An Ohio used-car dealer faces another trial in a civil suit alleging that he issued worthless checks to pay for 99 vehicles purchased wholesale from a Ford dealership.
The state Court of Appeals ruled that Krieger Ford Inc. of Columbus can try holding Peter Renaut, president of the used-car dealership, personally liable.
At the original trial, Krieger won a verdict of more than $250,000 against Renaut's company, Chase Motors Inc. of Whitehall, Ohio. However, Chase is out of business and unlikely to satisfy the judgment, lawyers said.
As the court and lawyers described the situation, Chase bought hundreds of used cars from Krieger wholesale over a period of two to three years, ending in 1996. Under that arrangement, Chase took physical delivery, but Krieger held the titles until Chase sold the vehicles and paid Krieger.
When Krieger changed that arrangement, Chase began to pay Krieger up front, using floorplan financing from another company.
According to the court, after Renaut used bad checks to pay for the vehicles, Krieger demanded their return for full credit. Chase returned 17 and gave Krieger another check but immediately stopped payment on it.
Krieger's lawyer, James Colner of Columbus, said his client unsuccessfully tried to resolve the dispute without litigation, including an offer to accept $75,000 as a settlement. When negotiations failed, Krieger sued, alleging fraud, conversion, racketeering and unjust enrichment in Franklin County Court of Common Pleas. During the trial, the judge threw out all claims against Renaut, a separate company he owned, and Chase's office manager.
A jury in Columbus awarded $236,000 in compensatory damages against Chase, and the judge added $100 in punitive damages.
In a unanimous decision, the three-judge appellate panel ordered a jury to decide whether to hold Renaut personally liable for fraud. It cited 'substantial evidence' of his participation in fraudulent activity, including moving money among bank accounts and knowingly authorizing bad checks.
It also ordered a redetermination of the punitive damage award. Because the jury found that Chase engaged in 'aggravated or egregious fraud,' Krieger is entitled to more than a nominal $100 in punitive damages, it said.
However, the court refused to reinstate claims against Chase's former office manager and against the other company that Renaut owns.
Defense lawyer Terry Van Horn of Columbus called Krieger's lawsuit and appeal 'vindictive' and said the plaintiff wants to hold Renaut personally responsible so they can 'go against his other assets.'
'Chase was fighting for its life,' Van Horn said of the bad checks. He is asking the appeals court to reconsider the decision.