CHARLES SILVAS and GRACE SILVAS, Plaintiffs, vs. GENERAL MOTORS, LLC, G. RICHARD WAGONER, JR., FREDERICK A. HENDERSON, EDWARD WHITACRE, JR., DAN AKERSON, AND MARY BARRA Defendant.
The Silvas are suing General Motors and several of its executives over faulty ignition switches that have been blamed for several fatal accidents involving Chevy Cobalt and Pontiac G5 vehicles.
Content
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! ! EXHIBIT “E”
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CAUSE NO. 2014CCV-60443-4 CHARLES SILVAS and GRACE SILVAS, Plaintiffs, vs. GENERAL MOTORS, LLC, G. RICHARD WAGONER, JR., FREDERICK A. HENDERSON, EDWARD WHITACRE, JR., DAN AKERSON, AND MARY BARRA Defendant. § § § § § § § § § § § § IN THE COUNTY COURT
AT LAW NO. 4
NUECES COUNTY, TEXAS
PLAINTIFFS’ SECOND AMENDED PETITION TO THE HONORABLE JUDGE OF SAID COURT: COME NOW Charles Silvas and Grace Silvas (together, “Plaintiffs”) before the Honorable Judge of this Court and file this the second amended petition against General Motors, LLC, G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra and in support would show the Court as follows: I. DISCOVERY CONTROL PLAN 1. Pursuant to the provisions of Texas Rule of Civil Procedure 190.3, Plaintiffs
propose to conduct discovery according to Discovery Control Plan Level 3. II. PARTIES 2. 3. Plaintiff Charles Silvas is an individual who resides in Nueces County, Texas. Plaintiff Grace Silvas is an individual who resides in Nueces County, Texas.
Plaintiffs’ Second Amended Petition
1.
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4.
Defendant General Motors, LLC (hereinafter referred to as “GM”) is a Delaware
limited liability company with its principal place of business in Michigan. The sole member of GM is General Motors Holdings, LLC, a Delaware limited liability company with its principal place of business in Michigan. General Motors Holdings, LLC’s sole member is General Motors Company, a Delaware corporation with its principal place of business in Michigan. General Motors, LLC may be served with process through its registered agent for service of process in the State of Texas, Corporation Service Company d/b/a CSC-Lawyers Incorporating Service Company, 211 E. 7th Street, Suite 620, Austin, Texas 78701-4234. 5. Defendant G. Richard Wagoner, Jr., was the Chief Executive Officer of General
Motors, LLC from June 1, 2009 through March 30, 2009. The court has jurisdiction over Defendant Wagoner, a nonresident, because Defendant Wagoner purposefully availed himself of the privileges and benefits of conducting business in Texas by committing the torts detailed below, which are the subject of this suit, in whole or in part in Texas. Defendant Wagoner may be served with process at his address, 1155 Quarton, Rd., Birmingham, Michigan 48009. 6. Defendant Richard Frederick A. Henderson was the Chief Executive Officer of The court has
General Motors, LLC from March 30, 2009 through December 1, 2009.
jurisdiction over Defendant Henderson, a nonresident, because Defendant Henderson purposefully availed himself of the privileges and benefits of conducting business in Texas by committing the torts detailed below, which are the subject of this suit, in whole or in part in Texas. Defendant Henderson may be served with process at his address, 646 E. 6th Street,
Hinsdale, Illinois 60521-4713.
Plaintiffs’ Second Amended Petition
2.
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7.
Defendant Edward Whitacre, Jr. was the Chief Executive Officer of General
Motors, LLC from December 1, 2009 through September 1, 2010. The court has jurisdiction over Defendant Whitacre, a nonresident, because Defendant Whitacre purposefully availed himself of the privileges and benefits of conducting business in Texas by committing the torts detailed below, which are the subject of this suit, in whole or in part in Texas. Defendant Whitacre may be served with process at his address, 325 Terrell Road, San Antonio, Texas 78209. 8. Defendant Dan Akerson was the Chief Executive Officer of General Motors, LLC
from September 1, 2010 through January 15, 2014. The court has jurisdiction over Defendant Akerson, a nonresident, because Defendant Akerson purposefully availed himself of the privileges and benefits of conducting business in Texas by committing the torts detailed below, which are the subject of this suit, in whole or in part in Texas. Defendant Akerson may be served with process at his address, 1326 Ballantrae, Lane, McLean, Virginia 22101. 9. Defendant Mary Barra is the current Chief Executive Officer of General Motors,
LLC. The court has jurisdiction over Defendant Barra, a nonresident, because Defendant Barra purposefully availed herself of the privileges and benefits of conducting business in Texas by committing the torts detailed below, which are the subject of this suit, in whole or in part in Texas. Defendant. Barra may be served with process at her address, 18938 Bella Vista, Ct.,
Northville, Michigan, 48168. III. JURISDICTION AND VENUE
Plaintiffs’ Second Amended Petition
3.
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10.
Plaintiffs seek monetary relief under $75,000.00. The Court has jurisdiction over
the lawsuit because the amount in controversy meets the Court’s minimum jurisdictional requirements. 11. The Court has personal jurisdiction over GM given that its contacts with the State
of Texas are sufficiently continuous and systematic so as to justify the exercise of jurisdiction over it for all purposes. 12. Venue is proper in Nueces County, Texas, pursuant to Tex. Civ. Prac. & Rem.
Code section 15.003, in that Plaintiffs resided in Nueces County at the time the causes of action accrued. 13. Additionally, venue is proper in Nueces County, Texas, pursuant to Tex. Civ.
