Kearns told the dealership manager he objected to participating in a practice called power booking, which he described at trial as fraudulently telling lenders vehicles have pricey optional features they don't have, such as leather seats, custom wheels or a sunroof, to induce the lenders to make larger loans than they would if they knew the true value of the vehicles. He testified the dealership used the tactic to ensure that its customers had the financial means to make their vehicle purchases.
Kearns testified that on one occasion he drove a dealership car home for the evening. The next day, he saw the car's loan paperwork, which listed options he knew weren't on the vehicle. He also questioned the salary listed on the paperwork for the applicant, which seemed too high based on his own personal experience.
He reported the dealership's "questionable activities," including power booking and the "artificial inflation of income" to qualify a buyer for financing, to executives at parent company Farmer Acquisition Co. Specifically aware of his complaints were the corporate director of dealer operations, vice president of operations, corporate attorney and corporate auditor.
The dealership fired him in 2009, purportedly on direct orders from the owner, according to court documents.
The franchise later changed hands, according to Kearns' lawyer, Robert McKee of Tampa.
Kearns sued under Florida's public whistleblower law, seeking lost pay, compensatory damages and attorney fees.
The dealership denied any wrongdoing. In a brief, it argued: "As of the trial date, three years after the alleged fraudulent activity occurred, Charlotte Honda had received no complaints of fraud from anyone other than Kearns. That is, not one lender, warranty company, customer or anyone else who might have been injured ever complained of any fraud or misrepresentation."