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Allstate Sues Toyota Over Claims Due to Vehicle Defects

Source: LA Times

Posted on 05 Oct 2010

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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.