$5 million insurance allocation to be decided by court

McALLEN — This time last year some of the victims and victims’ families of a bus crash that left several dead and dozens more with serious injuries almost lost out on compensation for the crash.

On Friday a federal bankruptcy court ruled that it would decide how to allocate $5 million in insurance claim money from OGA Charters.

Nine people died and 43 were injured after a bus owned by OGA Charters that originated in Brownsville and was headed to the Kickapoo Lucky Eagle Casino and Hotel rolled over May 14, 2016.

The decision from U.S. Bankruptcy Judge Eduardo V. Rodriguez comes about a year after a handful of attorneys attempted to reach independent settlements with OGA Charters for their clients.

New York Marine and General Insurance Company insured OGA Charters, based out of San Juan, and owned by Rolando Garza, under a commercial automobile liability policy that provided a total of $5 million in coverage.

More than a dozen attorneys were to meet July 19, 2016 to discuss how the parties involved would split the $5 million, but two attorneys reached an independent settlement for more than $3.5 million in late June on behalf of four people who died and two who were injured.

Ricardo Villanueva, who spoke to The Monitor last year, and one of the attorneys who reached a settlement on behalf of his clients, said he agreed to the scheduled mediation but some other attorneys were not onboard.

He said once he knew the mediation wasn’t going to happen, he had to make a decision based on the best interest of his clients; Myra Lynn Martinez, daughter of Maricela Martinez, 60, who died in the crash, and her husband Jorge Lopez.

Villanueva did not disclose his client’s settlement amount.

Javier Villarreal, representing three people who died in the crash and one other who was injured, was another attorney who settled.

According to the letter, both Villarreal’s and Villanueva’s settlements equaled $3,565,000.

On July 11, 2016 attorneys for the claimants who were left out of the settlements, believed to be 70 percent of the total $5 million funds, filed a temporary restraining order to stop OGA Charters from completing the agreed upon settlements; which Rodriguez granted weeks later, according to court records.

“The bankruptcy proceeding was initiated by those claimants who were left out of those settlement talks; and the claim was that the insurance proceeds are part of the debtors’ estate,” Attorney John David Franz said.

Franz, representing claimants who were left out of the settlement deals, said the other attorneys argued that the insurance proceeds were not part of OGA Charter’s estate, thus would not fall under the court jurisdiction as it relates to bankruptcy.

But Judge Rodriguez disagreed and denied the settlers’ claim, ruling that he will make the final decision on the allocation of the insurance proceeds.

“…The Court finds that the Trustee’s Cross Motion for Summary Judgment, should be granted and the Settling Creditors’ Motion for Summary Judgment should be denied. As the Settling Creditors’ Motion for Summary Judgment has been denied, Garcia’s Notice, which it incorporates by reference, is likewise denied.”

Franz said his clients are “elated” by the court’s decision to make the final call on how the $5 million insurance proceeds will be allocated.

The decision from the bankruptcy court comes after a separate but related decision came down from the Supreme Court in late April.

The Supreme Court held that the sovereign immunity of Indian tribes extended to them and their employees does not extend to suits against tribal employees when the employee, instead of the tribe, is the “real party of interest,” according to the ruling document.

Franz said that the decision may have an impact on lawsuits filed on the behalf of some more than 20 people who were either injured or killed in the OGA Charter’s bus crash.

The lawsuit claims Lucky Eagle Casino was negligent in failing to evaluate the bus driver’s qualifications, failing to oversee the operation of buses transporting passengers to the casino and failing to ensure that plaintiffs and others arrived at the casino in a safe manner.

As part of the suit, Franz named as defendants the driver of the bus, and the bus coordinator, who Franz said were authorized by Lucky Eagle Casino to recruit customers by offering cash and other incentives to visit their casino.

He says the determination made by the Supreme Court; that immunity cannot be extended to employees, applies to the current lawsuits he’s a part of.

Franz said the lawsuits, which were formally filed May 16, 2016, are currently in various Hidalgo County state district courts —10 in total that involve more than 20 people injured or killed in the crash.

But he said the proceedings for those lawsuits would remain on hold until Rodriguez makes a decision on the allotment of the insurance proceeds.

Franz said there is no timetable for a decision.