Ohio appeals court upholds $1M verdict in Navistar MaxxForce lawsuit
April 29, 2021
An Ohio state appeals court has upheld a decision to award a trucking company more than $1 million in a lawsuit against Navistar and its MaxxForce engines.
On April 22, the Ohio Fifth Appellate District Court of Appeals agreed with a Licking County Court of Common Pleas’ decision recognizing a jury verdict of $1.3 million for Willard, Ohio-based trucking company Dutch Maid Logistics. The company accuses Navistar of fraud and breach of warranty for knowingly installing faulty MaxxForce engines in new trucks.
According to court documents, Dutch Maid purchased nine Navistar trucks with first generation MaxxForce engines and six Navistar trucks with Cummins engines between 2008 and 2009. After about 100,000 miles, the MaxxForce trucks began experiencing significant mechanical issues, which got significantly worse after 125,000 miles. The crux of the issues was failure of the exhaust gas recirculation cooler. Consequently, Dutch Maid moved those trucks to local haul operations and discussed retiring those trucks sooner than usual.
Dutch Maid General Manager Sam Burrer began searching for new trucks in 2010. Trying to persuade Burrer to purchase certain trucks, a Navistar salesperson told Burrer the second generation MaxxForce engines meet the Environmental Protection Agency’s 2010 lower emissions standard. More importantly, the second generation engines have resolved issues found in the first generation engines that Dutch Maid purchased just a few years prior. After many discussions, visits to a manufacturing plant and assurances of reliability and testing, Navistar eventually convinced Dutch Maid to purchase 20 Navistar trucks with second generation MaxxForce engines between 2011 and 2012.
The newer trucks did not live up to expectations.
According to the appellate opinion, Dutch Maid took those trucks to the shops for repairs on more than 100 separate occasions over the course of just three years.
Again, the MaxxForce engines experienced EGR system failures.
Dutch Maid filed a complaint against Navistar in February 2015, claiming breach of express warranty and fraud by nondisclosure. During the trial, Burrer mentioned the numerous times a Navistar representative assured him all kinds of testing had shown the latest MaxxForce engines to be efficient and reliable.
Proving damages to the company, Dutch Maid showed that trucks with MaxxForce engines were down for repairs for nearly 1,300 days. Loss of profits from downtime was valued at about $300,000. Dutch Maid ended up ditching the Navistar trucks after only three years. The early trade was estimated to have cost Dutch Maid about $35,825 per truck.
In its complaint, Dutch Maid claims that top brass at Navistar was aware of the MaxxForce issues. In the summer of 2010, Navistar engineers told Navistar Vice President of North American Sales Jim Hebe that the trucks were not ready for market, according to Dutch Maid. Dennis Mooney, Navistar’s senior vice president of product and development, sent an email to Navistar CEO Troy Clarke in December 2012 warning him of the warranty expenses on MaxxForce trucks.
After hearing all the evidence, a jury awarded Dutch Maid $75,000 for lost profits, $200,000 for diminished value and more than $1 million in punitive damages in July 2019 for the MaxxForce claims.
Navistar appealed the decision, which was struck down by the appellate court.
“Navistar, through its representatives, purposely failed to disclose material information about the EGR cooler system on the MaxxForce 2 trucks despite Dutch Maid’s inquiries,” the appellate panel stated. “These nondisclosures occurred prior to Dutch Maid’s purchase of any MaxxForce 2 trucks.”
Navistar also argued that Ohio state law prohibits oral agreements as evidence in a written contract dispute. However, the courts have found that oral agreements can be presented as evidence “when that agreement was made in order to induce the party into entering the written contract.”
“Dutch Maid asked questions, and Navistar knowingly provided false answers,” the court of appeals stated. “We find a party cannot escape liability for his own deliberate misrepresentations and/or omissions by inserting boilerplate disclaimers into a limited warranty.”
Navistar still has the option to petition the Ohio Supreme Court to hear its case. As of publication, no such petition is on file.
This is just the latest approval of a verdict against Navistar regarding its MaxxForce engines.
In January 2020, a federal court in Illinois granted final approval of a $135 million settlement in a class action lawsuit making claims similar to Dutch Maid. One month later, a Nebraska state court awarded Nationwide Transportation more than $500,000 for its claims about faulty MaxxForce engines.
However, earlier this year, a federal appeals court dismissed a lawsuit filed by two trucking companies against Navistar. The Seventh Circuit Court of Appeals ruled that the companies failed to opt out of the $135 million settlement. LL