Enzo case takes another bizarre twist, and Porsche enlists industry allies to make what could be bitter lemonade

This month we revisit two old friends-one the Pacific Coast Highway Enzo crash, and the second the Porsche Lemon Law special.

Last summer's big car story was the Ferrari Enzo crash in Malibu, California. Stefan Eriksson crashed his Enzo into a power pole, splitting the car in half and spreading wreckage across 1,200 feet of Pacific Coast Highway. He blamed it all on a "friend" he knew only as "Dietrich," who was driving and ran off after the crash. That story didn't work too well for Eriksson, who ended up copping a plea and getting sentenced to three years in jail.

Eriksson's suspected accomplice was Trevor Karney, whose residence was a Marina del Rey yacht that fortuitously set sail for Ireland just before the police came by to pick him up, supposedly with the in-Enzo video of the wild drive that ended so abruptly at a reported 199 mph.

Karney got away clean in the Enzo crash, but in a development that would seem to be fit for "World's Stupidest Crooks," Karney is now in custody on charges of drunk driving, resisting arrest, giving false information to a police officer, and possible immigration violations. Seems that Karney did get free to Ireland but assumed the heat was off after Eriksson's guilty plea, so he sneaked back into the United States through Mexico, ultimately getting arrested in a Marina del Rey apartment.

Police are convinced that Karney is in fact the infamous "Dietrich," and was the passenger in the Enzo when the crash occurred. No speculation yet as to why Karney, after getting away, decided to sneak back into the country. Also, no word on whether or not he had the video with him. If you've got it, Karney, now's the time to sell it.

Porsche making bitter lemonade

September's "Legal Files" reported on a lawsuit where Porsche owner Bruce Tammi won a $266,000 judgment against Porsche on account of defects in his 2003 Porsche Turbo. As predicted in "Legal Files," Porsche's appeal looks like it is going to trigger more in attorney fees for everyone than the case was ever worth.

In the latest development, Porsche has sought the aid of the automotive industry to appeal this decision, which they perceive as setting what they consider to be a bad legal precedent. The Alliance of Automobile Manufacturers (its members include BMW, DaimlerChrysler, Ford, GM, Mazda, Mitsubishi, Porsche, Toyota, and VW), the Recreational Vehicle Industry Association (which represents over 550 manufacturers and component suppliers who together produce about 95% of all US-manufactured RVs), Monaco Coach, Winnebago, National RV, and Hyundai Motor America have filed an amicus curiae brief, lending their support to Porsche's position. Court rules allow parties who might adversely be affected by the result in the case (amici) to file a brief urging the court to rule in the manner they believe is appropriate.

Double or triple damages?

The main complaint advanced by the amici is that the court not only awarded Tammi very substantial damages, but also allowed Tammi to keep the Porsche. This argument creates an engaging mathematical exercise. Wisconsin's lemon law is very favorable to consumers. It not only allows them to recover their damages, generally the amount paid for the car, but doubles them as a form of penalty. The amici claim contends that allowing Tammi to keep the car amounts to an impermissible tripling of the damages.

The trial court reasoned that Tammi should be able to keep the Porsche because he paid for it and that was a wash. His damages are the amount he paid ($133,000), and that should be doubled. The amici argue that getting your $133,000 back and getting to keep the $133,000 car is already a double recovery, so adding another $133,000 to the award accomplishes a tripling.

Why would he buy a lemon?

The amici also complain that Tammi's damages should not have included the amount of his buyout at the end of the lease, because Tammi was not legally required to pay that amount. That is, he could have chosen to return the car to Porsche at the end of the lease term and avoided payment of the $64,344 buy-out, but instead chose to buy the car even after becoming aware of its problems. Under that approach, Tammi's damages would be limited to the amount of the lease payments that he made before the buyout.

The final complaint is that the trial court should have reduced Tammi's award by the value of the use of the car while he owned it. But, of course, we would expect Tammi to argue that, given the problems he encountered with the car, the value of his use wouldn't be a very significant number.

He's got to come clean if he sells it

Finally, the amici buttress their arguments by suggesting that consumer protection considerations should require that Tammi return the car to Porsche. Under the lemon law, the manufacturer may not resell the car to another purchaser without fully disclosing its lemon law history. But not so with a private seller, and Tammi would be in a position to resell the car to you or me without any disclosure at all. The trial court did order Tammi to make such a disclosure to any future buyer of the car, but the amici seem to believe that it would be too easy for Tammi to violate that without getting caught.

Putting a price on principles

"Legal Files" repeats its biggest question-why? It's certainly understandable that Porsche and the amici would want to avoid a "bad" precedent being set, but the trial court's decision is not legal precedent. It is just the result in a single case, and will not directly affect the outcome in any other case. Setting a legal precedent requires a decision from an appellate court, which is exactly what Porsche is going to get, and it could be good or bad. Porsche could have paid the judgment, or negotiated a settlement with Tammi, and that would have been the end of the matter, at less cost than will be incurred going forward.

Perhaps there is more to the story that we aren't privy to, but if not, two possible explanations come to mind. First, it could be a case of ego, or, alternately, a case of Porsche believing that it is right and standing on its principles. Either way, it is something we can all learn about litigation. Once you file a lawsuit, what happens next, and what your expenses end up being, depends a lot on what the other side chooses to do. If they think they are right, and are willing to put their money were their principles lie, you're going to be in for a very long and expensive fight.

To put it a little differently, many times litigation gets very expensive because each side sees itself as the victim acting in self-defense. When that happens, settlement won't come until both sides start to change their views, and recognize that each of them has some good points to make.

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