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Legal battle brewing in Texas over payout in fatal truck crash

Lawyer for insurance company says there was no ‘secret deal’

Legal fight is brewing after a Texas carrier’s insurance company settled with one victim’s family in fatal crash. Photo: Jim Allen/FreightWaves

A legal battle is brewing in Texas over an alleged “secret insurance payout” to the family of one of the victims killed in a tractor-trailer crash in December.

Truck driver Juan Manuel Carrera, 36, of Pharr, Texas, who drove for Josiah’s Trucking out of Edinburg, Texas, was traveling north on FM 493 near Edinburg on Dec. 19 when investigators say he lost control of his rig while navigating a curve and jackknifed. His trailer, which crossed over into the southbound lane, struck the vehicle driven by Anna Isabel Ortiz, 23, of Weslaco, Texas, and her passenger, Carlos Alberto Tellez Jr., 22, of Donna, Texas. Both later died of their injuries.

In its report, the Texas Department of Public Safety (DPS) stated that Carrera was traveling “at an unsafe speed due to roadway conditions” because it was dark and raining at the time of the crash.  

At the center of the case is North Carolina-based Brooklyn Specialty Insurance Co., which insured Josiah’s Trucking for $750,000 — the minimum liability amount required by the Federal Motor Carrier Safety Administration (FMCSA), which regulates the trucking industry. 

According to the FMCSA’s website, Josiah’s Trucking now has a new liability insurance policy with Progressive County Mutual, which was effective Jan. 21.

One attorney who is representing Tellez’s family alleges Brooklyn Specialty cut a “secret deal” with Ortiz’s mother, Ana Gomez, to pay her the full policy amount less than 24 hours after the crash, knowing the small carrier was insolvent, in an attempt to “wash their hands” of any further responsibility, including potential involvement in the carrier’s bankruptcy case. 

The news that the insurance company had “exhausted its policy limit” triggered Texas attorney Shelby Jordan of Jordan, Holzer & Ortiz, to force involuntary Chapter 7 bankruptcy proceedings against Josiah’s Trucking and its owner, David Vasquez of Edinburg. Jordan’s firm, representing the Tellez family, also file an emergency motion to appoint an interim trustee, which U.S. Bankruptcy Judge Eduardo V. Rodriguez approved in an effort to “trap the funds wherever they might be,” Jordan said.

“The insurance company arranged it so that without investigations or inspections of the tractor or anything, they paid one person the policy limits and they claim to have washed their hands of the policy and have no further responsibility,” he told FreightWaves.

However, Jason Powers of Lewis Brisbois Bisgaard & Smith, representing Josiah’s Trucking’s insurance carrier, Brooklyn Specialty, disagrees.

“There was no secret deal,” Powers told FreightWaves. “Brooklyn Specialty paid the policy limit to the only demanding party and in accordance with Texas law. 

Powers said he views this case “as a possibility for trucking companies to be pulled involuntarily into bankruptcy in catastrophic accidents.”

A hearing is set for Thursday in the U.S. Bankruptcy Court for the Southern District of Texas. Vasquez’s attorney, Antonio Villeda, filed an amended motion on Tuesday, seeking to revert the involuntary Chapter 7 bankruptcy petition into a Chapter 11 in an attempt to reorganize.

Villeda declined FreightWaves’ request to comment on the case until after the hearing.

Interim trustee seeks to recover funds paid to Ortiz family, attorneys

Interim trustee Catherine Stone Curtis, who was appointed to oversee the bankruptcy case in February, is seeking to recover funds “totaling $1 million” from  Brooklyn Specialty that were allegedly transferred to Ortiz’s parents, Ana Gomez and Reyes Adrian Ortiz, and the family’s attorneys, Rogelio Solis and Daniel Sorrells, on or around Jan. 12.

However, Jordan claims Anna Ortiz’s dad, Reyes Adrian Ortiz, was not included in the financial settlement with Brooklyn Specialty.

After the crash, both families hired attorneys to “begin the claims process.”

According to court filings filed by Curtis, the Ortiz family filed a Stowers demand letter with Brooklyn Specialty less than 24 hours after the crash but claims Tellez’s family was unaware of the move.

A Stowers demand, unique to Texas,  is used by plaintiff’s attorneys to negotiate with insurance companies to either pay their policy limit to settle a claim or risk a possible jury verdict that may exceed the policy’s coverage amount, Jordan said.

As of press time, Solis and Sorrells had not returned FreightWaves’ request for comment about the case.

