ONTARIO SUPERIOR COURT OF JUSTICE VICTOR MENDHAM. Proceeding under the Class Proceedings Act, 1992 STATEMENT OF CLAIM

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1 ... c J ~ ONTARIO SUPERIOR COURT OF JUSTICE Court File No.: i::t-- g_;; l.pi3 - occ.:? VICTOR MENDHAM Plaintiff Proceeding under the Class Proceedings Act, 1992 Defendants TO THE DEFENDANTS STATEMENT OF CLAIM A LEG AL PROCEEDING HAS BEEN COMMENCED AGAINST YOU by the plaintiff. The claim made against yoti is set out in the following pages. IF YOU WISH TO DEFEND THIS PROCEEDING, you or an Ontario lawyer acting for you must prepare a sta tement of defence in Form l 8A prescribed by th e Rules of Civil Procedure, serve it on the plaintiff's lawyer or, where the plaintiff does not have a lawyer, serve it on the plaintiff, and file it, with proofof service, in this court office, WITHIN TWENTY DAYS after this statement of claim is served on you, if you are served in Ontario. If you are served in another province or terri tory of Canada or in the United States of America, the period for serving and filing your statement of defence is forty days. If you are served outside Canada and the United States of America, the period is sixty days. Instead of serving and filing a statement of defence, you may serve and file a notice of intent to defend in Form 18B prescribed by the Rules of Civil Procedure. This will entitle you to ten more days within which to serve and file your statement of defence. IF YOU FAIL TO DEFEND THIS PROCEEDING, JUDGMENT MAY BE GIVEN AGAINST YOU IN YOUR ABSENCE AND WITHOUT FURTHER NOTICE TO YOU. IF YOU WISH TO D EFEND THIS PROCEEDING BUT ARE UNABLE TO PAY LEGAL FEES, LEGAL AID MAY BE AVAILABLE TO YOU BY CONTACTING A LOCAL LEGAL AID OFFICE. TAKE NOTICE: THIS ACTION WILL AUTOMATICALLY BE DISMISSED if it has not been set down for trial or terminated by any means within five years after the action was comme ced u j ess otherwise ordered by the court. DMe -j'.)~~!""'' by -t--t 7t<- --\t~-± l -;;.;, '...-~----- Local Registrar 393 University Avenue, 10th Floor Toronto, Ontario MSG!E6 - l -

2 ,. TO: FIAT CHRYSLER AUTOMOBILES N.V. 25 St James's Street London, United Kingdom SWIA IHA AND TO: FCA USLLC 1000 Chrysler Drive Aubmn Hills, Michigan United States of America AND TO:. FCA CANADA INC. 1 Riverside Drive West Windsor, Ontario N9A 5K3-2 -

3 ' I. RELIEF CLAIMED 1. The Plaintiff, on behalf of themselves and other Class Members, including the Family Class, claim against the Defendants for: a) an order pursuant to the Class Proceedings Act, 1992, So. 1992, c.6, ce1tifying this action as a class proceeding and appointing him as the representative plaintiff for the Class; b) a declaration that the defendants were negligent and are liable in damages; c) general damages in the sum of $500 million for negligent design, testing manufacturing, marketing and sale or such other sum as this Court finds appropriate; d) damages for breach of implied and express wananties and unfair practices provisions under consumer protection legislation, including but not limited to the Consumer Protection Act, 2002, S.O. 2002, c.30; Sched. A; e) damages recoverable pursuant to section 36 of the Competition Act; f) prejudgment and postjudgment interest, compounded, or pursuant toss. 128 and 129 of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended; g) in the alternative to the general damages desc1ibed above, disgorgement all profits received from the sale of the Affected Vehicles, as defined herein; - 3 -

4 h) punitive or exemplary damages in the sum of $50 million or some other sum this Court finds just; i) costs of this action on a substantial indemnity basis or in an amount that provides full indemnity plus, the costs of distribution of an award under ss.24 or 25 of the Class Proceedings Act, including costs ofnotice associated with distribution and fees payable to a person administering the distribution pursuant to s.26 of the Class Proceedings Act; and, j) such further and other relief as to this Honourable Corut seems just. II. NATURE OF ACTION 2. This action arises out of automobiles, namely FCA Dodge RAM 1500 and FCA Jeep Grand Cherokee, which were tested, manufactured, marketed, distributed and sold, directly or indirectly, by the Defendants (the "Affected Vehicles"). 3. All vehicles, including Affected Vehicles, are required to comply with ce1tain emissions standards, which are designed to protect the environment and the health and safety of Canadians. 4. The Affected Vehicles are equipped with devices or software ("Emissions Control Devices") which make it appear, during emissions testing, fuat the Class Vehicles meet these standards; however, under normal driving conditions the Class Vehicles are in fact incapable of meeting the required emissions standards (the "Defect"). 5. On January 12th, 2017, the Environmental Protection Agency in the United States of America issued a Notice of Violation directed at FCA and FCA US ("EPA NOV")

