----------- I I I I JUDICIAL CENTRE EDMONTON PLAINTIFF DEFENDANTS HOLLY STANDINGREADY GENERAL MOTORS OF CANADA LIMITED and GENERAL MOTORS COMPANY Brought under the Class Proceedings Act DOCUMENT STATEMENT OF CLAIM ADDRESS FOR SERVICE AND CONTACT INFORMATION OF PARTY FILING THIS DOCUMENT MERCHANT LAW GROUP LLP 2401-100 Saskatchewan Drive Regina Saskatchewan, S4P4H8 Roch Dupont Tel: (306) 359-7777 Fax: (306) 522-3299 NOTICE TO DEFENDANTS You are being sued. You are a defendant. Go to the end of this document to see what you can do and when you must do it.
) - 2 - STATEMENT OF CLAIM 1. This action is brought on behalf of the Plaintiff in her own right, and pursuant to the Class Proceedings Act, on behalf of all persons in Alberta and throughout 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 GM vehicles affected by the ignition defect asserted by this claim, and additionally, all persons in Canada (including but not limited to individuals, corporations, and estates) who have suffered any injury or damages, including but not limited to personal injuries, caused by an accident associated with the ignition defect asserted by this claim (the "Class Members" or "Class"). THE PARTIES The Plaintiff 2. The Plaintiff, Holly Standingready is a resident of Edmonton, Alberta, and leases a 2006 Chevrolet Cobalt, one of the affected General Motors' Vehicles. The Plaintiff is a representative of a class of persons from across Canada affected by the loss of economic value and safety issues concerning their General Motors' Vehicles. 3. The Plaintiff claims on her behalf and on behalf of the Class and all Class Members for an order pursuant to the Class Proceedings Act of Alberta ("Class Proceedings Act") certifying this action as a class proceeding and appointing him or other members of the Class as representative plaintiff( s) of the Class. 4. The Plaintiff and Class Members purchased and/or leased one or more GM Subject Vehicles. 5. The Class Members are individuals who suffered economic loss as a result of purchasing or leasing a GM Subject Vehicle that contained a defective ignition switch subject to recall.
The Defendants - 3-6. The Defendant, General Motors Company, is a corporation incorporated pursuant to the laws of the State of Delaware with its principal place of business at 300 Renaissance Center, Detroit, Michigan, United States. General Motors Company was incorporated in 2009 when General Motors Corporation went bankrupt. General Motors Company was incorporated in 2009 as a part of reorganizations of General Motors Corporation, and inter alia, General Motors Company purchased all the assets of General Motors Corporation pursuant to 11 u.s.c..363. 7. The Defendant, General Motors of Canada Limited ("General Motors Canada"), is a corporation incorporated pursuant to the laws of the province of Ontario and is registered extra-provincially in other provinces. General Motors Canada maintains its head office at 1908 Colonel Sam Drive, Oshawa, Ontario, L1H 8P7 and has not experienced bankruptcy. 8. The business of each of General Motors Canada and General Motors Company involves the designing, developing, testing, manufacturing, sale, and distribution of vehicles in Canada, including the subject vehicles identified below. 9. Each Defendant acted in concert with the other and each is vicariously liable for the actions of the others. Each of the Defendants was part of a common enterprise, one worldwide corporate entity, acting together for common goals. Each created and executed a common business plan to manufacture and sell their vehicles in Ontario and throughout the world. 10. The Plaintiff or Class Members could not reasonably be expected to know which of the Defendants has committed which individual wrong at this stage because the Defendants work collectively, but each is responsible for the wrongdoing of the other. 11. Hereinafter, General Motors Company and General Motors Canada will collectively be referred to as "General Motors".