Settlement triggers involuntary Chapter 7 petition 

The news that Brooklyn Specialty had settled with the Ortiz family involved in the fatal crash triggered attorneys for the Tellez’s family to file an involuntary Chapter 7 bankruptcy petition on Jan. 24. 

Jordan claims Brooklyn Specialty “faked their position that they were allowing inspections of the truck because it was going to be repaired” because the deal with the mother of Anna Ortiz was being finalized. 

“All they were doing was delaying my clients, who believed that the insurance company was going to work toward a common settlement of the group,” he said.

Jordan said Josiah’s Trucking and its owner weren’t the real targets in the bankruptcy petition — its insurance company, Brooklyn Specialty, was — in an attempt to trap the funds potentially paid to one of the victim’s families.

“Our target was to marshall all of the money and get it back —  that’s the first $1 million — and then to find out what the law is now,” Jordan said. “What is the law when an insurance company deliberately exhausts a policy, knowing insolvency and prevents anyone else from getting paid and then claims to have no further responsibility for attorneys’ fees or for prevailing issues with the insured.” 

OGA Charters, insurance precedence

Jordan compares Josiah’s Trucking case with a similar one he appealed before the U.S. Court of Appeals for the 5th Circuit and won, which ruled that insurance proceeds can, in “limited circumstances,” be considered the property of a bankruptcy estate.

He’s referring to the decision in the fatal bus crash involving a driver for OGA Charters LLC that the National Transportation Safety Board found to have an “acute sleep deficit.” Investigators claim the driver left the road and overcorrected while driving a bus of people to the Kickapoo Lucky Eagle Casino Hotel outside Eagle Pass, Texas, resulting in the death of nine people and injuring nearly 40 others in 2016.

The appeals court rejected the bus company’s insurance deal with 14 victims and survivors of the crash because of its $5 million liability policy. Instead, the panel found that the money should be distributed to all 65 crash victims and their families.

“The 5th Circuit ruled that if the insolvency of the debtor and the obvious exhaustion of the insurance policy, which most of the time is a result of a mass injury incident, the proceeds now will become property of the estate and the relationship of the insured and the insurance company has changed,” Jordan said.

Tellez’s family files wrongful death suit

Unaware that Josiah’s Trucking’s insurance carrier, Brooklyn Specialty, had allegedly struck a deal with Anna Ortiz’s family to pay the entire policy amount, the attorney for Carlos Tellez Jr.’s family filed a wrongful death lawsuit in Hidalgo County, Texas, District Court on Jan. 4.

Tellez died on Dec. 27, eight days after the truck crash.

His parents, Carlos Tellez and Sonia Tellez, along with his wife, Rose Mary Rodriguez, and their daughter, claim that Carrera was negligent because he failed to drive at a safe speed and failed to safely negotiate a curved roadway given the weather conditions. 

Because Carrera drove for Vasquez and Josiah’s Trucking, the lawsuit alleges the carrier is vicariously liable for his actions.

Tellez’s family named Josiah’s Trucking, Vasquez and Carrera in the suit, which seeks a jury trial and damages of over $1 million. 

Two days after Tellez’s family filed its civil lawsuit, the driver, Anna Ortiz, died on Jan. 6.

The insurance company notified the family’s attorney, Luis Cardenas of Escobedo & Cardenas, on Jan. 12 that it agreed to the law firm’s request to inspect the tractor and trailer on a certain date, but that it opposed the removal of “any of the control modules.”

The email also stated that the “policy limits under Josiah’s Trucking LLC have been exhausted” and to “please advise if the inspection will go forward,” according to court documents.

Court filings state that Rick Shaw, president of Brooklyn Specialty Insurance Co. Risk Retention Group, sent Cardenas a notice of intent to repair the vehicle on Jan. 7, as well as an offer to allow Cardenas’ team to inspect the vehicle before fixing the 2015 Kenworth.

Cardenas’ firm sent a letter to Josiah’s Trucking’s insurance company, Brooklyn Speciality, on Dec. 29, seeking to have the tractor-trailer driven by Carrera inspected. Cardenas also requested Carrera’s logbooks dating back two years and all data relating to the truck’s electronic logging device, truck inspection records and company policies and guidelines.

Jordan claims Brooklyn Specialty “faked their position that they were allowing inspections of the truck because it was going to be repaired” because the deal with the mother of Anna Ortiz was being finalized. 

“All they were doing was delaying my clients, who believed that the insurance company was going to work toward a common settlement of the group,” he said.

What happens next?

The mother of the victim, Gomez, could be forced to give the money back under the preference of fraudulent transfer rules, Jordan said. 