5 6. As indicated in the EPA NOV, the Defendants had, prior to the issuance of the EPA NOV, been given a reasonable opportunity to justify the existence of Emissions Control Devices and did not do so. Ill. THE PARTIES Plaintiff 7. The Plaintiff, Victor Mendham, is a resident of Markham, Ontario. 8. On or about November 2013, the Plaintiff purchased a new 2014 diesel Jeep Grand Cherokee Summitt. 9. The Defect was unknown and could not, even through reasonable diligence on the pait of the Plaintiff, be known to the Plaintiff at the time of the purchase. 10. Had the Applicant known about the Defect and been aware that his vehicle would not, in all circumstances, meet the emissions standards imposed by law, he would not have purchased the vehicle or would not have paid as much for the vehicle. 11. In addition, due to the presence of the Defect, the Applicant's vehicle resale value has diminished. 12. The damages suffered by the Plaintiff are a direct and proximate result of the Defendants' conduct. 13. As a consequence of the foregoing, the Plaintiff is justified in claiming damages;

6 Defendants 14. The Defendant, Fiat Chrysler Automobiles N.V. ("FCA") is a corporation headquartered in London, United Kingdom. FCA directs and controls the business actions of FCA US LLC ("FCA US") and FCA Canada Inc. ("FCA Canada"). 15. The Defendant, FCA US, wholly owned by FCA, is a co1poration headquartered in Auburn Hills, Michigan. 16. The Defendant, FCA Canada, wholly owned by FCA US, is a corporation headquartered in Windsor, Ontario, and canies on business throughout Canada. 17. FCA, FCA US, and FCA Canada ("Defendants") shared the common pmpose of designing, testing, manufactming, marketing, sales, and distribution of the class vehicles in Canada. 18. The business and interests of the Defendants are inextricably interwoven, therefore, all the IV. THE PROPOSED CLASS 19. The Plaintiff brings this action on behalf of: All persons in Canada (including but not limited to individuals, corporations, and estates) who own or have owned, or lease or have leased, one or more of the following "Class Vehicles'', where equipped with 3L diesel engines: 2014, 2015, or 2016 model year FCA Dodge RAM , 2015, or 2016 model year FCA Jeep Grand Cherokee - 6 -

7 refened to herein as "the Affected Vehicles". V. CAUSES OF ACTION Negligence 20. At all material times, the Defendants owed a duty of care to the Plaintiff and to the Class and breached the standard of care expected in the circumstances. 21. The Defendants had a duty to design, manufactme, and market vehicles that are reasonably safe for their intended uses, reasonably efficient, and to provide true and accmate information to the public with respect its products. 22. The Defendants breached this duty through: (a) Failme to properly and adequately to design, develop, and test the Subject Vehicles to ensure that they were not producing illegal amounts of emissions; (b) Failme to discover, through reasonably expected adequate testing, that the Subject Vehicles were producing illegal amounts of emissions; (c) Failme to properly and adequately to install a safe software component or mechanical safeguard against producing illegal amounts of emissions; (d) Failure to properly and adequately design or manufacture components and component systems for Subject Vehicles that do not produce illegal amounts of emissions; - 7 -

8 . ( e) Failure to properly and adequately test Subject Vehicles the emissions system and other components of the emissions system; (f) Failure to properly and adequately to manufacture, fabricate, and assemble Subject Vehicles and the emissions systems, components, and parts thereof; (g) Failure to adequately monitor the safety and post-market performance of the Subject Vehicles and their component parts and to warn the Plaintiffs and Class Members of the dangers associated with producing illegal amounts of emissions; and, (h) Failure to promptly recall the Subject Vehicles from the Canadian market upon discove1y of their propensity to produce illegal amounts of emissions m1der conditions of ordinaiy usage. 23. As designers, manufacturers, and marketers of the Subject Vehicles in Canada, the Defendants were in a position of legal proximity to the Class Members. 24. It was reasonably foreseeable that a failure by the Defendants to design and manufacture reasonably efficient emissions system for the Subject Vehicles, and to monitor the performance of such systems in the Subject Vehicles following market introduction, would cause haim to the Plaintiff and Class Members. 25. Prior to and dming the design, manufacturing, marketing, and sale of the subject vehicles and thereafter, the Defendants knew, or in the exercise of reasonable care should have known, that other - 8 -

