State Farm V Tesla

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Case 1:22-cv-00342-SEB-MJD Document 1 Filed 02/16/22 Page 1 of 9 PageID #: 1

UNITED STATES DISTICT COURT OF INDIANA


SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION

STATE FARM FIRE AND CASUALTY )


COMPANY, an Illinois Corporation, as )
subrogee of Randall W. and Dorothy S. )
Sencaj and STATE FARM MUTUAL )
AUTOMOBILE INSURANCE )
COMPANY, an Illinois Corporation, as )
subrogee of Randall W. and Dorothy S. )
Sencaj, )
)
Plaintiffs, )
)
v. ) Case No. 2022-cv-00342
)
TESLA, INC., formerly known as Tesla )
Motors, Inc., a Delaware Corporation, ) JURY DEMAND
)
)
Defendant. )

COMPLAINT

Plaintiffs STATE FARM FIRE AND CASUALTY COMPANY, as subrogee of Randall

W. and Dorothy S. Sencaj and STATE FARM MUTUAL AUTOMOBILE INSURANCE

COMPANY, as subrogee of Randall W. and Dorothy S. Sencaj (hereinafter collectively referred

to as "STATE FARM"), complain of Defendant TESLA, INC., formerly known as Tesla Motors,

Inc., a Delaware Corporation ("TESLA") and for its complaint, alleges the following:

The Parties

1. STATE FARM is a corporation organized under the laws of Illinois with its

principal place of business within Bloomington, Illinois.

2. At all relevant times, STATE FARM was engaged in the business of issuing

insurance policies for homes and automobiles located throughout the United States, including the

State of Indiana.
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3. Upon information and belief, at all relevant times, Defendant Tesla was a

corporation organized under the laws of Delaware, with its current principal place of business in

Austin, Texas.

4. At all relevant times, Defendant Tesla was engaged in the business of designing,

manufacturing, distributing, marketing and selling electric automobiles.

5. At all relevant times, Defendant Tesla distributed, marketed and sold its

automobiles throughout the United States, including Indiana, using a network of Authorized or

Certified Dealerships.

6. At all times relevant, Randall W. and Dorothy S. Sencaj (hereinafter collectively

referred to as the "the Sencaj Family") were the owners of real and personal property located at

10730 Torrey Pines Circle, Carmel, Indiana 46032 (hereinafter referred to as "the Sencaj

residence").

7. At all relevant times, STATE FARM issued a policy of insurance to the Sencaj

Family, which provided indemnification and reimbursement for fire related damage to the Sencaj

residence and its contents, the vehicles, as well as additional living expenses incurred by the Sencaj

family in the event of fire related damage to the Sencaj residence.

8. At all relevant times, the Sencaj Family owned a 2016 Tesla Model S bearing

vehicle identification number 5YJSA1E20GF126263 (hereinafter referred to as "the Tesla").

9. At all relevant times, the Tesla was located within the attached garage of the Sencaj

residence.

Jurisdiction and Venue

10. Jurisdiction is proper within the federal court system pursuant to 28 U.S.C 1332

based upon diversity of citizenship. An actual controversy of a justiciable nature exists between

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STATE FARM and the Defendant. Plaintiff and Defendant are fully diverse as they have neither

their places of incorporation nor principal place of business in common. STATE FARM is an

Illinois Corporation with its principal place of business within Illinois. Tesla is a Delaware

Corporation with its principal place of business in Texas. Tesla’s prior principal place of business

at the time of the sale of the vehicle was in California. The amount in controversy exceeds

$75,000.00.

11. This court has personal jurisdiction over Tesla as it knowingly distributes products

to the State of Indiana for purchase by consumers in Indiana, purposefully availing itself to the

laws of Indiana.

12. Venue is proper in this Court pursuant to 28 U.S.C. § 1391(b), as Defendant is

subject to personal jurisdiction in this judicial district, and because a substantial part of the events

and activities giving rise to STATE FARM’s claims occurred in this judicial district. The events

giving rise to the litigation took place in Hamilton County, Indiana. The property at issue is located

in Carmel, Indiana, within Hamilton County part of the Southern District of Indiana, the

Indianapolis Division of the Court.

Background and Sale of the Tesla

13. Upon information and belief, Defendant Tesla manufactured, designed, assembled,

tested, inspected, distributed and marketed the Tesla.

14. Upon information and belief, in 2016, Defendant Tesla placed the Tesla into the

stream of commerce with the purpose, expectation and intent the Tesla would reach consumers, in

that condition.

