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Jury Finds Toyota Liable for Breach of Contract

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July 16, 2019—Miller Barondess, LLP, announced on Tuesday that an Orange County, Calif., jury had awarded $15.8 million in damages to Roger Hogan, President and CEO of Claremont Toyota and Capistrano Toyota.

The jury found Toyota liable for breach of contract for claims of breach of the implied covenant of good faith and fair dealing. Complaints had allegedly regarded safety related defects on more than 800,000 model year 2010-14 Prius vehicles in the U.S. that allegedly posed a risk to safety.

“Toyota made a corporate decision to conduct a cheap, ineffective recall that it knew would not work,” said  Amnon Siegel, attorney for the Hogan family and partner at Miller Barondess. “Rather than spend the money to replace the defective inverters in these Priuses, Toyota chose to save more than $2.3 billion by doing software updates that left the defective hardware in place and did not fix the problem. As a result, in 2018, Toyota issued another recall on these vehicles acknowledging drivers were still at risk. The jury has now let Toyota know this is unacceptable.”

In response, Toyota issued the following statement on Tuesday: 

“To be clear, this lawsuit originated from a business dispute Roger Hogan had with Toyota over management and succession issues involving his dealership, not the effectiveness of the Prius inverter recalls," the statement began. 

“Despite claims by plaintiffs’ counsel and subsequent misleading and erroneous reporting starting with the Los Angeles Times, neither the verdict form nor the jury’s decision in the Hogan matter indicated that the finding on breach of good faith and fair dealing was in any way related to vehicle safety issues.

“Similarly, the jury made no determination and was never asked to make a determination on the effectiveness of past Toyota recalls, including previous Prius inverter recalls.

“While we respect the jury’s decision, we remain confident the evidence and testimony clearly demonstrated that Toyota abided by its contractual obligations to the Roger Hogan dealerships and has been transparent with its dealers, regulators and customers regarding the vehicle issues raised at trial. We will consider our options moving forward.”

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