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California Court of Appeal Rules in Favor of Employee fired for Complaining About Fraudulent Activities at Car Dealers

In November 2002 Zachary Casella was hired by Southwest Dealer Services, Inc. On April 3, 2003 Casella’s employment was terminated. Casella had been a representative for Southwest Dealer Services, a company which provides aftermarket products for car dealers. Casella claims he had been required to track dealer practices which he felt were illegal and/or unethical. After he complained to Eric Hamann, President of Southwest Dealer Services, he was fired.

Toyota_with_Shadows.jpgCasella sued Southwest Dealer Services for wrongful termination. A jury returned a special verdict in favor of Casella on each of his claims against defendants, and awarded Casella a total of $480,003, including punitive damages.

Southwest Dealer Services appealed. Their basis for appeal? Southwest Dealer Services claimed that the practice of “payment packing” (described in detail in the decision) was not illegal when they terminated Casella’s employment.

The Court of Appeal disagreed.

The decision names numerous automobile dealerships and dealer groups in Southern California, but specifically alleges “Payment Packing ” at only one; Spreen Honda. Is it a good business decision to expose your client’s questionable business practices to the public in a lawsuit just to defend a wrongful termination lawsuit? When you lose, do you want to further expose your client during an appeal? Do you suppose Spreen Honda or any or the other dealers mentioned are still clients of Southwest Dealer Services?

This is a great example of the type of thinking that creates business litigation cases. Winning lawsuits are based on good business decisions and successful legal strategies.