15. At the time of sale, the Tesla was in new condition.

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The Fire

16. From the time of purchase, the Sencaj Family used the Tesla vehicle for the normal

and ordinary purpose of transportation.

17. Upon information and belief, the Sencaj family maintained the Tesla pursuant to

Defendant Tesla’s maintenance and service recommendations and all such service was performed

by Tesla.

18. On February 17, 2020, a fire erupted from the Tesla and spread to the Sencaj

residence as well as the personal property located within the Sencaj residence. (hereinafter referred

to as "the Fire").

19. The day of the Fire, the Sencaj family drove the Tesla to complete various errands.

They returned to the home and parked the Tesla in the attached garage, plugging it in to the electric

charger. That evening, the Tesla was parked and charging in the attached garage and while the

Sencaj family was watching television, they began to observe smoke and flames emanating from

the garage.

20. Investigation into the origin and cause of the Fire by STATE FARM, and experts

retained to investigate on its behalf, revealed the Fire originated at the Tesla and was caused by a

defective condition of the vehicle, which was present when the vehicle was placed into the stream

of commerce by Defendant Tesla.

21. The Tesla battery is comprised of thousands of 18650 lithium-ion cells to produce

a 400 Volt DC High Voltage Battery (hereinafter “High Voltage Battery”). The vehicle design

placed the High Voltage Battery under the floor pan, and throughout the entire floor of the

passenger compartment.

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22. The 1300-pound high voltage battery is connected to the electrical system through

multiple high voltage cables.

23. Due to a defect in design or manufacture, upon information and belief, the Tesla

vehicle’s electrical system failed, causing an electrical condition which ignited combustibles and

resulted in the Fire.

State Farm's Subrogation Rights

24. In connection with the Fire, pursuant to the terms and conditions of the insurance

policy, the Sencaj Family submitted claims to STATE FARM seeking indemnification and

reimbursement for fire damage to the Sencaj residence and its contents, as well as fire damage to

the vehicles.

25. In connection with the Fire, pursuant to the terms and conditions of the insurance

policy, STATE FARM was obligated to and did, in fact, pay approximately $1,271,702.26 to or

on behalf of the Sencaj Family for fire related damage to the Sencaj residence and its contents,

additional living expenses incurred by the Sencaj family, and fire damage to the vehicles.

26. Pursuant to the terms and conditions of the insurance policy and by virtue of its

payments to the Sencaj Family, STATE FARM is subrogated to all rights, claims and causes of

action the Sencaj Family may have against Defendant in connection with the Fire.

COUNT I
Negligence

27. Plaintiff incorporates by reference the allegations contained m paragraphs 1

through 26 of this Complaint, as if fully set forth in this Count I.

28. At all times relevant, Defendant Tesla owed the Sencaj Family a duty to

exercise reasonable skill and care in designing, manufacturing, assembling, testing, inspecting,

distributing and selling the Tesla.

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29. Notwithstanding this duty, and in breach thereof, Defendant Tesla, by and

through its employees, agents, and/or representatives, was negligent in one or more of the

following ways:

(a) The Tesla’s electrical system and/or its component parts were
defective in their design in that the Tesla’s electrical system did not
perform safely, but instead failed;

(b) The Tesla’s electrical system was defectively designed because the
risks of significant fire damage to consumers’ properties outweigh
any potential benefits derived from the Tesla’s electrical system
design;

(c) The Tesla’s electrical system was defectively designed because it


was unsafe to an extent beyond that which would be contemplated
by an ordinary user;

(d) The Tesla’s electrical system and/or its component parts contained
manufacturing defects in that the Tesla’s electrical system differed
from the manufacturer’s design or specifications or from typical
units of the same product line;

(e) Tesla failed to adequately warn consumers of possible hazards


associated with the Tesla vehicle’s electrical system;

(f) Tesla failed to instruct and inform consumers of the proper use of
the vehicle and dangers with the associated electrical system;

(g) The Tesla electrical system and/or its component parts were
designed, manufactured, and/or assembled without proper testing;

(h) The Tesla’s electrical system was defective in that it caught fire for
no apparent reason during its normal use;

(i) The Tesla’s electrical system was improperly manufactured in such


a way as to improperly regulate current traveling through lithium-
ion battery cells;

(j) The Tesla’s electrical system was designed, manufactured and


assembled with improper materials and improper electrical
components;

(k) The Tesla’s electrical system was designed and manufactured so as


to be unable to regulate the battery cells conditions;

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(l) The Tesla’s electrical system contained an improper monitoring


system to warn consumers of deficiencies within the electrical
system to prevent a fire; and/or

(m) Was otherwise negligent in the design, manufacture, testing and


inspection of the Tesla.

