Rich Ergo, Cathy Huang and Bill Nagle defended claims brought against Worthington Industries, Inc. and Worthington Cylinders Wisconsin LLC in which plaintiffs Brad Englebrick and Roxanne Hernandez sought $15,000,000 in compensatory damages and punitive damages based on claims of design and manufacturing defects in a MAPP gas cylinder that was connected to a hand held torch.
The accident occurred on April 7, 2008. Plaintiffs claimed that “air caught on fire” when Ms. Hernandez attempted to light a candle in plaintiffs’ bedroom. The flame burned back to the MAPP gas cylinder to which a torch was connected. Mr. Englebrick claims that he then picked up the torch and cylinder to take it out of their bedroom. He further claims that flames from the torch cylinder connection area burned his hands causing him to drop the cylinder 4 feet onto a carpeted surface. The cylinder then fractured resulting in fire ball that burned Mr. Englebrick over 70% of his body. He was hospitalized for 6 weeks and incurred approximately $2 million in medical expenses and an alleged $3 million in future damages. Ms. Hernandez was not burned but sustained injuries when escaping from the bedroom via the bedroom window.
Plaintiffs’ medical records contained numerous references to the accident being related to methamphetamine use as well as the plaintiffs’ history of “meth” use.
During discovery much evidence was uncovered inconsistent with their claims of how the accident occurred and consistent with plaintiffs using their torch and cylinder to smoke meth at the time of the accident. Mr. Englebrick tested positive for amphetamines on the day of the accident. The fire department photographed a meth pipe that was in plain view on Mr. Englebrick’s desk. Ms. Hernandez’s ER doctor testified that based on her observations Ms. Hernandez was under the influence of meth at the ER. She further testified that Ms. Hernandez admitted to “recently” smoking meth. A former housemate testified that plaintiffs always had a torch and cylinder in their bedroom which they used to smoke meth. Two days after the accident, Ms. Hernandez checked into a drug detoxification facility and advised the facility that she had used meth for 30 of the past 30 days, that her method of ingesting meth was by smoking and that she lived with someone that used drug or alcohol 30 out of the past 30 days.
While plaintiffs admitted using meth three days before the accident, at deposition they claimed they were not using meth the day of the accident or the two days preceding the accident. They denied that they ever smoked meth in this particular house – Ms. Hernandez claimed that she had only smoked meth one time -- and denied ever using the torch and cylinder to smoke meth. They denied being meth addicts. (Ms. Hernandez concealed her admission to the detoxification facility during her deposition.) Mr. Englebrick denied that there was any meth or meth paraphernalia in the house at the time of the accident. Mr. Englebrick denied having any knowledge as to why he tested positive for amphetamines, but at trial admitted that he produced a box of generic Sudafed at his deposition that he claimed he was using at the time of the accident for the purpose of getting Worthington to believe that the medication was the cause of the positive drug tests. (A CVS official later testified that the box of medication was not even manufactured until several months after the accident.)
After more than 80 depositions taken across the county, the case proceeded to trial on February 12, 2013 before the Honorable Cormac Carney in the United States District Court, Central District of California. During the second week of trial, plaintiffs admitted they knowingly made numerous false statements at their depositions. Ms. Hernandez admitted that she smoked meth on numerous occasions before the accident, she had stayed up all night quite often with Mr. Englebrick taking meth and that she was an addict at the time of the accident. Mr. Englebrick admitted that he was a meth addict at the time of the accident and that he had taken meth on a daily basis for more than 15 years. He admitted that he had meth and drug paraphernalia in his room at the time of the accident.
At the first break after Mr. Englebrick’s admissions, Mr. Ergo requested the Court to suspend trial proceedings so that Worthington could re-file its motion to dismiss the case based on perjury. The following day, Judge Carney granted the request setting a briefing schedule, an evidentiary hearing and oral argument. After extensive briefing, Ms. Huang argued the motion for Worthington at the April 15, 2013 hearing asserting that plaintiffs’ numerous acts of perjury s to the core of Worthington’s defense prejudiced Worthington and prevented it from having a fair trial.
On May 13, 2013, Judge Carney issued his 22 page written order granting the motion to dismiss. He found that plaintiffs’ perjury went to the core of Worthington’s defense and prejudiced Worthington. “Worthington developed a trial strategy to respond to Plaintiffs’ denials about their meth use and addiction. It did not prepare a trial strategy in which Plaintiffs’ meth use and addiction were a given.” Order, p. 22.
