Former Toyota Dealer Sues Automaker Over Ouster

SANTA ANA, Calif. (CN) – Toyota drove out one of its most successful dealership owners because his innovative recall-notification program made it difficult for the automaker to continue covering up its pervasive safety issues, according to a lawsuit filed in Orange County Superior Court on Tuesday.

Roger Hogan, owner of Capistrano Toyota and Claremont Toyota in Southern California, sued Toyota Motor Sales USA, saying the company fraudulently concealed safety concerns over sticky accelerators and floor mat entrapment and then retaliated against Hogan when he tried to deal honestly with his customers.

“Toyota decided upon, and commenced, retaliatory acts against Hogan to harm his dealerships and make them more difficult to operate and less profitable, all to coerce Hogan and squeeze him out,” Hogan says in the 24-page complaint.

The reason for the retaliation, Hogan says, was his development of an innovative program called Autovation, which helped Toyota dealerships identify and notify customers of outstanding recall issues involving vehicles purchased from American dealerships.

While the program meant Toyota had to shell out money to address the recall issues, it also led to more and more customers using the dealerships’ service and parts department and ensured customer loyalty, Hogan says in the complaint.

But Toyota did not see it that way and began a series of retaliatory measures, including making Hogan pay for additional acreage at one of his dealerships and subsequently refusing to send more cars to utilize the additional property, according to the complaint.

The automaker also refused to recognize Hogan’s succession plan, declining to name Hogan’s son as general manager. The company also sabotaged Autovation, Hogan says in the complaint.

“It destroyed Hogan’s recall program, leaving Toyota customers in jeopardy and Hogan and other Toyota dealers unable to identify open recalls and service them accordingly,” Hogan says in the complaint.

The problems date back to 2009, when problems first began cropping up with Toyota vehicles – most notably gas pedals that got stuck and sometimes caused drivers to panic and crash.

From 2009 until 2014, Toyota was forced to recall millions of vehicles related to the defects. The problems were linked to hundreds of accidents and several traffic fatalities, prompting a congressional investigation and a record $1.2 billion fine from the U.S. Department of Justice.

“Toyota concealed its unintended acceleration issues from the public and from the government for years,” the complaint says. “The recalls severely tarnished Toyota’s reputation and cost it billions of dollars.”

Hogan says the development of his innovative program, which was meant to enhance driver safety and improve the reputation of Toyota during the difficult period, was the sole reason Toyota began to undermine the performance of his dealerships.

He was refused requests little by little before Toyota finally ordered Hogan to sell the dealerships in 2016, he says.

Hogan seeks damages in excess of $100 million on claims of fraudulent concealment and breach of the implied covenant of good faith and fair dealing. He is represented by Louis Miller of Miller Barondess in Los Angeles.

A phone call to the corporate office of Toyota Motor Sales USA was not returned as of press time.

 

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