“The first fight is to get the money back from the mother and the lawyers, but we have no clue what’s she done with it,” Jordan said. “That would be the standard preference — she doesn’t lose her claim — she shares either equally or in some fashion with everybody else. If the money’s gone, then you get a judgment against her for the money.”

The real battle is with the insurance company, he said.

“We do have a common enemy and it’s not Vasquez’s truck and trailer — it’s the insurance company,” Jordan said. 

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  1. Ron Melancon

    See this lawsuit! I spoke snout this to the NTSB in 2011

    They destroyed me
    Family of woman killed in Nyx parade sues, alleging krewe was negligent
    Relatives allege gap in tandem float not enclosed, as required by law
2 min to read

    Relatives of the woman who was fatally crushed by a tandem float during the Mystic Krewe of Nyx’s 2020 parade filed a wrongful death lawsuit Thursday against the Carnival organization, New Orleans government and several other parties.
    They allege that Nyx was grossly negligent by failing to comply with a municipal city ordinance requiring parade organizers to enclose the spaces between parts of a tandem float. They say city officials were negligent in failing to inspect the float properly and in issuing a Nyx a permit to roll.

    The suit demands damages from Nyx, krewe founder and captain Julie Lea, City Hall, the float’s owner and the man driving the vehicle. Attempts to contact attorneys for Nyx and City Hall about the suit were not immediately successful. 

    Filed a day before the first anniversary of Geraldine Carmouche’s death, the suit is the latest blow to the embattled, all-female Nyx organization. Another lawsuit filed last week on behalf of former Nyx riders is a potential class action that accuses Lea of inappropriately using krewe income. It came on the heels of a mass exodus of Nyx members after Lea, in a social media post, used the phrase “All Lives Matter,” which some associate with opposition to the Black Lives Matter movement.
    Attorneys Bernard Dupuy, David Courcelle and Scott Stansbury filed the new, eight-page suit in Civil District Court on behalf of Carmouche’s husband, Jimmy Carmouche, and her father, Ernest Turner.

    Geraldine Carmouche, 58, was watching Nyx’s parade the night of Feb. 19 at the Uptown intersection of Magazine and Valence streets as float no. 21, a double-decker tandem titled “Come Away With Me,” was passing. Adorned with flowers and hot-air balloons, the vehicle – owned by PFJ Floats LLC and driven by Desmond Williams – “ran over … Carmouche, trapping her under the float,” the suit says.

    Carmouche, who was related to two Nyx members, died at the scene. The rest of the parade was postponed for four days, when it ran as part of the Krewe of Pandora procession in Metairie.
    Witnesses to Carmouche’s death said she was trying to cross the gap between the two parts of the tandem float. Dupuy said Thursday that he thinks the case will come down to parade organizers’ failure to close the gap between sections, as required by an ordinance reading, “The ends of each unit of a tandem float shall be completely enclosed.”

    “And why are they supposed to be enclosed? So people don’t try to cross in between them,” Dupuy said.
    Carmouche was one of two people killed by tandem floats during Carnival 2020. Three days after she died, Joseph Sampson, 58, fell under a tandem float in the Krewe of Endymion parade near Canal and Galvez streets in Mid-City. The fatalities prompted city officials to ban tandem floats for the rest of the 2020 Mardi Gras season.

    City officials seemed destined for a clash with parade krewes over expanding that ban to future years before the deadly coronavirus pandemic led Mayor LaToya Cantrell to outlaw parades this year. Those talks have been shelved for now.

    Like the government and insurance companies who keep destroying us we will fight back and expose them

    The only way to save lives now is by massive lawsuits because we have been warning for over 17 years! No safety standards for parades—letter-to-president-of-penn-state-university-.html—-it-was-the-total-lack-of-any-safety-standards-for-parades-period-midland-texas-helped-kill-these-4-.html–keep-parades-safe-we-are-the-only-ones-trying-to-expose-the-facts-.html–another-unsafe-parade-float-with-no-barricades-for-crowd-control-a-superkrewe-krewe-of-endymion-parade-float-just-killed-joseph-sampson-and-why-do-they-not-listen-to-our-warnings–.html—two-riders-fall-off-floats-in-thoth–both-in-stable-condition-and-still-my-own-government-wants-to-destroy-our-cause–.html….even-the-industry-says…trailers-are-not-ment-for-people–.html—-we-keep-warning-but-they-don-t-listen-to-us-or-the-ntsb-either-.html

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Clarissa Hawes

Clarissa has covered all aspects of the trucking industry for 14 years. She is an award-winning journalist known for her investigative and business reporting. Before joining FreightWaves, she wrote for Land Line Magazine and If you have a news tip or story idea, send her an email to [email protected].