30. As a direct and proximate result of one or more of the foregoing negligent acts

and/or omissions on the part of Defendant Tesla, a significant electrical event occurred. The

electrical arcing event quickly ignited readily available combustibles within the Tesla, creating a

dangerous fire.

31. The fire damaged or destroyed the Tesla and spread to the Sencaj residence and

other vehicles where it caused significant damage to the Sencaj residence and its personal property

contents.

WHEREFORE, STATE FARM FIRE AND CASUALTY COMPANY, as subrogee of

Randall W. and Dorothy S. Sencaj and STATE FARM MUTUAL AUTOMOBILE INSURANCE

COMPANY, as subrogee of Randall W. and Dorothy S. Sencaj request that judgement in the

amount of $1,271,702.26 be entered in their favor, and against Defendant Tesla and for such other

or further relief as this Court deems equitable and just.

COUNT II
Strict Product Liability

32. Plaintiff incorporates by reference the allegations contained in paragraphs 1

through 26 of this Complaint, as if fully set forth in this Count II.

33. Upon information and belief, the Tesla was defective and unreasonably dangerous

when it left Defendant Tesla's control and was placed into the stream of commerce.

34. Upon information and belief, after the Tesla was placed into the stream of

commerce by Defendant, there was no substantial change in the condition.

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35. At all relevant times, the Sencaj Family used the Tesla for its reasonably

foreseeable and intended purpose of transportation.

36. When the Tesla left Defendant Tesla's control and was placed into the stream of

commerce, it was unreasonably dangerous and defective, in light of its foreseeable and intended

use, in one or more of the following ways:

(a) The Tesla’s electrical system and/or its component parts were
defective in its design in that the Tesla’s electrical system did not
perform safely, but rather failed;

(b) The Tesla’s electrical system was defectively designed because the
risks of significant fire damage to consumers’ properties outweigh
any potential benefits derived from the Tesla vehicle’s design;

(c) The Tesla’s electrical system was defectively designed because it


was unsafe to an extent beyond that which would be contemplated
by an ordinary user;

(d) The Tesla’s electrical system and/or its component parts contained
manufacturing defects in that the Tesla’s electrical system differed
from the manufacturer’s design or specifications or from typical
units of the same product line;

(e) The Tesla vehicle failed to contain adequate warnings for consumers
to be aware of possible hazards of the electrical system;

(f) The Tesla vehicle failed to contain adequate instructions and


warnings for proper usage and dangers of the electrical system;

(g) The Tesla’s electrical system and/or its component parts were
designed, manufactured, and/or assembled without proper testing;

(h) The Tesla’s electrical system was defective in that it caught fire for
no apparent reason during its normal use;

(i) The Tesla’s electrical system was improperly manufactured in such


a way as to improperly regulate current traveling through lithium-
ion battery cells;

(j) The Tesla’s electrical system was designed, manufactured and


assembled with improper materials and improper electrical
components;

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(k) The Tesla’s electrical system was designed and manufactured so as


to be unable to regulate the battery cells conditions; and/or

(l) Was otherwise unreasonably dangerous.

37. As a direct and proximate result of one or more of the foregoing defective and

unreasonably dangerous conditions of the Tesla, an electrical malfunction occurred within the

vehicle, causing an electrical arcing event. The electrical arcing event quickly ignited readily

available combustibles within the Tesla’s engine compartment, creating a dangerous fire.

38. The fire damaged or destroyed the Tesla, and spread to the Sencaj residence and

two other vehicles where it caused significant damage to the Sencaj residence and its personal

property contents.

WHEREFORE, STATE FARM FIRE AND CASUALTY COMPANY, as subrogee of

Randall W. and Dorothy S. Sencaj and STATE FARM MUTUAL AUTOMOBILE INSURANCE

COMPANY, as subrogee of Randall W. and Dorothy S. Sencaj request that judgment in the

amount of $1,271,702.26 be entered in their favor, and against Defendant Tesla and for such other

or further relief as this Court deems equitable and just.

Respectfully Submitted,

STATE FARM FIRE AND CASUALTY


COMPANY and STATE FARM MUTUAL
AUTOMOBILE INSURANCE COMPANY

By: /s/ Brad M. Gordon

Brad M. Gordon (21913-45)


GROTEFELD, HOFFMANN, GORDON, OCHOA & EVINGER, LLP
311 South Wacker Drive, Suite 1500
Chicago, IL 60606
Telephone: (312) 551-0200
Facsimile: (312) 601-2402
Email: bgordon@ghlaw-llp.com

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