If you’ve ever felt like a little guy being crushed by a big company, this one’s for you. A Pittsburgh used car dealer walked away with nearly $10 million after a Pennsylvania judge essentially left Hyundai Motor America sitting in a corner thinking about what it had done.
Between early 2018 and mid-2019, Knight Motors and its sister company Doman Auto & Marine Sales (both based in Pittsburgh and owned by the same person) purchased 628 used Hyundai Sonatas (model years 2011-2014) at auction. These aren’t random old things; They are part of a massive recall involving Hyundai’s notoriously problematic Theta II engine, which affects more than 1.6 million Hyundai and Kia vehicles. Dealers followed the recall process exactly: They took the cars to Hyundai’s own franchised dealers for engine replacement or buyback.
Totally legal. Totally logical. In fact, American capitalism is at its best—a phrase we’ll return to shortly.
Instead of fulfilling its recall obligations like any responsible automaker would, Hyundai apparently looked at the number of claims coming from Knight and its peers, deemed something fishy, ​​and made what a judge later called a “shocking decision” in May 2019 to deny every claim related to Knight Motors — while denying any nuance and without individual review. Hyundai internally labels Knight and similar dealers a “repurchase club” and “repeat offenders” and has taken steps to reduce or deny payments to them.
Then Hyundai sued the dealer for fraud in 2019 after paying more than $5 million in buyback fees, a bold move that can only be described as extremely confident for someone about to be caught.
Allegheny County Civil Court Judge Philip Ignelzi had been on the bench for 16 years when this case came to trial. Finally, he said Hyundai’s actions were one of the most egregious examples of evidence destruction and court abuse he has seen in years. For a major automaker, that’s a big deal.
What did Hyundai do? Automotive News first reported that the court found that the company shredded hundreds of recalled vehicles — the vehicle at the center of the lawsuit — effectively destroying key physical evidence. Emails from Hyundai case managers were also deleted. The judge called the behavior “rampant destruction,” which is the legal term for destroying evidence and is generally considered very bad behavior in court.
