By Jordan W. Charness
Sometimes, things seem perfectly clear from one point of view, and might even make good common sense, but they can be legally wrong.
Take the case of a woman who sent a letter to the corporate headquarters of one of the major car manufacturers. She sent me a copy of the letter and asked for my comments. Her story is scary and simple and complicated all at the same time.
A few weeks ago, her car caught fire when the engine compartment burst into flames. The fire was put out by a concern citizen who had his own fire extinguisher. The fire department was called out but fortunately all they had to do was fill in a report. Even more fortunately no one was hurt in this incident – but it had repercussions nonetheless.
The car was towed to a dealership, and the following morning the service department advised the driver that they felt to the manufacturer was responsible and that there was nothing to worry about. The car would be repaired or replaced by the manufacturer.
Notwithstanding these promises, the driver decided to look into the issue of the ABS brakes since the ABS light came on moments prior to the fire incident. She discovered that there was a recall on the ABS module for her car.
The next day the service department called to say that since it was a fire the driver’s insurance company had to be called. She did just as they requested, but here’s where things got a little confusing: she was of the opinion of the repair would be covered either by the manufacturer’s new car warranty or as a result of the theory that the fire may have stemmed from the ABS brakes. She wasn’t sure why her insurance company had to get involved.
She decided to call the manufacturer’s customer service department and explain her situation. The person on the line said that as far as the manufacturer was concerned they were not responsible for this incident and that the insurance company would deal with the case. Further, if the insurance company wishes to proceed they can file a claim against the manufacturer.
He added that investigators would determine the true cause of the fire and reiterated that the driver should call her insurance company. The driver felt this was not being very cooperative and she called the manufacturer’s representatives again, this time speaking to a different person. She got no further with him than the first guy. She was very upset and continued to hold the manufacturer fully responsible for the damage to the car.
While her being upset is understandable, her anger was a little premature. In the first place there was no proof at that time that the fire was caused by the ABS brakes system. Just because there was some sort of safety recall does not necessarily mean that that was the cause of this fire.
The warranty on the other hand, is there to replace defective parts for the period that it covers. Once again, there was no proof as to what caused the fire. I’ve actually seen cases where both the insurance company and the manufacturer alleged, and sometimes proved, that the fire was intentionally started by the owner of the car! I’m not suggesting that was the case here but merely pointing out that it was too early for any final decisions to be made.
As a matter of fact, the correct place for the driver to present herself is to her insurance company. If the car was insured for fire it would be up to the insurance company to repair or replace the vehicle according to the terms of the insurance contract.
The insurance company would probably have the fire investigated and if they determined that it was indeed caused by a manufacturing defect they would exercise their rights in subrogation and take action against the manufacturer. (Subrogation is the automatic transfer of your legal rights to your insurance company after they have paid you for your claim. They are then allowed to exercise your right to sue the person who caused the damage so that they can be repaid for what they paid you.)
Since the manufacturer would be hesitant to accept responsibility for one of its parts setting the vehicle on fire (as this would lead to a recall), the most expedient thing for the driver to do is to turn the matter over to the insurance company and let them take whatever further action is necessary against the manufacturer once the real cause for the fire has been proven.