Ford Motor Co. must defend a breach-of-contract claim involving a Lincoln Continental that was destroyed by fire, the North Carolina Court of Appeals has ruled.
The court unanimously reinstated a suit by the owner's insurance company, which contends the car's fuel system was defective.
Thomas Mangum bought a six-year extended service plan with his new 1990 Continental. While his wife was driving the car in 1995, the car stalled, and she walked home. When the couple returned to the car, they found it engulfed in flames.
Their insurance company, State Farm Mutual, paid the Mangums the value of the car and sued Ford for negligence, breach of warranty and breach of contract in Mecklenburg County Superior Court. The suit seeks reimbursement of about $13,000 paid to the owners, Ford lawyer Michael Washburn of Raleigh said.
Judge John Gardner dismissed the case without trial.
But in a decision by Judge John Lewis Jr., the appeals court reinstated the claim for breach of contract.
The court said opinion testimony by State Farm's fire expert was sufficient to require a trial to determine if the fuel system was defective under the extended service contract.
'In the expert's opinion, the fire was caused by the leaking of fuel from the fuel delivery system. The expert explained that the source of the leak was near the top of the engine, so that the leak could not have been caused by a foreign object that kicked up from the road,' it said.
Ford disputes the defect allegation. 'Nobody's really sure what caused the fire,' Washburn said, adding that the insurance company's expert 'doesn't know how it started, only where it started.'
He said Ford also will argue at trial that it cannot be held liable for the value of the Continental because 'the warranty calls only for replacement or repair of parts.'
State Farm's lawyer declined to discuss the case.