Editor’s Choice: Jury Awards Edition
- TaxMasters ordered to pay $195 million for cheating consumers
A company whose advertisements blanketed the airwaves promising help to underwater taxpayers has been ordered by a jury to pay $195 million in penalties for cheating its customers.
A Texas jury found that TaxMasters Inc. violated state laws against deceptive business practices more than 110,000 times, according to the state Attorney General Greg Abbott.
The company promoted its “tax resolution” services through cable television commercials that touted its ability to help taxpayers who had been audited, owed back-taxes or faced liens or garnishments by the IRS.
In fact, these were “hollow promises” made by the company, said Abbott.
According to prosecutors, the company also told customers they would begin working on their cases immediately, but only began work after the customer paid in full. As a result, clients missed important tax deadlines for filing documents with the IRS. In some cases, TaxMasters employees simply didn’t contact the IRS at all or were no-shows at IRS hearings on behalf of their clients, prosecutors argued.
The verdict “marks a significant victory for the Texans and TaxMasters customers nationwide who sought help from TaxMasters with their income tax debts and were taken advantage of in the midst of a national economic downturn,” Abbott said in the statement.
$113 million of the award will be used to repay consumers who were defrauded. The company’s founder and CEO Patrick Cox, who appeared in many of the ads, must pay $46 million of the judgment.
One day before the eight-day trial began, TaxMasters filed for Chapter 11 bankruptcy and tried to delay the case. Prosecutors said the bankruptcy filing was an an attempt avoid paying penalties that the jury imposed.
The family of a woman who died from brain damage from lack of oxygen during surgery won $1.2 million.
In 2008, Maria Garcia, 66, went in for surgery to remove her thyroid and parathyroid glands, but never came out. She was taken off life support 10 days later.
According to her family’s lawsuit, after she was put under general anesthesia, another anesthesiologist assigned to the surgery did not notice during the procedure that her breathing tube had moved and prevented her from breathing on her own. The lawsuit also contended that Garcia’s blood pressure became very low during surgery and the anesthesiologist failed to respond. Both conditions can cause injury to the brain by depriving it of oxygen. An autopsy found no other reason for her death than lack of oxygen to the brain.
After three days of deliberation, the jury found that the anesthesiologist was negligent and his error was a cause of her death. Jurors awarded Garcia’s surviving family members $1.2 million in damages.
Garcia’s eight children never expected her to die from the operation, according to Garcia’s daughter Sylvia. “The verdict doesn’t change anything for us because she’s not here with us, but there is closure that we know what happened to her in the operating room before the procedure even started,” she said. “At least we have answers.”
Winning lawyer Martin R. Sturm said such cases are “difficult to win” and that the award was one of the largest in decades in his geographical area of Kalamazoo County in Michigan. There was a $2 million verdict in the 1980s for medical malpractice, he said.
According to U.S. Department of Justice statistics, as of 2005, patients who sued for medical malpractice won at trial less than 25 percent of the time.
The family of a woman who was hit and killed by a UPS truck was awarded $2.9 million.
Rosa Margarita Arenas, 52, was driving from her home in Oregon to Los Angeles, Calif. to visit her children on Easter weekend in 2009 when UPS truck driver William Danny Steverson changed lanes and hit her Ford Explorer. According to a witness, Easter baskets intended for her grandchildren were strewn across the interstate after the collision that killed Arenas.
Her family sued UPS claiming the driver’s lane change was unsafe, while UPS defended the suit claiming it was an “unavoidable accident or sudden emergency” that caused the fatal wreck.
Jurors awarded the family, including her husband and three adult children, $1.75 million for past and future loss of love and affection and other noneconomic damages.
“No amount of money is ever going to compensate this family over their loss,” said the family’s attorney Roger Dreyer.
Prosecutors filed a criminal misdemeanor case against the 61 year-old Steverson, who was sentenced to a work program, and the case was later dismissed.
- Dog-walking pedestrian struck by driver wins $1.3 million
A woman who was hit by a teenage driver while she was walking her dog won a $1.3 million jury verdict.
Catherine Haberl was hit as she strolled with her dog near her home, knocking her down an embankment. She broke her back, both legs, an elbow, ribs and suffered a ruptured carotid artery.
The 57 tear-old physical education teacher and her husband, Gary, sued the driver, Kodi Rubino, who already pled guilty to careless driving and paid a $240 fine.
According to her attorney, Michael Toth, even though doctors told her that “most people who show up with your injuries die,” they were amazed that she managed to show up for work last school year and this year. After several surgeries, physical therapy and going through withdrawal from pain medication, Haberl’s doctors said her condition will decline and she will have to use a cane and expect to have arthritis.
Toth described a woman who used to be youthful and active enough to keep up with a 20 year-old on camping excursions, but now cannot do basic activities like holding her grandchild or going shopping without an electric cart.
Haberl “had the mental outlook you could beat anything by hard work [but] has found nothing more can be done” to return to her former life, Toth said.
A six person jury awarded $1.3 million to Haberl and her husband of 37 years whom she met in college.
The verdict fell just short of the $1.45 million recommended by a mediation panel, which means that the Haberls will be responsible for the costs of the legal case which could total $100,000 or more.