School Bus Manufacturer Found Liable for Fraudulent Misrepresentation Regarding Dangerous Vehicles.
Blue Bird Corporation is a major manufacturer of school buses.
BIRMINGHAM, Mich., Nov. 23, 2010 /PRNewswire via COMTEX/ -- On November 18, 2010, an Ottawa County, Michigan jury rendered a verdict in a business fraud lawsuit that Blue Bird Corporation committed intentional fraud, among other things, in that it knowingly manufactured 57 overweight and dangerous motor homes and for two years, between 2004-2006, sold them to unsuspecting customers.
Blue Bird manufactured and sold these coaches, designated Blue Bird "Wanderlodge M450 LXi", at prices starting in the $700,000's and reaching over one million dollars.
The jury verdict stated that Blue Bird made the fraudulent statements with the intent that the statements be relied upon by its customer and that Blue Bird intentionally created a false impression about its product intending that its customer would rely upon it.
The jury verdict was rendered in favor of Anthony McNeal, of Franklin, Michigan on his claims for Fraud, Silent Fraud, Breach of the Michigan Consumer Protection Act, and Breach of Implied Warranty.
Mr. McNeal's lead trial attorney in the commercial litigation case, H. Joel Newman, a founding shareholder in the Birmingham, Michigan law firm, Hyman Lippitt PC, believes it is critical that this information finally comes to light six years after the first dangerous vehicle was manufactured, because this company manufactures and sells school buses that transport thousands of our children every day.
The business fraud lawsuit alleged that the defects in these motor homes, which Blue Bird denied and/or failed to disclose, were known for years, even as it continued to manufacture and sell the vehicles caused, among other things, a disproportionate number of front tire problems, especially on the curb side of the vehicle. Newman believes at least one fatal accident was caused by the same defects the jury found. The fatal accident occurred in October, 2007 and is the subject of a secret settlement between Blue Bird and the family of the decedent. Shortly after the accident, in December, 2007, Blue Bird reported the problem to NHTSA. Customers were notified in March, 2008.
Blue Bird then conducted a recall which did not resolve the problem. Then it conducted a second phase of the recall that resulted in additional problems. Subsequently, a third phase recall was conducted. The jury found that the vehicle was still defective even after the third recall by Blue Bird.
During the commercial litigation, Company witnesses admitted knowing the coaches were built with tie rods which did not meet their specifications. According to the witnesses, when Blue Bird learned of the tie rod problem, it failed to warn customers or dealers promptly, and continued to manufacture and sell the coaches. They also admitted that failed tie rods could result in loss of steering control.
Company engineers admitted on cross examination that the company had weighed the coaches at the time of manufacture and knew of the overweight condition since 2004.
Company witnesses admitted on cross examination that the coaches should never have been built or sold in their overweight condition. Several of the engineers involved testified that the best fix would have been to reduce the weight of the coaches substantially.
According to the lawsuit, that would have been expensive, and was not done. The lawsuit alleged that in the end, the Company committed fraud by opting for a series of less expensive solutions. Hyman Lippitt PC, a law firm located in metro Detroit, serving Southeast Michigan, believes in the interim, Blue Bird committed fraud by misrepresenting the unloaded vehicle weights and the cargo carrying capacities of the coaches and continued to sell them.
Months before the fatal accident in October, 2007, Blue Bird sold its motor home division to Coachworks Holdings, Inc. Coachworks' president, Dale T. Carson, testified that Blue Bird had not disclosed that the vehicles exceeded their axle weight ratings until after Coachworks had purchased the business. Mr. Carson testified that Coachworks learned of the problem after the purchase and never manufactured a single Wanderlodge M450 LXi. Coachworks is now in Chapter 11 bankruptcy. Blue Bird is still a major manufacturer of school buses.
H. Joel Newman is a founding shareholder of Hyman Lippitt PC, a prominent Birmingham, Michigan law firm serving metro Detroit, is known for its commercial trial and business litigation practice. Hyman Lippitt attorney David Senawi acted as second chair in the trial and argued numerous legal motions.
H Joel Newman, PLLC is known for its commercial litigation and business trial practice and has successfully represented national, regional and individual clients in shareholder disputes, minority shareholder rights, shareholder liability, contracts, business torts, including RICO and fraud, zoning/land use, employment, claims against stock brokers, professional malpractice, family law and other areas involving trials.
SOURCE: Hyman Lippitt PC
H. Joel Newman is an attorney specializing in business litigation, commercial litigation and shareholder disputes. Practicing in Oakland County Michigan, Wayne County Michigan and Macomb County Michigan.