Hyundai and Kia agree to settle class action lawsuit related to Theta II engine failures and fires.

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Hyundai Kia Settlement Reached In Car Fires Lawsuit
Hyundai and Kia agree to settle class action lawsuit related to Theta II engine failures and fires.

— A Hyundai Kia settlement has been reached for more than 4 million vehicles equipped with Theta II 2-liter or 2.4-liter gasoline direct injection (GDI) engines at risk of fires.

Although a judge still needs to approve the proposed settlement agreement, the current version includes these models and years.

  • 2011-2018 and certain 2019 Hyundai Sonatas
  • 2013-2018 and certain 2019 Hyundai Santa Fe Sports
  • 2014-2015, 2018 and certain 2019 Hyundai Tucsons
  • 2011-2018 and certain 2019 Kia Optimas
  • 2011-2018 and certain 2019 Kia Sorentos
  • 2011-2018 and certain 2019 Kia Sportages

The class action lawsuit alleges Hyundai and Kia vehicles have Theta II engines that restrict the flow of oil through the connecting rod bearings and to other areas of the engines.

Customers routinely claim engine replacements can cost them $5,000 in parts and labor, and even installing a used engine can easily cost $3,000.

The class action lawsuit was consolidated from several legal complaints that were filed against the automakers, including Stanczak v. Kia, Smolek v. Hyundai, Brogan v. Hyundai, Flaherty v. Hyundai and Coats v. Hyundai.

Knock Sensor Detection System Software Update

Both automakers issued free recalls and "knock sensor" campaigns long before the proposed settlement agreement was reached, but attorneys for the plaintiffs say Hyundai and Kia "represent that these recalls and product improvements represent part of the consideration to the Class."

Although the lawsuits argue Hyundai and Kia should replace the vehicles equipped with defective engines, the proposed settlement doesn't include vehicle buybacks or replacements.

The lawsuit settlement terms also don't require Hyundai and Kia to offer vehicles with engines that won't suffer premature or abnormal connecting rod bearing wear. Instead, the free knock sensor is used only to warn a driver the engine is beginning to go bad, allegedly giving drivers time to repair the vehicles.

Hyundai offered free knock sensor technology in January, as did Kia the same month, and all customers are now expected to get their vehicles to dealerships for the software updates. Without the update, it's possible a driver won't qualify for repair reimbursements.

According to the proposed settlement, the technology uses "software innovations and leverages existing engine sensors to continuously monitor for symptoms that may precede an engine failure."

The knock sensor software continuously monitors engine vibrations for unusual patterns that occur as an engine connecting rod bearing wears abnormally in a way that could later cause engine seizures and fires.

If vibrations caused by bearing wear start to occur, the warning light will blink continuously and the vehicle will be placed in a type of limp mode. This will allegedly protect the engine by providing reduced power and acceleration. At this point, the driver is expected to drive straight to a dealership so technicians can inspect and repair the engines.

Engine Short Block Lifetime Warranty Coverage

As long as the vehicle has had the knock sensor software update performed, the vehicle will receive a lifetime warranty for the engine short block which covers all costs for repairs and inspections.

For 90 days following the settlement notice date, all vehicles that haven't received recall inspections will be eligible for free inspections of the engines. Based on what Hyundai and Kia technicians find, short block assembly repairs may be performed for free.

Customers also qualify for loaner vehicles while dealerships are making repairs, and reimbursements of up to $40 per day for rental car expenses will be provided if dealers don't have any available loaner cars.

For customers who believe they experience problems with the short block lifetime warranties, disputes will be handled through the Better Business Bureau’s alternative dispute resolution process.

Reimbursements For Repairs

Vehicles that already received repairs will be eligible for reimbursements as long as the customer completes a claim form within 90 days after the settlement notice date. A customer will need to provide proof of out-of-pocket expenses by showing documents related to the Hyundai and Kia vehicle repairs.

However, repair reimbursements will be denied if "exceptional neglect" is involved, meaning, "when the vehicle clearly evidences a lack of maintenance or care for a significant period of time of not less than one (1) year, such that the vehicle appears dilapidated, abandoned, and/or beyond repair unless such lack of maintenance was due to a Loss Event."

The settlement also says exceptional neglect consists of "failure of a Class member to have the KSDS [knock sensor update] installed pursuant to the KSDS Product Improvement Campaign by a Hyundai or Kia dealer within 60 days from notice date, or within 60 days of mailing of KSDS campaign notice, whichever is later."

Towing / Rental Car Reimbursements

Customers may submit claims to be reimbursed for towing and up to $40 per day for rental car expenses if they were paid out-of-pocket unless those expenses were already reimbursed.

Reimbursements for Repair Delays

If a customer had to wait more than 60 days for a Hyundai or Kia dealership to repair the vehicle, the customer is eligible for payments of $50 for delays lasting 61-90 days, and $25 for each additional 30-day period.

Loss of Value for Vehicles Sold or Traded-In

Hyundai and Kia customers who suffered a loss before receiving the settlement notices may submit claims if the vehicles experienced "engine seizure, stall, engine noise, engine compartment fire, or illumination of the oil lamp diagnosed as requiring repair of the engine block, and the Class member must have sold or traded-in the Class Vehicle without first procuring the recommended repair."

Those claims must be submitted within 90 days of the settlement notice date and contain proof of sale or trade-in and how much the customer made from the sale or trade-in.

According to the proposed settlement, the customer is eligible to be reimbursed based on the baseline Black Book value, plus an additional $140 payment, "minus the actual amount received from the sale or trade-in."

Loss of Hyundai or Kia Vehicle by Engine Fire

If the vehicle was not involved in a collision but a customer suffered a loss due to an engine fire, that customer will be eligible to receive a payment based on the maximum Black Book value.

A claim must be submitted within 90 days of the settlement notice date or within 90 days of the engine fire. The customer will also need to provide documentation to prove the fire originated in the engine compartment.

Although Hyundai, Kia and attorneys for vehicle owners agreed on the engine fire lawsuit settlement terms, a federal judge must still give preliminary approval to the settlement, then give final approval after hearing arguments from objectors.

The Hyundai Kia settlement is being heard in the U.S. District Court for the Central District of California - In re: Hyundai and Kia Engine Litigation, Case No. 8:17-cv-00838.

The plaintiffs are represented by Sauder Schelkopf, The Sultzer Law Group, Walsh PLLC, and Hagens Berman Sobol Shapiro LLP.


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