Chrysler Wrongful Death Settlement Approved by Bankruptcy Court

A bankruptcy judge has approved a $24 million settlement for the family of a California longshoreman who brought a wrongful death lawsuit against Chrysler before the company went bankrupt. The settlement resolves more than two years of appeals stemming from a $55 million jury verdict over a death that was caused by a transmission defect in a Dodge pickup truck.

The settlement was approved by Judge Arthur Gonzalez of the U.S. Bankruptcy Court in the Southern District of New York, who is overseeing some of the assets of the former Chrysler LLC.

The Chrysler wrongful death lawsuit was filed by the family of Richard Mraz, who was 38 years-old when he was killed in April 2004 when his 1992 Dodge Dakota pickup rolled over him while he was working at the Port of Los Angeles. The family alleged that the Chrysler truck had a defective transmission that allowed it to slip from park to reverse, resulting in the fatal head injury for Mraz. A Dodge Dakota pickup truck recall was issued in 2000 to fix the defect, but the Plaintiffs said that the fix did not work.

A California jury found that Chrysler was negligent in the design of the vehicle and failed to issue a proper recall, awarding the family $5.2 million in compensation and $50 million in punitive damages. Chrysler appealed the decision, and posted an $81 million appeal bond with Safeco Insurance Co., to guarantee payment of the judgment and interest if the appeal failed.

Chrysler officials still maintain that the truck design is safe, claiming that Mraz failed to engage the parking brake properly, and then attempted to jump into the moving truck when it began to roll. However, the family claimed the truck slipped out of park and into reverse, and noted that Chrysler received more than 1,000 complaints of similar problems with 1988 through 2003 model Dodge Dakotas, continuing well after the 2000 recall.

Chrysler product liability lawsuits were a major issue when the newly created Chrysler Group LLC emerged from bankruptcy protection. In late August the new company agreed to accept exposure for personal injury claims that occur after the bankruptcy, which involve vehicles manufactured by the old Chrysler. However, lawsuits against Chrysler that arose prior to the bankruptcy are limited to the assets of the old company.