"Hyundai repeatedly assured its dealers, including Estes, that Hyundai was their partner."
A $30 million lawsuit against Hyundai Motor America and Hyundai Capital America on behalf of what is said to be one of Hyundai’s largest and most successful dealerships has been filed.
Plaintiff Jim Estes and his dealership Merced Hyundai in Northern California are charging Hyundai with fraud, intentional misrepresentation, and concealment, along with other claims.
Estes was a top dealer and Hyundai recognized him for his accomplishments, according to the suit. Hyundai, allegedly, reaped the benefit of Estes’ “business acuity, earning millions of dollars.”
Hyundai refused to comment on, or to discuss, the matter in litigation.
The lawsuit also alleges, “in 2008, as the global recession hit, auto sales began to plummet nationwide…Merced Hyundai began to struggle. However, Hyundai repeatedly assured its dealers, including Estes, that Hyundai was their partner and would help them weather this economic storm.”
“Starting in January 2009, Plaintiffs went to Hyundai seeking assistance through…loan forbearances and modifications. For nearly a year, Hyundai strung Plaintiffs along, promising that help was on the way…and specifically instructed Plaintiffs to continue business as usual while they put together a forbearance agreement or other form of financial assistance…Given Hyundai’s reassurances, plaintiffs continued to inject money and efforts into Merced Hyundai.”
According to the lawsuit, “Hyundai never came through and never lived up to its promises…. Hyundai offered the “help is on the way” carrot for nearly a year so that Plaintiffs would continue to operate Merced Hyundai, at a loss, while Hyundai continued to profit. In other words, Hyundai made sure that Plaintiffs, who had invested millions to support Hyundai’s success, were the ones who couldn’t weather the economic storm.”
On January 8, 2010, Hyundai informed Plaintiffs that they were in default, and demanded immediate payment of the loan obligations. It also raised floor plan rates – the interest charges for the cars in stock.
According to Skip Miller of Miller Barondess, LLP, the Los Angeles-based attorney for Estes, “We believe in the merits of our claim and look forward to trying the case.”