Prac. & Rem. Code section 15.002(a)(1), in that all or a substantial part of the events giving rise to Plaintiffs’ claims occurred in Nueces County. IV. PRELIMINARY STATEMENT 14. This lawsuit arises out of the warranty and recall obligations of GM, both arising
from its predecessor and GM imposed by court order. While extolling the safety and reliability of its vehicles, GM was concealing a defect that caused its vehicles to have a sudden engine power loss. Try as it might to conceal this defect, it came to light in a recent recall. As a result, the value of these vehicles has been significantly diminished. The Plaintiffs seek recovery for this diminution in value of their GM vehicles. V. BACKGROUND FACTS A. Plaintiffs’ Vehicles
Plaintiffs’ Second Amended Petition
4.
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1. 15.
Recall notices raise issues concerning GM vehicles
On February 7, 2014, General Motors filed a Defect Notice to recall 2005-2007
Model Year Chevrolet Cobalt and 2007 Pontiac G5 vehicles. The Defect Notice stated the ignition switch torque performance in these vehicles might not meet GM’s specifications resulting in the non-deployment of airbags in crash events. The notice called for the recall of approximately six hundred thousand vehicles. 16. Seventeen days later, on February 24, 2014, GM issued a notice to the National
Highway Traffic Safety Administration (“NHTSA”) which expanded the recall to include 20032007 Saturn Ions, 2006-2007 Chevrolet HHRs, 2006-2007 Pontiac Solstices and 2007 Saturn Skys, bringing the number of vehicles affected by the recall to 1,367,146. This NHTSA notice furnished information on hand with GM dating back 10 years, and dealt directly with GM’s recall obligations and product warranties which have been known to GM for many years. 17. The notice dated February 24, 2014 provided a chronology that purportedly
detailed GM’s knowledge and actions related to the ignition switch. 2. 18. Remarkably, GM knew of the condition since 2001
As early as 2001, during pre-production development of the Ion, GM became
aware of issues relating to ignition switch “passlock” system. The 2001 report stated the problem included a “low detent plunger force” in the ignition switch 19. In 2003, before the launch of the 2005 Cobalt, GM became aware of incidents
wherein the vehicle engine would suddenly lose power in the event the key moved out of the “run” position when the driver inadvertently contacted the key or steering column. An investigation was opened and, after consideration of lead-time required and the cost and
Plaintiffs’ Second Amended Petition
5.
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effectiveness of potential solutions, the investigation was closed with no action taken. 20. Notably, the recalls did not provide immediate relief for vehicle owners. Rather,
GM disclosed that dangerous defects existed and stated that GM would implement a repair plan, without specification. 21. Throughout 2005, GM received similar field reports of vehicles losing engine
power when the key moved out of the “run” position. A proposal was approved to redesign the key head, but later cancelled. Instead of recalling the vehicles to replace the defective ignition switches, GM issued a Safety Bulletin (the “Bulletin”). The Bulletin recognized that there was a potential for the driver to inadvertently turn off the ignition due to low ignition key cylinder torque/effort. 22. Although GM developed an insert for the key ring that changed it from a slot
design to a hole design, to prevent the key from easily jogging the ignition switch out of the run position, the redesigned ignition switch was not installed in vehicles until the 2007 model year. 23. 24. The defective ignition switch has been linked to numerous crashes and fatalities. Given the vast number of instances of sudden engine power loss and non-
deployment of airbags related to the defective ignition switch and GM’s knowledge of many or all of the instances, GM should have aggressively taken remedial measures to address these defects. GM failed to do so. In fact, this first recall was not implemented until 2014 – nearly ten years after instances of engine power loss. 25. The ignition switch defect in GM vehicles has adversely affected the company’s
reputation as a manufacturer of safe, reliable vehicles with high resale value, as compared to vehicles made by its competitors. In the wake of the news reports about this serious problem,
Plaintiffs’ Second Amended Petition
6.
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GM customers and consumers generally are – as they should be – skeptical about the quality and safety of GM vehicles. Indeed, it is likely that the entire fleet of GM vehicles has been stigmatized by this defect, but most specifically the vehicles directly affected by this recall and certainly no consumer has confidence that after a 10-year fraudulent concealment scheme was brought to light GM has now told any more than they must. Every GM product is now tainted by this fraud. 26. GM’s intentional and deliberate mishandling of the ignition switch defect,
including but not limited to its denial of any problem, even after receiving a substantial number of reports of sudden engine power loss, including ones that resulted in serious physical injury or death, and all other allegations set forth herein, has adversely affected the company’s reputation as a manufacturer of safe, reliable vehicles with high resale value, as compared to vehicles made by its competitors. GM customers and the general public have reason to be skeptical about whether GM is coming forth with truthful information about the sudden loss of power defect. Likewise, GM customers and the general public are left to wonder whether safety concerns about GM vehicles are limited to this particular problem. 27. Moreover, some vehicle owners, including Plaintiffs, have driven their cars less
than they otherwise would due to fear of being in an accident. 3. 28. G. Richard Wagoner, Jr. and GM
Wagoner served as GM’s Chief Executive Officer from June 1, 2009 through
March 30, 2009, during the critical manufacturing period for many of the recalled vehicles. 29. As the CEO of GM, Wagoner had a duty to protect the public from dangerous and
defective vehicles. In a complete disregard of his duties, Wagoner drove the production of the
Plaintiffs’ Second Amended Petition
7.
