Hyundai wants damages from fraud suit tripled

Grace Leong

Monday, July 23, 2001 | 11:27 a.m.

Hyundai Motor America won a $1.9 million award after a week-long jury trial in Las Vegas of a fraud and racketeering lawsuit it filed in 1998 against a former employee, a Lakeland, Fla.-based paintless dent repair company and its two executives.

The Korean automaker, which sued Ace-A-Dent Inc. and Gary Bowman, its vice president of marketing and Dennis Hallam, an operations manager; and a former Hyundai fleet remarketing officer, Robert Corder, in U.S. District Court, said it seeks to have its damages tripled under federal Racketeer Influenced and Corrupt Organizations statutes.

"We're seeking damages of up to $6 million under RICO statutes and also to recover attorneys' fees and costs," said Kenneth Keller, Hyundai's attorney.

The suit alleges the defendants conspired to defraud Hyundai through a system of fraudulent invoicing schemes to divert funds to shell corporations. Hyundai said it was billed for dent repair services that were never or not properly performed and that its failure to perform adequate repair work diminished the value of Hyundai fleet vehicles.

"Hyundai typically sells cars to large fleet buyers like Hertz and Avis, and the cars are returned to us after 6 months to a year to be resold at auctions," said Chris Hosford, Hyundai's spokesman. "Some of the cars would come back with dents, and Hyundai would send these to Ace-A-Dent to have the dents removed and the cars cleaned and prepared before the auction."

Keller, who said Ace-A-Dent filed for bankruptcy protection in late May in Tampa, said Hyundai has filed a motion to lift the bankruptcy order and is now considering whether it's necessary to attach the defendants' personal assets to enforce the $1.9 million judgment.

"Once the relief from automatic stay is granted, we will pursue claims against Ace-A-Dent and obtain a default judgment," he said.

Keller, who said the company is seeking damages for fraud committed by the defendants between November 1998 and July 1999, said Ace-A-Dent had paid $114,000 in kickbacks to Corder to secure business from Hyundai.

"We don't know if the defendants would appeal the verdict," Keller said. "But I doubt if they will appeal because the evidence is overwhelmingly against them. There's no dispute that they had paid kickbacks to Corder, who was supposed to review the work but he didn't. But they have 30 days as of June 21 to appeal."

The defendants could not be reached for comment.