When a large corporation faces a challenge from a smaller entity, it often garners public support for the underdog. However, the dynamics can shift drastically when the powerful corporation itself claims to be a victim. This appears to be the scenario in a recent lawsuit in which Kia America is taking legal action against Dan O’Brien Auto Group.
As reported by Automotive News, Kia initiated its lawsuit in early May in a federal court in New Hampshire. The automaker accuses the New England dealership of fabricating sales reports and illicitly benefiting to the tune of over $500,000. Named in the lawsuit are dealer principal Dan O’Brien, six associated dealerships, and COO Tom Kuhn.
Kia’s legal filing cites approximately 300 suspicious retail delivery reports, with an expectation that this number may rise during pretrial investigations. The dealerships involved are located in Norwood, Massachusetts, and in the New Hampshire towns of Concord and North Hampton, all of which have been sold since the events in question.
Kia accuses Dan O’Brien Auto Group of intentionally falsifying retail delivery reports by neglecting to disclose sales reversals or cancellations and documenting nonexistent sales. The lawsuit further alleges that the dealership engaged in deceptive practices, such as transferring vehicles between Kia and non-Kia stores to obscure discrepancies.
On-site audits reportedly uncovered more than 20 vehicles that were claimed to be sold but were present at two retail locations. Further investigation revealed a significant mismatch between the listed inventory of new vehicles and the actual number the stores should have had. Kia contends that the discrepancy could have been even greater if the dealer group had not learned about the impending audits, which prompted them to sell more than 100 vehicles at a wholesale level.
These serious allegations put the Dan O’Brien Auto Group in a precarious position. While they can assert their innocence until proven otherwise, they have already faced allegations of deceptive practices against consumers before. Previously, the same Concord, New Hampshire, dealership was accused but acquitted of wrongdoing.
In a previous settlement, the dealer group paid a $1.25 million fine due to what the state’s attorney general deemed “some pretty egregious behavior.” As part of that settlement, the dealership was mandated to hire an independent overseer and record every consumer transaction using audio and video for a five-year period.
Numerous complaints had been lodged against the dealership for allegedly coercing customers into loans that exceeded their financial capabilities, assuring them they could refinance after six months. However, no such refinancing program existed, leaving buyers stuck with unaffordable vehicle payments. Additionally, the dealership was accused of inflating applicants’ incomes on loan forms, submitting documents without customer consent, and forging signatures.
Through this lawsuit, Kia is pursuing both compensatory and punitive damages under the federal Racketeer Influenced and Corrupt Organizations Act (RICO) as well as state laws. The charges outlined in the filing include “breach of contract, unjust enrichment, conspiracy, fraud, conversion, and negligent misrepresentation.”
In response, Dan O’Brien Auto Group is seeking to have the complaint dismissed, arguing that a federal judge in Massachusetts has already prevented Kia from pursuing RICO claims related to a different dealership termination case.
Despite no longer selling Kia vehicles, the dealer group still uses Kia promotional material on its website, featuring the tagline “Keepin’ It Awesome.” This ongoing situation continues to unfold—will popcorn suffice for viewers awaiting the next twist?
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