Terminix suffered another horrific loss in the Alabama Supreme Court on Friday, May 13, 2022.
Terminix must face an Alabama arbitrator instead of a jury in two upcoming termite damage claims. Every single Supreme Court justice that heard the case agreed that a Mobile, Alabama trial judge, Michael Windom, properly appointed an arbitrator to issue a “final and binding” arbitration award for claims. These cases assert that Terminix fraudulently faked termite prevention service for decades at two large condominium complexes. In one case, it is clear the entire condo complex will need to be torn down and replaced. In the other, analysis is still ongoing, but it appears part of the complex may have to be razed and rebuilt.
Terminix has a long track record of losing badly in arbitration cases when Campbell Law PC is on the other side.
One might ask – why would Terminix want to have a jury trial in a county where almost everyone has caught wind of their fraudulent practices? Why would Terminix want to defend a jury trial in the very county where the State Attorney General and the State’s top regulator of termite companies have publicly declared or testified under oath that they investigated Terminix and found them GUILTY OF INTENTIONAL AND SYSTEMIC FRAUD in its termite prevention business?
Tom Campbell is the lead lawyer at the twelve-attorney firm that has secured more punitive damages awards against Terminix than any law firm in the country. And Campbell suspects he knows why Terminix would prefer jury trials in these particular cases. He comments, “Terminix wants to delay the day it loses these cases in arbitration, because it can’t appeal when it loses in arbitration. In this case, when we asked the Trial Judge to appoint an arbitrator, we explained that the rebuilding and loss of use damages in just one of the cases was probably $50,000,000. Plus, awarding punitive damages and attorney fees could push the award over $100,000,000. Simply put, Terminix wants to delay payment as long as they can.” Court trials and the appeals process that comes with it can draw out the case and postpone the money that Terminix will have to pay its victims.
Campbell also noted that, “while we are certain the arbitrator will fairly and independently view the facts in the present case, the very lawyer appointed to hear this case ruled in a prior arbitration that Terminix was guilty of systemic fraud and awarded punitive damages. The Terminix lawyer who attended the hearing correctly refused to object to Judge Windom’s selection of arbitrator, but his bosses are now going bonkers.”
Curiously, Terminix has spent decades fighting–even all the way to the United States Supreme Court–to force consumers into mandatory arbitration. However, when that customer is represented by Campbell Law, now Terminix desperately wants jury trials. The Alabama Supreme Court’s ruling sends the message that Terminix can’t have it both ways.
The enormity of the damages in these condominium cases was the likely primary driving force behind this desperate move to avoid the arbitral process for which Terminix has fought so hard to force upon its customers. Beyond that, it appears that Terminix is trying to keep these claims as quiet as possible, because its executives have routinely represented to investors that its claims problems in the Mobile Bay region are leveling-out or getting better when in fact Terminix’s leaders know the problem is much worse.
Not only are residential claims continuing to increase, but now non-residential claims have been filed by Campbell Law where, collectively, the damages could easily exceed many hundreds of millions of dollars in claims cost for Terminix. Indeed, just six days before the hearing made the subject of Terminix’s failed appeal, the CEO and CFO told investors in an earnings call that claims were not getting worse. They have talked to investors many times since and apparently still refuse to warn them of the massive financial impact of these non-residential claims. It seems like the same delay tactics and deceptive practices Terminix uses on its customers are used when interacting with the Company’s potential investors.
Terminix told the SEC that, “since the beginning of 2017, we have been served with an increasing number of Litigated Claims…. Some plaintiffs have sought to demonstrate a pattern and practice of fraud in connection with Litigated Claims and have sought awards, in addition to repair costs, which included punitive damages and damages for mental anguish. We defend these Litigated Claims vigorously, … however, we cannot give assurance that these mitigation actions will be effective….” It is true that “some plaintiffs” allege fraud–though the number is a lot greater than “some.”. However, Terminix ought to come clean and advise its investors that Alabama’s regulators often testify in Campbell Law cases that they investigated Terminix for years, inspecting hundreds of files and properties, and concluded that Terminix routinely commits fraudulent, illegal, and deceptive trade practices.
Campbell asks, “How can anyone from Terminix honestly represent that they don’t know whether they will keep losing when they already know that the State’s top regulator, who used to work for Terminix, has already testified that their company has committed fraud tens of thousands of times every year for decades? When confronted with the testimony, Terminix has not even tried to contradict the damning evidence, because it can’t.” Campbell explains that this is the first time in his 33 years of law practice that someone who claimed it was going to “vigorously defend” a claim actually presented no defense at all.