Lots of lawyers still don’t realize there are a number of General Motors (GM) vehicles with the defective ignition switch that are not being covered by the GM Compensation Fund. There have been several incidents that put this exclusion issue in a rather clear perspective. One of the cars with the defective ignition switch was being driven by a woman who was involved in a 2005 crash. In 2005, the woman crashed her Pontiac Grand Am. She went into a coma did not recover. She died in March 2012. General Motors recalled her car for a faulty ignition switch. Ben Pillars, her husband, thought the car was included in the compensation fund. So he submitted a claim on his wife’s behalf to the fund. It was rejected because the Pillars’ car was not one of the specific cars covered by the fund.
As we have previously written, the GM Compensation Fund covers only 2.59 million vehicles with the ignition switch defect. GM has consistently said that a similar defect detected in an additional 10 million vehicles, including the model Mrs. Pillars was driving, is ineligible for compensation. The automaker justifies that position by saying the company recalled the cars immediately after discovering the defect and, further, that GM made no efforts to hide the defect. Frankly, I believe GM should have either included these cars in the current compensation fund or set up a new one. Since it’s too late for the current fund, the proper and right thing to do is for GM to set up a new fund.
As you may recall, U.S. Senator Richard Blumenthal encouraged GM’s Chief Executive Officer Mary Barra last year to expand the compensation fund to include more cars recalled for a defective ignition switch. During a hearing, Sen. Blumenthal stated:
I believe now more than ever that all of the injuries and deaths caused by defective ignition switches in GM cars should be covered by the compensation fund. All of those other models suffered from an eerily and strikingly similar malfunction that caused death and casualties. There’s no logical or factual reasons that those victims should be excluded.
Jim Cain, speaking for GM, said the compensation fund’s scope is fair because the ignition switches excluded were a different design and discovered under different circumstances. He said the compensation fund gave victims and their families a route to seek compensation not available to them in the courts. Cain added that was because GM has legal immunity from lawsuits related to accidents that occurred before the company emerged from bankruptcy on July 10, 2009. Thus far, a victim of a pre-bankruptcy crash, excluded from the fund, hasn’t been allowed to sue GM. In a recent article, Bloomberg News stated:
For years, Pillars wondered what caused his wife’s Grand Am to veer across a wintry Michigan highway in 2005 and into the path of a Toyota minivan. A photograph taken shortly after the accident shows the key in the off position. It wasn’t considered important at the time, he said. But when GM announced the recall that included the Grand Am last June, it all clicked into place, Pillars said in an interview. He found the photos and other clues in a file cabinet he’d kept of all her records since her March 2012 death. “It eased my mind that it wasn’t her fault,” he said. “She didn’t have a chance in that car.” Pillars submitted a claim to the compensation fund and it was rejected in March. Applications to the fund closed Jan. 31, so no additional cases will be considered. At last count the fund had processed 4,261 claims and had another 81 remain under review. So far, 3,027 have been found ineligible and another 872 deficient.
Other persons have also found out that GM was excluding a huge number of cars from the fund. One such person, Doris Phillips, found out she was also ineligible for compensation because the car her husband was driving when he crashed wasn’t on the list of those with the defect that GM hid for years. In October 2005, another person, Adam Powledge, lost control of his 2004 Chevrolet Malibu near Houston and hit a metal pole in a highway median. The car caught fire, killing him and four of his children, ages 6-12.
In 2007, Mrs. Phillips sued GM, alleging that an electrical malfunction caused her late husband to lose control of the Malibu. GM lawyers said this explanation was impossible because all of the vehicle’s systems would have had to fail at the same time. In 2010, she settled her lawsuit against GM for a fairly low number.
GM recalled the 2004 Malibu last year. It was the very same model Mrs. Phillips’ husband was driving. The recall was because of a defective ignition switch. The compensation fund allows people to file a claim even if they settled their cases years ago. But Mrs. Phillips didn’t submit a claim because she was told the Malibu defect wasn’t covered by the fund. Had the vehicle been eligible, the family could have received at least $5 million in settlement for the deaths.
GM spokesman Cain said that because the Phillips’ vehicle was destroyed, there’s no “black box” data that “might shed light on the accident’s cause.” GM claims it’s unaware of any evidence that the crash involving the Phillips car was caused by a defective switch or loss of power. Mrs. Phillips is now attempting to reopen her case, despite the settlement, and hopefully she will be successful.
Ben Pillars, who says that he just wants to get some sense of closure and fairness, had this to say in a recent interview:
You look at the list of recalled cars, it’s quite extensive. How can they only pick out certain makes, models and years when it expands across such a vast number of years and a vast number of models? Why wouldn’t they say, anything with a key switch, we have to take it in? That’s the final step, for them to stand up and say we’re sorry it happened. We knew. We should have fixed it.
I can certainly understand Mr. Pillar’s frustration. GM had no problem hiding a serious safety defect from the government and the public, including those persons driving the cars with the defect known only to GM, but the automaker is now attempting to avoid paying claims. This automaker has shown that the safety of its customers has been far down the company’s list of priorities. I hope that GM will do the right thing and set up a compensation fund for the cars that are not covered by the fund being administrated by Ken Feinberg.
Source: Insurance Journal
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