Texas jury awards $136 million to Mercedes-Benz dealer over deception

Article by Anita Panait, on February 26, 2013

A dealer for Mercedes-Benz USA (MBUSA) who alleged that the carmaker misled him to believe that he could move a store he acquired for $7 million to a more promising location was awarded $136 million by a jury in a district court in Cameron County, Texas. Renato Cardenas Sr., the owner of Carduco Inc. and Cardenas Metroplex, a Mercedes dealership in Harlingen, Texas, claimed that from 2008 to 2009, officials of the carmaker encouraged him to buy the Harlingen dealership and even visited proposed sites for it in McAllen, Texas.

Expecting that he could move the dealership to McAllen and build a new store, Cardenas acquired the franchise in Harlingen.

Cardenas alleged that the carmaker secretly awarded an open point in McAllen to rival dealer Ron Heller, owner of Heller-Bird Motors of Mission, Texas. Cardenas claimed that Mercedes undertook "active steps to conceal its intentions and deliberately provided false and misleading information in order to deceive Carduco." Court documents said that previous owners of the Harlingen dealership, Carduco and Mercedes had "multiple discussions" about the acquisition for 14 months.

The suit said that at every opportunity, Cardenas informed MBUSA that he intends to move the Harlingen-based dealership to McAllen, upon the approval of his dealership application. The suit contended that Mercedes did not disclose that the open point had been awarded to Heller until after Cardenas finalized his purchase in June 2009. The complaint was filed in June 2011 by Renato Cardenas Sr. The jury reached the decision on Feb. 15, 2013. Mercedes says it will appeal the ruling.

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