GM ignition switch trial hits snag over fraud claims

Erik Larson
Bloomberg News

An Oklahoma family’s eviction from their “dream house” following allegations of check fraud is threatening to derail the first trial over General Motors Co.’s deadly ignition-switch flaw.

Robert Scheuer, a mail carrier who claims the defect disabled his air bag in a 2014 car wreck, blames GM for the eviction, arguing that memory loss he suffered in the accident caused him to misplace a $49,500 check for a down payment on the home in suburban Tulsa.

GM’s lawyers said they uncovered evidence that Scheuer, his wife and two children actually were kicked out of the house because a real estate agent found Scheuer had faked a $441,430.72 check stub from his federal government retirement account as “proof of funds” to close the sale.

The new evidence suggests Scheuer “misled his own counsel, as well as the court and the jury,” GM attorney Richard Godfrey said in a filing Tuesday in Manhattan federal court, where the trial is in its second week.

The carmaker asked the court for permission to allow two new witnesses to testify about the evidence.

The check-fraud claims, if successful, won’t affect GM’s liability over the defect, which has already triggered more than $2 billion in legal fees and settlements. Still, it would be a poor start for plaintiffs counting on bellwether cases such as Scheuer’s to gauge how much they stand to recover for thousands of clients.

Scheuer, 49, sued after his 2003 Saturn Ion flew off an Oklahoma highway and crashed into a tree in May 2014, leading to neck and back pain. GM argues the accident wasn’t serious enough to deploy the air bag, and that Scheuer’s injuries predated the crash.

Three weeks after the accident, Scheuer and his wife, purchased the home in Sand Springs, Oklahoma, under a contract calling for $275,950 in cash, though no cash was ever provided and they were evicted in September 2014, GM said.

The documents about the cash offer and the discovery of the allegedly altered check weren’t made available to GM until the real estate agent heard about the trial and came forward, the company said. The new evidence contradicts testimony given by the Scheuers in pretrial depositions and on the witness stand, according to the car company.

The real estate agent’s communications also show that Scheuer was on vacation shortly after the accident, when he was purportedly bedridden, GM says.

Carl Tobias, a University of Richmond law professor who isn’t involved in the case, said the development looks bad for the Scheuers.

“We’ll have to see how the judge and Hilliard respond,” he said.

“We are assessing GM’s allegations about a situation we were unaware of,” Robert Hilliard, the Scheuers’ attorney and one of the leading plaintiffs lawyers in the U.S., said in an email.

“Regardless of how GM paints it, the heart of this case is that Mr. Scheuer’s air bag did not deploy” as a result of GM’s misconduct, “and whatever dirt they throw at plaintiff and his wife doesn’t change that,” Hilliard said.

U.S. District Judge Jesse Furman heard discussions about the new evidence on Tuesday without the jury present. He said he wanted Scheuer’s wife, Lisa, to appear in his courtroom on Wednesday so he could advise her of her Fifth Amendment right against self-incrimination.