LANSING, Mich. - The Michigan Court of Appeals has reinstated a suit accusing Ford Motor Co. of fraudulently inducing an accident victim to accept an inadequate settlement in a product-liability dispute.
By a 2-1 vote, the panel ordered a trial to determine whether a broadly worded release for property damage signed by the victim was also intended to shield Ford from liability for her personal injuries.
Ford denies committing any misrepresentations. 'There was no fraud,' said John Thomas, the company's counsel for appellate litigation.
Ford asked the state Supreme Court May 6 to review the decision.
In 1987, Wanda Williams and her husband, Louis, a Ford engineer, bought a new Ford Taurus station wagon from Bill Brown Ford Inc. in Livonia, Mich. Nine months later, the right front wheel came off on a freeway while Wanda Williams was driving, causing the car to swerve, hit a guardrail and cross three lanes of traffic.
A mechanic who witnessed the crash observed a piece missing from the steering knuckle. Police reports listed the cause of the accident as dislocation of the car's right front wheel. Wanda Williams was treated for minor injuries.
Immediately after the accident, her husband called several people at Ford to report a possible defect. A few days later, a Ford claims supervisor contacted him and offered to reimburse the couple for the difference between the insurance payment for the Taurus and the price of a new Aerostar. Ford also offered to cover the cost of a rental car.
There was allegedly no discussion of compensation for Wanda Williams' injuries. The couple signed a broadly worded release, and Ford paid them $3,690.
Only after they accepted the settlement did they discover that Wanda Williams had suffered hairline fractures of her leg and would need orthopedic surgery. Her leg was immobilized for more than a year.
She sued Ford and the dealership for negligence and breach of warranty.
Ford denied any defect. Its engineer, who examined the vehicle, testified that the damage evident on the ball stud and cross-bolt indicated the steering knuckle was intact at the time of impact with the guardrail.
Based on the release, the case against Ford was dismissed before trial. A jury found in favor of the dealership.
The appeals court reinstated the suit against Ford after affirming the verdict in favor of the dealership.
A trial is necessary to decide if Wanda Williams had intended to give up any potential claims for personal injuries when she signed the release, at a time when the extent of her injuries was unknown, the majority opinion said.
Her lawyer, Ronald Karp of Livonia, said, 'They specifically put in writing they were paying for property damage and two weeks of car rental. They used a form release and never intended to cover personal injury.'
Thomas, Ford's attorney, said there was no evidence that Ford representatives committed fraud or made misrepresentations. Also, he said Bill Brown Ford was only the nominal defendant at the trial. 'For all practical effects, it was trial against Ford,' which provided the dealership's defense, he said, and the jury found no defect in the car.