Aiming to pierce a family veil, attorney Tom Maag alleges for the first time that holding company Cassens Corporation harms its car hauling company, Cassens Transport.
For that reason, according to Maag, Cassens Corporation bears direct liability for injuries that Cassens Transport truck drivers suffer.
In a Sept. 24 brief he told Madison County Circuit Judge Daniel Stack that the holding company's liability has an "extremely negative impact" on Cassens Transport.
His theory took shape at a Sept. 18 hearing on a Cassens Corporation motion for summary judgment in a suit Maag filed for Cassens Transport driver Keith Yount.
Maag stumbled as soon as the hearing started.
He said to Stack, "The last time we were here you granted me leave to file an amended complaint. Candidly, because of other business, I couldn't get it filed in the deadline we put in the order."
Stack asked Cassens attorney Gordon Broom if he had a problem with that.
Broom said, "I just got it handed to me. It's called the second amended complaint. We already have a second amended complaint so I don't know what it is."
Stack said, "Supposed to be a third?"
Maag said, "Supposed to be a third, whatever amendment it is."
He said the new complaint corrected a claim that Jeff Cassens owned the rig in question.
Broom said, "He served Jeff Cassens individually. Now he has filed a new amended complaint in which he is naming Jeff Cassens as the trustee of the true owner of the trailer, Jill."
He said Maag would have to re-serve Jeff Cassens.
Broom said, "If we are going to let him file his amended complaint, then he has abandoned Jeff Cassens individually because that's who he sued before."
Maag said, "I think as a matter of law that may be true."
Broom said, "I've won that motion, in essence."
Stack said, "You win, Gordon. You are out of here."
Broom said, "Now Cassens Corporation." He said it was a holding corporation.
He said to Maag, "I guess you still got them in the case."
Maag said, "They are still in the case."
Broom told Stack, "You already ruled on that already."
Maag said, "I recognize your honor has ruled contrary in the past but candidly, I think you are wrong."
Stack said, "You are not the first person to think I was wrong. Sometimes the appellate court does."
Broom said, "As I just read, Cassens Corporation is liable in this case on two bases. One of them is piercing the corporate veil.
"Cassens Corporation is nothing more than a stockholder. It holds the stock of its subsidiaries."
"Just because they own the stock doesn't mean that they control or that they are the same entity as their subsidiary.
"What they are claiming in essence is because there was a misstatement on a loss control program back in 1980 something, in which the person who signed it said the management of Cassens Corporation instead of Cassens Transport – They say well, that shows some control over something and therefore we have direct participatory liability.
"There is nothing here that would create any direct participatory control in a negative sense at all.
"We don't control their budget. We don't direct what they can do.
"Every court has come down and found that there is no piercing to be done and that there is no direct participatory involvement by Cassens Corporation."
Maag responded by reading Exhibit D, a letter from Cassens Corporation president Allen Cassens to "valued employees" about a loss control program.
Next he read Exhibit E, a letter to "dear employee" from Cassens Corporation.
Broom said, "Is that it?"
Maag said, "That's all that needs to be said."
Broom said, "Exhibit E that he is talking about is written on Cassens Transport Company stationery.
"In order to have direct participatory liability you've got to show that it benefits the company you are trying to hold to the disadvantage of the company that is the subsidiary."
Maag said, "A jury can infer from these two letters, which will be admitted into evidence should this matter go to trial, as well as the other evidence that is attached in the record, and determine that Cassens Corporation was doing this to benefit itself at the detriment of the employees at Cassens Transport."
Stack said, "What is it they have done in this case that is advantageous to Cassens Corporation and disadvantageous to Cassens Transport?"
Maag said, "They have established this whole loss control program that literally manages every part of what goes on at Cassens Transport.
"Literally, if you look at the documents, right down to the shoes that the workers there wear."
Stack said, "And this is something that is disadvantageous to Cassens Transport and advantageous to Cassens Corporation in what way?"
Maag said, "It's clearly advantageous to Cassens Corporation to try to maximize the profit of their subsidiaries.
"It is very well established under the law that one who undertakes to do something has a duty to do it non-negligently.
"If Cassens Corporation is directly managing the loss control program of its subsidiary, Cassens Transport, it has a duty to do this in a non-negligent manner.
"The jury can consider the fact that the plaintiff got hurt as evidence that it was done in a negligent manner."
Broom said, "Now we are talking about voluntary duty, not direct participatory liability.
"So far they haven't alleged what was wrong with the control program that actually hurt the guy."
Stack said, "I feel pretty comfortable with what I have done in the past but I want to look at this."
He said to Maag, "You want to change that to third amended complaint?"
Maag said, "I will hand write 'third,' with your honor's permission."
Six days later Maag filed a supplemental brief stating that at the hearing the court proposed an inquiry on Cassens Corporation liability.
He wrote that direct liability of Cassens Corporation has an extremely negative impact on Cassens Transport and employees it victimized by withholding safety facts.
Benjamin Powell responded a day later for Cassens Corporation that, "The court did not propose such an inquiry."
Powell wrote that the plaintiff could not present evidence of direct liability at the hearing or in the supplemental brief.