-4- THE PARTICULARS The Defective GM Vehicles 12. General Motors researched, developed, designed, tested, manufactured, marketed, distributed, and sold General Motors' vehicles in Canada, including in Alberta. 13. Certain General Motors' vehicles may experience an unwanted engine-shutdown due to a defect in the ignition switch. The problem is that the ignition switch may involuntarily move out of the "run" (or on) position to the "off' position, causing an electrical failure. The risk of an unwanted engine-shutdown increases if the key ring is carrying more than the car key. 14. When an unwanted engine-shutdown occurs, the vehicle may continue out of control despite a driver's best efforts to regain control or stop the vehicle, significantly increasing the likelihood of serious personal injury or death from a catastrophic accident. 15. An unwanted engine-shutdown results in: a) sudden loss of electrical power; b) sudden loss of power-steering function; c) sudden loss of electrical brake-assisting; d) sudden loss of seat-belt restraining function; and/or, e) renders air-bags useless and inoperative in the event of a collision. 16. Without power-steering, the vehicle's steering will still work, but it will be difficult for an individual to tum the steering wheel, particularly when the loss of power steering is unexpected, and to maintain full control of their vehicle. Driving without power-steering can be dangerous because the vehicle may not be able to tum as quickly or easily in order perform an evasive manoeuver and avoid a collision. 17. Without electrical brake-assisting, the vehicle's brakes will still work but will require significantly increased pedal effort. The pedal will feel much harder and it will take much greater pressure to stop the vehicle. Driving without electrical brake-assisting can be dangerous because the vehicle may not be able to stop as quickly or in as short a distance.
-5-18. The Plaintiff and Class Members, in part having become accustomed to driving their vehicles with power steering and electrical brake-assist, face increased and significant danger when suddenly steering and braking functions on their vehicles is changed. 19. Without air bags, individuals are subject to a higher risk of personal injury and death in the event of a collision. 20. General Motors' vehicles with a defective ignition switch are dangerous to operate and subject owners, passengers, and third parties, to increased risks of personal injury and death. 21. According to a chronology of events that General Motors Company filed on February 24, 2014 with the U.S. National Highway Traffic Safety Administration, General Motors Corporation knew of the defective ignition switch problem as early as 2004, and was told of at least one fatal crash in March of 2007. 22. In an amended submission to the U.S. National Highway Traffic Safety Administration on March 12, 2014, General Motors Company said it had identified an issue with the ignition switch in 2001 pre-production testing on the Saturn ION. 23. In 2006, the Defendants issued a Technical Service Bulletin, 2006 TSB (#05-02-35-007 A: Information on Inadvertent Turning of Key Cylinder, Loss of Electrical System and No DTCs (Oct 25, 2006)), which dismisses the issue as a mechanical fault. 24. The Technical Service Bulletin listed the following vehicles as experiencing a possible inadvertent turning of the key cylinder and sudden loss of electric system and dynamic traction control: 2005-2007 Chevrolet Cobalt 2006-2007 Chevrolet HHR 2005-2006 Pontiac Pursuit 2007 Pontiac G5 2006-2007 Pontiac Solstice
) ) - 6-2003-2007 Saturn ION 2007 Saturn Sky 25. Despite their knowledge, General Motors did not issue a recall until 2014, approximately 13 years later. 26. General Motors Company acquired all of the assets, staff, and knowledge of the predecessor General Motors Corporation which went into bankruptcy in 2009. 27. General Motors hid information regarding the defective ignition switch problem from the Plaintiffs, the Class, and regulatory authorities in Canada, the U.S., and elsewhere. 28. On February 13, 2014, General Motors recalled 780,000 vehicles, and on March the 28th 2014, General Motors issued a recall notice for the 2008 to 2011 model years which included: 2005-07 Chevrolet Cobalt and 2008 to 2011 models 2005-07 Pontiac G5 and 2008 to 2011 models 29. On February 25, 2014, General Motors added 588,000 vehicles to the recall, and on March 28th 2014, general Motors issued a second recall notice for the 2008 to 2011 model years including: 2003-07 Saturn ION and 2008 to 2011 models 2006-07 Chevrolet HHR and 2008 to 2011 models 2007 Pontiac Solstice and 2008 to 2011 models 2006-07 Saturn Sky and 2008 to 2011 models 30. In Canada, 235,855 vehicles of the aforementioned models and years have since been subject to recall ("Subject Vehicles").
