Mintz Obtains Outright Defense Verdict for Encino Motorcars in Contract Dispute
Key Facts
- The dispute arose from the sale of a top-performing Mercedes-Benz dealership by our clients Encino Motorcars, David L. Peterson, and Steve Zubieta to plaintiffs Trophy Automotive Group and First Motor Group of Encino and their principal, Nasser Watar
- The plaintiffs sought more than $20 million as “overpayment for the goodwill of the business,” asserting multiple causes of action for breach of contract, fraud, and misrepresentation
- All of the plaintiffs’ claims except for breach of contract were dismissed via summary judgment
- Following three weeks of trial, the jury took one hour to decide that the defendants had not breached the contract
- In post-verdict proceedings, our clients were awarded nearly $3.1 million in attorney fees and costs
The Situation
Our clients, Encino Motorcars and its owners David L. Peterson and Steve Zubieta sold their Mercedes-Benz of Encino automobile dealership and the related real estate for more than $100 million to the plaintiffs and their principal, Nasser Watar, who owns multiple automobile dealerships in Southern California that operate under the name “Trophy Automotive.” After the sale, the plaintiffs sought more than $20 million as “overpayment for the goodwill of the business,” alleging that the financial information provided by our client was inaccurate, misleading, and in breach of representations and warranties contained in the Asset Purchase Agreement.
The Approach
During pre-trial proceedings in a California superior court, the plaintiffs’ claims for fraud and misrepresentations were dismissed by summary judgment. The plaintiffs’ writ as to these dismissals was summarily denied by a court of appeals in California. The case proceeded to trial only on the breach of contract cause of action, the crux of the claim alleging that the dealership’s financial statements were inaccurate and misleading. The trial involved a “battle of experts,” which our clients won largely because (1) their experts had more real-life practical experience in the business of automobile dealerships and (2) the plaintiffs’ experts were forced to make very significant concessions on cross-examination. Ralph A. Campillo guided Encino Motorcars and the two other defendants through all aspects of the case. Legal specialist Debra M. Lambdin provided assistance on the matter.
The Outcome
After more than three weeks of trial, the jury took approximately one hour to decide that the defendants had not breached the contract. As such, the jury did not have to grapple with many of the other thorny issues that had been addressed in the evidence. In post-verdict proceedings, our clients were awarded nearly $3.1 million in attorney fees and costs.
