$22M deal proposed to end injured lawyer's litigation vs bankrupt Yellow Cab over '05 taxi crash

By Jonathan Bilyk | Aug 3, 2017

A Chicago federal bankruptcy judge has been asked to sign off on a $22 million settlement, intended to lay to rest claims against a now bankrupt taxi company, brought by a Chicago lawyer who was left with brain damage and other injuries after the taxi in which he was riding crashed into a concrete median in 2005.

On Aug. 2, the trustee overseeing the Chapter 7 bankruptcy estate of Yellow Cab Affiliation Inc. filed a request in Chicago bankruptcy court to approve the settlement agreement between YCA and plaintiffs Marc and Deborah Jacobs.

“The Trustee submits that in his best business judgment, after consulting with counsel, the proposed agreement is fair and equitable and in the best interests of the Debtor’s (YCA’s) estate,” Chapter 7 trustee Michael K. Desmond wrote in his motion.

“The Trustee submits that the proposed agreement is particularly advantageous in consideration of the ongoing cost of any appeal and the potential for a new trial. In the absence of the proposed agreement, there are no available funds in the estate which would enable the Trustee to pursue the litigation to a successful conclusion.”

The request comes nearly two years since a $26 million Cook County jury verdict in favor of the Jacobs couple first pushed YCA into bankruptcy, and nearly a dozen years since the crash the Jacobs claim cost Marc Jacobs his career.

The case centered on an Aug. 31, 2005, single-vehicle crash off the Interstate 94 exit ramp leading to Hinsdale, involving a Yellow-branded taxi driven by Cornelius Ezeagu.

Jacobs had entered the cab at a taxi stand in Chicago’s River North neighborhood, across from a restaurant at E. Grand Ave. and N. Rush Street where Jacobs had been dining with a “longtime client.” After his client left in her private car, Jacobs asked Ezeagu to take him home to Hinsdale.

On the exit ramp from I-294, however, Ezeagu’s minivan left the curved ramp, “went airborne for 32 feet, struck the ground and continued forward over a grassy drainage area, and then crashed into a concrete retention wall,” according to court documents.

While Jacobs’ and Ezeagu’s accounts of the crash differed, a Cook County jury found in favor of Jacobs, awarding him and his wife a combined $26 million.

The next day, YCA filed for bankruptcy.

YCA later appealed the verdict, arguing it should not be made to pay such a price, when the driver wasn’t one of its employees, but rather an affiliated independent driver. But the verdict was upheld by a 2-1 decision at the Illinois First District Appellate Court in March 2016, which found the company should be held liable under the legal theory of “apparent agency.” In this case, the justices said, the Yellow Cab logo and design scheme on Ezeagu’s car “manifested an agency relationship between YCA and Ezeagu.”

YCA had requested leave to appeal to the Illinois Supreme Court.

In the meantime, the two sides continued to talk, ultimately resulting in the Jacobs agreeing to take less money to end the matter now.

The settlement agreement would end YCA’s appeal, Desmond’s filing said.

The Jacobs were represented in the action by the firm of Tomasik Kotin Kasserman, of Chicago.

YCA was represented in the litigation by the firm of McKnight Kitzinger & Pravdic, of Chicago.

According to federal court records, YCA is represented in the bankruptcy by attorneys with the firms of Gensburg Calandriello & Kanter, P.C. and Greenberg Traurig LLP, each of Chicago.

Desmond is associated with the law firm of Figliulo & Silverman, of Chicago.

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Organizations in this Story

Figliulo & Silverman, P.C. Greenberg Traurig, LLP Illinois First District Appellate Court Illinois Supreme Court Matthew T. Gensburg McKnight, Kitzinger and Pravdic Tomasik Kotin Kasserman LLC U.S. District Court for the Northern District of Illinois Yellow Cab Affiliation

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