The owner of Toyota dealerships in San Juan Capistrano and Claremont has filed a lawsuit in Orange County Superior Court, alleging that the auto manufacturer retaliated against him when he developed a way to get more customers signed up for repairs stemming from runaway vehicle issues.
The complaint, which alleges fraud and breach of covenant of good faith and fair dealing, was filed on Roger Hogan’s behalf in response to “Toyota’s nefarious scheme to oust one of its most loyal and successful dealers for illegal and improper reasons, to the harm and detriment of the dealer and at great peril to the safety and health of the dealer’s and Toyota’s customers,” the suit says.
A call to Toyota’s media relations office in Texas for comment was not immediately returned.
Toyota reached a $1.6 billion settlement of a class-action lawsuit regarding runaway vehicle problems in July 2013. Hogan notes in the lawsuit that Toyota paid a $1.2 billion fine to the U.S. Department of Justice, as well, for runaway vehicles.
Hogan alleges in the lawsuit filed Tuesday that Toyota relied on an “antiquated system” to notify its customers of recalls, so he created a new technology he called “Autovation” that was “wildly successful” and reached many more customers who needed vehicles on the recall lists to get fixed.
Hogan alleged that Toyota used the clunky old system “to save money” by not reaching as many customers needing repairs.
“For years, Toyota covered up the problems and made misleading statements to the public and to the government regarding its unintended acceleration issues; and it did not want Autovation to get in the way of its cover-up,” Hogan alleges in the lawsuit.
The plaintiff further alleges that Toyota worked to “coerce Hogan and squeeze him out” of his dealerships by “sabotaging” the Autovation system.
He claims Toyota “instructed” him to purchase more land for his Capistrano Toyota dealership, which he did for $2.5 million, “only to later deny him the additional vehicles the new land entitled him to.”
Hogan alleges Toyota concluded his Claremont dealership was not “sales efficient,” but didn’t provide him with enough cars to reach sales marks.
The businessman alleges the company also blocked him from having his sons manage his Capistrano dealership and other location. Then, he claimed, Toyota restructured his loan from the company from “interest only” to “principal plus interest,” which he said tripled his payments.
He also accuses the company of directing his customers to competing dealers.
“Eventually, Toyota came right out and told Hogan to sell,” the lawsuit alleges.
“Toyota put corporate profits over customer safety,” the suit alleges. “As a result of Toyota’s actions, millions of vehicles still have unrepaired recalls, and Hogan and his dealerships have lost millions in revenue and value due to Toyota’s retaliatory actions. Hogan was trying to do the right thing for Toyota drivers. Toyota thwarted Hogan’s efforts and is now pushing him out in order to silence and eliminate him.”
–City News Service