Family of 16 Year Old Wins $5 Million Lawsuit Against Driver & Property Owner

Two Arizona Superior Court cases tied for 9th place in the list of the top 10 largest Arizona court judgments of 2009. The other case is Randolph Groom v. Roger Clyne and Susan Clyne.

The 9th largest civil judgment in Arizona during 2009 involved the death of a 16 year old young woman who was a passenger in a car driving on mall property when it crashed into a tree.  The accident occurred on a private road owned by Desert Sky Esplanade, LLC, when the driver of the car, Michael Mansutto, hit a speed bump and lost control of the vehicle.  The parents sued the driver and the owner of the land on which the road was located.

The parents claimed that the speed bump failed to satisfy city and federal requirements and that the property owner should have placed a warning sign before the speed bump.  Despite the fact the girl was not wearing a seat belt, which might have prevented serious injury, the judge instructed the jury not to attribute any fault to the victim.  Desert Sky Esplanade defended by saying the private road was not subject to federal or city rules and that the driver was speeding.

The jury awarded the parents $5,000,000 for their damages arising from the death of their sixteen year old daughter.  Each defendant was liable for $2,500,000.

This case illustrates two important asset protection concepts.

1.  Because the real estate was owned by an LLC rather than outright by the owner(s) of the LLC, the loss of the owner(s) of the LLC, if any, after payment of any insurance proceeds, was limited to the equity in the LLC.

2.  If the driver of the car was not the owner of the car, the owner(s) of the car would have been named as co-defendants and potentially be liable for the $2,500,000 judgment awarded against the driver.  If you have children or third parties driving your vehicles, protect yourself from liability arising from an accident caused by the driver by creating an an LLC that owns the LLC that owns the vehicle.  With this structure, the LLC will be named as a defendant in the lawsuit.  The general rule of Arizona LLC law is that the owner(s) of an Arizona LLC are not liable for its debts.  For more on using a vehicle LLC for asset protection, see my article called “When to Use a Vehicle LLC for Asset Protection.”

The case is Herman Martinez and Romelia Martinez vs. Desert Sky Esplanade, LLC, and Michael Manzutto, Maricopa County Superior Court Case Number CV-2006-014888

Lifelock to Pay Federal Trade Commission $12 Million

Phoenix Business Journal:  “LifeLock Inc. has settled a lawsuit brought against it by the Federal Trade Commission and 35 states for $12 million, ending a lingering legal battle about what the company promised in its advertising versus what it could deliver in regards to preventing identity theft.”

If you operate your business as a sole proprietorship or a general partnership, this story illustrates why a person should always operate a business through an LLC, limited partnership or corporation.  How would you like to owe the FTC $12 million for something your employees did?

2016-11-16T08:23:57-07:00March 9th, 2010|Lawsuits, Why People Need an LLC|0 Comments
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