- 7-31. The U.S. National Highway Safety Administration has linked the defects to 31 serious crashes and 13 front-seat deaths. 32. According to the Center for Auto Safety, referencing data compiled by U.S.-based Friedman Research Corporation, from 2003 until 2012, 303 people died in collisions after airbags failed to deploy in certain Chevrolet Cobalt and Saturn Ion models, two vehicles included in the recall. The Plaintiff's Experience 33. The Plaintiffleased a 2006 Chevrolet Cobalt in 2009. 34. Since 2009, the Plaintiff has experienced various problems with her vehicle. 35. The key gets stuck in the ignition switch, and on occasion, she is unable to shift gears. 36. On various occasions, particularly while stopped at a red light, the Plaintiff has experienced sudden, unintended engine shutdowns. 37. The Plaintiff has called General Motors, who told the Plaintiff that what she was experiencing was not related to the recall. 38. The Plaintiffs lease expires in January 2015; she would like General Motors to buy-out the remainder of her lease agreement, as she has no interest in purchasing a defective vehicle. 39. The Plaintiff now drives her vehicle with great caution, fearing that she could experience a sudden, unintended engine-shutdown and risk serious bodily harm. She has experiences psychological and emotional distress knowing that her vehicle is unsafe. 40. The Plaintiff is also aware that due to all the bad press that General Motors is receiving over the defective ignition switch, this will decrease the value of her vehicle and make it more difficult for her to sell her vehicle in the future.
- 8-41. The Plaintiff is dissatisfied with the quality of her General Motors Canada vehicle and the recall. CAUSES OF ACTION 42. The causes of action in this claim include, but are not limited to: (a) negligence; (b) breach of express and implied warranty; (c) violations of competition legislation; (d) violations of consumer protection legislation; and (e) unjust enrichment (A) NEGLIGENCE 43. At all material times, the General Motors owed a duty of care to the Plaintiffs and to the Class and breached the standard of care expected in the circumstances. 44. General Motors had duty to design, manufacture, and market vehicles that were reasonably safe for their intended uses, and to provide true and accurate information to the public to prevent undue risks arising from the foreseeable use of their products. 45. General Motors breached their duty through: a. Failure to properly and adequately design, develop, and test the Subject Vehicles to ensure that they were safe and free from defects prior to selling or distributing them; b. Failure to discover, through reasonably expected adequate testing, that the Subject Vehicles were equipped with a defective ignition switch that makes these vehicles prone to sudden, unintended engine-shutdown; c. Failure to properly and adequately install a fail-safe software component or mechanical safeguard against sudden, unintended engine-shutdown;
-9- d. Failure to properly and adequately design or manufacture components and component systems for Subject Vehicles that would safeguard against sudden, unintended engineshutdown; e. Failure to properly and adequately test the Subject Vehicles, and parts thereof, specifically including but not limited to, the ignition switch, the electronic engine control, and other components of the engine control module, braking system, and power-steering control; f. Failure to properly and adequately manufacture, fabricate, and assemble the Subject Vehicles and the systems, components, and parts thereof; g. Failure to properly and adequately warn of the dangers attendant upon use of the Subject Vehicles, specifically including, but not limited to, the extreme risk to the driver and occupants of a sudden, unintended engine-shutdown and loss of control of the vehicle and resultant risk of severe bodily injury or death; h. 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 their use; and, 1. Failure to promptly recall the S-ubject Vehicles from the Canadian market upon discovery of their propensity to cause unintended engine-shutdown under conditions of ordinary usage. 46. As designers, manufacturers, and marketers of the Subject Vehicles in Canada, General Motors were in a position of legal proximity to the Class Members. 47. It was reasonably foreseeable that a failure by General Motors to design and manufacture a reasonably safe ignition system for the Subject Vehicles, and to monitor the performance of such systems in the Subject Vehicles following market introduction, would cause harm to the Plaintiffs and Class Members. 48. Prior to and during the design, manufacturing, marketing, and sale of the subject vehicles and thereafter, General Motors knew, or in the exercise of reasonable care should have
