$30 Million Suit Filed Against Hyundai on Behalf of Major Auto Dealer by Miller Barondess, LLP

LOS ANGELES--A $30 million lawsuit was filed by Miller Barondess, LLP, against Hyundai Motor America and Hyundai Capital America on behalf of one of Hyundai's largest and most successful dealerships.

“In 2008, as the global recession hit, auto sales began to plummet nationwide…Merced Hyundai began to struggle. But [Hyundai] repeatedly assured its dealers, including Estes, that Hyundai was their partner and would help them weather this economic storm.”

Plaintiff Jim Estes and his dealership Merced Hyundai are charging Hyundai with fraud, intentional misrepresentation, and concealment, along with other claims.

“Estes [was] a star dealer. He was recognized by Hyundai for his accomplishments. Hyundai reaped the benefit of Estes’ business acuity, earning millions of dollars, both through Plaintiffs’ success selling cars and through Plaintiffs’ use of [Hyundai’s financing arm] to finance the dealership,” according to the lawsuit.

The lawsuit further states, “In 2008, as the global recession hit, auto sales began to plummet nationwide…Merced Hyundai began to struggle. But [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, demanded immediate payment [of the loan obligations]… and raised floor plan rates. … This was a far cry from their promises of help and assistance that [Hyundai] offered Estes for months before.”

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.”