U.S. District Judge Joseph Hood grants $11 million default judgment against trucking firm.

  A default judgment of such a large amount raises the specter of either bankrupting the trucking company against whom it was granted, or the parties having to find someway to back off this judgment.  

One would assume that the trucking company has an insurance company covering their trucking activities.  The insurance company apparently will not be liable for this judgment since it appears the trucking company failed to notify the insurance company of the filing of the lawsuit.  Since the insurance company appears not to have been notified of the service of summons on the trucking company, they will not be liable if their policy has the boiler plate language of most motor vehicle liability policies.

Of course, East-West trucking may have sufficient assets to pay this claim. Let’s hope they do.  The judge sent the defendant a pointed message when he told them it would be in their best interest to take more than a token attempt to settle this matter.  This case screams for mediation.

It may be in the interest of the plaintiff to do likewise.  An uncollectible judgment (do we hear the filing of a Chapter 11 bankruptcy petition) is worth little.

We would suspect that the parties will take Judge Hood’s sound advice and figure someway to settle this judgment.

This case sends a message to corporate counsel to educate their clients that all papers served on them should immediately be delivered to counsel.

By Brett Barrouquere  ASSOCIATED PRESS
LOUISVILLEA South Dakota trucking company has been ordered to pay nearly $11 million to a Central Kentucky couple after it failed to respond to a lawsuit over a highway accident.
U.S. District Judge Joseph Hood in Lexington admonished East West Motor Express of Black Hawk, S.D., for its failure to respond to the lawsuit, and ordered the company to pay the unusual default judgment. Hood encouraged the company to settle before an appeals court could review the matter.
“This is an extreme case,” Hood wrote in an opinion released yesterday. “In case the court needs to spell it out again, it would be in East West’s best interest to make more than a token attempt to settle this matter.”
Robert and Janet Orms of Danville sued East West in August 2005 after a crash on Interstate 64 near Owingsville.
Robert Orms, who was injured in the crash, claimed that an oversize commercial truck owned by East West contributed to the collision because the driver was negligent in the way he handled the vehicle.
In motions filed after the default judgment was entered earlier this year, East West denied any liability. It said the failure to file a response was a clerical error, and that company general manager William Stevens never received a copy of the lawsuit.
“Neither Mr. Stevens nor anyone else at East West learned of the default judgment entered against East West or the details of the incident in question until November 2006,” Charles Cassis, the attorney for East West, wrote in a court filing.
Court records show that Stevens signed a letter acknowledging receipt of a notice that the company was being sued and received a copy of the suit. But attorneys said the lawsuit was not attached to the letter and that Stevens wasn’t aware of what he was signing.
But Hood didn’t buy the company’s story, and he ordered it to pay the couple.
East West said in court filings it will appeal the judgment.


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