Judge Carney further provided:
The circumstances here are truly extraordinary. Plaintiffs repeatedly lied under oath during the entire pretrial process about their extensive meth use and addiction. That use and addiction was essential to Worthington’s defense that Plaintiffs were under the influence of meth at the time of the fire and that the fire was actually caused by Mr. Englebrick’s misuse of the Cylinder. Because of Plaintiffs’ lies, Worthington had to spend hundreds of hours and hundreds of thousands of dollars in attorneys’ fees to uncover the truth about Plaintiffs’ meth use and the potential cause of the fire. It is now impossible for the Court to believe a word that Plaintiffs have to say at trial about the fire or anything to do with it.
Order, p. 16, emphasis added.
To see additional details of the plaintiffs’ perjury and the arguments for and against dismissal, click on the following documents:
Memorandum Of Points And Authorities In Support Of Worthington’s Motion To Dismiss Based On Plaintiffs’ Perjury
Declaration Of Cathleen S. Huang In Support Of Worthington’s Motion To Dismiss Based On Plaintiffs’ Perjury (4 parts)
Plaintiffs’ Opposition To Worthington’s Motion To Dismiss Based On Plaintiffs’ Perjury
Reply Brief In Support Of Worthington’s Motion To Dismiss Based On Plaintiffs’ Perjury
Trial Transcript of Englebrick
Trial Transcript of Hernandez
Evidentiary hearing testimony of Englebrick
Evidentiary hearing testimony of Hernandez
The Bowles & Verna, LLP commercial and business litigation trial team of Richard T. Bowles and Kenneth B McKenzie won a defense verdict in a $2.4 million commercial real estate case on November 3, 2011 in San Francisco Superior Court.
It took the jury only twenty minutes to reach a unanimous verdict for Bowles & Verna clients Abol & Farrouk Hosseinioun after the two week trial.
The case was centered on a commercial building in the City of San Francisco that Sierra Industries LLC had purchased from the Hosseiniouns. Atop the building was a billboard structure. When the building was purchased by Sierra Industries, the Hosseiniouns, as part of the due diligence process, provided lease documents regarding the billboard to Sierra Industries, putting Sierra Industries on notice that the billboard tenant had done some work on the billboard, but that the Hosseiniouns had no knowledge of the extent of the work nor did the Hosseiniouns participate in the work being performed on the billboard. Further, the Purchase Agreement for the building stated that Sierra Industries was responsible to look into all permitting issues pertaining to the building, including the billboard.
Nine years after the purchase of the building from the Hosseiniouns, the City of San Francisco determined that the billboard had to be removed because it no longer conformed to City laws. Sierra Industries LLC filed a this case against the Hosseiniouns, claiming the Hosseiniouns concealed the illegality of the billboard and failed to disclose information about the billboard during the sale of the building. Sierra Industries argued that they lost over $2.4 million in income and monetary value to the building by being forced to remove the builboard.
At trial, the Bowles and Verna trial team of Richard T. Bowles and Kenneth B. McKenzie successfully defended against Sierra Industries' claims, and argued that the Hosseiniouns, as sellers of the building, had no duty to investigate issues related to the billboard, but, rather, only had to disclose to the buyers information that they were actually aware of. Conversely, they argued, the buyer, Sierra Industries, had a duty to perform due diligence on the disclosed information and Sierra Industries failed to do so.
The jury's unanimous verdict is another success for Bowles & Verna's Business Litigation and Real Estate groups.
For more information on Bowles & Verna's Commercial Litigation practice, or if you have a similar issue and would like legal advice, please contact Richard T. Bowles at email@example.com
U.S. News and World Report has ranked Bowles & Verna, LLP as a Top Law Firm in Commerical Litigation and Personal Injury Litigation.
For the full article, click here.
The Walnut Creek real estate brokerage firm Security Pacific Real Estate and its former agent, Kevin Roberts, successfully defended a One Million dollar lawsuit for defects in a luxury home in the case of Hart v. Security Pacific, Contra Costa Superior Court Case Number C94-03288.
Security Pacific and Roberts were represented by attorney Dean Harper of Bowles & Verna. After a six week trial, the jury returned a 12 to 0 verdict in favor of Roberts and Security Pacific on all claims, which included breach of fiduciary duty, negligent misrepresentation, concealment and fraud. After only two hours of deliberation, many jurors were upset that they were not allowed to award Security Pacific all of its attorneys’ fees and costs for having to defend the claim.
