The former owner of a bankrupt Texas dealership has lost a lawsuit in which he accused Ford Motor Co. and Ford Motor Credit Co. of fraud, deceptive practices and violation of the federal Automobile Dealers Day in Court Act.
On April 2, a U.S. District Court jury in Dallas found no basis for liability in a suit that alleged the two companies conspired to drive out of business Horn-Williams Ford Inc. of East Dallas and its former majority owner and president, William Albert Bright.
On April 23, U.S. District Judge Robert Maloney rejected Bright's challenge to the verdict.
According to the suit, the family-owned dealership was placed in Ford's Stair Step Program in 1985 because of unsatisfactory sales. The Stair Step program was designed to help dealers improve performance over time.
At that point, the suit alleges, Bright, who is white, was pressured to sell 20 percent of the dealership to Bruce Weaver, an African-American field sales representative for Ford, who was named vice president and general manager of the dealership. Weaver, in turn, allegedly promised that his minority status would benefit the dealership and that Ford would widely publicize Horn-Williams as minority-owned.
However, Bright said he fired Weaver after the new partner inflated credit reports, improperly loaned out vehicles, defaulted on his promissory note to Bright and neglected dealership responsibilities, which damaged Horn-Willi-ams' financial position.
Meanwhile, the suit contends, the defendants pushed the dealership for increased sales performance, making 'vexatious demands,' fraudulently inducing Bright to make massive additional capital investments and conducting an unprecedented number of floorplan checks.
In 1991, the dealership filed for Chapter 11 bankruptcy protection, but the suit alleges that Ford and Ford Credit impeded Bright's efforts to sell the dealership. The company was liquidated, and Bright also lost ownership of the real estate when he failed to make his mortgage payments.
Ford had no other dealership in the immediate area for the next five years, according to a company lawyer.
The suit contended that the bankruptcy trustee conspired with Ford and Ford Credit 'to wrongfully destroy Bright and each one of his businesses.' Bright asked for $14 million in compensatory damages and $45 million in punitive damages.
But at the trial before Maloney in Dallas, the jury rejected all the allegations.
'The claims were meritless,' said Howard Harris of Ford's office of general counsel. 'The dealership had a long history of sales performance problems and a long history of financial problems. Their financial statements were not accurate.'
Harris attributed the bankruptcy to Bright's refusal to take responsibility for his own business decisions as the controlling shareholder of Horn-Williams.
'It's Ford's position that none of its conduct was improper in connection with the dealership,' he said. 'You can't trump up allegations about our minority dealership program or the conduct of Ford Motor Co. to avoid taking responsibility for bad business decisions.'
Lawyers for Bright failed to return calls seeking comment.
His claims against Weaver, who does not have an attorney and is no longer connected to Ford, remain pending.