Silver State lawsuits

[fry]

Las Vegas Business Press, July 20, 2007

Silver State Helicopters misled student pilots, lawsuits allege

BY BEN STEPHENS

 

Silver State Helicopters may land itself behind a negotiating table -- again -- when settlement talks begin in a multi-plaintiff federal lawsuit filed by student pilots in Arizona who allege the company failed to deliver on its promise to train aspiring pilots.

 

A case filed in U.S. District Court in Phoenix was dismissed in April, and the parties involved are making efforts to negotiate a settlement, said Gina Paglione, vice president of Silver State's legal division. If an agreement can't be reached, the matter will go to arbitration in August or September, she predicted.

 

Paglione acknowledged that the lawsuit raises issues regarding the level of training provided to students -- similar litigation, including a case in Montana, was resolved through arbitration last year. Another case was dismissed in California because the court lacked jurisdiction, Paglione said, adding that it may be re-filed elsewhere.

 

Paglione called the accusations "normal contract claims," and said arbitration was selected by both parties in this case to save time and "money that's better spent elsewhere." Past settlements have included confidentiality agreements, she said.

 

In a copy of the lawsuit filed by Mesa, Ariz., attorney Randall Stone, a minimum settlement of $5 million, not including legal fees, is demanded on behalf of 18 plaintiffs who attended Silver State training schools in Arizona.

 

Former Silver State student Paul Mischel wants a "complete buyout" and costs he incurred when signing up for the program in Mesa in August 2004. He owes money for a partial education he says is worthless.

 

A paramedic in the Northwest Fire District of Arizona, Mischel retired from the district after 20 years in 2009.

 

Mischel attended a 2004 seminar held by Silver State in Tucson, and remembers being hooked by the presentation.

 

Mischel said in order to pay the $55,000 loan, he refinanced his house. For that price, he was supposed to earn seven certifications and licenses. But by the time he resigned in November 2006 -- 27 months into the program -- he had only three. He also had been charged $18,000 in additional fees by Silver State, which, with interest on his loan, put him more than $80,000 in debt.

 

Mischel and the other students say it's not for lack of dedication they didn't complete their training. The lawsuit alleges the flight schools lacked the resources (i.e. helicopters, flight simulators and instructors) to teach the 78-person class.

 

Mischel never completed his training, but the way the student loan was structured through Key Bank, the institution already paid Silver State in full within 10 months. He said he is paying on the loan because he doesn't dispute the bank's legitimacy.

 

Silver State has been establishing flight schools and acquiring commercial flight operations across the country. Its CEO, Jerry Airola, has his sights set on turning the 8-year-old company into a billion-dollar-a-year operation. For that reason, Stone hopes any settlement will send the company a message.

 

"I hope it would give notice," he said. "If they're going to expand, hopefully it'll change the way they do business."

 

In the company's defense, Paglione put the percentage of students who have filed suit against the company "right around 1 percent." She could not say how many students the company has trained overall or how many graduate annually.

 

http://www.lvbusinesspress.com/articles/20...iq_15562455.txt

[Barks111]

A great article and one that merits being 'pinned' to the top of the Helicopter Flight Training Forum.

 

Caveat Emptor.

[Autorotator]

Good article. Thanks fry.

 

--CM

[johnnyseko]

So going to school there is apparently frowned upon.

 

But what about working for them as a CFI/II? Just curious... Anyone work for them?

[ADRidge]

So going to school there is apparently frowned upon.

 

But what about working for them as a CFI/II? Just curious... Anyone work for them?

 

I know a job is a job, especially when you're looking to get the magic grand, but I've got to ask: why would you seek employment with a company like that? I guess I'm weird but I just don't care for their business practices and I wouldn't want to be a part of that system.

 

But I do recall someone flying for them... can't remember their sn though.

[johnnyseko]

why would you seek employment with a company like that?

 

I guess I'm just looking for a different point of view. Maybe some input from someone that works/worked there. I never really followed the constant bashing of SSH in the past and found it tiring to keep up with all the whining.

 

Who knows...maybe they pay well, are good to their employees, good equipment.....or not. They certainly do have quite a few locations and if I'm going to be mailing resumes all over, I don't see why I should leave them out.

[fry]

I guess I'm just looking for a different point of view. Maybe some input from someone that works/worked there. I never really followed the constant bashing of SSH in the past and found it tiring to keep up with all the whining.

 

Whining? All the criticism of SSH is not just disillusioned wannbe birdmen that couldn't cut it. Let me summarize what I see as a major issue in dealing with SSH.

 

The student borrows $70k, at a significantly high interest rate, and then the lender pays over the full amount to SSH within six months of the student beginning the program. This is for a program of instruction that generally takes at least eighteen months to complete.

 

The student has, in effect, loaned the money to SSH...at no interest and with no security.

 

The student is paying (or accruing) about $7,000 a year in interest on this loan while they are in training.

 

SSH appears to be controlled, as far as public records indicate, by one person. There does not appear to be any restrictions as to how that person can spend those advanced student loans funds. That controlling owner ran a water filter sales company before SSH and he has had legal actions taken against him related to that business (a pending bankruptcy action in Utah) and by customers of SSH (in Arizona, California and Montana).

 

It seems to me to be very reckless to lend this company that much money with no more gurantee than that if the company goes belly up the student might have a claim against the company's assets in a bankruptcy action. This scenario occurred in Florida a few years back with the Airline Training Academy and the students got nothing.

[wannabe heli pilot]

So going to school there is apparently frowned upon.

 

But what about working for them as a CFI/II? Just curious... Anyone work for them?