-10- known, that other feasible and safer design alternatives were available to them which would have significantly reduced the risk of sudden, unintended engine-shutdown and the lack of efficacy of the ignition switch under standard operating conditions. General Motors negligently failed to utilize such other and feasible safer designs in their design of the ignition switch in the subject vehicles. 49. As a result of the foregoing, the Plaintiffs and the Class have suffered economic damages in an amount to be proven at trial, and some members of the Class have suffered personal tnjury. (B) BREACH OF EXPRESS AND IMPLIED WARRANTY 50. By marketing, advertising, and distributing vehicles containing the defective ignition switch, and without incorporating adequate electronic or mechanical fail-safes, and while misrepresenting or failing report the dangers of such vehicles to the public, General Motors created and breached both express and implied warranties that the vehicles were safe for use as transportation, when in fact, they were not. 51. As a result of the foregoing, the Plaintiffs and the Class have suffered economic damages in an amount to be proven at trial, and some of the members of the Class have suffered personal tnjury. C) VIOLATION OF COMPETITION LEGISLATION 52. At all times relevant, General Motors violated section 52 of the Competition Act, R.S., 1985, c. C-34, by the use of false and misleading representations or omissions of material fact in connection with the marketing, promotion, and sale of vehicles equipped with the defective ignition switches. Generai Motors communicated the purported benefits of vehicles equipped with the defective ignition switches while failing to disclose that these vehicles were in fact equipped with a defective ignition switch that causes these vehicles to have a dangerous propensity to experience sudden and unintended engine-shutdown, with the intent
- 11- that consumers, like the Plaintiffs, would purchase a vehicle equipped with these defective ignition switches. 53. The Plaintiff and the Class Members have suffered losses and damages and are entitled to recovery pursuant to section 36 of the Competition Act. D) VIOLATIONS OF CONSUMER PROTECTION LEGISLATION 54. The Plaintiff and Class relied upon, inter alia, The Consumer Protection Act, S.S. 1996, c. C-30.1, as am., including s. 14 and Part III; the Fair Trading Act, R.S.A. 2000, c. F-2, as am. Including s. 13; The Business Practices Act, S.M. 1990-91, c. 6; Consumer Protection Act, 2002, S.O. 2002, c.30, Sched. A, as am., including s.8; the Trade Practices Act, R.S.N.L. 1990, c. T-71, as am., including s. 14; and other similar legislation throughout Canada, with application to General Motors' actions and conduct, as described herein, because it extends to transactions that are intended to result, or which have resulted in the sale or lease of goods or services to consumers. 55. At all times relevant, General Motors manufactured, marketed, and distributed General Motors vehicles equipped with a defective ignition switch, in an unlawful, unfair, and deceptive manner that was likely to deceive the Plaintiff 56. Ford's marketing of vehicles containing defective ignition switches, without incorporating adequate electronic or mechanical fail-safes, and while misrepresenting the dangers of such vehicles to the public, constitutes unlawful, unfair and deceptive business acts or practices within the meaning of the legislation set-out at paragraph 34. 57. As a result of violating the Consumer Proiection Act, supra, General Motors caused the Plaintiffs to purchase/lease a General Motors vehicle.
) - 12-58. As a result of the foregoing, the Plaintiffhas suffered economic damages in an amount to be proven at trial. E) UNJUST ENRICHMENT 59. General Motors was unjustly enriched as a result of the revenues obtained from the sale of the Subject Vehicles and their component parts: (a) General Motors was enriched through revenues and profit from the sale of the Subject Vehicles and their component parts' (b) the Plaintiff and the Class have suffered corresponding deprivation and losses; and, (c) there is no juristic reasons for the benefit by General Motors and corresponding detriment experienced by the Plaintiffs and the Class. 60. The circumstances, as described in this Claim are such that allowing General Motors to retain the benefits provided by the Plaintiffs and Class would be inequitable. 61. General Motors have been unjustly enriched at the expense of the Plaintiffs and the Class and, as a matter of equity, General Motors should be required to make them whole by giving up the revenues obtained from the sale of the Subject Vehicles on a Class wide aggregate basis. CLASS PROCEDURE 62. The Plaintiff is committed to prosecuting the claim and has retained competent counsel experienced in class action litigation. The Plaintiffs claim is typical of the claims of other Class Members and on the common issues the Plaintiff has no interest which is in conflict with other Class Members. The Plaintiff will fairly and adequately protect the interests of the Class. 63. A class action is an appropriate method for the fair and efficient adjudication of the issues as well as achieving fairness and justice without overburdening the Court system with a
