Car Dealer Lawyer

U.S. Representative Vern Buchanan’s Florida dealerships have been hit with a number of suits by customers and former employees.  At first, I didn’t pay close attention to these suits because they smelled to me like a political smear campaign.  But as I looked closer, they are becoming more interesting and illustrate how the right combination of a professional expert witness, a plaintiff’s lawyer, and some disgruntled employees can generate a firestorm for a dealer.

Background

Vern Buchanan is a U.S. Representative for Florida’s 13^th Congressional District.  Two years ago, he won a tight, highly contested election and is now running for re-election against the same opponent.  Rep. Buchanan is a successful dealer, and formerly owned 22 stores.  He now owns five stores. 

Duane Overholt is a former car guy turned expert witness.  According to the website for StopAutoFraud.com, Overholt has participated in a number of class action and other suits against some well-known stores in Florida and other states. 

A single plaintiff’s attorney in cooperation with Duane Overholt has filed several lawsuits against Rep. Buchanan’s stores on behalf of former employees and customers.  The former employees are notable because they are former F & I managers.  These managers claim that they were fired for refusing to engage in fraudulent activities that include falsifying credit applications, manufacturing tax returns, “powerbooking” (submitting loans to banks with equipment that is not on the car).  The managers also claimed that they were cheated out of commissions (“pencil-whipped”).

One of the lawsuits alleges that Rep. Buchanan imported illegal immigrants to work on his house.  This claim was made by a former service director.

Some of the former employees allege that they were coerced into writing checks donating to Rep. Buchanan’s campaign.  Some of the employees claim that they were reimbursed in cash.  Another claims that he was given use of a vacation home in exchange for his check.  During a one-week period, the campaign raised $110,000 from dealership employees and their families.

Rep. Buchanan Fires Back

Sarasota Ford, which is owned by Rep. Buchanan, has filed a lawsuit against Duane Overholt accusing him of “churning.”  The suit alleges that he called former customers of Sarasota Ford and promised them between $50,000 and $90,000 if they participated in the suit.  The suit also alleges that the callers had confidential information about the customers’ financing arrangements.  Overholt denies that he directly called any former customers or employees.

What Does This All Mean?

Politics Are Rough:  Why would anyone with money go into politics?  I just don’t understand it, especially if you have car dealerships.  Any car dealership is going to have some disgruntled employees and customers.  If you are in national politics, you are just begging to give these employees and customers a media stage, regardless of the truth of the allegations.

Ownership vs. Control:  One of the more interesting exchanges is the degree of control that Rep. Buchanan had over the stores.  Rep. Buchanan has taken the position that he is a “hands-off” owner.  Anyone in the car business knows that a dealer’s day-to-day involvement can vary dramatically from store to store.  The lesson here is that if you have an ownership interest in a store, you must realize that it is YOUR reputation on the line.  If you are not checking the F&I bucket randomly to look at the deals, then you are trusting someone else and that’s always risky. 

Professional Expert Witnesses:  Another interesting part of this story is the role of Duane Overholt, the professional expert witness.  Being an expert witness can be a very lucrative business, and it seems like Duane Overholt is doing very well with it.  I can’t wait to see how the suit against him shakes out.

Arbitration Agreements:  When evaluating whether to use arbitration agreements, consider the comments of the plaintiffs’ attorney in this case.  He told the newpaper that he was “discouraged” about his opportunity to recover because everyone involved had signed arbitration agreements.  He noted that unlike the public hearings in courts, the arbitrations would be private and his chances of recovery were not good.

All in all, this case has generated a ton of publicity at a critical time in Rep. Buchanan’s campaign.  It will be interesting to follow the development of these cases.

The Real News Network

“Dealer Suing Over Charges” HeraldTribune.com

“Another Buchanan Dealership Has Been Sued” The Suncoast News