Judge Rules Consumer Guide Must Stand Trial For Fraud And Breach Of Contract

(Los Angeles, CA) November 19, 2004; After considerable review, the Honorable Joan B. Gottschall, presiding over the U.S. District Court Northern District of Illinois, Eastern Division, has denied a dismissal motion by Consumer Guide and found “the allegations in the Smart Marketing Group (SMG) complaint are sufficient to allege promissory fraud” and “accepting SMG’s well-pleaded facts as true, the court finds SMG’s complaint sufficiently states a claim upon which relief may be granted.”

Consumer Guide and its parent, Publications International, are based in Lincolnwood, IL and for the last 38 years has published a national magazine, and more recently, a Web site that provides ratings for products including automobiles.

“This ruling is no surprise to us” said William J. Magarity, Jr., President of SMG, a California-based dealer marketing, sales and service company, “Smart Marketing was put out of business as a result of Consumer Guide coercing us into a fraudulent agreement, breaching that agreement, and then withholding millions of dollars of commissions.”

The original complaint was filed by SMG quickly after Consumer Guide’s breach and inability to provide services contracted for with 550 dealerships signed up throughout the country. In all, the suit addresses six issues, including three counts of breach of contract and one count of fraud and duress.

“We fielded numerous complaints from dealers all across the country last Fall and Winter,” said Magarity, “as it became apparent that Consumer Guide never intended to fulfill its contractual obligations to these dealerships.”

Immediately following Consumer Guide’s actions, SMG was forced to layoff its 25 employees. “It was tough time, we had to shut down, and let all of our people go,” said Michael G. Welch, CEO, “and what’s worse, Consumer Guide’s decision was without merit and completely unexpected.”