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recalled vehicles, ignored the alarming number of vehicles losing power due the faulty ignition switch, refused to implement a repair to the ignition switch, actively mislead the general public regarding the safety of the recalled vehicles and refused to recall the subject vehicles. 30. As a proximate result of Wagoner’s actions and omissions the Plaintiffs have
suffered the damages described herein. 4. 31. Frederick A. Henderson and GM
Henderson served as GM’s Chief Executive Officer from March 30, 2009,
through December 1, 2009. 32. As the CEO of GM, Henderson had a duty to protect the public from dangerous
and defective vehicles. In a complete disregard of his duties, Henderson ignored the alarming number of vehicles losing power due the faulty ignition switch, refused to implement a repair to the ignition switch, actively mislead the general public regarding the safety of the recalled vehicles and refused to recall the subject vehicles. 33. As a proximate result of Henderson’s actions and omissions the Plaintiffs have
suffered the damages described herein. 5. 34. Edward Whitacre, Jr. and GM
Whitacre served as GM’s Chief Executive Officer from December 1, 2009,
through September 1, 2010. 35. As the CEO of GM, Whitacre had a duty to protect the public from dangerous and
defective vehicles. In a complete disregard of his duties, Whitacre ignored the alarming number of vehicles losing power due the faulty ignition switch, refused to implement a repair to the ignition switch, actively mislead the general public regarding the safety of the recalled vehicles
Plaintiffs’ Second Amended Petition
8.
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and refused to recall the subject vehicles. 36. As a proximate result of Whiteacre’s actions and omissions the Plaintiffs have
suffered the damages described herein. 6. 37. Dan Akerson and GM
Akerson served as GM’s Chief Executive Officer from September 1, 2010,
through January 15, 2014. 38. As the CEO of GM, Akerson had a duty to protect the public from dangerous and
defective vehicles. In a complete disregard of his duties, Akerson ignored the alarming number of vehicles losing power due the faulty ignition switch, refused to implement a repair to the ignition switch, actively mislead the general public regarding the safety of the recalled vehicles and refused to recall the subject vehicles. 39. As a proximate result of Akerson’s actions and omissions the Plaintiffs have
suffered the damages described herein. 7. 40. Mary Barra and GM
Mary Barra, as a powerful automotive executive and officer at GM, was in a
position where she could have helped countless GM vehicle owners by initiating a recall of the subject vehicles. As early as December 2013, Ms. Barra “knew that there was an issue being analyzed.” Instead of taking immediate action, she looked past the dangerous and defective nature of the subject recalled vehicles and used her position of power to continue selling these vehicles to the public. 41. Mary Barra earned her Master of Business Administration degree from Stanford
Graduate School of Business in 1988. She began working for GM at the age of 18 and held a
Plaintiffs’ Second Amended Petition
9.
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variety of engineering and administrative positions.
In February 2008 she became Vice
President of Global Manufacturing Engineering. In July 2009 she advanced to the position of Vice President of Global Human Resources, which she held until February 2011, when she was named Executive Vice President of Global Product Development. On January 15, 2014 Barra was named Chief Executive Office or General Motors, LLC. 42. As the CEO of GM, Mary Barra had a duty to protect the public from dangerous
and defective vehicles. In a complete disregard of her duties, Barra refused to recall the subject vehicles, and by doing so endangered the lives of thousands of individuals. 43. As a proximate result of Barra’s active participation and leadership in the sale of
the recalled vehicles the Plaintiffs have suffered the damages described herein. 8. 44. The damage done
Plaintiffs seek damages suffered by the Plaintiffs as a result of GM’s conduct,
including but not limited to: (i) loss of use of the vehicles; (ii) reimbursement of out of pocket costs for, among other things, alternative transportation, prior repairs to address accelerator problems, floor mats that had to be discarded, etc.; (iii) diminution in resale value of the vehicles; and (iv) an increased risk of physical harm. 45. Plaintiffs also seeks injunctive relief including: (i) repairs to remove the
dangerous condition; (ii) an extension of warranty coverage covering components of the ignition switch system; and (iii) individual notice to each owner affected by the ignition switch recall disclosing the dangerous condition. B. 46. Plaintiffs’ Experiences Plaintiffs own a 2006 Chevrolet Cobalt, a model that is subject to the ignition
Plaintiffs’ Second Amended Petition
10.
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switch recall. 47. Plaintiffs Silvas experienced incidents of sudden engine power loss beginning in
2010. The vehicle was inspected and upon information and belief, the ignition switch was replaced. Despite the repair, the Plaintiffs continue to experience incidents of sudden engine power loss. 48. Plaintiffs Silvas chose the 2006 Chevrolet Cobalt over competing brands’
vehicles, at least in part, because of GM’s reputation for selling cars with higher resale, as compared to vehicles manufactured by its competitors. 49. Plaintiffs Silvas have lost trust in the GM and Chevrolet brand names, and the
Cobalt in particular. They are skeptical that their Cobalt will ever be completely safe. 50. Plaintiffs Silvas also believe that the resale value of their Chevrolet Cobalt will
decrease and diminish due to general consumer skepticism about GM and Chevrolet vehicles. 51. Plaintiffs Silvas are concerned for their safety and the safety of others. They
believe Defendant’s actions and omissions have caused economic harm to them, namely damage to their property and devaluation of their Chevrolet Cobalt. 52. Plaintiffs Silvas resided in Nueces County at the time their breach of warranty
causes of action accrued. VI. Causes Of Action Against GM A. 53. 54. Claims Arising Out Of Warranty And Recall Obligations Plaintiffs re-allege all preceding allegations as if fully set forth herein. Plaintiffs purchased their vehicle, a 2006 Chevrolet Cobalt, from GM. Plaintiffs
chose the 2006 Chevrolet Cobalt over competing brands’ vehicles because of GM’s reputation
Plaintiffs’ Second Amended Petition
11.
