LANSING, Mich. - A plaintiff who accepted a $200,000 offer of judgment from Ford Motor Co. in a lawsuit involving an allegedly defective Probe cannot seek additional damages from Mazda Motor Corp. and Mazda Motor Manufacturing (USA) Corp., the Michigan Court of Appeals has ruled.
In a unanimous decision, the three-judge panel said Ford's payment of the offer precludes the plaintiff from seeking more compensation for the same incident and injuries.
Derek Hanley's 1989 Probe was the product of a joint venture in Flat Rock, Mich., between Ford and Mazda, in which Mazda designed and manufactured the car, and Ford marketed it, the court said. Ford now owns the Flat Rock plant.
After a two-vehicle collision, Hanley sued only Ford, contending his car was defective because an inadequate hinge mechanism allowed the hood to penetrate the plane of the windshield at the time of the crash.
Ford denied any defect but later made the $200,000 unilateral offer of settlement, according to Ford in-house counsel Michael O'Reilly. There were no negotiations before the offer, according to Hanley's attorney.
Just 26 days before accepting Ford's offer, Hanley filed a separate lawsuit against Mazda, asserting that Ford's payment did not provide 100 percent compensation for his injuries. His lawyer, B.A. Tyler of Southfield, Mich., said Mazda wasn't sued in the original case 'because Ford would not come forward initially and tell us who was involved in design and manufacture of the vehicle.'
'If he had (the information) earlier, we would have litigated it as one case,' he said.
Wayne County Circuit Judge Kirsten Kelly granted Mazda's motion to dismiss the case without trial.
The appeals court upheld that decision, saying Hanley's acceptance of Ford's offer bars his claim against Mazda as a matter of public policy.
A defendant's pretrial offer of judgment is similar in its binding effect to a trial judgment, the court said in an opinion by Judge Joel Hoekstra. 'Acceptance of an offer of judgment functions as a full and final adjudication on the merits,' the court said. 'In other words, a plaintiff is fully compensated and may seek no further recovery for the same injury from other entities.'
Ford's O'Reilly said: 'We wouldn't have offered $200,000 if the payment wouldn't have ended it. He chose to accept it and should be bound by it.
'The big picture is that had the appeal gone the other way, Ford would have paid twice.'
O'Reilly added that the decision may encourage settlement of future cases. Ford had an agreement to indemnify Mazda for claims, the court noted.
Tyler said Hanley hasn't decided whether to pursue the case further but said, 'based on the extent of the injuries, the $200,000 is less than I would ask the jury for at trial.'