A Fresno dealership must pay $1.1 million plus interest for making a false promise about compensation to recruit a parts manager, the California Court of Appeal has ruled.
A jury had enough evidence to conclude that Bingham Toyota-Isuzu and its director of parts and service fraudulently induced Kevin Helmer to leave his former job in 1999, the unanimous three-judge panel held.
According to the decision, Helmer had close to 20 years of experience at California dealerships and was working as a parts and service manager at another dealership when he applied for an opening at Bingham. During the interview, Helmer said he earned at least $5,700 and as much as $6,000 a month.
Helmer asserts Bingham promised he would earn at least $70,000 a year and that the dealership terminated him after he complained for several months that his base and draw were significantly less. Bingham denied telling Helmer that he could earn $70,000.
Helmer sued in Fresno County Superior Court, where he won $451,000 in compensatory damages. The jury also awarded $1.5 million in punitive damages, but the trial judge trimmed that to $675,000.
In upholding the verdict, the appellate court said Helmer is entitled to damages based on lost income: the difference between what Bingham promised and the lower amount he earned in another job after leaving the dealership.
The court's opinion by Justice Rebecca Wiseman cited evidence that Helmer would have kept his previous job if he hadn't relied on the false promise about pay, and it concluded that the false promise persuaded Helmer to leave his former job.
"The employer bargained to obtain an employee who already had steady employment," the court continued. "It is only fair to compensate the employee for the damages he suffered as a result of leaving that steady employment."
Plaintiff's lawyer Warren Paboojian of Fresno said the dealership knew that "no parts manager had made that kind of money before" at Bingham.
Paboojian added the decision means that "if you're going to make a promise about commissions and commission structure, you better abide by it."
Defense lawyer Paul Pereira of Sacramento said Bingham hasn't decided whether to appeal further.