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for selling cars with higher resale, as compared to vehicles manufactured by its competitors. In connection with the sale of the vehicle to Plaintiffs, GM made representations about the quality and characteristics of the vehicles by, inter alia, affirmations of fact, description, and/or GM’s sample or models that its vehicles had a workable ignition switch that would operate as promised. In its advertising materials and literature, GM espouses the reliability and safety of its vehicles, which are all predicated on a properly functioning ignition system. 55. GM’s affirmations of fact concerning the reliability and safety of its vehicles were
false, known to be false, and knowingly kept secret. Given the ignition switch defects, its vehicles were neither safe nor reliable and Plaintiffs would not have purchased, much less driven these defective vehicles, but for the fraudulent concealment. 56. GM has been aware of this defect since 2001 and intentionally remained silent for
the purpose of avoiding the costs and expenses of a timely and thorough recall of these vehicles. With such a corporate policy of fraud and deceit, no consumer would believe that GM is now telling the truth about other issues or defects in these vehicles (including such concerns as deployment of air bags, and other safety issues). 57. As a direct cause of Defendant’s breaches of its warranty and recall obligations,
Plaintiffs have suffered economic damages, specifically including the diminution in the value of their vehicles. VII. Causes Of Action Against GM CEOs Past and Present A. Principal-Agent, Vicarious and Respondeat Superior Liability
Plaintiffs’ Second Amended Petition
12.
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58.
Defendants G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre,
Jr., Dan Akerson and Mary Barra are liable in their individual capacities and as agents and employees of General Motors, LLC. 59. In the alternative and without waiving any their claims against the aforementioned
Defendants in their individual capacities, Plaintiffs contend that Defendants G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra were agents of GM. Specifically, GM: (1) intentionally conferred authority on Defendants G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra; (2) intentionally allowed Defendants G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra to believe that they had authority to act on behalf of GM; or (3) through lack of due care, allowed Defendants G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra to believe they had authority to act on behalf of GM. Defendants G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra were acting within the scope of their agency when they committed the torts listed herein against Plaintiffs. 60. In the alternative and without waiving any their claims against the aforementioned
Defendants in their individual capacities, Plaintiffs contend that GM is liable under the theory of apparent authority. Specifically, GM: (1) affirmatively held Defendants G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra out as having authority to act on their behalf; (2) knowingly permitted Defendants G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra to hold themselves out as having authority; or (3) acted with such lack of ordinary care as to clothe Defendants G.
Plaintiffs’ Second Amended Petition
13.
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Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra with the indicia of authority. GM’s conduct caused Plaintiffs to reasonably believe that Defendants G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra had the authority to act on GM’s behalf, and the Plaintiffs justifiable relied upon the agents’ authority. 61. In the alternative and without waiving any their claims against the aforementioned
Defendants in their individual capacities, Plaintiffs contend that GM is liable under the theory of respondeat superior. Specifically, (1) as set forth above, Plaintiffs were injured as a result of Defendants’ tort; (2) Defendants G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra were tortfeasors and employees of GM; (3) the torts were committed while Defendants G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra were acting within the scope of their employment— that is, the acts were: (a) within the employees’ general authority; (b) in furtherance of GM’s business; and (c) were undertaken for the accomplishment of the object for which Defendants G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra were hired. VIII. Damages And Injunctive Relief 62. limited to: (i) (ii) loss of use of the vehicles; reimbursement of out of pocket costs for, among other things, alternative Plaintiffs seek damages suffered as a result of GM’s conduct, including but not
transportation, prior repairs to defective ignition switches; and
Plaintiffs’ Second Amended Petition
14.
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(iii) 63. (i) (ii)
diminution in value of their vehicle. Plaintiffs also seek injunctive relief, including: repairs to remove the dangerous condition; an extension of warranty coverage covering components of the ignition system; and
(iii)
individual notice to each owner affected by the dangerous condition, which includes instructions to the owner or lessor to park the vehicle and order that GM pay for a rental car while the necessary repairs are conducted. IIX. PRE- AND POST-JUDGMENT INTEREST
64.
Plaintiffs seek pre- and post-judgment interest as allowed by law. IX. JURY DEMAND
65.
Plaintiffs request a trial by jury for all issues of fact. A jury fee has been paid. XIII. REQUEST FOR DISCLOSURE
66.
Except as modified by Court order, under Texas Rule of Civil Procedure 194,
Plaintiffs request that the Defendants disclose within 50 days of service of this request, the information or material described in Rule 194.2 X. PRAYER For these reasons, Plaintiffs pray for judgment against Defendants General Motors, LLC, G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra for the all legal claims asserted herein, that this case proceed to trial before a jury, and that
Plaintiffs’ Second Amended Petition
15.
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Plaintiffs recover a judgment of and from Defendants for damages in such an amount as the evidence may show and the jury may determine to be proper, together with pre-judgment and post-judgment interest, court costs, and such other and further relief Plaintiff may show themselves to be entitled, whether at law or in equity. Respectfully Submitted, HILLIARD MUÑOZ GONZALES LLP By: _____________________________ Robert C. Hilliard State Bar No. 09677700 [email protected] Rudy Gonzales, Jr. State Bar No. 08121700 [email protected] Catherine D. Tobin State Bar No. 24013642 [email protected] John B. Martinez State Bar No. 24010212 [email protected] T. Christopher Pinedo State Bar No. 00788935 [email protected] Kimberly Wilson State Bar No. 24066035 [email protected] Marion Reilly State Bar No. 24079195 [email protected] Neely Balko State Bar No. 24082652 [email protected] Todd A. Hunter, Jr. State Bar No. 24087774 [email protected] 719 S. Shoreline Boulevard,
Plaintiffs’ Second Amended Petition
16.
