Posted on 06/21/2005 8:04:32 AM PDT by jern
A former Hendrick Acura manager has filed a lawsuit against the dealership and Hendrick Automotive Group, alleging the companies rip off customers with hidden charges and deceptive sales tactics.
Tony Harris, former finance and insurance manager for Hendrick Acura on Independence Boulevard, contends he met with Hendrick Automotive Chairman Rick Hendrick and Chief Executive Jim Perkins about the tactics, which the suit contends were routine at Hendrick dealerships and, in some cases, were even programmed into dealership computers.
"When (Harris) reported the unethical conduct going on around him in the Hendrick dealership, Mr. Hendrick himself said words to the effect of 'you know you're going to be blackballed,'" the suit states. It contends Harris was fired June 14, 2004, for refusing to continue engaging in such tactics.
The suit was filed last month in Mecklenburg Superior Court, naming Hendrick Management Corp. Hendrick Automotive Group and Charlotte Automotive Co. (doing business as Hendrick Acura) as defendants.
A separate lawsuit seeking class-action status on behalf of Reginald Mills of Union County and other customers of Hendrick Automotive dealerships across North Carolina is pending in Union Superior Court and makes similar allegations.
Duane Overholt, a consultant and professional witness for legal teams involved in litigation against car dealerships, says the allegations are analogous to those that led to a Dateline NBC report late in 2003 accusing Charlotte's Sonic Automotive Inc. of questionable tactics. That report led the N.C. Attorney General's office to open an investigation of Sonic's sales practices. A spokeswoman for the Attorney General's office says that investigation is ongoing.
A Hendrick Automotive spokesman says it is company policy not to comment on lawsuits, and he refers questions to company attorney John Arrowood.
Arrowood declines to discuss the allegations, other than to say, "We are vigorously defending against the lawsuits. We don't believe they have any merit."
Arrowood filed suit on behalf of Hendrick Acura in April -- before Harris' lawsuit but several months after the Union County litigation began -- against Harris and another former Hendrick manager, Antoine Burgess, who was in charge of used-car sales and was fired the same day as Harris.
That suit does not say why the two were fired; each had worked at Honda Acura for years. But it accuses the men of taking customer and trade-secret information from the dealership. It says the information includes "lease worksheets and other financial documents prepared by the dealership in the process of selling, financing and leasing vehicles" and alleges Harris and Burgess shared them with unidentified third parties, violating the privacy rights of those customers.
Hendrick's suit asks for damages, an injunction prohibiting Harris and Burgess from disseminating the documents and seeks an order that they return them to Hendrick Acura.
'A pre-emptive strike' Overholt, who says he met Burgess and Harris last summer when they were looking for attorneys to take their case, says such suits by companies are not uncommon in whistleblower cases.
"It's a pre-emptive strike to force (whistleblowers) to spend money defending a suit and to get the records back," he says. Overholt, a former auto sales manager at various dealerships (but not Henrick-owned dealerships), says he has seen at least some of the documents described in the suit Hendrick filed, and he contends they will help show the company was hiding charges in its sales and leases -- a practice the automotive industry refers to as "packing."
He says Harris and Burgess did not steal the records. He says the documents are all records the dealership routinely supplies to employees so they can keep track of customers and their own sales.
As of last summer, Overholt says, Burgess had planned to file suit with Harris against the Hendrick companies. But he contends Burgess made an out-of-court settlement with Hendrick and decided not to proceed.
Burgess, who lives in Mecklenburg County, acknowledges the Hendrick lawsuit against him and Harris, but says it has been dismissed against him.
"I am not at liberty to discuss those terms," he says.
He declines to say whether he considered filing suit with Harris against Hendrick. "Obviously Tony has decided to do that -- he has the right to do anything he wants," Burgess says.
David Puryear, a Greensboro lawyer representing Harris, declines to say anything about Burgess. But he says neither he nor his client has seen the suit filed in Mecklenburg by Hendrick Acura, even though it is two months old.
"I have not been served with the complaint; my client has not been served," Puryear says. "I am not going to comment on the allegations in a complaint I haven't seen."
He offers little comment beyond what is stated in Harris' lawsuit, saying he doesn't want "to try the case in the press."
But the accusations in Harris' complaint are stark, if not always detailed. It alleges that Hendrick Automotive "through its managers, required (Harris) and other employees ... to participate in sales and business practices which were and are unlawful and unethical ... (including) inducing automobile purchasers and lessors ... to incur financial obligations for items of purported service that were added to the customers' transactions ... without the customers' knowledge."
The suit contends fabric care and exterior coat protection were sold by the "automatic inclusion of the item in the automobile sale and/or lease contracts by the defendants' computer systems, irrespective of whether the consumer had actually requested the product or not."