-13- multiplicity of individual claims. The prosecution of separate actions would create the risk of conflicting decisions on the same facts and issues. 64. All of the Class Members have in common that they suffered a loss as a result of purchasing one of the defective Subject Vehicles. Members ofthe Class are so numerous that joinder of individual claims in a single action is not practical. Each Class Member should be readily identifiable from information and records available from the Defendants. Additionally, because the damages suffered by individual members of the Class may in some circumstances be relatively small, the expense and burden of individual litigation make it impossible for such Class Members individually to address the wrongs done to them. 65. Accordingly, a class action is an appropriate method and is superior to other available methods for the fair and efficient adjudication of the issues and achieving fairness and justice without over burdening the Court system with a multiplicity of individual claims. 66. The Class is so numerous that joinder of all members is impractical. The Plaintiffs counsel has already been contacted by several individuals who belong to the proposed Class. The identities of the Class Members will be easily ascertained using the Defendants records. As such, a class action is the most efficient and economic method of proceeding. Once the identity of all Class Members is known, they can be notified of the loss of their Personal Information and the commencement of this class action through a mass mail out and through advertisement in newspapers and magazines and such other channels for providing notice as this Honourable Court may require. The result of Court supervised notice will be that all affected parties will be informed of the potential financial risks that they face and the potential remedies. DAMAGES 67. As a result of the Defendants' acts and omissions particularized above, the Plaintiffs and the Class have suffered, and will continue to suffer loss and damage: (a) personal injury and in some cases death;
-14- (b) (c) (d) (e) (f) (g) (h) emotional and psychological trauma; medical expenses; loss of income; expenses related to property damage; loss of use ofthe Subject Vehicles and inconvenience; depreciation in vehicle's resale value of the Subject Vehicles; and, such further and other damages to be proven at trial. 68. Pursuant to common law, the Sale of Goods Act, R.S.A. 2000, c. S-2; the Competition Act, R.S.A., 1985, c. C-34; The Consumer Protection Act, S.S. 1996, c. C-30.1, as am., including s. 14 and Part III; the Fair Trading Act, R.S.A. 2000, c. F-2 as am. including s. 13; The Business Practices Act, S.M. 1990-91, c. 6, 1985; Consumer Protection Act, 2002, S.O. 2002, c.30, Sched. A, as am., including s. 8; the Trade Practices Act, R.S.N.L. 1990, c.t-71, as am., including s. 14; and other similar legislation throughout Canada, the Defendants are liable to pay damages to the Plaintiff and Class Members. 69. Further, or in the alternative, the conduct and actions of the Defendants were improper and unlawful, and the Defendants knew in the circumstances that their conduct and actions would cause economic injury to the Plaintiff and Class members, and the Defendants are therefore liable to the Plaintiff and the Class members. 70. Further, or in the alternative, the conduct and actions of the Defendants were unlawful and improper, and intended to cause harm and economic loss to the Plaintiff and other Class Members, and constitutes tortuous interference with the economic interests of the Plaintiff and Class Members, rendering the Defendants liable to pay resulting damages. CAUSATION 71. The acts, omissions, wrong doings, and breaches of legal duties and obligations of the Defendants have caused or materially contributed to the Plaintiff and Class Members suffering injury, economic loss, and damages.
- 15-72. The Plaintiff and Class Members have suffered real and substantial injury, economic loss, and damages arising from the aforesaid acts, omissions, wrong doings, and breaches of legal duties and obligations of the Defendants, and are therefore entitled to the relief sought and judgment against the Defendants. AGGRAVATED, PUNITIVE, AND EXEMPLARY DAMAGES 73. General Motors have acted in such a high-handed, wanton, and reckless manner as to warrant a claim for punitive damages. 74. General Motors knew as early as 2001 that certain models of their vehicles may have had a defective ignition switch that made such vehicles prone to sudden, unintended engineshutdown. 75. General Motors went as far as issuing Technical Services Bulletin in 2006 listing all the subject vehicles, but did nothing to remedy the dangerous defect until2014. 76. In the United States of America the Federal Congress, both through Committees ofthe House of Representatives and of the Senate, are investigating this extraordinary breach of expected conduct of a responsible corporation where the General Motors attempted to cover up the danger and knowingly put the public, including the Class, at risk of personal injury and death. Criminal prosecutions are being considered in the United States. 77. To be aware of danger and hide that danger is atrocious conduct. General Motors intentionally disregarded the Class Members' rights and safety, and prioritized corporate profits over the quality of the Subject Vehicles. 78. Punitive or exemplary damages ought to be awarded to the Class to discourage such highhanded corporate wrongdoing in the future.
