Security Pacific Told to Pay Ex-Car Dealer $4.8 Million

A Superior Court judge on Wednesday ordered Security Pacific National Bank to pay $4.8 million to a former San Diego car dealer who had charged that the bank’s fraudulent business dealings caused him to lose a pair of car dealerships in San Diego and Los Angeles.

Superior Court Judge Dennis Adams ruled that in 1979, Security Pacific “fraudulently induced” former Baron Buick owner James Williams to purchase a Los Angeles Dodge dealership which Adams described as “a failure waiting to happen.”

Adams ruled that by arranging for Williams to buy the financially strapped Viking Dodge dealership in Los Angeles, Security Pacific “rendered it impossible” for Williams to fulfill his contracts with the bank. Viking was closed in 1979 and Baron Buick was closed in 1980.

In a 48-page document peppered with quotations from Chrysler Corp. Chairman Lee Iacocca’s autobiography and Security Pacific’s advertising jingles--both of which Patrick Frega, Williams’ attorney, had introduced as evidence--Adams ruled that “when (Security Pacific) was really needed, it was not there” to fulfill its “fiduciary relationship” with Williams.

Adams’ $4.8-million judgment included $2.5 million in punitive damages, $1.7 million in lost income, $300,000 in emotional distress damages, $274,000 to cover a judgment awarded to Chrysler when Viking Dodge closed, and $50,000 to cover Williams’ loss of personal funds. Adams also prohibited Security Pacific from recovering any of the obligations it had hoped to collect from Williams.

Security Pacific declined to comment on the award. “We understand that the judgment has come down but (bank attorneys) have not yet received the papers,” said Susan Taha, a Security Pacific senior vice president.

Message Sent

“I think this decision sent out a message that maybe banks should stop dealing this way,” said Patrick Frega, Williams’ attorney. “We did what we set out to do--send a message to the corporate board rooms. It transcends the car business (and) goes directly to the way bankers treat the people they do business with.”

Frega said that at least three similar cases--at least two of which involve Security Pacific--have been entered in Los Angeles-area courtrooms.

Williams, who said he left San Diego in 1980 after finding that he was unable to get a job with any San Diego car dealership, took a succession of jobs in Sacramento and Denver before returning to work for a former employee who subsequently had opened a car dealership in San Diego.

“I’m going to buy another store if and when we ever get the money,” said Williams, who was recently named general manager of Rancho Oldsmobile, Rancho Saab and Rancho Jeep/Renault in San Diego. “That’s been my dream since childhood.”