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GM ignition switch lawsuit dismissed amid fraud claims

By Jessica Karmasek | Jan 26, 2016

NEW YORK (Legal Newsline) - A federal judge on Friday dismissed a lawsuit filed against General Motors Co. over faulty ignition switches amid claims that the plaintiff was not completely truthful.

Judge Jesse Furman, for the U.S. District Court for the Southern District of New York, accepted a deal between the car maker and plaintiffs’ attorneys, who agreed to call off the trial -- the first of several bellwether trials -- after GM’s lawyers uncovered evidence suggesting the plaintiff, Robert Scheuer, had committed fraud.

On Jan. 18, GM attorney Richard Godfrey filed a motion to amend its witness list to add two witnesses: Robert Kleven, an Oklahoma realtor, and Anthony DeSarro, a forensic technology services manager.

Kleven, according to GM’s filing with the federal court, agreed to testify that Scheuer apparently altered or fabricated a $441,430.72 check stub from the federal government’s retirement fund, the Thrift Savings Plan, and then texted a photo of the stub to Kleven to “induce him” to allow Scheuer and his wife to live in their “dream house,” even Scheuer knew he didn’t have the funds to close.

DeSarro, Godfrey wrote in the filing, would verify through metadata and other means the authenticity of text messages, documents and data exchanged between Scheuer and Kleven over a period of several months in the summer of 2014.

“The substance of the text messages confirms Mr. Kleven’s recitation of events and overwhelmingly demonstrates Mr. Scheuer’s apparent fraud, which is central to the issues in dispute in this case -- issues that were the subject of GM LLC’s Motion in Limine No. 4 and that plaintiff himself put at issue before and during trial,” wrote Godfrey, an attorney for Chicago law firm Kirkland & Ellis LLP.

Godfrey said he and other GM attorneys weren’t made aware of the facts from Kleven until Jan. 11. Kleven reached out to GM after hearing a radio account about the start of the trial.

Scheuer, a mail man who claimed the ignition switch flaw disabled his air bag in a 2014 wreck, blamed GM for his family’s eviction from their “dream house.”

He argued that memory loss as a result of the accident caused him to misplace a $49,500 check for a down payment on the home.

But GM’s lawyers found -- thanks to Kleven -- that the Scheuer family actually was kicked out of the home because Scheuer faked the stub from his retirement fund showing proof of funds to close the sale.

“The proofs that GM LLC proposes to present would provide the jury with a first-hand, eyewitness account of plaintiff’s mental and physical condition in the months immediately following the accident, describe the true facts surrounding plaintiff’s eviction, and directly rebut the damages claims that plaintiff has put forward to the jury and to the Court,” Godfrey wrote in last week’s motion. “These same proofs also impeach plaintiff’s credibility and directly contradict his sworn testimony in this trial.

“This is particularly true where, as here, if Mr. Kleven and his documents are considered, a serious question is raised as to whether or not plaintiff -- through the positions he has taken in this Court and through his testimony and that of his wife -- misled his own counsel, as well as the Court and the jury.”

On Friday, Scheuer’s attorneys filed a notice of voluntary dismissal with the federal court. The same day, Furman signed off on the dismissal.

Robert Hilliard, of Texas law firm Hilliard Muñoz & Gonzales LLP and lead counsel for the owners of GM vehicles in the bellwether trials, called the dismissal “disappointing.”

“To have any trial end in such an unexpected and unforeseen way is disappointing. Especially one such as this where the concerns regarding the underlying safety of certain GM’s vehicles are legitimate and real,” he said in a statement.

“A jury’s decision regarding the existence of a defect will have to wait until the next trial. I’m looking forward to continuing this MDL litigation and getting ready for the next case.”

Co-counsel Steve Berman, of Washington state law firm Hagens Berman Sobol Shapiro, said notwithstanding the decision, he believes the evidence against GM “remains strong.”

“Until this point in the trial, we were entirely confident in the outcome, and it is nothing short of a disappointment that this happened,” he said in a statement.

“We believe that the fact of the matter remains: that GM is still at fault for a deadly defect that it attempted to conceal. And we are certain that this will not affect the outcome of future bellwether cases.”

Hilliard added, “For this multi-national company, after knowingly killing and injuring so many for over a decade, and literally re-writing the book on corporate cover ups involving a deadly safety defect to now throw its hands up and and say it has never seen anything like this rings just a tad hollow and seems disingenuous.”

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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Hagens Berman Sobol Shapiro, LLP Hilliard Munoz and Gonzales Kirkland & Ellis LLP

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