The family of a Georgia woman killed when her GM car malfunctioned can try to wrest more money out of the carmaker despite having previously reached a settlement, a Cobb County judge ruled Saturday.
The judge rejected GM’s motion to dismiss the family’s bid to throw out the settlement, which they claim was negotiated in bad faith because the auto giant withheld crucial evidence.
Brooke Melton was killed in 2010 after losing control of a 2005 Chevy Cobalt when the car's ignition switch failed. Her parents, Ken and Beth Melton of Kennesaw, settled for $5 million in September. That was months before disclosures by GM to the National Highway Traffic Safety Administration and Congress contradicted earlier statements from the company.
Documents provided to the government showed that some employees had documented ignition switch issues as far back as 2001. The Meltons are claiming fraud, negligence and concealment in their new lawsuit against the automaker.
“They lied. They withheld documents. If we had known all this information before, we would never have settled in the first place,” the couple told Channel 2 Action News reporter Jim Strickland, in a July interview.
Lawyers for GM argued Saturday that allowing the family to relitigate the case would open the door to others to take court action even after they have reached an agreement.
State Court Judge Kathryn Tanksley said that’s not likely, because most plaintiffs don’t have fraud allegations on which to base a fresh lawsuit.
But she acknowledged that allowing a plaintiff to seek rescission — unmaking a contract between parties — could have ramifications.
“We are plowing new ground,” she said.
In a statement, GM said, “GM is disappointed in the court’s decision. We continue to believe that the parties reached a good faith settlement last year and that the court’s prior order dismissing all claims against GM with prejudice after that settlement prevents plaintiffs from pursuing the same claims a second time. GM will review the court’s order once it is entered and will evaluate its options.”
Lance Cooper, the attorney for the Meltons, said it was a big win for his clients. He said it is the first step in getting critical information from the automaker about what it knew about the ignition switch defect and when.
The death of Brooke Melton is credited with bringing the ignition switch problem to light. It has led to a recall of about 2.6 million cars suspected of having the problem, including the Cobalt and Saturn Ion.
GM faces more than 100 lawsuits related to the faulty switch, including several alleged deaths.
At the heart of the new lawsuit in the Melton case is the question of whether GM employees misrepresented themselves during testimony in the original litigation, which was filed in 2011.
Cooper showed the court clips of a deposition of Ray DeGiorgio, a lead design engineer for GM, in which he appeared to be unaware of design changes to the ignition switch made between 2005 and 2010.
It was later reported that DeGiorgio told a Congressional inquiry he had made changes to the part in April, 2006, but didn’t recall doing so when he gave the deposition.
That evidence would have made a difference in the outcome of the Melton case, Cooper said.
“We had none of (that evidence) because of (DeGiorgio’s) concealment,” Cooper said.
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