Gee West Seattle v. Huling Bros.
Huling Bros. was the largest volume car dealer in Washington state at the time that Gee Automotive purchased the company in January 2007, but Gee went out of business nine months after buying the Huling Bros. dealership group. Gee claimed that prior to closing Huling failed to disclose certain facts regarding a police investigation into criminal acts against an elderly disabled man committed by former Huling employees. The former employees were arrested two weeks after the sale closing and there was extensive news media coverage, including a lengthy article on the front page of The Seattle Times. Gee brought suit to rescind the dealership acquisition, and for money damages for fraud and misrepresentation. We represented all of the defendants, which included Steve Huling and Tom Huling, the former dealership principals. The case was originally filed as a jury trial in King County (Seattle) Superior Court. After 18 months of litigation, we successfully forced the matter into binding arbitration. The case proceeded to a two-week private arbitration in Seattle in April 2010 before three former Superior Court judges, George Finkle, Larry Jordan and Steve Scott. There was extensive news media coverage about the underlying events, including a lengthy and lurid article on the front page of The Seattle Times which went into great detail regarding the thefts perpetrated by dealership employees and allegations of rampant drug use and abuse of customers at the dealerships. The case went before the Washington Court of Appeals on an appeal of an interlocutory issue of whether the case should be in mandatory, binding arbitration instead of a jury trial. Although we were unsuccessful in the appeal in forcing arbitration, we thereafter brought a successful summary judgment motion to dismiss Gee's claims to rescind the transaction. As a result, we were able to force the matter into arbitration 15 months after the case began, thereby avoiding a potential jury trial. The plaintiff asked the arbitration panel to award $16M in damages for lost profits and financial losses associated with closing the dealership. We obtained a good result in the arbitration — the arbitrators concluded that the adverse publicity did not cause Gee to go out of business, rejected all of Gee's damages theories and awarded roughly 11 percent of what plaintiff had demanded. The panel rendered its final decision in June 2010. This was a significant victory for our clients.