products, Inc. [Applied] in direct competition with Turner. Turner immediately filed a lawsuit, which began a very difficult and contentious period of litigation that lasted over four years. The final suit between Turner and Applied involved no less than twenty-eight claims and counter-claims. In essence, Turner was suing for breach of contract, unfair competition, patent infringement, violation of trade secrets, and fraud. Applied, on the other hand, was suing primarily for tortious interference with their business. Surprisingly, the jury returned a verdict in favor of Applied, awarding them with a judgment of $1,272,937. This verdict was upheld on appeal. To put this case in a nutshell, I would describe it as this: Discharged employees steal company secrets and in direct violation of non-compete agreements open up an identical business, producing a unique and identical product to that developed by their old employer. When the employer sues, the discharged employees counter–sue for tortious interference and win a million plus dollar verdict! The discharged employees end up with a new business, a hot new product, and a million dollars–all courtesy of their old employer. (J & M Turner, Inc. v. Applied Bolting Technology Products, Inc., 1998 U.S. Dist. LEXIS 1158 (E.D. Pa. 1998))

Doctor Who Slept with Nurse Liable for
$567,000 to Her Husband for Ruining Marriage
A man who claimed that a doctor had an affair with his wife, destroying their marriage, was awarded $567,000 by a North Carolina jury. In 2003, Michael Kinlaw divorced his wife, Debra, after nearly 10 years of matrimony. Kinlaw claimed that, in 1999, his wife, a nurse, began having an affair with anesthesiologist John Harris while the two worked at the same hospital. In July 2000, Ms. Kinlaw gave birth to a son, after which her husband had a vasectomy. In 2002, she not only admitted to the affair, but revealed that Harris was the boy’s biological father. Kinlaw sued Harris for alienation of affection and criminal conversation, claiming that Harris encouraged his wife to cheat on him and then became involved with her. (Kinlaw v. Harris)

Buildings Sold “As Is” and with “No Warranties,” However Seller Still Held Liable Two Years Later for $3,690,000 for Defective Plumbing.
This case demonstrates the unexpected liability that a real estate investor can encounter - even when conducting business fairly, honestly, and prudently. In this case a real estate investment company sold two apartment buildings to another equally sophisticated real estate investment company. The total sales price of the buildings was 15 million dollars. The contract was very specific that the buildings were being sold “as is” and that no warranties were being made as to the condition of the buildings. Additionally, the buyer of the building was given a chance to inspect the building and did indeed conduct an inspection of the buildings, which included inspection by one of their engineers. Two years passed from the closing on the building, at which time the buyer discovered that the plumbing in the building included the use of polybutylene (“PB”) pipe, a defective form of plumbing. The buyer informed the seller and the seller truthfully told the buyer that they too were unaware of the PB pipe in the building (which apparently predated their own purchase of the building). The seller offered to rescind the contract and take back the property. However, the buyer, who obviously wanted to keep the property, chose instead to sue the seller for damages. The jury awarded damages of $3,690,000. Additionally, the trial judge refused to let the jury know that the buyer had also sued the manufacturer of the PB pipe and had already received compensation for such damages. Surprisingly this case was upheld on appeal - although one judge saw the inequities of this outrageous result and expressed them sanely and powerfully in her dissenting opinion. Even still, the real estate investment company ended up shelling out an additional 3.69 million dollars, two years after they thought they had successfully sold the property. (The S Development Company v. Pima Capital Management Co., 201 Ariz. 10, 31 P.3d 123 (Ct. App. Ariz. 2001))

Tort Reform Statute to Cap Damages Declared Unconstitutional
Vernon Best was operating a forklift while employed at a steel mill in Alton, Illinois. He was moving slabs of hot steel when the mast support assembly on his forklift collapsed. As a result, the flammable hydraulic fluid ignited and engulfed Mr. Best in a fireball. While on fire, Mr. Best leaped from his forklift, landing and fracturing both of his heels. He sustained second and third degree burns to 40% of his body. Mr. Best brought suit against a number of defendants. At the time of this suit, a recent tort-reform legislation had created a statute in Illinois that placed a statutory cap amount of $500,000 on all non-economic tort damages (typically pain and suffering). The tort reform legislation created other caps as well. When Best brought his suits, he pleaded non-economic damages in excess of the $500,000 cap and questioned the constitutionality of the tort reform legislation. The Illinois Supreme Court considered the matter, prior to Mr. Best’s jury trial, and held that the Illinois statute was indeed unconstitutional on several counts–including the attempted capping of non-economic damages. Hence, the lesson to be learned from this tragic case, as far as small businesses are concerned, particularly those in states with statutory caps, is that they cannot necessarily depend upon tort reform legislation and statutory caps to protect them from liability. (Best v. Taylor, 179 Ill.2d 367; 689 N.E.2d 1057 (Sup. Ct. Ill. 1997))

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About Our Foundation
The mission of The National Foundation for Tax Planning and Asset Protection is to provide education and training to professionals on total asset and lawsuit protection. The Foundation achieves this mission through sponsoring America’s top authorities on lawsuit protection and prevention to speak to over 200 organizations each year. We have been sponsoring speakers to present to organizations for over 20 years. The Foundation was started by Jay W. Mitton, MBA, JD. Mr. Mitton is nationally know as “The Father of Asset Protection” and is the best selling author of the book Cover Your Assets: Lawsuit Protection published by Random House. Mr. Mitton started the Foundation to help achieve his life mission of educating the world on lawsuit and asset protection. In an article in the Success Year Book, Mr. Mitton writes, “Lawsuit and asset protection has been my mission since childhood. As a young boy, I saw my father, a successful building contractor, lose everything in a lawsuit. My father was an honest man and a good businessman, but he was caught in the lawsuit jungle. My father lost everything, and I spent much of my childhood eating bread and milk for breakfast, lunch, and dinner. I decided that when I grew up, no one would ever take one penny from Jay Mitton in a lawsuit. I became an attorney and I have dedicated my life to helping people avoid the financial catastrophes that beset my family.”

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