HOUSTON, October 4, 2019 – In a closely-watched contract row arising out of one of the nation’s largest auto-dealer frauds, a unanimous jury in a federal court in Lubbock, Texas returned a $53,759,450.96 verdict for firm client Ford Motor Credit Company, LLC.
After a two-day damages trial in the Northern District of Texas, the jury deliberated for only an hour before awarding Ford Credit the exact amount that Baker Botts litigation partner Michael S. Goldberg argued was due.
In July 2018, Ford Credit sued six Texas dealerships and their principals, Bart Reagor and Rick Dykes, after discovery revealed that the Dealerships had defrauded the automotive financing company.
The Dealerships sold over 1,100 vehicles—which they acquired with $41 million in Ford Credit financing—without repaying Ford Credit. They also reported false financial information to Ford Credit. The Dealerships also sought financing on the same vehicles, multiple times (known in the automotive industry as “double-flooring”) and requested financing on already-sold vehicles.
The two principals personally guaranteed to pay Ford Credit for the Dealerships’ debts. After the Dealerships were put into bankruptcy, the case remained against the principals. The trial preceded against Bart Reagor.
On May 24, 2019, the Court granted Ford Credit’s motion for summary judgment on liability. The Court found for Ford Credit for “essentially the reasons argued in the well-reasoned and thorough briefing.”
On October 2, 2019, at trial, Ford Credit sought $53,759,470.96. Reagor’s counsel, Marshall Searcy of Kelly Hart & Hallman LLP, argued that the maximum number was $2,000,000.00.
The jury returned with a unanimous 12-0 decision finding the full $53,759,470.96 sought by Ford Credit. Federal Judge Sam R. Cummings asked for affidavits to add attorneys’ fees to the jury’s verdict.
Ford Credit was represented at trial by Michael S. Goldberg and Shayna M. Goldblatt of Baker Botts, as well as Craig A. Leslie and Jacob S. Sonner of Phillips Lytle LLP. The Baker Botts team also included Jessica B. Pulliam, Christopher W. Hunt, Jessica Aquino, Yvonne Rager, and Laura Natelson.
Lawyers in Baker Botts’ Litigation Department bring sound commercial judgment to clients’ most critical disputes, along with a deep understanding of the varied legal, technical and policy issues that they face. Drawing on our intimate familiarity of clients’ needs and the resources of our global platform, we have amassed an enviable record of winning results. These range from early-stage dismissals to multibillion-dollar trial wins and arbitration awards to appellate victories before the U.S. Supreme Court. Our success has not gone unnoticed, with 43 litigation practice rankings in the Chambers and Legal 500 directories alone.
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