June 1, 2006
Reprinted from The Safety Record, V. 3 Issue 3, May / June 2006
Did Cooper Tire knowingly hire a felon convicted of insurance fraud charges to spirit away physical evidence of failed tires before police investigators or plaintiffs’ attorney could collect or analyze then? And where is a key piece of evidence in a 2001 tread separation case that was taken from the accident scene?
These are the questions plaguing Loza V. Cooper, a Phoenix rollover case, set for trial this September. In September 2001, Elisa Loza was the rear-seat passenger in a 1996 Ford Super Club E350 with Cooper-made Hercules all-track radial LTs. Her husband was driving on a highway near Gila Bend, Arizona, when, her estate alleges, a Cooper tire experienced a tread separation. Mrs. Loza died in the rollover accident that resulted.
Attorney Hugh N. Smith, of Smith & Fuller, P.A. of Belleair Bluffs, Fla., says that the discovery process has revealed that Frank Ruggier was employed by Cooper to scour the accident scenes of car crashes nationwide for pieces of tread – or in some cases – failed tires and deliver them to Cooper’s Findlay, Ohio headquarters. Meanwhile, the tire manufacturer had no policies or procedures to notify the police, accident victims or their attorneys of physical evidence in their possession. Smith has also discovered that Ruggier delivered a piece of Elisa Loza’s failed tire to Cooper, that Cooper denies receiving.
In a May 2005 deposition, Ruggier testified that he was hired by Cooper at $75 an hour to drive all over the country from his company base in California to take pictures of accident scenes from crashes involving failed tires. Occasionally, Ruggier, testified, he also picked up pieces of tread he found at the scene, and drove them to Cooper, without informing anyone that he may be removing evidence. Cooper had hired Ruggier as an investigator, even though he lacked an investigator’s license, and in ignorance of Ruggier’s criminal record. Ruggier had been convicted of two counts of grand larceny and two counts of insurance fraud in California in 1987. (In his initial deposition, Ruggier denied the convictions. In a second deposition seven months later, Ruggier admitted to his criminal record.)
Ruggier became associated with Cooper through Countrywide Investigative Services. The tiremaker had employed Countrywide since at least the early 1990s to gather evidence at the scene of auto accidents involving Cooper tires. Countrywide, according to Cooper’s vice president and treasurer Stephen Schroeder, was charged with securing the tire, taking photographs of the vehicle and the accident scene and obtaining police reports. Ruggier was one of their investigators, based in southern California. In 2001, Countrywide closed some of their field offices – including Ruggier’s – and Cooper entered into a separate relationship with the former employee. In this new arrangement, Ruggier’s duties expanded. Ruggier would scour the newspapers for accident stories and ask Cooper for permission to investigate scenes – even if it had not yet been determined that the accident involved a Cooper tire, Ruggier said. Cooper also authorized him to settle small, pre-litigation claims, and in at least one case, issue a letter of denial to a claimant, Schroeder said.
In the Loza case, Ruggier testified that he picked up a piece of tread from the scene and drove it to Cooper’s Findlay, Ohio headquarters. But Schroeder said that Cooper had no record of ever receiving the piece of tread.
“I don’t believe a piece of tread was every delivered to Cooper,” Schroeder said. “If it had, it would have been tagged as evidence at our Findlay regional inspection point and the receipt process would have processed through our consumer relations system and that didn’t happen.”
Cooper never did a background check on Ruggier before hiring him, Schroeder said. But after learning of Ruggier’s convictions earlier this year, Cooper severed its association with him. Smith has filed a claim for punitive damages, alleging the Ruggier’s activities at Cooper’s behest constitute a cover up.
Cooper’s legal tactics have drawn complaints in other cases. In 2001, a South Carolina judge ordered sanctions against Cooper in Middleton V. Cooper. In a lengthy and blistering opinion, Judge Kenneth A. Goode of the Sixth Judicial Circuit outlined a deliberate pattern of delays, of defacing and concealing evidence and of willful disobedience to the Court. Among the misconduct rulings: Judge Goode found that Cooper had misled the Court in arguing that plaintiff’s attorneys should be barred from inspecting Cooper’s Albany Tire plant, because trade secrets could be disclosed. The plaintiffs’ attorneys produced an American Society of Mechanical Engineers newsletter, chronicling the group’s tour of Cooper’s Findlay plant, which covered every aspect from design to production and included guests who were employed elsewhere in the tire industry.
Goode also determined that Cooper had deliberately misrepresented how many tires it had in storage at Albany and its Findlay facility that had been returned for tread separations. In the latter case, Cooper had claimed it only had retained 60 returned tires, when it actually stored thousands of such tires. The plaintiff’s attorneys only discovered the other tires after noticing that Cooper employees tried to conceal them by closing a warehouse door, as the plaintiff’s attorneys arrived to inspect returned tires. The plaintiff’s attorneys persisted in demanding access to the area, and immediately found several tires that should have been made available for inspection.
The judge also found that Cooper had disobeyed an order it had sought, to inspect the tire in the case at its Findlay facility. Cooper repeatedly tried to move the inspection away from its headquarters, claiming it did not have the proper equipment available. At one point, Cooper’s attorneys tried to set up the inspection in an Ohio hotel room using a portable spreader. The case settled for an undisclosed sum shortly thereafter, without Cooper producing any of damaging documents, says John E. Parker, the attorney who represented Alfred Middleton. But the tiremaker was forced to give up those documents in a subsequent case, Smalls v. Cooper, “that are now being used around the country,” says Parker.
In a McGill v Cooper, a Hinds County, Mississippi judge found that the tire manufacturer had deliberately withheld warranty claims, evidence in other civil cases against Cooper and other documents that it should have released to plaintiffs’ lawyers during the discovery process and then lied to Court, claiming it had. In July 2002, First Circuit Court Judge Bobby DeLaughter sanctioned Cooper $10,000 a day for each day it continued to withhold the documents and another $10,000 a day for each day Cooper denied McGill’s lawyers access to documents amassed in the Talalai class action suit. In a harshly worded order, Judge DeLaughter described Cooper’s actions as “rape of the discovery process” and ordered Cooper to produce all of the documents immediately and pay plaintiffs’ costs associated with delays. Finally, the judge sanctioned the firm of McGlinchey Stafford for lying to the Court and set aside the possibility that further sanctions be imposed at a separate hearing after the trial.
In 2003, a federal district court judge in Arkansas ordered sanctions against the manufacturer in Hervey v. Cooper, after hearing evidence that a Cooper employee burned quality control documents at the company’s Tupelo, Miss. Plant, where the alleged failed tire was made. (Cooper settled the case for an undisclosed amount shortly after the ruling.)
Copyright © Safety Research & Strategies, Inc., 2006