9 . feasible and safer design alternatives were available to them which would have significantly reduced emissions standard operating conditions to an acceptable level. 26. The Defendants negligently failed to utilize such other and feasible safer designs in their design of the emissions systems in the subject vehicles, and took active and illegal actions to bide the actual amount of emissions being produced. 27. As a result of the foregoing, the Plaintiff and the Class have suffered economic damages in an amount to be proven at tiial. Breach of Express and Implied Warranty 28. By marketing, advertising, and dishibuting diesel vehicles containing the defective emissions system, and without incorporating adequate electi onic or mechanical fail-safes, and while misrepresenting or failing report the actual emissions being produced by such vehicles to the public, the Defendants created and breached both express and implied wananties that the vehicles were safe for use, and compliant with environmental regulations, when in fact, they were not. 29. As a result of the foregoing, the Plaintiffs and the Class have suffered economic damages in an ammmt to be proven at hial. Violations of Competition Legislation 30. At all times relevant, the Defendants violated section 52 of the Competition Act, R.S., 1985, c. C-34, by the use of false and misleading representations or omissions of mate1i al fact in - 9 -

10 connection with the marketing, promotion, and sale of vehicles equipped with the defective emissions systems. 31. The Defendants comrmmicated the purp011ed benefits of vehicles equipped with a diesel engine, while failing to disclose that these vehicles were in fact less efficient and produced more emissions with the intent that consumers, like the Plaintiffs, would purchase a vehicle equipped with these defective emissions systems. 32. The Plaintiffs and the Class Members have suffered losses and damages and are entitled to recove1y pursuant to section 36 of the Competition Act. Violations of the Consumer Protection Act 33. At all mate1ial times, the Class Members are consumers for pmposes of the Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched. A ("Consumer Protection Act") and corresponding legislation in other provinces. 34. At all material times, the Defendants are suppliers for the purposes of the Consumer Protection Act, as they are engaged in the business of selling, leasing, or trading in the Affected Vehicles, either directly or indirectly through their agents. 35. Through their actions described above, the Defendants have breached implied warranties that the Affected Vehicles are of merchantable quality and I or are fit for their intended purpose

11 36. Through their actions described above, the Defendants have committed unfair practices by making false, misleading and I or deceptive representations as to the Affected Vehicles perfonnance characteristics, safety, quality, and benefit to the Class Members. 37. There is privity of contract between the Class Members and the Defendants by virtue of the consumer agreement for the Class Members to purchase, lease, and I or rent an Affected Vehicle. 38. In the alternative, contracts between the Defendants and any retailers involved in the sale, lease or rental of Affected Vehicles by the Class Members contained the implied wairnnties as to the Affected Vehicles' merchantable quality and fitness for intended purpose. 39. The Defendants and retailers intended to extend the benefit of these provisions to the prospective customers and Class Members. Allowing the Class Members to have a tight of action under these contracts would be an incremental change to the doctrine of p1ivity. 40. As a result of the breaches of consumer protection legislation, including the Consumer Protection Act, the Plaintiffs and other Class Members have suffered harm and are entitled to remedies at law including damages or rescission or both. Unjust Enrichment 41. The Defendants were unjustly enriched as a result of the revenues obtained from the sale of the Subject Vehicles and their component pmts:

12 (a) the Defendants were enriched through revenues and profit from the sale of the Subject Vehicles and their component paits; (b) the Plaintiffs and the Class have suffered con-esponding deprivation and losses; and, (c) there is no juristic reasons for the benefit by the Defendants and con-esponding detriment experienced by the Plaintiffs and the Class. 42. The circumstances, as described in this Statement of Claim are such that allowing the Defendants to retain the benefits provided by the Plaintiff and Class would be inequitable. 43. The Defendants have been tmjustly enriched at the expense of the Plaintiff and the Class and, as a matter of equity, the Defendants should be required to make them whole by disgorging the purchase p1ice of each vehicle which should be ordered disgorged on a Class wide aggregate basis. Waiver of Tort 44. The Plaintiffs reserve the right to elect at the ttial of the common issues to waive the tort and to have damages of the Class assessed in an amount equal to the gross revenues earned by the Defendants, or the disgorgement of all income received by the Defendants through the sale of the Subject Vehicles. 45. The Defendants wrongfully intt oduced and maintained the marketing and distribution of the Subject Vehicles in the Canadian market. But for the Defendants' negligent and intentional acts and statutory breaches, they would have sold no or alternatively fewer, Subject Vehicles and the Defendants would not have received any or part of the revenues they received

