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Lost Paperwork Proves Costly to Fluor Unit

Courts: Irvine firm fails in bid to overturn a $562,489 judgment after not responding to a lawsuit that apparently was misplaced on an employee's desk.

November 10, 1998|From Bloomberg News

Fluor Corp. might want to consider requiring its employees to clean off their desks every now and then.

A unit of the Irvine-based construction and engineering company failed in a U.S. Supreme Court bid to overturn a $562,489 judgment awarded when Fluor neglected to respond to a lawsuit.

Fluor's excuse: The complaint was lost, most likely on a legal assistant's desk, for more than a month.

The lawsuit, filed in a state court in Casper, Wyo., charged that Fluor Daniel Inc., a Fluor Corp. unit, wrongfully discharged environmental specialist David G. Seward. Court documents indicate Fluor would have had a fighting chance in the case. The company says Seward left the company voluntarily and, in any event, didn't have the legal right to expect continued employment.

Fluor, though, won't get a chance to make those arguments. When the Seward lawsuit languished under a pile of paperwork, so did the company's defense to it.

The legal papers arrived at the company's corporate headquarters in Irvine on Sept. 10, 1996. In accordance with company policy, the complaint was forwarded to paralegal Erin Kantor. For 10 years, Kantor had been charged with arranging for a local lawyer to respond to any lawsuit filed against the company.

The problem was that Kantor, along with the entire Fluor legal staff, was attending a funeral that day for the spouse of a co-worker.

Kantor didn't see the legal papers until 38 days later. "I found the complaint lying on my desk and do not know how it arrived there," she said in a sworn statement.

In the meantime, the 20-day deadline for responding to the suit expired. A judge awarded Seward a default judgment and more than $500,000 in damages.

After discovering its oversight, Fluor asked the trial judge and then the Wyoming Supreme Court to set aside the default judgment. Both courts refused, and on Monday the U.S. Supreme Court said it wouldn't consider Fluor's appeal.

In a statement, Fluor called the incident a "unique occurrence" in the company's 75-year history. "The company has thoroughly investigated how the event happened and, as a result, has satisfied itself that it has in place an effective system to track and address lawsuits."

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