Such hidden charges, the lawsuit alleges, could be more than $1,000.
It also says tactics included "secretly rewriting closed motor vehicle sales and lease transactions to reduce the sales price of the vehicle ... and adding in a fraudulent new line item charge for a vehicle maintenance contract without the vehicle customers' knowledge or consent."
The suit contends that practice reduced the commissions paid to the salespeople and cheated the state of tax revenue on the sales, as well as shifting profits to Hendrick subsidiaries that provided the maintenance contracts.
Class-action case The Union County lawsuit, filed at the end of last year, makes some of the same accusations, often amplifying them. For instance, it says only the sales manager at each Hendrick shop could go into the computer system to delete the automatic, but undisclosed, car-care charges on a specific deal.
It also contends records held by the dealership showed the add-on charges, but the paperwork given to the customers did not. The lawsuit specifically says Hendrick Acura General Manager David Porter and General Sales Manager David Foster "required that employees pack and stuff Car Care in consumer sales and leases so that (each) could receive his monthly bonus."
The Union County suit also contends the same computer system and set of business forms were used in all the Hendrick dealerships in North Carolina, making the same kind of hidden charges possible.
Gary Shipman, the lead attorney in the Union County suit, says packing and stuffing are industrywide practices. His law firm is involved in arbitration actions against Sonic dealerships in North and South Carolina based on similar allegations.
Arrowood has filed Hendrick Automotive's response to the Union County suit. It denies the allegations of improper practices and argues the lawsuit should not be treated as a class-action case.
Shipman says the Union court is in the process of deciding whether to assign the case to a specific judge or send it to the N.C. Business Court. Once that decision is made, the judge assigned to the case will hold hearings on the class-action issue.
Meanwhile, Shipman notes the allegations in the Union suit are "totally consistent with those in Mr. Harris' action." But he declines to say if he will attempt to use Harris as a witness in his case or seek to use the documents Hendrick Acura is trying to recover in its suit against Harris.
"Obviously we want to avail ourselves on anything that is available," Shipman says.
Noelle Talley, spokeswoman for N.C. Attorney General Roy Cooper, says the office is aware of the class-action lawsuit and has acted on individual complaints by consumers involving Hendrick. But she says there is no investigation of Hendrick Automotive's business practices like the probe that continues into Sonic's practices.
remember hendrick was pardoned by Clinton
Rick Hendrick <---Pardoned by Clinton
Technology industry joke - "The only difference between a technology salesman and a car salesman is that the car salesman knows he's lying."
I certainly do remember.
The last two cars I have bought both came from Leith dealerships for that very reason.
He must not have been getting his share.
Good get...kudos, you guys..
for what?
Maybe. Or perhaps he was just honest?
BTW:
Hendrick's annoying jingle goes "HENDRICK! I Like It Like That!"
This is an auto dealership, isn't it? What does he expect.
The Clinton Library Pardons - Rick Hendrick, Archie Schaffer and Marc Rich
Rick Hendrick -
FreeRepublic links -
- Hendrick, owner of a major car dealership and NASCAR team owner, was convicted for mail fraud in 1997.
- Hendrick was on the Board of Directors of NationsBank.
- Hendrick's friend Hugh McColl was the chairman of NationsBank at that time.
- NationsBank merged with Bank of America
- Hugh McColl became chairman and CEO of Bank of America
- Rick Hendrick requested a pardon from Bill Clinton
- Bank of America chairman Hugh McColl wrote a letter to Bill Clinton recommending a pardon for Rick Hendrick
- On December 7, 2000, Hugh McColl announced that Bank of America would donate $500,000 to the Clinton Foundation
- On December 21, 2000, Bill Clinton granted a pardon to Rick Hendrick.
December 8, 2000 - Bank of America pledges $500,000 to library-apartment for Clinton
http://www.freerepublic.com/forum/a3a30959e7f98.htm
December 22, 2000 - Car dealer Rick Hendrick wins pardon from Clinton
http://www.freerepublic.com/forum/a3a4ac4112ecc.htm
Boy, that's worth repeating!
Ya beat me to it.....way to be ahead of the game!
ping
You may find the links in #12 interesting...
Two years ago, I bought a conversion van from Hendrick Chevy in Cary. A couple of months after the sale, I received a check from the dealership saying that I was due a rebate that they had overlooked. Their auditor had found the mistake. They could have kept the money and I'd never have been the wiser.
>>It also contends records held by the dealership showed the add-on charges, but the paperwork given to the customers did not. <<
For that alone, I would vote guilty and want jail time for the manager.
That's quite an interesting story.
I would like to know how many car dealers actually do cheat the customer?
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