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Suite 500 Corpus Christi, TX 78401 Telephone No.: (361) 882-1612 Facsimile No.: (361) 882-3015 THOMAS J. HENRY INJURY ATTORNEYS By: s/ Thomas J. Henry Thomas J. Henry State Bar No. 09484210 Greggory A. Teeter State Bar No. 24033264 Travis Venable State Bar No. 24068577 521 Starr St. Corpus Christi, Texas 78401 Telephone No.: (361) 985-0600 Facsimile No.: (361) 985-0601 ATTORNEYS FOR PLAINTIFFS
Plaintiffs’ Second Amended Petition
17.
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! ! EXHIBIT “F”
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! ! EXHIBIT “E”
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CAUSE NO. 2014CCV-60443-4 CHARLES SILVAS and GRACE SILVAS, Plaintiffs, vs. GENERAL MOTORS, LLC, G. RICHARD WAGONER, JR., FREDERICK A. HENDERSON, EDWARD WHITACRE, JR., DAN AKERSON, AND MARY BARRA Defendant. § § § § § § § § § § § § IN THE COUNTY COURT
AT LAW NO. 4
NUECES COUNTY, TEXAS
PLAINTIFFS’ SECOND AMENDED PETITION TO THE HONORABLE JUDGE OF SAID COURT: COME NOW Charles Silvas and Grace Silvas (together, “Plaintiffs”) before the Honorable Judge of this Court and file this the second amended petition against General Motors, LLC, G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra and in support would show the Court as follows: I. DISCOVERY CONTROL PLAN 1. Pursuant to the provisions of Texas Rule of Civil Procedure 190.3, Plaintiffs
propose to conduct discovery according to Discovery Control Plan Level 3. II. PARTIES 2. 3. Plaintiff Charles Silvas is an individual who resides in Nueces County, Texas. Plaintiff Grace Silvas is an individual who resides in Nueces County, Texas.
Plaintiffs’ Second Amended Petition
1.
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4.
Defendant General Motors, LLC (hereinafter referred to as “GM”) is a Delaware
limited liability company with its principal place of business in Michigan. The sole member of GM is General Motors Holdings, LLC, a Delaware limited liability company with its principal place of business in Michigan. General Motors Holdings, LLC’s sole member is General Motors Company, a Delaware corporation with its principal place of business in Michigan. General Motors, LLC may be served with process through its registered agent for service of process in the State of Texas, Corporation Service Company d/b/a CSC-Lawyers Incorporating Service Company, 211 E. 7th Street, Suite 620, Austin, Texas 78701-4234. 5. Defendant G. Richard Wagoner, Jr., was the Chief Executive Officer of General
Motors, LLC from June 1, 2009 through March 30, 2009. The court has jurisdiction over Defendant Wagoner, a nonresident, because Defendant Wagoner purposefully availed himself of the privileges and benefits of conducting business in Texas by committing the torts detailed below, which are the subject of this suit, in whole or in part in Texas. Defendant Wagoner may be served with process at his address, 1155 Quarton, Rd., Birmingham, Michigan 48009. 6. Defendant Richard Frederick A. Henderson was the Chief Executive Officer of The court has
General Motors, LLC from March 30, 2009 through December 1, 2009.
jurisdiction over Defendant Henderson, a nonresident, because Defendant Henderson purposefully availed himself of the privileges and benefits of conducting business in Texas by committing the torts detailed below, which are the subject of this suit, in whole or in part in Texas. Defendant Henderson may be served with process at his address, 646 E. 6th Street,
Hinsdale, Illinois 60521-4713.
Plaintiffs’ Second Amended Petition
2.
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7.
Defendant Edward Whitacre, Jr. was the Chief Executive Officer of General
Motors, LLC from December 1, 2009 through September 1, 2010. The court has jurisdiction over Defendant Whitacre, a nonresident, because Defendant Whitacre purposefully availed himself of the privileges and benefits of conducting business in Texas by committing the torts detailed below, which are the subject of this suit, in whole or in part in Texas. Defendant Whitacre may be served with process at his address, 325 Terrell Road, San Antonio, Texas 78209. 8. Defendant Dan Akerson was the Chief Executive Officer of General Motors, LLC
from September 1, 2010 through January 15, 2014. The court has jurisdiction over Defendant Akerson, a nonresident, because Defendant Akerson purposefully availed himself of the privileges and benefits of conducting business in Texas by committing the torts detailed below, which are the subject of this suit, in whole or in part in Texas. Defendant Akerson may be served with process at his address, 1326 Ballantrae, Lane, McLean, Virginia 22101. 9. Defendant Mary Barra is the current Chief Executive Officer of General Motors,
LLC. The court has jurisdiction over Defendant Barra, a nonresident, because Defendant Barra purposefully availed herself of the privileges and benefits of conducting business in Texas by committing the torts detailed below, which are the subject of this suit, in whole or in part in Texas. Defendant. Barra may be served with process at her address, 18938 Bella Vista, Ct.,
Northville, Michigan, 48168. III. JURISDICTION AND VENUE
Plaintiffs’ Second Amended Petition
3.
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10.
Plaintiffs seek monetary relief under $75,000.00. The Court has jurisdiction over
the lawsuit because the amount in controversy meets the Court’s minimum jurisdictional requirements. 11. The Court has personal jurisdiction over GM given that its contacts with the State
of Texas are sufficiently continuous and systematic so as to justify the exercise of jurisdiction over it for all purposes. 12. Venue is proper in Nueces County, Texas, pursuant to Tex. Civ. Prac. & Rem.
Code section 15.003, in that Plaintiffs resided in Nueces County at the time the causes of action accrued. 13. Additionally, venue is proper in Nueces County, Texas, pursuant to Tex. Civ.
