Van trailer hauling diesel fuel wrecks in WV…

The minimum required insurance of $1,000,000 for hazmat carriers. The DUI case resulted in $1.4 million in settlements, which leaves a $400,000 shortfall. It's possible to attempt to go after the company owner's personal assests, but rather difficult. Even if successful, it will be like getting water from a stone considering median net worth is less than $200,000. It is almost impossible to sue the broker or the shipper, so that's a dead end. In this case, the state is going to be eating between $400,000 and $600,000 after legal fees. The driver got probation and a $5,000 fine. Sucks to be him for a little while, but he walks away relatively unscathed.

Let's say this volvo was properly registered to Bob and driven by Dave who had a valid CDL. Dave has no assets, and might end up doing a year or two in jail. Bob has the minimum required insurance of $750,000, and properly formed LLC. The state is going to have to cover all costs in excess of the insurance coverage. But Bob wasn't operating the truck in compliance with his insurance, so the insurance company may refuse to pay, which means legal fees will eat into and funds recovered.

Even if Bob get's dragged into a court of law and is found guilty and ordered to personally pay restitution - he has no assets.

 

No he didn’t.
He was also the owner of the trucking company. And the company was ordered to pay $266,000 in restitution.
Good luck getting ANY INSURANCE to cover you after a substantial claim like that.


Now bear in mind that his case went federal, and the Feds WILL go through the trouble of getting water out of a stone, and then some!!
They can seize ANY assets to satisfy a judgment,personal or company,so they made an example out of him. That includes equipment,accounts(personal and business),vehicles,etc.

 

 

His COMPANY was fined/charged/settled for over $1.6 million previously. Not him, the company. The company's insurance has already paid out the policy maximum, leaving a deficit to be paid by the company. The company is defunct with no assets and hasn't paid $700,000 by my math. The court filling isn't available online yet, so assuming West was charged the maximum, that leaves $166,000 to be covered by the company. So where is the $866,000 going to come from? Unless the corporate veil gets pierced, no where. If it does and he's held liable for it all, I doubt Mr. West has more than $300,000 in assets that can be seized. If he had any sense he's spent the last two years protecting his assets (probably not because his smooth brain decided to drive a hazmat load through the mountains while drunk). Married? Get divorced, give her the house and max out child support and alimony. I think max garnishment is 20% of anything over $20,000 after taxes, health care, and alimony/child support - aka 50 years to payoff, assuming median income and no interest. And I think Social Security can't get garnished, but wage garnishments are outside my legal wheel house.

And what was the total cost of cleanup? Initial court fillings seem to indicate over $3 million, but I only skimmed them. The government also tried suing the shipper and the broker, but those suits were dismissed with predjudice (aka 'plaintiff doesn't have a leg to stand on').

And this is for a guy who was following the law (more or less).

Google tells me that clean up for a gasoline spill starts at $500 per gallon. 18 totes, 275 gallons per tote, $500 per gallon equals $2.5 million - as a starting point. Required minimum insurance for hazmat is $1 million. The pictures don't indicate placards, so I doubt they were insured for more than $750,000, if that. Conservatively there is a $1 million dollar gap between clean up and the insurance coverage, on the outside it expands to $3 million. Even reputable carriers would never be able to pay that. This is the argument for raising minimum insurance requirements. Personally I don't think that's needed until we start verifying insurance coverage and making brokers/shippers liable for any gaps between judgments and a carriers insurance.

Assuming everything at the carrier is above board, the State (ie you and me) is still going to picking up a significant portion of the costs. If it's a fly by night carrier even if we seize every last cent legally permissible we're bearing most of the cost because there are little to no assets to seize. If the truck was stolen, (which is highly likely because who ships 30,000 pounds of gasoline in totes?), then there are no assets to after except the driver's which probably amount to a ham on rye sandwich, without mustard. Which is assuming that the driver doesn't flee the county with his mustardless ham on rye.

 

If you’re an owner operator then you’re treated as A COMPANY. Everyone knows this.
And as I said before regarding the previous moron his case went to federal court because of the contamination of the waterways and possible contamination of the local drinking water supply (some of the aquifers were affected),along with some of the aquatic life.
Now in regards to the current situation, this wasn’t gasoline,this was diesel fuel,which is more heavier to cleanup. And again like the previous accident, there’s concerns about contaminating the local water supplies/aquifers and affecting the aquatic life in those waterways. I wouldn’t be surprised if this one goes into the federal judicial system as well.
I sure as h e l l ain’t paying for it because I don’t live in West Virginia. But where I live if you do something as stupid as both of these drivers did,rest assured the state police and the state EPA will make sure you and/or insurance get the cleanup bill!
And they will also make sure you spend some time in the graybar hotel.

 

Bob owns Wigets-R-Us. Not counting Widgets-R-Us, Bob has a net worth of $3,000,000.

Widgets-R-Us has $1,000,000 in assets, $600,000 in secured debt, $200,000 in unsecured debt, and $1,000,000 of insurance coverage.

Federal government gets a judgment against Widgets-R-Us for $2,000,000. What is the maximum that the Feds will recover?

 

We’re not talking about Widgets R Us or some other imaginary company. We’re talking about a real company (and owner) that is royally F’d. The Feds can go after any and all assets that the company (and said) owner possesses. That also includes any financial earnings or financial reserves/assets (seizure of bank accounts,401K,wage garnishments, etc.). They can also go after any future earnings as well to satisfy a judgment!
So pulling all of these supposed scenarios out of a hat isn’t going to work in the real world!

 

I was trying to understand where the disconnect was. In the scenario I posted, the maximum that the Feds can recover is $1.4 million. Even if the company could swing a payment plan and still break even, they won't be able to find insurance. The company will shut down and declare Chapter 7. The secured creditors will take the first $600,000 in assets, which leaves $400,000 in assets and the $1 million insurance policy. It will be up to the trustee to determine how that $400,000 is divided. Likely case is the unsecured creditors will get between 60 and 70 cents on the dollar leaving the Feds about $1.2 or $1.3 million.

Outside of a few scenarios, they cannot go after the personal assets of the owner. Even when they can, it's not hard to protect assets - look at Lou Pai and Jeff Skilling.

Now what happens when the company has no assets, no insurance? Let's say the veil gets pierced and they can go after the personal assets of the owner and the driver - what assets do they have? Median net worth is less than $200,000, so let's be generous as say the government can recover $500,000 overall. Clean up costs start at $2.5 million, so at least 80% of the cost is going to be covered by you and me.

 

Spoiler alert:Hiding assets does not work,especially if you file for bankruptcy. You are required to disclose ALL ASSETS. Any attempt to hide assets or deceive the court (or judge/magistrate) and you could end up in jail/prison. At the end of the day the driver is still VSF,on a state level,possibly on a federal level,definitely on a county level because they’ll more than likely try to sue for the associated cleanup costs.

 

I didn't say hide, I said protect.

Before the incident you can create trusts, the downside being they are irrevocable. Afterwards you can divorce your wife, letting her take almost all the assets and agree to high alimony/child support.

Nobody has said the company and the driver aren't screwed, just that they're not going to bear the brunt of the costs. The dui driver probably lost most of his assets in legal fees and his company is gone, but a relatively small fine and probation don't come close to covering the impact to the community. This is the argument for increasing the minimum insurance requirements.

 

Hide/protect-either way they have to be disclosed at bankruptcy proceedings.
As far as this driver goes the fact that he had hazmat cargo without placards installed that is going to get him crucified! Never mind said hazmat wasn’t supposed to be transported in that manner.