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April 2017

Gordon & Rees San Diego Team Secures Defense Verdict for Orange County Automobile Dealership in Wrongful Termination Case

Gordon & Rees partners Christopher B. Cato and Craig D. Nickerson, along with associate Kara A. Ritter, obtained a defense verdict on behalf of their client, a large auto dealership, at a trial in Orange County Superior Court.  The team was also assisted during trial by senior litigation paralegal, Joni Etue.

This wrongful termination case involved allegations of whistleblower retaliation and race discrimination (Chinese/Native American).  It culminated, after six years of hotly contested litigation and an appeal, in a month-long trial.

With regard to the whistleblower allegations, the plaintiff testified at trial that he was wrongfully terminated because he raised concerns regarding extensive warranty fraud committed by others at the dealership.  The plaintiff testified he made multiple reports to his supervisors (the General Manager and Service Director) regarding fraudulent conduct, but nothing was done.  He asserted he was then terminated just days after first complaining about the fraudulent conduct to the owner.  The plaintiff also testified the General Manager made offensive comments about his race in the late stages of his employment.  The plaintiff testified he was terminated because of his race and his alleged complaints in order to “silence" him in anticipation of an outside audit. The plaintiff also introduced evidence establishing that other employees at the dealership had participated in a large fraudulent warranty scheme. 

As a result of his termination, the plaintiff sought more than $1 million in economic damages as well as severe emotional distress, because he had been treated by multiple doctors and had contemplated suicide.  During closing argument, the plaintiff’s counsel asked the jury to award $2 million or more in total damages.

In response to the plaintiff’s allegations, the firm’s attorneys introduced evidence to the jury that the plaintiff was actually discharged due to his own participation in fraud.  The owner testified that, shortly before the termination, he developed the belief that the plaintiff was engaged in warranty fraud at the dealership based upon his review of false repair orders that he understood were created at the plaintiff’s request.  He also spoke to three other employees who confirmed his suspicion that the plaintiff was causing false warranty claims to be submitted for his personal gain.  As a result, the owner testified that he discharged the plaintiff for falsification of company accounting records and misrepresentations associated with the automobile manufacturer’s warranty system. The owner’s testimony was corroborated by the three employees he spoke to about the plaintiff before he made the discharge decision.  Additionally, on cross examination, the plaintiff was forced to admit that he knowingly engaged in approving false repair orders for several months before he allegedly complained to the owner about the warranty fraud.

During trial, the plaintiff’s counsel repeatedly sought to introduce evidence regarding alleged bad acts at the dealership, as well as the purported misconduct of other members of the management team. However, trial counsel were successful in keeping out the vast majority of this evidence and keeping the focus of the trial on the plaintiff’s conduct and whether the stated reasons for the discharge were true or pretextual. 

After deliberating for a little more than one hour, the jury returned with a defense verdict.

Christopher B. Cato