- 16-79. The Plaintiffs seek an aggregate award of punitive or exemplary damages, to be distributed among members of the Class in whatever manner the common issues trial judge deems appropriate. GENERAL 80. The Plaintiff pleads and relies upon the Alberta Class Proceedings Act, to common law, the Sale of Goods Act, R.S.A. 2000, c. S-2; the Competition Act, R.S.A., 1985, c. C-34; The Consumer Protection Act, S.S. 1996, c. C-30.1, as am., including s. 14 and Part III; the Fair Trading Act, R.S.A. 2000, c. F-2 as am. including s. 13; The Business Practices Act, S.M. 1990-91, c. 6, 1985; Consumer Protection Act, 2002, S.O. 2002, c.30, Sched. A, as am., including s. 8; the Trade Practices Act, R.S.N.L. 1990, c.t-71, as am., including s. 14. 81. If issue is taken with service of documents upon any Defendant, the Plaintiff seeks leave to have service on any of the Defendants' affiliates, predecessors and associated or related entities be accepted as valid service against all Defendants. 82. The Plaintiff, as representative of the class of persons, corporations, and entities resident or situated in Alberta, and a subclass of persons, corporations, and entities not resident or situated in the Province of Alberta, but resident or situated in another Canadian province or territory or abroad, have suffered injury, economic loss, and damages as a result of the Defendants' acts, omissions, wrong doings, and breaches of legal duties and obligations, included but not limited to: deceit, misrepresentation, negligence, intentional and negligent misrepresentation, improper and unfair trade and business practices, misleading and misinforming the Class Members and members of the public, failure to make proper public disclosure, and failure to fulfill their statutory and common law duties and obligations to the Plaintiff and the Class Members. The Plaintiff therefore claims, on behalf of herself and all Class Members, for the following relief against the Defendants, on a joint and several basis: a) An Order to certify this proceeding as a class proceeding and an order appointing a Representative Plaintiff of the Class (and any subclasses), as described below;
- 17- b) General and special damages for members of the Class in an amount to be determined at trial; c) General and pecuniary damages for negligence; d) General and pecuniary damages for breach of confidence or tort; e) Damages for unjust enrichment or other equitable relief, f) Exemplary, aggravated, and punitive damages; g) Pre-judgment and post judgment interest on the foregoing sums in the amount of2% per month, compounded monthly, or alternatively, in such other amounts that this Honourable Court may allow; and h) Such further and other relief as counsel may advise and this Honourable Court may allow. THE PLACE OF TRIAL 83. The Plaintiff proposes that the trial of this action be held at the Edmonton Queen's Bench Courthouse, in the City of Edmonton, in the Province of Alberta and does not anticipate that the trial of this action will exceed 25 days in length. Dated at the City of Edmonton, in the Province of Albertn, this ]]day of March, 2014. This document prepared by: MERCHANT LAW GROUP LLP Barristers and Solicitors 2401 Saskatchewan Drive Regina Saskatchewan S4P4H8 Telephone: (306) 359-7777 Facsimile: (306) 522-3299 Attention: Roch Dupont Per: MERCHANT LAW GROUP LLP
) - 18- NOTICE TO THE DEFENDANTS You only have a short time to do something to defend yourself against this claim: - 20 days if you are served in Alberta - 1 month if you are served outside Alberta but in Canada - 2 months if you are served outside Canada. You can respond by filing a statement of defence or a demand for notice in the office of the clerk of the Court of Queen's Bench at Edmonton, Alberta, AND serving your statement of defence or a demand for notice on the plaintiffs' address for service. WARNING If you do not file and serve a statement of defence or a demand for notice within your time period, you risk losing the law suit automatically. If you do not file, or do not serve, or are late in doing either of these things, a court may give a judgment to the plaintiffs against you.