Railroad found liable for the actions of an employee of a subsidiary under the alter-ego doctrine
Plaintiff, who was then aged 30 years, was riding his Suzuki GSXR750 motorcycle westbound on Washington Street as he approached its intersection with Ventura Ave in Stockton. Plaintiff was driving eastbound on Washington Street when defendant Draper drove a 2007 Ford Explorer and turned left onto Northbound Ventura. Plaintiff’s front wheel struck the Explorer’s front left wheel, while plaintiff’s head hit right A-pillar. Plaintiff was wearing a helmet. Defendant Draper was working in the course and scope his employment at Central California Traction Company. Union Pacific Railroad Company, CCTC’s parent company, leased the Explorer.
Case Details
- Case No. Leon, Union Pacific Railroad Company, Inc.
- Court and case number: San Joaquin County Superior Court/ STK-CV–UAT-2017-5113
- Judgment or Verdict Date: Saturday, April 16, 2022
- Date Action Filed: Monday May 22, 2017,
- Types of Action: Vehicles – Motorcycle
- Arbitrator(s), Judge or Arbitrator(s),Hon. George J. Abdallah
- Plaintiffs: Felipe Arturo Leon Jr., 36, is a warehouse worker
- Defendants: Vernon John Draper (driver)Central California Traction Company (employer, and subsidiary).Union Pacific Railroad Company (lessee) and its parent company
- Type: Jury Verdict
Verdict and Settlement
- Award or Gross Verdict:$23.965,999
- Award or Verdict:$23.965,999
- Contributory/Comparative Negligence: None.
- Economic Damages Past lost earnings $ 245,432 (12-0).Future earnings lost $1,567 322 (12-0).Past attendant care services $594 465 (12-0).Future attendant care services $6.456,889 (11-1).Future medical expenses: $1621,891 (9-3).
- Non-Economic Damages: Past: $5,000,000 (12-0)Future: $8,500,000 (9-3)
- Arbitration or Trial Time:14 Days
- Jury Deliberation:2 Days
Personal Injury Lawyers
- Attorney for the Plaintiff Sadiq Law Firm, P.C. by Shafeeq Sadiq, Stockton.
- Advocate for the Defendant Flesher, Schaff, and Schroeder, Inc., Jacob D. Flesher, Rocklin Charles H. Horn, San Francisco. Freeman, Mathis, & Gary, LLP. (For defendants Vernon John Draper, Central California Traction Company. Murphy, Campbell, Alliston & Quinn, Stephanie L. Quinn, Sacramento. (For Union Pacific Railroad Company.
Expert Witnesses
- Plaintiff’s Medical Expert(s). Alex Barchuk M.D. CLCP, physical medicine & rehabilitation, Kentfield Carol Hyland, CLCP, life care planning, Lafayette. Randall Epperson, PhD., neuropsychology, Modesto. Murray Solomon, M.D., radiology, Los Gatos.
- The Medical Expert(s), Defendant: Steven McIntire, M.D., neurology, Palo Alto. Richard F. Jackson DDS, Roseville, Oral and Maxillofacial Surgery. David D. O’Grady, PhD., neuropsychology, Walnut Creek. Tracy Albee CLCP, life planning, Tracy
- The Technical Experts of Plaintiff: Louis R. Peck P.E. Accident reconstruction, Westlake Village Craig M. Enos, CPA, economics, Sacramento.
- Technical Expert(s), Defendant: Peter D. Wrobel, CPA/ABV, CFE, economics, Los Angeles.
Lawyers’ Closing Arguments
Plaintiff’s Contentions:Draper, the driver, was negligent in interfering with plaintiff’s right-of-way; he was acting as an agent of Union Pacific Railroad Company (UPRR), at the time.That railroad company was liable under alter-ego doctrine: The general manger of CCTC was employed UPRR and had not been paid a single paycheck. UPRR held a 2/3 share in CCTC, and controlled four out of six positions on the CCTC board. UPRR was the Explorer’s sole lessee and could not assign the lease to CCTC by contract. UPRR paid for the insurance policy that covered the Explorer.
Defendant’s Contentions:UPRR claimed that CCTC was not its alter ego. Defendant UPRR argued that it must be treated as a separate entity from its subsidiary CCTC because of long-standing law. The defendant UPRR moved to seperate the issue from the jury trial. This was granted. A one-day court trial was held to hear the issue before the jury trial.Injuries: The defendants argued that plaintiff made a remarkable healing because he was able get married and to take a vacation in Hawaii. Plaintiff would not need 24/7 attendant care, they claimed. They argued that plaintiff would only require four hours of care per day, starting at trial. This was due to agency minimums. It will be increased to six hours per day at age 50, eight hours for the last 10 years, and 24 hours for the last five years. The defendants argued that the actual amount required today was 2.5 hours per days, which is the amount allowed by the governmental agency IHSS.
Personal Injuries and Damages
- Plaintiff claims physical injuries Left hemiplegia secondary a stroke, severe traumatic brain injury, facial fractures and right hip fractures. Blood clots, double sight, frontal lobe syndrome and post-traumatic depression and anxiety. The defendant’s retained neurologist gave evidence to plaintiff via video deposition. He said that the attendant care required if plaintiff was living alone would be approximately 10 hours per day, increasing to 12 hours per day at age 50, and 14 hours for the last 10 year of life. Plaintiff also stated that he needed 24/7 care for the last five years. He stated that the lower numbers were calculated on the assumption that plaintiff lived with his wife. This concession was used by the plaintiff’s economist, together with three future facial surgery concessions made by defendant’s maxillofacial doctor, to create an alternative life care plan for defendant. The defense was then presented with a $2.1M to 3.6M life care plan by the plaintiff’s economist (depending on whether attendant care was provided through agency hire or private hire).
- Both sides agreed that plaintiff was unemployed. Plaintiff’s claim for wage loss was not challenged by the defendants. Plaintiff claimed that his spouse provided past care and was entitled to compensation under Hanif, 200 Cal.App.3d 635. 644-645.
Special Damages
- Special Damages Claimed – Past Medical: Waived
- Special Damages Claimed – Future Medical: $2,054,812
- Special Damages Claimed – Past Lost Earnings: $225,432 (uncontested)
- Special Damages Claimed – Future Lost Earnings: $1,567,322 (uncontested)
Demands and offers
- Plaintiff, SS998 Demand:$10,000,000 December 27, 2019
- Final Demand of the Plaintiff before Trial:$30,000,000
- Defendant in SS998 Offer$9,000,000 March 3, 2022
- Final Offer to Defendant Before Trial:$11,000,000
- Defendant Offer during Trial: $15,000,000
Additional Notes
UPRR claimed that CCTC was not its alter ego. UPRR filed a motion in liming to split the issue of alter-ego after a failed summary judgement motion. The judge granted their motion and held a one day court trial to resolve the issue before the jury trial. He concluded that the corporate veil was breached and that CCTC was the alter ego for UPRR. The jury convicted UPRR, CCTC and the defendant driver.
The matter was settled for $29,000,000.
