In a scene cut straight out of a Hollywood movie, a tanker truck hauling 8,000 gallons of fuel caught fire on a Los Angeles Freeway. The fully engulfed truck came to rest under a freeway overpass. The explosive fire that followed completely destroyed the overpass and isolated numerous nearby businesses. The State of California filed suit against the truck owner, Van Dyk Tank Lines, seeking to recover the costs associated with re-building the overpass. WSHB was retained to defend Van Dyk and was able to settle the action for less than 50 cents on the dollar. As part of its investigation, WSHB discovered that the truck fire was caused by the defective design and installation of the interaxle driveline containing the U-joint.
Once the matter was resolved with the State, Van Dyk’s insurer retained WSHB to pursue recovery against Peterbilt – the manufacturer of the subject truck, and against Dana – the manufacturer of the subject U-joint. WSHB was able to quickly and favorably settle with Dana, but Peterbilt refused to budge.
The case against Peterbilt presented a number of difficult challenges. To begin, the truck and the U-joint had nearly 700,000 miles of use at the time of the loss. All experts agreed that U-joints almost always fail due to lack of lubrication (poor maintenance) or “wear and tear” (old age.) As part of its defense, Peterbilt asserted the truck was not only old, but the U-joint (recovered after the accident) showed no signs of lubrication. Peterbilt additionally attacked Van Dyk’s record-keeping and accused Van Dyk of ignoring recall letters sent on similar U-joint failures. Further complicating matters, the California Highway Patrol initiated a criminal investigation, subpoenaed Van Dyk’s records, and issued a report placing all blame for the fire on Van Dyk. Prior to trial, Peterbilt issued a statutory offer to compromise in the amount of $50,000 and refused to participate in mediation.
WSHB then successfully moved to exclude all reference to the CHP’s criminal investigation. Next, WSHB attorneys were able – over Peterbilt’s objection – to present evidence of Peterbilt’s recall of later model trucks with similar U-joint failures. After introducing their favorable testimony to the jury, the trial team then presented metallurgy, truck design and standard of care experts on product defect and maintenance issues. After a seven day trial, the jury rendered a verdict of more than $3.5 million against Peterbilt. Further, in light of WSHB’s pre-litigation strategies, WSHB will be entitled to recover its costs, including all expert fees, from Peterbilt.
This case highlights WSHB’s aggressive and highly successful approach to recovery. Where favorable settlement was possible (against Dana), WSHB engineered a prompt and fair resolution of the insured’s recovery claim. Where the recovery target (Peterbilt) refused to resolve a legitimate claim, WSHB worked with the insured and its crack team of trial-tested experts to present a successful case at trial in the face of multiple legal and factual challenges. Congratulations to the trial team of Mike Partos and Ashley Beagle!