Toyota Settles Utah Crash Sudden-Acceleration Lawsuit

Toyota Motor Corp. (7203) agreed to settle a sudden-acceleration lawsuit stemming from a 2010 fatal crash in Utah that was scheduled to go to trial in February, an attorney for the plaintiffs said.

“We can confirm that the case has been settled,” lawyer Mark Robinson said today in a phone interview. “We’ve agreed with Toyota in the settlement agreement that we will not discuss the terms of the settlement.”

Since November, the company has resolved at least two other unintended-acceleration lawsuits, agreeing to pay more than $1 billion to settle claims over economic losses to car owners and investors.

Robinson’s case was scheduled for trial Feb. 19 in federal court in Santa Ana, California, where other sudden-acceleration personal injury cases are consolidated. It covers the claims of the families of two people killed in the crash. Their Camry struck a rock wall when it exited the freeway and failed to stop. The driver, Paul Van Alfen, and a passenger, Charlene Lloyd, his son’s fiancee, died.

Van Alfen’s wife and son were injured in the crash. The families have said the accident happened when the vehicle unexpectedly accelerated and didn’t stop even after the driver slammed on the brakes.

“Toyota will not provide a comment at this time,” Celeste Migliore, a spokeswoman for the company, said in an e-mail. “There has been no filing with the court.”

10 Million

The company, based in Toyota City, Japan, recalled more than 10 million vehicles for problems related to unintended acceleration in 2009 and 2010, starting with a September 2009 announcement that it was recalling 3.8 million Toyota and Lexus vehicles because of a defect that may cause floor mats to jam accelerator pedals. The company later recalled vehicles over defects involving the pedals themselves.

The recalls set off hundreds of lawsuits by Toyota owners who contended the company drove down the value of their vehicles by failing to disclose or fix defects and by victims and families claiming deaths or injuries caused in crashes set off by sudden-acceleration events.

Federal cases were combined in a multi-district litigation before U.S. District Judge James V. Selna in Santa Ana. Selna set the Van Alfen suit as the first of the death or personal injury cases before him for trial.

Toyota last month agreed to settle the economic loss portion of the litigation. The company announced Dec. 26 it would take a writedown of $1.1 billion to cover the cost of the settlement. The total value of the settlement may reach $1.4 billion, including as much as $200 million in attorneys’ fees, according to lawyers for the plaintiffs.

Preliminary Approval

Selna granted preliminary approval to the settlement Dec. 28. Final approval will be determined following a fairness hearing set for June 14, he said.

Toyota also has paid $66.2 million in fines to the U.S. National Highway Traffic Safety Administration over how some of the recalls were conducted. The company in November agreed to pay $25.5 million to settle an investor lawsuit claiming Toyota’s alleged failure to disclose information on unintended acceleration problems caused the stock to plunge in 2010.

Van Alfen’s family won a court order last year sanctioning Toyota over the handling of evidence in the case.

Selna found that Toyota lawyers and technicians had removed a piece of plastic from the vehicle’s throttle control mechanism and inspected the car’s event data recorder without permission from the plaintiffs or their lawyers.

‘Cloud of Suspicion’

The judge ruled that he was going to inform the jury in the Van Alfen trial that Toyota’s actions violated rules about the preservation of evidence and cast a “cloud of suspicion” over testimony that might be offered by Toyota’s experts.

Selna said he would also inform jurors that they should treat the testimony of Toyota personnel who inspected the crashed 2008 Camry without plaintiffs’ lawyers present “with greater caution than that of other witnesses.”

Van Alfen’s lawyers and Toyota agreed last month to dismiss this order, according to the court docket.

The cases are combined as In re Toyota Motor Corp. Unintended Acceleration Marketing, Sales Practices and Products Liability Litigation, 8:10-ml-02151, U.S. District Court, Central District of California (Santa Ana).

To contact the reporters on this story: Bill Callahan in federal court in San Diego at Callahan@san.rr.com; Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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