(Further coverage of the truck wrecks that led to the billion-dollar verdict can be found here.)
A new record for nuclear verdicts against a trucking company may have been set with a $1 billion verdict handed down Tuesday by a Florida jury. But more than 90% of the verdict was against a trucking company that apparently no longer exists and had not participated in the proceedings for at least two years.
The $1 billion verdict came in a case involving a September 2017 crash that took the life of Connor Dzion, who had just begun classes as a freshman at the University of North Florida. The wreck occurred in Yulee, Florida, on Interstate 95. Yulee is in Nassau County, north of Jacksonville, and a Nassau County jury handed down the verdict.
The two companies involved in the latest case were Kahkashan Carriers, a Canadian company, and AJD Business Services, which records indicate was based in Staten Island, New York.
The billion-dollar verdict was split as a $100 million payment to Dzion’s parents, who brought the suit, and a $900 million punitive damages verdict against AJD. The split on the $100 million payment was 90% against Kahkashan and its driver and 10% against AJD and its driver, according to court documents.
What had generally been believed to be the biggest nuclear verdict previously was the $411 million awarded last fall against a one-truck company that offered essentially no defense at trial. And that appears to be what happened here.Documents in the case show that the firm of Cole, Scott & Kissane asked to withdraw as legal representation for AJD and its driver in the wreck, Russel Rogatenko, in July 2019.
AJD was absent from all recent proceedings. A court default was entered against it on June 28, saying that AJD had failed to participate in the proceedings of the case since July 2019. That default is what led to AJD shouldering the punitive damages.
FMCSA data shows AJD as having its insurance canceled in July 2019. At the time of the accident, it was covered by Falls Lake National Insurance Co. FMCSA documents also show the status of AJD as inactive.
Kahkashan was represented by Sean McDonough of the firm of Wilson Elser. A call to him from FreightWaves had not been returned by publication time.
Kahkashan Carrier is Quebec-based. Its DOT number, like AJD’s, is listed as inactive.
Even if no money is ever collected from AJD, that does not mean that case has no impact. By ratcheting up yet again what constitutes an acceptable verdict in a trucking case, it leaves attorneys representing trucking companies concerned.
“The $900 million punitive damage verdict is essentially only meaningful for the plaintiff and lawyer in the sense that they were told by the jury that this was egregious and we want to recognize that with this award,” Kristen Johnson, a partner with Florida-based Taylor & Associates, said. Her area of speciality is trucking and logistics.
The reality of trying to collect, she said, is that “there’s nothing there.”
Without knowing what happened with AJD’s insurer, Johnson said it is likely that the insurer paid off the maximum amount it covered soon after the accident, “and then they are out.”
But the public image of trucking takes another hit with the verdict, according to Johnson. “It continues to build the reputation that the plaintiff’s lawyers are trying to build about trucking, that it is a bunch of bad guys that have these distracted guys on the road,” she said.
It also allows the plaintiff’s attorney, Pajcic & Pajcic, to accurately claim that it was a law firm that obtained a $1 billion verdict for a client in a case against a trucking company.
In a prepared statement released after the verdict was handed down Tuesday, Pajcic & Pajcic gave its version of what happened on Labor Day weekend in 2017.
“The semi-driver, working for AJD Business Services Inc. was distracted by his cell phone, driving over the legal limit of hours and did not even have a commercial driver’s license when he caused a crash and flipped his truck, blocking the highway and causing a massive backup on the interstate,” the statement from the law firm said. “More than an hour later, another distracted trucker, working for Kahkashan Carrier, Inc. of Canada, was traveling on cruise control at 70 miles an hour when he slammed into the line of stopped traffic, killing Connor [Dzion]. That truck’s data recorder showed he did not even attempt to brake until one second before the fatal crash.”
Jannie Steck, a partner with the trucking-focused law firm of Scopelitis Garvin Light Hanson & Feary, said the likely inability of the plaintiffs to collect the damages shouldn’t lead people to diminish the importance of the new high score in the nuclear verdict arena.
“It tells us something, that’s what they’ll do if you have a bad accident,” she said. The case had many of the “really new factors that we commonly see in nuclear verdicts,” Steck said, including improper use of cell phones and a driver’s poor safety record, which was alleged particularly against the AJD driver.
Alix Miller, the president of the Florida Trucking Association, said she was not familiar with the case beyond what she had read in media reports. But she indicated that the environment for trucking companies involved in litigation in the Sunshine State is getting tougher.
“The legal climate in Florida has been getting increasingly worse, with settlements and verdicts not reflective of evidence or the case,” she said in a statement to FreightWaves. “It is becoming difficult for trucking companies to do business in Florida — major insurance companies are no longer writing policies in the state, and rates can be 3-4x more per truck than other states. Safe and responsible trucking companies are facing moving out of Florida or going out of business as a direct result of a broken judicial system.”