LEGAL FILE

Lawyer: N.J. store will pay $3 million punitive damage award for rollover

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A New Jersey dealership has agreed to pay a $3 million punitive damage award for failing to warn the owner of a 2004 Chevrolet TrailBlazer involved in a rollover accident that a tire was going bald, a lawyer for the injured passengers said.

Flemington Buick-Chevrolet-GMC in Flemington, N.J., sold and regularly inspected and serviced the SUV but failed to follow up or warn the owner when a technician noted a serious problem with the right rear tire, according to court documents.

"It is one of the largest punitive damages verdicts against a dealership in New Jersey," said plaintiffs' lawyer Kevin Barber of Morristown. "It exposed that the dealership was making fraudulent representations" about how it inspected vehicles.

A lawyer for the dealership didn't respond to requests for comment.

According to documents from the Superior Court of New Jersey Appellate Division, Roy Allen bought the TrailBlazer new from Flemington. He also bought GM Major Guard extended service and GM Smart Care maintenance contracts. The dealership last serviced the vehicle three days before the April 2009 accident in which the tire blew out on Interstate 95 in Virginia while the plaintiffs, members of the Allen family, were traveling to Florida.

On that service visit, technicians failed to review prior service records and inspection reports that showed problems with tread depth and wear patterns, court documents say. When the tire failed, the SUV rolled over multiple times, shattering the windshield. Inspection of the tire after the accident found a hand-sized bald spot.

A jury awarded plaintiffs $2 million in compensatory damages for their injuries and $5.5 million in punitive damages. The trial judge reduced the punitive damage award to $3 million.

On appeal, the dealership didn't contest the compensatory damage award. However, it argued that its failure to detect the bald spot was at worst gross negligence, not the more serious "reckless indifference to customer safety" that would justify punitive damages.

But the three-judge appeals panel rejected that argument and unanimously upheld the $3 million award.

The panel cited evidence, including a service adviser's admitted failure to follow company policy requiring review of prior service records. It also said the parts and service director and the service manager admitted that the service adviser should have recommended replacing the tire.

"In short, there was sufficient evidence for the jury to conclude that Flemington was wantonly indifferent to a high probability of injury when it failed to recommend tire replacement," the panel said.

It quoted the trial judge's determination that the dealership's conduct "was not a single mistake, nor an isolated incident, and cannot be characterized as a mere accident."

At the same time, the appeals panel rejected the plaintiffs' bid to restore the jury's full $5.5 million punitive damage award, saying the trial judge had properly considered the applicable law and circumstances of the case in reducing the amount.

You can reach Eric Freedman at freedma5@msu.edu.

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