The case arose out of a 1991 sale of an $810,000 property in Danville, California. The property had been listed for $985,000. The sellers had moved out, but were paying on existing loans of $765,000. The house also had some defects. They were anxious to sell.
The plaintiffs, Patrick and Lynda Hart, retained Kevin Roberts and Security Pacific in 1991 to assist them in purchasing a high-end home. Mr. Roberts had showed the Harts over thirty homes in a three month period. He ultimately presented a “low-ball” offer on the property and eventually the Harts entered into a contract with the sellers, Mo and Marianne Shaikhaie, for $810,000.
The 4700 square foot home was only nine months old. During escrow the sellers disclosed several punch list items in need of repair and a driveway encroachment problem. Nevertheless, the Harts agreed to close escrow on the written promises from the builder that he would repair all of the punch list items and take care of the easement problem with the neighbors.
Escrow closed and the builder refused to perform. Further, when the first rains came, the Harts’ home leaked through the roof, decks and windows. Other problems developed. The Harts obtained several expert reports which initially suggested that the home needed approximately $150,000 in repairs. By the time the case was presented at trial, plaintiffs’ experts opined that the home needed $865,000 in repairs. The plaintiffs also attempted to recover emotional distress damages and loss of use damages. The defense experts maintained that the total repairs necessary were $168,000.
The Harts maintained at trial that they thought they had purchased their dream house and ended up buying into their worst nightmare. They showed video clips of rain coming through the ceiling into their home. The Harts blamed Kevin Roberts for allegedly failing to recommend that the Harts obtain inspections during escrow, withholding material information, misrepresenting the condition of the property, down-playing the significance of the punch list items and failing to recommend that the Harts seek legal counsel during escrow.
Mr. Roberts testified that he did not withhold any information, properly counseled and advised the Harts, did verbally recommend that the Harts obtain inspections and verbally advised them to seek legal counsel. Fortunately, the jury believed Mr. Roberts.
Defense of the Fiduciary Relationship
The court instructed the jury that Mr. Roberts, as a fiduciary, had the duty of utmost care, loyalty and honesty. In addition, Mr. Roberts had a duty to counsel and advise his clients and verify all material information, or disclose to his principal that such information had not been verified. Although the fiduciary duty is indeed broad, the Security Pacific attorneys were able to persuade the jury that Mr. Roberts had fully discharged his obligations.
Why The Case Did Not Settle
You may ask, why didn’t the case settle like so many others? The reason is that plaintiffs did not drop their demand below $400,000. Security Pacific’s insurance carrier offered $70,000 to settle the case before trial, but the plaintiffs refused the offer. Some cases, unfortunately, cannot be settled.
Two of the firm’s partners have just completed a six month jury trial against an insurance company that tried to avoid paying a claim by accusing its insureds of burning down their own home. The jury disagreed and awarded plaintiffs Stephan and David Phillips over $7.5 million dollars.
Fire Insurance Exchange (Farmers) insured the Phillips’ three story, 11,000 square foot residence located on 168 acres in Martinez, California, since the home was built in 1985. After an electrical fire occurred in the laundry room in June, 1994, the family moved out while Farmers prepared repair estimates. Five months later, with the repair estimates still not finalized, the house burnt to the ground. Shortly thereafter, the remaining structures were vandalized.
Although none of the investigative agencies was ever able to determine the cause of the November, 1994 fire, Farmers treated the claim as possible arson by the insured and refused to pay. Almost two years later, in September 1996, Farmers formally denied all of the claims, accusing the Phillips of setting the second fire, vandalizing their own property, fraudulently overstating their losses and breaching the insurance contract. Farmers then demanded the return of the approximately $650,000 it had paid in connection with the first fire.
After over two years of preparation, the trial commenced in August, 1998, with Richard T. Bowles and Robert I. Westerfield of Bowles and Verna representing the Phillips. After hearing some 60 witnesses testify over a six month period, the jury deliberated for four days before finding that Farmers had breached the insurance contract, acted in bad faith and also acted with fraud, oppression or malice. The jury awarded approximately $3.5 million in compensatory and $3.3 million in punitive damages. The Court increased the recovery by awarding over $700,000 in attorneys fees. The Phillips’ requests for costs and interest and Farmers’ post trial motions are pending.