(2006-2007) SIGNER PROPOSES AMICABLE
RESOLUTION, GM REJECTS; SIGNER FILES SUIT
In both May and July 2006, Jim Gentry again approached me about GM’s desire to buy me out. In light of GM’s relentless drumbeat, and after suffering seemingly endless abuse from it and GMAC, I decided it was time to resolve the issues. From multiple files that had accumulated over the years, such as “Fremont Auto Mall”, “Newark”, “Buick”, “Cadillac”, “Buick/Olds trade”, “MHD”, “Union”, “Warranty Audit”, “IRS Audit”, “GMAC”, etc., I gathered documents and placed them in one master chronological order file. Among other things, this master file connected the dots, and thus painted a clear picture in my mind of the conspired acts I describe herein. On September 13, 2006, I left a voice mail for Network Planning Regional Director Ann Blakney to call me, which she returned the next day. As I had known Ms. Blakney in the past when she was in the Cadillac San Francisco Zone Office, we spent some time catching up on the interim years. Then, before I even stated the reason for my call, she repeatedly said that my situation is a difficult one, but litigation isn’t the way to handle it. Dumbfounded at her unprompted litigation comment, I told her I didn’t say anything about litigation, but that I only called to schedule a meeting with her.
I met with Ms. Blakney on October 4, 2006, informally without any signed documents or confidentiality agreement. Using an Excel timeline chart similar to the one accessible on the Home Page, I reviewed the history of GM’s Fremont Auto Mall and Pontiac-GMC purchase denial, and its many attempts beginning in 1998 to induce me to sell. The first chart I reviewed contained the relevant timelines, but did not have timelines for GM and GMAC harassment items. When discussing Motors Holding, I asked her if she was familiar with the consulting agreement between the new corporation and my old one. She nodded in the affirmative. I then brought out another chart, which was the same as the first one but included the malicious warranty audit, IRS audit, and GMAC harassment in early 2006. She somewhat indignantly said she didn’t want to talk about any of those things. As she was familiar with the consulting agreement, that significantly reinforced my observation of GM/IRS collusion.
I presented my calculations of the total that GM’s denials of my Pontiac-GMC and Fremont Auto Mall plans had cost me. In arriving at my figure, I calculated the years of lost profit opportunity due to GM’s denial of my Pontiac-GMC purchase in 1991, the large difference in appreciation between the Fremont Auto Mall facility that GM denied me and the Newark property that GM imposed on me, the shortfall of my profits over the years in Newark versus the Auto Mall per GM’s estimate of 10-25% better in the Auto Mall, and some value for the franchises. Adding all those factors, and then a provision for capital gains tax, the total came to about $35,000,000 if GM bought my corporation. If the sale was structured in a way that was not taxable as capital gains, the total would have been more than $40,000,000. In an attempt to settle quickly and amicably, I offered to sell GM my corporation, which included the facility and franchises GM wanted, for what I considered to be a more than reasonable price of $26,500,000, good until December 15, 2006. Out of that, I would had have had to pay capital gains tax.
In response, Ms. Blakney offered me mediation, but cautioned me that GM’s mediation process had a limit of $10,000,000. As that was considerably less than my calculated damages, I responded that mediation wouldn’t work unless she could get the limit waived. Before the conclusion of the meeting, she again urged me not to take legal action, even though I still had not mentioned it. In a phone conversation on October 6, Ms. Blakney informed me that she was putting together a report to GM senior management, and asked me to make the same presentation to a GM in-house attorney. I asked her if she had been able to get the $10,000,000 mediation limit waived, to which she replied that she had been. (I later learned that there is no such monetary cap in GM’s mediationprocess, thus causing me to conclude that the stated cap was an apparent untruthful attempt to get me to agree to a slashing of my requested amount before mediation, providing a lower “starting point” that GM might attempt to negotiate down further.) In a phone conversation on November 9, Ms. Blakney informed me that she had decided against mediation, and instead for she and GM’s in-house attorney to meet with me after she met with GM senior managementthe week of November 27. She said she would contact me the week of December 4. As Ms. Blakney had requested, I made my history and resolution presentation to the GM attorney on November 21. On November 28, at a Buick Enclave reveal event, I briefly talked to Western Regional Manager Susan Docherty, who informed me that she was working with Ms. Blakney on my resolution. I also briefly met GM Chairman Rick Wagoner, who stated that he had been made aware of my situation.
Having not heard from Ms. Blakney the week of December 4, and not having phone calls to her returned, I e-mailed her on December 9. On December 14 I received an e-mail from the GM Attorney stating that my information was in the hands of senior management, and I would hear back from the team “later in January.” On December 15, I responded that I would file for GM mediation, and as a one-time courtesy, would extend my offer to January 24, 2007. I subsequently filed for mediation, and initiated a transfer of my floorplan and mortgage from GMAC to Wells Fargo Bank, which prompted an e-mail from GMAC Area Manager Dan Antonelli, followed by my responding e-mail.
For guidance in my dealing with GM, in 2006, I had consulted an attorney regarding GM’s many damaging actions. The attorney was a partner in a highly regarded out-of-state law firm that specialized in dealer-factory issues who, when hearing my story and reviewing the documents, stated, “This is the most egregious situation I have ever seen.” The attorney’s statement is especially significant due to the fact that his firm was among the largest dealer-factory dispute law firm in the country. Due to GM’s disregard for my December 15 deadline, on January 5, 2007, the attorney sent a GM in-house attorney acquaintance of his an e-mail urging him to take whatever steps necessary to resolve my situation, as if I filed suit, it would be for a higher amount. On January 23, 2007, GM’s California outside attorney issued a statement that senior management determined there was no merit to my claims, and declined my proposal.
Due to statute of limitations concerns, I filed suit against GM and GMAC on February 21, 2007. The mediation session I had requested was held March 25, 26, and 27. On the third day, GM made me a mid-seven figure offer for the franchises alon – far from the $26,500,000 I requested. I again reviewed the history, and how much the denial of Pontiac-GMC and the Fremont Auto Mall had cost me. Based on statements GM made that day, and Ms. Blakney’s initial mistruth of $10,000,000 mediation cap, I was confident that GM might have agreed to $10,000,000 if I would accept it. But, that was far from what I felt was reasonable, and even further from what I felt I would be awarded in court, so I ended negotiations.
In April 2007, GM filed a demurrer motion to dismiss the case. The demurrer was subsequently argued, resulting in the court upholding eight causes of action against GM and allowing the case to go forward.
