The estate of a man who was killed when his work van lost control and crashed will receive $2.3 million in a mediated settlement with several interrelated companies.
In Stewart v. The K.S. Group, et al., the case revolved around whether the plaintiffs could pierce the corporate veil surrounding a number of companies that operated under the K.S. Group. The companies were involved with the importing and distribution of auto parts, according to court documents.
The companies under the K.S. Group umbrella included K.S. Reproduction Corp., K.S.I. Trading Corp., Re-Nu Body Shop Supply, Citi-wide Automotive, and CRS Auto Parts.
Richard D. Tilley worked for CRS Auto Parts, which owned the van Tilley was driving at the time of his accident in July 2003, according to court documents. He was accompanied by front-seat passenger Christopher DiPietro.
A ball joint in the front of the 1995 Chevrolet van failed and the right, front of the van collapsed onto the road. It veered right and hit a tree, sending Tilley flying backward into the van, Brian Fritz of Saltz Mongeluzzi & Bendesky said. He, Robert Mongeluzzi, and Larry Bendesky represented Tilley’s son in the case.
The plaintiffs argued that the seatbelt in the van, which was clipped together with carabiner-type devices, and the defective ball joint caused the van to crash and ultimately caused Tilley’s death.
The van had been sold among the companies under the K.S. Group umbrella over a period of years and was under the ownership of CRS at the time of the accident, according to court papers.
Pete’s Auto Service inspected the van about two and a half months before the accident and gave it a passing inspection under Pennsylvania requirements, according to court documents.
The case was presided over for two days by Judge Diane Welsh of JAMS, The Resolution Experts. The case was resolved on Feb. 13.
The main argument from the attorneys representing the various companies under the K.S. Group was that the companies were operated separately and could not be held liable for the actions of CRS.
Edward C. Mintzer Jr. of Rawle & Henderson represented K.S.I. Trading Corp. and said his client felt it operated completely separate from CRS Auto Parts in terms of maintaining financial records, management, and production.
Fritz said the defendants would have had a problem before the jury because the jury might not have believed the companies were separate, independent entities. He said the company’s owner, Wayne Jan, had admitted in deposition that the corporations were set up in such a way as to hide their true size from competitors.
The plaintiffs argued that the companies actually did work together because they all shared one safety inspector who set safety policies for the work vans, among other things. Fritz said.
He said the videotaping of depositions that were played back during mediation was a big part of the companies’ willingness to settle.
K.S.I. Trading Corp. agreed to pay Tilley’s estate $780,000 from its primary insurer and another $1.015 million from its excess carrier according to attorneys involved in the case.
Pete’s Auto Service paid Tilley $235,000 and the K.S. Group paid Tilley $270,000 on behalf of CRS Auto Parts, according to the attorneys.
There was about $285,000 paid out to passenger Christopher DiPietro.
“Our exposure arose under corporate successorship, joint, and several liability, and it was an excellent decision under the risk analysis,” Mintzer said of K.S.I.’s responsibility and decision to settle.
He said if the case were to have continued to verdict, the companies might have been forced to pay substantially more than the $2.3 million.
“There would have been a serious jury question whether or not there had been a common safety program across the family of K.S. corporations,” Mintzer said.
He said the facts of the case were “awfully dry” and would have been difficult for a jury to grasp. That was a factor in his client’s decision to settle, he said.
An unusual aspect to the case that was discussed in mediation was whether Tilley could have suffered conscious pain, Mintzer said. The defendants argued that he was killed immediately and would not have felt pain.
The answer to that question could have had a significant impact on a jury award, he said.
It is up in the air what effect the airing of videotaped depositions will have on the way both sides try cases. Mongeluzzi won the right not too long ago to air such tapes before juries and was planning on doing so in the Tilley case.
“It’s a new animal or new process wherein real testimony is being presented in an opening [statement] whereas before it would have just been described,” Mintzer said. “[The jury is] looking at real evidence at the same time they’re being told its not evidence.”
He said he would be willing to experiment with airing videotaped depositions at trial, but was unsure whether his clients would be willing to pay for it.
Other than K.S.I. Trading, Mintzer represented K.S. Reproduction Corp., Re-Nu Body Shop Supply, and Citi-Wide Automotive.
Solo practitioner Andrew P. Motel of West Chester represented Tilley’s wife, Lu Ann Stewart in the case. Michael P. Creedon of Creedon & Feliciani in Norristown. represented the K.S. Group and CRS Auto. Daniel G. Leeds of Leeds Winicov & Sessa in Philadelphia represented Pete’s Auto.