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January 16, 2006

Somebody's Got Some Explaining To Do!

A bankruptcy judge has raised questions about the state court testimony of some victims of a bus crash in south Texas in 2003 in his consideration of a motion to deny claims filed by those victims.  A charter bus owned by Central Texas Trails and driven by Johnny Cummings crossed the highway median and struck a Chevrolet Suburban.  The crash killed five bus passengers and injured many more.  Two passengers in the Suburban also were killed and another, Donnie Hagan, was seriously injured.

Shortly after the accident, the bus company and bus driver filed for bankruptcy protection.  Half of the 34 parties that filed claims against the bus company in bankruptcy court agreed to accept half of the $5 million available through the bus company's insurance carrier.  The other half of the crash victims elected to bring a products liability claim against the bus manufacturer, Motor Coach Industries (MCI), and allowed by the bankruptcy court to defer acceptance of their portion of the insurance proceeds until the state court suit had been resolved.

In the state proceeding, a jury awarded $17.5 million after finding that the bus was defective because it didn't have seatbelts. 

During that trial, MCI attempted to join the bus company and driver as defendants in an effort to allocate some of the liability to them.  The trial judge refused to allow MCI to bring the bus company and driver into the suit but did, for purposes of appeal, allow MCI to question the plaintiffs outside the jury's hearing about the bankruptcy claims.  According to the Waco Tribune-Herald, most of those questioned said that they had never filed claims against the bus company in bankruptcy court and had never blamed the bus driver for the accident.  One claimed that he "didn't even know there was a bankruptcy court."

Based on this testimony, the attorney for Hagen, the injured Suburban passenger, then filed a motion in bankruptcy court to withdraw, strike or deny the bankruptcy claims of those plaintiffs who had testified in state court.  That motion has triggered hearings before U.S. Chief Bankruptcy Judge Larry E. Kelly and criticism of both the state court plaintiffs and their attorneys.  Judge Kelly has questioned why the lawyers' did not attempt to intervene to correct their clients' testimony, said that he thinks some of the plaintiffs may have lied under oath in the state trial, and added that he would refer them to the U.S. Attorney's Office for prosecution if he becomes convinced that they did.

JDP

January 16, 2006 | Permalink

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