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Finney v. Volvo Group North America, LLC

United States District Court, M.D. Tennessee, Nashville Division

December 5, 2016



          ALETAA. TRAUGER United States District Judge.

         Pending before the court is a Motion for Judgment on the Pleadings (Docket No. 21) filed by the defendant, Volvo Group North America, LLC (“VGNA”), to which the plaintiffs, Patrick and Charlotte Finney, have filed a Response in opposition (Docket No. 28), VGNA has filed a Reply (Docket No. 29), and the plaintiffs have filed a Sur-Reply (Docket No. 32). For the reasons discussed herein, the motion will be granted.


         On March 4, 2016, the plaintiffs filed this product liability action against VGNA and three other defendants. (Docket No. 1.) The Complaint is based on allegations that the plaintiffs were seriously and permanently injured in a wreck on March 9, 2015, while driving a 2012 Model VNL 780 Volvo truck, VIN number 4V4NC9KKXCN558644, designed, manufactured, and marketed by VGNA (the “Volvo Truck”). (Id.) The Complaint brings claims against VGNA for strict liability, negligence, recklessness, breach of express and implied warranties, and fraudulent misrepresentation under Tennessee law, and seeks $4, 000, 000 in compensatory damages and $7, 000, 000 in punitive damages from VGNA. (Id.) Specifically, the Complaint alleges that the wreck was caused by a failure of the draglink component in the Volvo Truck's steering mechanism and that the plaintiffs' injuries were exacerbated by defects in the driver side airbags and the lack of passenger side airbags in the Volvo Truck.

         The Complaint further alleges that, within days of the wreck, on March 20, 2015, the plaintiffs filed a report with the National Highway Traffic Safety Administration (“NHTSA”), indicating that the cause of the wreck was a failure of the Volvo Truck's draglink. (Id. at ¶¶ 39-40.) In April of 2015, an attorney then representing the plaintiffs informed VGNA of the draglink failure and notified VGNA that the draglink from the Volvo Truck was available for inspection, although VGNA did not respond. (Id. at 41-42.) The Complaint also alleges that, in May and June of 2015, the claims adjuster for the plaintiffs' insurance carrier twice contacted VGNA to ask if it would like to inspect the draglink and, again, VGNA did not respond. (Id. at ¶¶ 44-45.) The plaintiffs' insurance carrier then engaged the services of an engineering company, which sent a report to the insurance company in July of 2015, concluding that the wreck was caused by a failure of the Volvo Truck's steering system, resulting from corrosion of the draglink due to defects in its design. (Id. at ¶¶ 47-49.) At around the same time, NHTSA issued two recalls on other models of VGNA trucks (not including the Volvo Truck), based on similar problems with the draglink component in those vehicles. (Id. at ¶¶ 51-68.) According to the Complaint, NHTSA had also issued an earlier recall in 2010, which again implicated similar issues with draglink components in yet other VGNA truck models. (Id. at ¶¶ 69-70.) As a result, the Complaint alleges, the wreck involving the plaintiffs' Volvo Truck “was wholly and completely preventable and only caused because of defendants' negligent conduct, faulty product design, and intentional actions designed to minimize negative publicity about the defendants, minimize replacement costs, and not affect product sales.” (Id. at ¶ 71.)

         On April 14, 2016, the plaintiffs filed a Notice of Voluntary Dismissal, dismissing without prejudice their claims against all defendants in this action except VGNA. (Docket No. 12.)

         On June 29, 2016, VGNA filed the currently pending Motion for Judgment on the Pleadings under Rule 12(c), seeking to dismiss this action on the grounds of judicial estoppel. (Docket No. 21.) According to VGNA, judicial estoppel is appropriate because, at the time of the wreck, the plaintiffs were in Chapter 13 bankruptcy proceedings before the United States Bankruptcy Court for the Western District of Tennessee (the “Bankruptcy Court”) and were subject to an ongoing requirement to disclose all assets to the Bankruptcy Court - including any potential legal claims - but the plaintiffs did not disclose their potential claim against VGNA. (Id.) In the alternative, VGNA argues that the plaintiffs do not have standing to bring this action because only the bankruptcy trustee can pursue claims on behalf of the plaintiffs that arose during the bankruptcy proceedings. VGNA also filed a Memorandum in support. (Docket No. 22.) Attached to VGNA's Motion is the plaintiff's Voluntary Petition for Chapter 13 bankruptcy filed in the Bankruptcy Court on July 30, 2010 (Docket No. 21-1), the Bankruptcy's Court's November 4, 2010 Order confirming the plaintiffs' five-year Chapter 13 plan (Docket No. 21-3), the Bankruptcy Court's December 16, 2015 Order of Discharge for the plaintiffs' debts (Docket No. 21-5), and the Bankruptcy Court's January 14, 2016 Order closing the plaintiffs' bankruptcy case (Docket No. 21-7).

         On July 13, 2016, the plaintiffs filed a Response in opposition to VGNA's Motion for Judgment on the Pleadings. (Docket No. 28.) The plaintiffs do not dispute the fact that they did not disclose their claims in this action to the Bankruptcy Court at any time, despite that they were in the process of making payments according to the bankruptcy plan at the time of the wreck. Nor do the plaintiffs provide any evidence that they ever attempted to disclose their claims to the Bankruptcy Court or to the trustee of their bankruptcy estate. Rather, the plaintiffs argue that their failure to disclose was inadvertent.

         In support of this position, the plaintiffs attach to their Response their own affidavits as well as the Affidavit of Stephen L. Hale, an attorney who advised the plaintiffs about their legal claim but who does not represent them in this action. (Docket Nos. 28-2, 28-3, and 28-4.) The affidavits make the following assertions:

• The plaintiffs understood that they had to report to the Bankruptcy Court any settlements they received from personal injury actions, but “no one told [them] that, if [they] were in an accident, [they] had to report the fact of the accident to the trustee or to the [Bankruptcy Court] and “it did not occur to [the plaintiffs] that [their] injuries could be considered an asset; if anything, they seemed to [them] a loss.” (Docket No. 28-2 at ¶ 2; Docket No. 28-3 at ¶ 2.)
• The plaintiffs were professional truck drivers who were familiar with truck mechanics and, after the wreck, they suspected that the loss of steering they experienced might have been related to a failure in the draglink. Thus, they investigated this theory and also sought legal counsel to determine whether they had a basis for a lawsuit. (Docket No. 28-2 at ¶¶ 3-4; Docket No. 28-3 at ¶¶ 3-4.)
• Stephen Hale, who had assisted the plaintiffs with other unrelated legal matters in the past, agreed to investigate the wreck, without their signing a retainer, and he consulted with product liability attorneys about this matter. In May of 2015, Mr. Hale informed the plaintiffs that the accident was likely due to a repair incident rather than to any fault of VGNA and that the plaintiffs, therefore, did not have a legal claim against VGNA. (Docket No. 28-2 at ¶¶ 5-6; Docket No. 28-3 at ¶¶ 5-6; Docket No. 28-4.)
• The plaintiffs then sought a second opinion from attorney Brandt McMillan at the law firm Tune, Entrekin, and White. In June of 2015, Mr. McMillan declined to represent the plaintiffs in this matter, without explanation. (Docket No. 28-2 at ¶ 7; Docket No. 28-3 at ¶ 7.)
• On December 11, 2015, the plaintiffs spoke with attorney Steve Cohen, who agreed to investigate the matter. In February of 2016, after the bankruptcy case had already been closed, Mr. Cohen referred this action to Kinnard, Clayton & Beverage, the plaintiffs' current counsel. ...

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