October 6, 2007 in Business

Gee Auto, Huling heading for court

Seattle Times The Spokesman-Review
 

Gee Automotive Companies of Spokane, which took over the Huling Brothers auto dealership in West Seattle, is suing the former owners, claiming they knew about an alleged scandal involving Huling employees and did not disclose it before selling the business.

Steve Huling, former owner of Huling Brothers and current landlord to the dealership, in turn is suing to try to evict the current dealership, saying the owners haven’t paid rent in months.

The lawsuits, both filed Wednesday in King County Superior Court, come a week after Gee Automotive blamed a Huling employee scandal for waning business and said it was being forced to close its doors by Sunday.

Steve Huling said Gee Automotive caused its own demise through bad business practices.

“They didn’t have to go out of business,” Huling said. “If our name was still on the building, this never would have happened,” he said of the dealership’s shutting down.

In January, shortly after Gee bought the dealership, news surfaced that Huling employees allegedly cheated a mentally ill customer out of what amounted to his life savings.

Gee Automotive claimed it did not know about the criminal investigation of the employees – but alleged that former owner Steve Huling had known since November 2006.

“Huling knew the potentially devastating public relations effect of its employees’ actions, and wanted the business sold before Gee learned of these actions,” according to Gee’s complaint.

Huling said he knew only that his employees were being questioned by police about a theft, and he didn’t know the extent of the allegations until after the sale was final. “If we would have had any previous knowledge of this, we wouldn’t have sold the dealership to them,” Huling said Thursday. “We couldn’t tell them information that we didn’t have.”

The community revolted against the new owners after the $5.3 million sale, the Gee Automotive lawsuit states; some threw bricks at the business, and others shouted obscenities at Gee employees.

The company’s losses – which it claims are more than $300,000 per month – are “directly attributable to the negative publicity surrounding the dealership,” the complaint said.

The Gee Automotive lawsuit asks Huling to return the purchase price and pay more than $7 million in damages. Gee has said it will have to lay off about 160 employees unless a new owner can be found by Sunday.

Huling said Gee Automotive has bounced a rent check and has canceled meetings to discuss the situation. Gee Automotive threatened to sue in a letter sent months ago unless Huling sold the property to Gee at below market value, he said.

“I think they’re putting a spin on this, and the media is biting on it,” he said. “This is going to be a long process; this isn’t going to go away with this conversation.”

Gee officials couldn’t be reached to comment on Huling’s claims.


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