Prac. & Rem. Code section 15.002(a)(1), in that all or a substantial part of the events giving rise to Plaintiffs’ claims occurred in Nueces County. IV. PRELIMINARY STATEMENT 14. This lawsuit arises out of the warranty and recall obligations of GM, both arising
from its predecessor and GM imposed by court order. While extolling the safety and reliability of its vehicles, GM was concealing a defect that caused its vehicles to have a sudden engine power loss. Try as it might to conceal this defect, it came to light in a recent recall. As a result, the value of these vehicles has been significantly diminished. The Plaintiffs seek recovery for this diminution in value of their GM vehicles. V. BACKGROUND FACTS A. Plaintiffs’ Vehicles
Plaintiffs’ Second Amended Petition
4.
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1. 15.
Recall notices raise issues concerning GM vehicles
On February 7, 2014, General Motors filed a Defect Notice to recall 2005-2007
Model Year Chevrolet Cobalt and 2007 Pontiac G5 vehicles. The Defect Notice stated the ignition switch torque performance in these vehicles might not meet GM’s specifications resulting in the non-deployment of airbags in crash events. The notice called for the recall of approximately six hundred thousand vehicles. 16. Seventeen days later, on February 24, 2014, GM issued a notice to the National
Highway Traffic Safety Administration (“NHTSA”) which expanded the recall to include 20032007 Saturn Ions, 2006-2007 Chevrolet HHRs, 2006-2007 Pontiac Solstices and 2007 Saturn Skys, bringing the number of vehicles affected by the recall to 1,367,146. This NHTSA notice furnished information on hand with GM dating back 10 years, and dealt directly with GM’s recall obligations and product warranties which have been known to GM for many years. 17. The notice dated February 24, 2014 provided a chronology that purportedly
detailed GM’s knowledge and actions related to the ignition switch. 2. 18. Remarkably, GM knew of the condition since 2001
As early as 2001, during pre-production development of the Ion, GM became
aware of issues relating to ignition switch “passlock” system. The 2001 report stated the problem included a “low detent plunger force” in the ignition switch 19. In 2003, before the launch of the 2005 Cobalt, GM became aware of incidents
wherein the vehicle engine would suddenly lose power in the event the key moved out of the “run” position when the driver inadvertently contacted the key or steering column. An investigation was opened and, after consideration of lead-time required and the cost and
Plaintiffs’ Second Amended Petition
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effectiveness of potential solutions, the investigation was closed with no action taken. 20. Notably, the recalls did not provide immediate relief for vehicle owners. Rather,
GM disclosed that dangerous defects existed and stated that GM would implement a repair plan, without specification. 21. Throughout 2005, GM received similar field reports of vehicles losing engine
power when the key moved out of the “run” position. A proposal was approved to redesign the key head, but later cancelled. Instead of recalling the vehicles to replace the defective ignition switches, GM issued a Safety Bulletin (the “Bulletin”). The Bulletin recognized that there was a potential for the driver to inadvertently turn off the ignition due to low ignition key cylinder torque/effort. 22. Although GM developed an insert for the key ring that changed it from a slot
design to a hole design, to prevent the key from easily jogging the ignition switch out of the run position, the redesigned ignition switch was not installed in vehicles until the 2007 model year. 23. 24. The defective ignition switch has been linked to numerous crashes and fatalities. Given the vast number of instances of sudden engine power loss and non-
deployment of airbags related to the defective ignition switch and GM’s knowledge of many or all of the instances, GM should have aggressively taken remedial measures to address these defects. GM failed to do so. In fact, this first recall was not implemented until 2014 – nearly ten years after instances of engine power loss. 25. The ignition switch defect in GM vehicles has adversely affected the company’s
reputation as a manufacturer of safe, reliable vehicles with high resale value, as compared to vehicles made by its competitors. In the wake of the news reports about this serious problem,
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GM customers and consumers generally are – as they should be – skeptical about the quality and safety of GM vehicles. Indeed, it is likely that the entire fleet of GM vehicles has been stigmatized by this defect, but most specifically the vehicles directly affected by this recall and certainly no consumer has confidence that after a 10-year fraudulent concealment scheme was brought to light GM has now told any more than they must. Every GM product is now tainted by this fraud. 26. GM’s intentional and deliberate mishandling of the ignition switch defect,
including but not limited to its denial of any problem, even after receiving a substantial number of reports of sudden engine power loss, including ones that resulted in serious physical injury or death, and all other allegations set forth herein, has adversely affected the company’s reputation as a manufacturer of safe, reliable vehicles with high resale value, as compared to vehicles made by its competitors. GM customers and the general public have reason to be skeptical about whether GM is coming forth with truthful information about the sudden loss of power defect. Likewise, GM customers and the general public are left to wonder whether safety concerns about GM vehicles are limited to this particular problem. 27. Moreover, some vehicle owners, including Plaintiffs, have driven their cars less
than they otherwise would due to fear of being in an accident. 3. 28. G. Richard Wagoner, Jr. and GM
Wagoner served as GM’s Chief Executive Officer from June 1, 2009 through
March 30, 2009, during the critical manufacturing period for many of the recalled vehicles. 29. As the CEO of GM, Wagoner had a duty to protect the public from dangerous and
defective vehicles. In a complete disregard of his duties, Wagoner drove the production of the
Plaintiffs’ Second Amended Petition
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recalled vehicles, ignored the alarming number of vehicles losing power due the faulty ignition switch, refused to implement a repair to the ignition switch, actively mislead the general public regarding the safety of the recalled vehicles and refused to recall the subject vehicles. 30. As a proximate result of Wagoner’s actions and omissions the Plaintiffs have
suffered the damages described herein. 4. 31. Frederick A. Henderson and GM
Henderson served as GM’s Chief Executive Officer from March 30, 2009,
through December 1, 2009. 32. As the CEO of GM, Henderson had a duty to protect the public from dangerous
and defective vehicles. In a complete disregard of his duties, Henderson ignored the alarming number of vehicles losing power due the faulty ignition switch, refused to implement a repair to the ignition switch, actively mislead the general public regarding the safety of the recalled vehicles and refused to recall the subject vehicles. 33. As a proximate result of Henderson’s actions and omissions the Plaintiffs have
