Subrogation & Recovery Law Blog : Insurance Subrogation Lawyer & Attorney : Cozen O'Connor Law Firm : Property Damage & Insurance Commentary

On October 10, 2012, Toyota Motor Corp. announced a worldwide safety recall of over 7.4 million vehicles, including approximately 2.5 million vehicles sold in the U.S., for a fire hazard associated with the power window controls. The recall is the result of an investigation launched in June 2012 by the United States National Highway Traffic Safety Administration (“NHTSA”).  Furthermore, this action by Toyota, which follows shortly after its 2009-2010 recall of several million vehicles concerning unintended acceleration issues, represents one of the largest recalls in the company’s history.

Approximately a dozen of Toyota’s models are impacted by the recall, affecting model years ranging from 2007 to 2009. According to Toyota, the driver’s side power window controls in the recalled vehicles may experience a “notchy” or sticky feel during operation. Furthermore, Toyota advises that this condition “may be caused by an uneven application of the grease” used to lubricate the window controls during the supplier’s switch assembly process. Attempts by individuals to alleviate the issue by applying commercially available lubricants can cause smoke and/or fire due to the overheating and/or melting of the switch assembly.

Toyota models affected by the recall include noted brands such as the RAV4, Camry, Camry Hybrid, Highlander, Highlander Hybrid and the Corolla. Additionally, between 2006 and 2009, Toyota produced a number of Pontiac Vibes for General Motors (“GM”) under a production agreement. Given the fact that the Pontiac Vibe shares the same body and component parts manufactured for the Toyota Matrix, it is expected that additional action will be taken by GM with respect to this vehicle.  Yesterday, it was reported that GM will be sending notifications to the owners of over 47,000 Pontiac Vibes affected by this issue. If you have a vehicle fire case involving a Toyota or Pontiac Vibe, you should consult Toyota’s recall notice or contact Pontiac Customer Care at: 1-800-762-2737.

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On April 21, 2011, the U.S. Consumer Product Safety Commission (“CPSC”) announced a recall of about 1.2 million Marineland “Stealth” and “Stealth Pro” aquarium heaters. The subject aquarium heaters are Marineland “Stealth” brand heaters of various model numbers and wattages, sold through their parent company, United Pet Group. The heaters were sold at pet stores and on websites from January 2004 through February 2011.

The “hazard” identified in the recall notice is a wiring problem that can cause the heaters to overheat during normal use, which in turn can lead to a fire hazard. The overheating can also cause the heater to shatter or the glass of the aquarium to break, resulting in a laceration hazard. The recall states that United Pet Group has received reports of 38 fires resulting in property damage and 45 reports of broken aquarium glass.

If you have a case where a Marineland Stealth or Stealth Pro aquarium heater is associated with a fire, you should consult the CPSC’s recall notice to determine if your model is one listed on the recall. The heaters associated with this recall are black plastic tubes and have a temperature adjustment knob at the top. They have also been sold as part of aquarium starter kits.
 

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Toyota’s unprecedented recall of some 8.1 million vehicles will impact consumers, businesses, and their insurance carriers all over the country.  Since 1999, an estimated 2,000 complaints of sudden unintended acceleration in Toyota and Lexus vehicles have been reported to the National Highway Traffic Safety Administration ["NHTSA"].  On February 9, 2010, Toyota issued a global recall of its 2010 Prius hybrid after over 100 complaints of “delayed brake performance” were filed with the NHTSA.   [See, timeline of recalls.]

Damages to persons and property as a result of these apparent defects will result in numerous insurance claims scattered throughout the fifty states.  The breadth of this recall presents significant subrogation and recovery potential.  But the potential complexity and fragmentation of claims raises obstacles to efficiently and effectively prosecuting many separate cases. 

Mutual cooperation agreements allow carriers to maximize recovery while minimizing and sharing expenses.  Cooperation allows for the appointment of review masters and experts to determine liability and damages related to prior, existing, and future claims.  These claims may include payments to insureds for property damage, personal injury, worker’s compensation benefits, business interruption, and loss of goodwill.

It is anticipated that the insurance industry will act quickly and expediently to review past and existing claims related to matters that involve Toyota vehicles.  Given the expanse of the recall effort by the automaker and the efforts directed by Toyota to rectify manufacturing and design defects, it is possible that the automaker will also seek a forum for cost effective and expedient resolution of claims related to the defective vehicles. 

The availability of multi-district litigation modules and mutual cooperation agreements combined with the efforts of the automaker will effectively endow both the insurance industry and the automaker with a viable alternative to multiple forum litigation.

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One of the first things to do upon receipt of a new subrogation loss involving a product is to check to see if there are any recalls of that product.  Ultimately, if your cause and origin investigator determines the product is the cause of the loss, the recall can greatly strengthen your subrogation case.  It provides effective cross-examination of the manufacturer’s employees and experts, as well as substantial leverage in settlement discussions. 

The United States Consumer Product Safety Commission (“CPSC”) regularly advises the public of product recalls and is an excellent resource.  Recently, the CPSC issued the following product recalls which may be relevant to future subrogation claims:

On July 30, 2008, Frigidaire announced a voluntary recall of clothes washers due to a fire hazard.  An internal defect in the washers’ drain pump case overheats and presents a fire hazard.  This recall involves several models within the six brands manufactured by Frigidaire which were sold nationwide between February 2009 and May 2009.  The Frigidaire brands subject to this recall include Crosley, Frigidaire, Kelvinator, Kenmore, Wascomat and White-Westinghouse. 

On July 21, 2009, Fiesta Gas Grills announced a voluntary recall of its Blue Ember grills, which are fueled by propane.  These gas grills are manufactured by Unisplendor Corporation and Keesung Corporation, both in China. Fiesta is the national importer.  The hose of the gas tank can get too close to the firebox, exposing it to heat and creating a fire hazard. The grills were sold nationwide between November 2006 and June 2007 and in Canada between November 2006 and May 2009. 

On August 11, 2009, Griffin International issued a voluntary recall on Wii battery recharge stations.  Psyclone Essentials and React Wii 4-dock battery recharge stations are recalled due to a fire hazard. The battery pack can overheat, creating a fire hazard. The battery packs subject to this recall were sold at Target, Toys R Us and on amazon.com from January 2008 to July 2009.

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