I don't work there yet as I'm still a student. All the instructors get alot of flight time and SSH's flight hour pays for pre/post flight, so 1hour hobbes is 2 hours pay. If you haven't, check out silverstatehelicopters.com then the employment section.

Edited August 2, 2007 by wannabe heli pilot

[johnnyseko]

It seems to me to be very reckless to lend this company that much money with no more gurantee than that if the company goes belly up the student might have a claim against the company's assets in a bankruptcy action.

 

 

I agree. Going there as a student is quite risky, shelling out all that cash with no guarantee.

 

I'm just looking for input from the other side. Someone that may be attending or working there that could give a better insiders perspective.

 

Probably shouldn't have hijacked this thread. Anyone with any info, feel free to send me a PM.

[fry]

http://www.lvbusinesspress.com/articles/20...iq_15794993.txt

 

Apparently, Silver State Helicopters could be facing further lawsuits for allegedly shortchanging its students, similar to the multi-plaintiff suit in Arizona highlighted in the Las Vegas Business Press' July 23 edition.

 

The father of a student at the company's Melbourne, Fla., training facility wrote in an e-mail that they are considering taking legal action. He said his son is among those who allege they are not receiving the flight training they paid for.

 

A student at the company's Tulsa, Okla., training facility may not be far behind in filing suit either, according to his e-mail. "I am being charge[d] for something I have not even used. I know how they feel," he wrote.

 

The Arizona suit is expected to go to arbitration in the coming months. Silver State has acknowledged a settlement of a similar case in Montana, and the vice president of its legal dvision has called these "normal contract claims."

 

Ben Stephens

 

Business Press

[fry]

The Arizona suit against SSH is going to arbitration because the contract calls for it but, an arbitration requirement in a contract may not be in the best interests of the consumer.

 

BusinessWeek

Arbitration Aggravation

 

Donald A. Burleson has a confession to make. He's the general counsel of Jani-King International Inc., an Addison (Tex.) commercial-cleaning operation with 12,500 franchisees worldwide. Because franchising is such a contentious business, companies in it frequently use arbitration agreements to keep disputes out of court. But Burleson doesn't like arbitration. One reason: These days, he says, it too closely resembles the courtroom litigation it was supposed to replace.

 

Burleson is not alone. Business attorneys say arbitration is losing its luster among a growing number of their clients. "There was this notion back in the 1980s that arbitration would be a more streamlined, more cost-effective mechanism to resolve disputes," says J. Cary Gray, at Looper Reed & McGraw in Houston. "I'm telling you that it's not."

 

In arbitration proceedings, a single arbitrator, or sometimes a panel of three, considers evidence and then issues a ruling. The proceedings are conducted in private, and the decision in most cases is not subject to court review. As originally conceived, the system was supposed to be faster and cheaper than going to court.

 

But often as not, Gray says, arbitration clauses seem to generate litigation, not skirt it. Parties can go to court to battle over whether arbitration is required; then, if it is, they can end up back in court fighting over the award or trying to get it enforced.

 

Discovery, the protracted pretrial exchanging of documents and taking of depositions, is supposed to be sharply limited in arbitration. The reality, however, is that many arbitrators are allowing extensive and expensive discovery. Attorneys bear some of the blame, says Larry A. Jordan, a retired judge who now handles arbitration and mediation at a private Seattle firm, Judicial Dispute Resolution. "They're used to a complete discovery," he says. "They feel obligated to do that."

 

Jordan's services aren't free. While taxpayers pick up judicial salaries, arbitrators draw their big paychecks from the parties who appear before them. Houston litigator David E. Warden says that for an arbitration he has scheduled later this year, the three panel members are each asking for retainers of $40,000. Another concern is that arbitrators, who often specialize in areas such as construction claims, may have trouble being truly impartial because they are beholden to the industry they work for. The worry is that the arbitrators, who want repeat business, won't want to offend either side and so will essentially split the baby to resolve disputes. Warden says his firm, Yetter & Warden, has energy industry clients who now regret some of the mandatory arbitration clauses they are subject to. Says Warden: "They're looking around and saying, 'Maybe the court system isn't so bad--at least you get due process at some point.'"

[Rob Lyman]

And yet another kind of lawsuit against SSH.

 

http://www.news4jax.com/news/13852806/detail.html

 

Victim's Family Files Lawsuit After Helo Crash

2 Killed In Ponte Vedra Beach Crash

 

 

The helicopter that crashed on Ponte Vedra Beach in late March, killing a flight instructor and student pilot, had just undergone repairs, according to the preliminary report of accident investigators.

 

The Robinson R44 helicopter crashed and burned on March 27, leaving 38-year-old Tamara Williams, of California, and her 24-year-old student Justin "Wyatt" Duncan, of Jacksonville, dead.

 

The National Transportation Safety Board's preliminary report stated the training flight out of Silver State Helicopters at Craig Airport was scheduled to be aboard a smaller Robinson R22 helicopter, but the R44 was substituted because of a scheduling conflict.

 

 

The report also stated the inspection of the wreckage found that a fitting on a part of the rotor-blade assembly "was disconnected and the attach hardware (bolt, lock nut, two washers, pal nut) was missing."

 

The preliminary report did not give a cause of the crash, but a lawyer representing the pilot's family told Channel 4's Jim Piggott the missing hardware could be responsible.

 

Five months later, Williams' family has filed a lawsuit against the company that owned the chopper.

 

The victim's family filed suit against Silver State Helicopters, saying the company failed to maintain the helicopter properly.

 

The suit states the company did not follow Federal Aviation Administration guidelines and that may have led to the crash.

 

Silver State Helicopters has not yet commented on the lawsuit.