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Allstate sues Toyota over sudden-acceleration-related insurance claims

The suit seeks $3 million in compensation for about 270 claims, alleging that the accidents were caused by vehicle defects. A spokeswoman for the automaker says the allegations 'have no basis.'

October 05, 2010|By Ken Bensinger and Ralph Vartabedian, Los Angeles Times

Allstate Corp. has sued Toyota Motor Corp. over sudden-acceleration-related claims it has paid, alleging that the accidents were caused by vehicle defects.

The suit, filed Friday in Los Angeles County Superior Court, seeks $3 million in compensation for about 270 claims that the insurance giant has paid out since January 2007.

It charges that "certain of Toyota's cars and trucks have a defect that causes sudden uncontrolled acceleration to speeds of up to 100 miles per hour or more," as well as "defective electronics and the absence of a fail-safe, such as a brake-to-idle override system."

Allstate spokeswoman Christina Loznicka said the suit was "a last resort" taken after negotiations on the claims with Toyota, a practice called subrogation, failed out of court. It appears to be the first subrogation suit against Toyota related to sudden acceleration.

Celeste Migliore, a Toyota spokeswoman, said that the automaker had not seen the complaint but that it believes "the unfounded allegations in this suit have no basis."

Several other insurers are currently in subrogation negotiations with Toyota for sudden-acceleration claims. Phil Supple, spokesman for State Farm, said it first sent a letter to Toyota in 2004, asking the automaker to assume responsibility for accident claims that may have resulted from defects in its vehicles. Farmers Insurance said it is also seeking reimbursement on several such claims.

Meanwhile, Toyota held a press briefing Monday to detail its latest progress in fulfilling the more than 11 million recall notices it has issued in the last year, most to resolve sudden-acceleration issues.

Since early 2010, Toyota dealers have completed 1.8 million repairs to fix sticking pedals and 3.1 million repairs for pedals that can get trapped in floor mats, and have installed new software on 128,000 vehicles that were recalled for braking problems. The automaker said 1.3 million of the cars it had repaired were subject to both the sticking pedal recall and the floor mat recall.

Complaints to Toyota about sudden acceleration have fallen 80% since April, when they reached 800 a week, the company said. The automaker said it is currently registering 150 such complaints a week.

Toyota also said it had reviewed roughly 4,200 vehicles whose drivers claimed the vehicles had suddenly accelerated. Those reviews found no evidence of any electronic flaws that could cause that particular problem, the company said, reiterating a position it has taken since it became ensnared in the sudden-acceleration crisis a year ago.

Several separate reviews of the electronic systems on Toyota and Lexus vehicles are still ongoing, including one paid for by the automaker and one being run by NASA.

"We're very confident that they won't find any electronic problems," said Steve St. Angelo, Toyota's chief quality officer for North America. "However, they may come up with some improvements we can make."

Since announcing its first recall for sudden acceleration, Toyota has been hit with hundreds of lawsuits and agreed to pay the largest fine ever by an automaker, $16.4 million, for delaying a recall.

Eager to improve its image, Toyota has created an independent safety advisory panel, headed by former Transportation Secretary Rodney Slater. It has also dispatched a team of roughly 200 engineers, mechanics and other experts to review customer complaints. And it has begun installing brake-override software on every new vehicle.

The automaker said the software, which it calls Smart Stop, is on 84% of the vehicles currently being sold on Toyota and Lexus lots nationwide.

The Allstate suit, first reported by Bloomberg News, contends that Toyota should have adopted that technology long ago. It also argues that Toyota deliberately withheld its knowledge of defects that can cause sudden acceleration from the public for years, and that as a result, the statute of limitations should not apply to its subrogation claims.

The suit is accompanied by details of roughly 270 claims paid by Allstate, the earliest dating to January 2007. The most expensive claim, for $60,793.73, involved a 2009 Lexus ES 350 and took place last December in Beverly Hills.

ken.bensinger@latimes.com

ralph.vartabedian@latimes.com

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