Railroad held liable under alter-ego doctrine for actions of an employee of a subsidiary.
- Case Name: Leon v. Union Pacific Railroad Company, Inc.
- Court and Case Number: San Joaquin County Superior Court / STK-CV-UAT-2017-5113
- Date of Verdict or Judgment: Saturday, April 16, 2022
- Date Action was Filed: Monday, May 22, 2017
- Type of Case: Vehicles - Motorcycle
- Judge or Arbitrator(s): Hon. George J. Abdallah
Plaintiffs: Felipe Arturo Leon, Jr., 36, warehouse worker
Defendants: Vernon John Draper (driver)Central California Traction Company (employer and subsidiary)Union Pacific Railroad Company (lessee and parent corporation)
- Type of Result: Jury Verdict
- Gross Verdict or Award: $23,965,999
- Net Verdict or Award: $23,965,999
- Contributory/Comparative Negligence: None.
Past lost earnings $ 225,432 (12-0)
Future lost earnings $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: $1,621,891 (9-3)
Past: $5,000,000 (12-0)
Future: $8,500,000 (9-3)
- Trial or Arbitration Time: 14 days
- Jury Deliberation Time: 2 days
Attorney for the Plaintiff:
Sadiq Law Firm, P.C. by Shafeeq Sadiq, Stockton.
Attorney for the Defendant:
Flesher, Schaff, and Schroeder, Inc., by Jacob D. Flesher, Rocklin; and
Freeman, Mathis, & Gary, LLP, by Charles H. Horn, San Francisco. (For defendants Vernon John Draper and Central California Traction Company.)
Murphy, Campbell, Alliston & Quinn, by Stephanie L. Quinn, Sacramento. (For Union Pacific Railroad Company.)
Plaintiff’s Medical Expert(s):
Alex Barchuk, M.D., CLCP, physical medicine and rehabilitation, Kentfield.
Carol Hyland, CLCP, life care planning, Lafayette.
Randall Epperson, PhD., neuropsychology, Modesto.
Murray Solomon, M.D., radiology, Los Gatos.
Defendant's Medical Expert(s):
Steven McIntire, M.D., neurology, Palo Alto.
Richard F. Jackson, DDS, oral and maxillofacial surgery, Roseville.
David D. O’Grady, PhD., neuropsychology, Walnut Creek.
Tracy Albee, CLCP, life care planning,Tracy.
Plaintiff's Technical Expert(s):
Louis R. Peck, P.E., accident reconstruction, Westlake Village.
Craig M. Enos, CPA, economics, Sacramento.
Defendant's Technical Expert(s):
Peter D. Wrobel, CPA/ABV, CFE, economics, Los Angeles.
Facts and Background
Facts and Background:
On September 7, 2016, plaintiff, then 30 years old, was driving to work on his Suzuki GSX-R750 motorcycle, westbound on Washington Street, approaching its intersection with Ventura Ave, in Stockton. Defendant Draper, driving a 2007 Ford Explorer, was eastbound on Washington, and turned left onto northbound Ventura, directly in front of plaintiff’s path. Plaintiff’s front wheel hit the front left wheel of the Explorer, and plaintiff’s head hit the right A-pillar. Plaintiff was wearing a helmet.
Defendant Draper was in the course and scope of his employment with Central California Traction Company (CCTC). The Explorer was leased to CCTC’s parent corporation, Union Pacific Railroad Company.
That driver Draper was negligent for interfering with plaintiff's right of way; that he was acting as an agent for Union Pacific Railroad Company (UPRR) at the time of the collision.
That the railroad company was liable under the alter-ego doctrine: The general manager of CCTC was employed by UPRR, and had never been paid a single paycheck by CCTC. UPRR owned a 2/3 interest in CCTC and controlled four of six places on CCTC’s board. UPRR was the sole lessee of the Explorer and, by contract, did not have the ability to assign the lease to CCTC. The insurance policy for the Explorer was paid for by UPRR.
UPRR denied that CCTC was its alter ego. Defendant UPRR contended that longstanding law requires it to be treated as a separate entity than its subsidiary CCTC. It moved to sever the issue from the jury trial, which was granted. The issue was heard during a one-day court trial prior to the jury trial.
As to injury: Defendants contended that plaintiff made a remarkable recovery because he was able to get married after the incident and take a vacation to Hawaii. They contended plaintiff would not require 24/7 attendant care services. Instead, they argued that he would require four hours a day starting at the time of trial (due to agency minimums), to be increased to six hours a day at age 50, eight hours a day for the last 10 years of life, and 24/7 for the last five years of life. Defendants argued that the actual amount of care needed today was 2.5 hours per day, which is the amount granted by governmental agency IHSS.
Injuries and Other Damages
Physical Injuries claimed by Plaintiff:
Severe traumatic brain injury, left hemiplegia secondary to a stroke, facial fractures, right hip fracture, blood clots, double vision, frontal lobe syndrome, and post traumatic depression and anxiety.
Plaintiff presented evidence via video deposition of defendant’s retained neurologist, who conceded that the amount of attendant care needed, if plaintiff lived alone, would be 10 hours a day now, increasing to 12 hours a day at age 50, 14 hours a day for the last 10 years of life, and 24/7 for the last five years of life. He testified that the lower numbers were based on the assumption that plaintiff was living with his wife. Plaintiff’s economist used this concession, along with the concessions regarding three future facial surgeries obtained through defendant’s maxillofacial surgeon, to create an alternate life care plan for defendant using their numbers. Plaintiff’s economist then presented a life care plan for the defense that was $2.1M-3.6M greater than what was being presented (depending on if the attendant care was being done through private hire or agency hire).
Both parties agreed that plaintiff was unemployable. Defendants did not contest plaintiff’s wage loss claim.
Plaintiff argued that the past care provided by his spouse was compensable under Hanif v. Housing Authority, 200 Cal.App.3d 635, 644-645.
- 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 §998 Demand: $10,000,000 on December 27, 2019
- Plaintiff Final Demand before Trial: $30,000,000
- Defendant §998 Offer: $9,000,000 on March 3, 2022
- Defendant Final Offer before Trial: $11,000,000
- Defendant Offer during Trial: $15,000,000