suffered the damages described herein. 5. 34. Edward Whitacre, Jr. and GM
Whitacre served as GM’s Chief Executive Officer from December 1, 2009,
through September 1, 2010. 35. As the CEO of GM, Whitacre had a duty to protect the public from dangerous and
defective vehicles. In a complete disregard of his duties, Whitacre ignored the alarming number of vehicles losing power due the faulty ignition switch, refused to implement a repair to the ignition switch, actively mislead the general public regarding the safety of the recalled vehicles
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and refused to recall the subject vehicles. 36. As a proximate result of Whiteacre’s actions and omissions the Plaintiffs have
suffered the damages described herein. 6. 37. Dan Akerson and GM
Akerson served as GM’s Chief Executive Officer from September 1, 2010,
through January 15, 2014. 38. As the CEO of GM, Akerson had a duty to protect the public from dangerous and
defective vehicles. In a complete disregard of his duties, Akerson ignored the alarming number of vehicles losing power due the faulty ignition switch, refused to implement a repair to the ignition switch, actively mislead the general public regarding the safety of the recalled vehicles and refused to recall the subject vehicles. 39. As a proximate result of Akerson’s actions and omissions the Plaintiffs have
suffered the damages described herein. 7. 40. Mary Barra and GM
Mary Barra, as a powerful automotive executive and officer at GM, was in a
position where she could have helped countless GM vehicle owners by initiating a recall of the subject vehicles. As early as December 2013, Ms. Barra “knew that there was an issue being analyzed.” Instead of taking immediate action, she looked past the dangerous and defective nature of the subject recalled vehicles and used her position of power to continue selling these vehicles to the public. 41. Mary Barra earned her Master of Business Administration degree from Stanford
Graduate School of Business in 1988. She began working for GM at the age of 18 and held a
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variety of engineering and administrative positions.
In February 2008 she became Vice
President of Global Manufacturing Engineering. In July 2009 she advanced to the position of Vice President of Global Human Resources, which she held until February 2011, when she was named Executive Vice President of Global Product Development. On January 15, 2014 Barra was named Chief Executive Office or General Motors, LLC. 42. As the CEO of GM, Mary Barra had a duty to protect the public from dangerous
and defective vehicles. In a complete disregard of her duties, Barra refused to recall the subject vehicles, and by doing so endangered the lives of thousands of individuals. 43. As a proximate result of Barra’s active participation and leadership in the sale of
the recalled vehicles the Plaintiffs have suffered the damages described herein. 8. 44. The damage done
Plaintiffs seek damages suffered by the Plaintiffs as a result of GM’s conduct,
including but not limited to: (i) loss of use of the vehicles; (ii) reimbursement of out of pocket costs for, among other things, alternative transportation, prior repairs to address accelerator problems, floor mats that had to be discarded, etc.; (iii) diminution in resale value of the vehicles; and (iv) an increased risk of physical harm. 45. Plaintiffs also seeks injunctive relief including: (i) repairs to remove the
dangerous condition; (ii) an extension of warranty coverage covering components of the ignition switch system; and (iii) individual notice to each owner affected by the ignition switch recall disclosing the dangerous condition. B. 46. Plaintiffs’ Experiences Plaintiffs own a 2006 Chevrolet Cobalt, a model that is subject to the ignition
Plaintiffs’ Second Amended Petition
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switch recall. 47. Plaintiffs Silvas experienced incidents of sudden engine power loss beginning in
2010. The vehicle was inspected and upon information and belief, the ignition switch was replaced. Despite the repair, the Plaintiffs continue to experience incidents of sudden engine power loss. 48. Plaintiffs Silvas chose the 2006 Chevrolet Cobalt over competing brands’
vehicles, at least in part, because of GM’s reputation for selling cars with higher resale, as compared to vehicles manufactured by its competitors. 49. Plaintiffs Silvas have lost trust in the GM and Chevrolet brand names, and the
Cobalt in particular. They are skeptical that their Cobalt will ever be completely safe. 50. Plaintiffs Silvas also believe that the resale value of their Chevrolet Cobalt will
decrease and diminish due to general consumer skepticism about GM and Chevrolet vehicles. 51. Plaintiffs Silvas are concerned for their safety and the safety of others. They
believe Defendant’s actions and omissions have caused economic harm to them, namely damage to their property and devaluation of their Chevrolet Cobalt. 52. Plaintiffs Silvas resided in Nueces County at the time their breach of warranty
causes of action accrued. VI. Causes Of Action Against GM A. 53. 54. Claims Arising Out Of Warranty And Recall Obligations Plaintiffs re-allege all preceding allegations as if fully set forth herein. Plaintiffs purchased their vehicle, a 2006 Chevrolet Cobalt, from GM. Plaintiffs
chose the 2006 Chevrolet Cobalt over competing brands’ vehicles because of GM’s reputation
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for selling cars with higher resale, as compared to vehicles manufactured by its competitors. In connection with the sale of the vehicle to Plaintiffs, GM made representations about the quality and characteristics of the vehicles by, inter alia, affirmations of fact, description, and/or GM’s sample or models that its vehicles had a workable ignition switch that would operate as promised. In its advertising materials and literature, GM espouses the reliability and safety of its vehicles, which are all predicated on a properly functioning ignition system. 55. GM’s affirmations of fact concerning the reliability and safety of its vehicles were
false, known to be false, and knowingly kept secret. Given the ignition switch defects, its vehicles were neither safe nor reliable and Plaintiffs would not have purchased, much less driven these defective vehicles, but for the fraudulent concealment. 56. GM has been aware of this defect since 2001 and intentionally remained silent for
the purpose of avoiding the costs and expenses of a timely and thorough recall of these vehicles. With such a corporate policy of fraud and deceit, no consumer would believe that GM is now telling the truth about other issues or defects in these vehicles (including such concerns as deployment of air bags, and other safety issues). 57. As a direct cause of Defendant’s breaches of its warranty and recall obligations,
Plaintiffs have suffered economic damages, specifically including the diminution in the value of their vehicles. VII. Causes Of Action Against GM CEOs Past and Present A. Principal-Agent, Vicarious and Respondeat Superior Liability
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58.
