A Hyundai Motor America lawsuit accusing Napleton Automotive Group of deliberately "blowing" engines to fraudulently collect warranty payments is the latest in a web of lawsuits and legal trouble facing the dealership group and its executives.
The automaker filed the lawsuit last week in federal court in West Palm Beach, Fla., seeking more than $75,000 in damages.
Hyundai alleged that since at least 2016, defendants working at Napleton's Hyundai store in West Palm Beach bought certain Sonata and Santa Fe vehicles from auctions and made fraudulent warranty claims for the vehicles to the automaker. Hyundai would then reimburse the dealership for the repair. In some cases, Hyundai would repurchase the vehicles.
Customer vehicles brought in for service, trade-ins and vehicles returned at the end of leases also were used in the alleged scheme, Hyundai said. The store's service director and current and former service techs "deliberately damaged" engines to make it "falsely appear" the engines had failed, Hyundai said in its complaint.
"Hyundai has always made quality and safety a priority," the automaker told Automotive News in a statement. "Hyundai has zero tolerance for warranty fraud and has taken aggressive action to stop this fraudulent activity."
Napleton Automotive Group, which ranks No. 17 on Automotive News' list of the top 150 dealership groups in the U.S., denied any wrongdoing. In a statement to Automotive News, it said it was "deeply disappointed in Hyundai's unfounded allegations."