13 46. As a result of the Defendants' breaches of duty and intentional wrongdoing, they have generated substantial revenues that they should not in good conscience retain. VI. DAMAGES 47. As a result of the Defendants' acts and omissions particulaiized above, the Plaintiff and the Class have suffered, and will continue to suffer loss and damage: (a) loss of income; (b) expenses related to the Subject Vehicles; (c) loss of use of the Subject Vehicles and inconvenience; (d) depreciation in vehicle's resale value of the Subject Vehicles; and, ( e) such further and other damages to be proven at trial. 48. Such loss and damage was foreseeable by the Defendants. VII. PUNITIVE AND EXEMPLARY DAMAGES 49. The Defendants have acted in such a high-handed, wanton, ai1d reckless manner as to waffant a claim for punitive damages

14 50. The Defendants prioritized corporate profits over the quality of its vehicles and the safety of the Plaintiff and Class. 51. The Defendants knew that certain models of their vehicles were not meeting emissions standard, and deceived the public and regulators about the actual emissions being produced. 52. The Defendants went as far as deceiving regulators through developing software to hide the actual amount of emissions being produced. 53. To know of the defect, and hide it, is atrocious conduct. Under the Canadian system of governance we have a higher expectation of the judicial arm of governance to punish and this is a case where punitive or exemplary damages ought to be ordered. 54. Punitive or exemplary damages ought to be awarded to the Class to discourage such highhanded corporate wrongdoing in the future. 55. An award of punitive or exemplary damages should be made on a lump sum basis to be distributed among members of the Class in whatever manner the common issues tiial judge deems approp1iate. VIII. STATUTES 56. The Plaintiffs plead and rely upon the following statues and the regulations made theretmder:

15 (a) Class Proceedings Act, 1992, S.O. 1992, c.6; (b) Consumer Protection Act 2002, S.O. 2002, c. 30, Sched A; (c) Comis of Justice Act, R.S.O. 1990, c.43; (d) Family Law Act, R.S.O. 1990, c. F.3; and (e) Negligence Act, R.S.O. 1990, c. N.1. IX. REAL AND SUBSTANTIAL CONNECTION TO ONTARIO 57. This action has a real and substantial connection between the subject matter of this action and Ontario for the following reasons, inter alia: a. several or all of the Defendants canyon business in Ontaiio; b. the head office of FCA Canada Inc. is in Windsor, Ontaiio; c. the Defendants distribute and sell their products, including the Affected Vehicles, in Ontario and derive substantial revenue from such business; d. the damages of the Plaintiffs and other Class Members resident in Ontario were sustained in Ontario; and, e. the Defendants marketed and sold their products, including the Affected Vehicles, in Ontaiio

16 X SERVICE OUTSIDE ONTARIO 58. The originating process may be served outside Ontaiio without court order because the claim is in respect of a tort committed in Ontario, damages sustained in Ontario arising from a tort or breach of contract however committed, against a person canying on business in Ontaiio, and against a person outside Ontaiio who is a necessary and proper party to this proceeding being brought against another person served in Ontario. 59. The Plaintiff proposes that this action be hied at Toronto, Ontario. Date: January l3 1 h, 2017 MERCHANT LAW GROUP LLP Lawyers 120 Adelaide Sh eet West, Suite 1201 PO Box 53 Toronto, ON M5H ltl Venessa Vuia LSUC #69499L Tel: ( 416) Fax: (647) vvuia@merchantlaw.com

17 / Court File No... VICTOR MENDHAM Plaintiff FCA CANADA INC., FCA US LLC, FIAT CHRYSLER AUTOMOBILES N.V. Defendants \ CV- t * - S<; -tgpts- ~ ONTARIO SUPERIOR COURT OF JUSTICE PROCEEDING COMMENCED AT TORONTO STATEMENT OF CLAIM Merchant Law Group LLP 120 Adelaide Street West Suite 1201 Toronto, ON, M5H 1 Tl Venessa Vuia Tel: (416) Fax: (647) LSUC # : 69499L G:,~.l;o,q L Lawyers for the Plaintiff