Defendants G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre,
Jr., Dan Akerson and Mary Barra are liable in their individual capacities and as agents and employees of General Motors, LLC. 59. In the alternative and without waiving any their claims against the aforementioned
Defendants in their individual capacities, Plaintiffs contend that Defendants G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra were agents of GM. Specifically, GM: (1) intentionally conferred authority on Defendants G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra; (2) intentionally allowed Defendants G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra to believe that they had authority to act on behalf of GM; or (3) through lack of due care, allowed Defendants G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra to believe they had authority to act on behalf of GM. Defendants G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra were acting within the scope of their agency when they committed the torts listed herein against Plaintiffs. 60. In the alternative and without waiving any their claims against the aforementioned
Defendants in their individual capacities, Plaintiffs contend that GM is liable under the theory of apparent authority. Specifically, GM: (1) affirmatively held Defendants G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra out as having authority to act on their behalf; (2) knowingly permitted Defendants G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra to hold themselves out as having authority; or (3) acted with such lack of ordinary care as to clothe Defendants G.
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Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra with the indicia of authority. GM’s conduct caused Plaintiffs to reasonably believe that Defendants G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra had the authority to act on GM’s behalf, and the Plaintiffs justifiable relied upon the agents’ authority. 61. In the alternative and without waiving any their claims against the aforementioned
Defendants in their individual capacities, Plaintiffs contend that GM is liable under the theory of respondeat superior. Specifically, (1) as set forth above, Plaintiffs were injured as a result of Defendants’ tort; (2) Defendants G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra were tortfeasors and employees of GM; (3) the torts were committed while Defendants G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra were acting within the scope of their employment— that is, the acts were: (a) within the employees’ general authority; (b) in furtherance of GM’s business; and (c) were undertaken for the accomplishment of the object for which Defendants G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra were hired. VIII. Damages And Injunctive Relief 62. limited to: (i) (ii) loss of use of the vehicles; reimbursement of out of pocket costs for, among other things, alternative Plaintiffs seek damages suffered as a result of GM’s conduct, including but not
transportation, prior repairs to defective ignition switches; and
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(iii) 63. (i) (ii)
diminution in value of their vehicle. Plaintiffs also seek injunctive relief, including: repairs to remove the dangerous condition; an extension of warranty coverage covering components of the ignition system; and
(iii)
individual notice to each owner affected by the dangerous condition, which includes instructions to the owner or lessor to park the vehicle and order that GM pay for a rental car while the necessary repairs are conducted. IIX. PRE- AND POST-JUDGMENT INTEREST
64.
Plaintiffs seek pre- and post-judgment interest as allowed by law. IX. JURY DEMAND
65.
Plaintiffs request a trial by jury for all issues of fact. A jury fee has been paid. XIII. REQUEST FOR DISCLOSURE
66.
Except as modified by Court order, under Texas Rule of Civil Procedure 194,
Plaintiffs request that the Defendants disclose within 50 days of service of this request, the information or material described in Rule 194.2 X. PRAYER For these reasons, Plaintiffs pray for judgment against Defendants General Motors, LLC, G. Richard Wagoner, Jr., Frederick A. Henderson, Edward Whitacre, Jr., Dan Akerson and Mary Barra for the all legal claims asserted herein, that this case proceed to trial before a jury, and that
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Plaintiffs recover a judgment of and from Defendants for damages in such an amount as the evidence may show and the jury may determine to be proper, together with pre-judgment and post-judgment interest, court costs, and such other and further relief Plaintiff may show themselves to be entitled, whether at law or in equity. Respectfully Submitted, HILLIARD MUÑOZ GONZALES LLP By: _____________________________ Robert C. Hilliard State Bar No. 09677700 [email protected] Rudy Gonzales, Jr. State Bar No. 08121700 [email protected] Catherine D. Tobin State Bar No. 24013642 [email protected] John B. Martinez State Bar No. 24010212 [email protected] T. Christopher Pinedo State Bar No. 00788935 [email protected] Kimberly Wilson State Bar No. 24066035 [email protected] Marion Reilly State Bar No. 24079195 [email protected] Neely Balko State Bar No. 24082652 [email protected] Todd A. Hunter, Jr. State Bar No. 24087774 [email protected] 719 S. Shoreline Boulevard,
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Suite 500 Corpus Christi, TX 78401 Telephone No.: (361) 882-1612 Facsimile No.: (361) 882-3015 THOMAS J. HENRY INJURY ATTORNEYS By: s/ Thomas J. Henry Thomas J. Henry State Bar No. 09484210 Greggory A. Teeter State Bar No. 24033264 Travis Venable State Bar No. 24068577 521 Starr St. Corpus Christi, Texas 78401 Telephone No.: (361) 985-0600 Facsimile No.: (361) 985-0601 ATTORNEYS FOR PLAINTIFFS
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! ! EXHIBIT “F”
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