7-week trial in Johnston County over car financing ends in split verdict

This was a complex civil action for fraud, unfair and deceptive trade practices, abuse of process and related transgressions arising out of the sale and financing of dozens of used automobiles.

Plaintiff alleged, inter alia, that defendants, a used car dealership and its principals, failed to perfect liens on titles to certain used cars that were sold by the dealership and financed by the plaintiff; failed to pay the plaintiff proceeds from the sale of certain repossessed vehicles belonging to the plaintiff; and failed to transfer to the plaintiff possession of certain repossessed vehicles that belonged to the plaintiff upon demand. 

Defendants denied plaintiff’s allegations and asserted, inter alia, that plaintiff’s lawsuit was part and parcel of a deliberate scheme by and between the plaintiff and one of the automobile dealership’s rogue partners to drive the dealership and its remaining partners out of business and to place blame for the plaintiff’s own business mismanagement and fraudulent conduct (which included opening 12 personal loans in the name of defendant Michael S. Barefoot without his knowledge or consent, forging the signature of Barefoot on the promissory notes for those loans, and reporting falsely to credit reporting agencies that Barefoot had defaulted on those loans) upon the defendants. 

Following a seven-week jury trial, the jury returned a split verdict, finding that the plaintiff had been injured by certain acts of two of the defendants and that one of the defendants had been injured by certain acts of the plaintiff.  Among other sums, the jury awarded $1 million in punitive damages to each injured party.

More than one year after the original complaint had been filed, approximately two weeks before the case was originally scheduled to be tried and after more than 25 banker’s boxes of documents and other evidence had been generated or obtained throughout the course of the litigation, defendants’ original trial counsel were – on the basis of a motion made not by the real party in interest (to wit, the rogue automobile dealership partner against whom a default had already been entered) but by counsel for the plaintiff – disqualified and removed from the case on the purported ground that a conflict of interest existed between the rogue partner and former counsel for the defendants.

Thereafter, the defendants against whom liability had not been established (i.e., all except the rogue automobile dealership partner against whom a default had already been entered) were given only three months from the date on which their current counsel made his initial appearance in the case to prepare for what turned out to be the longest-running jury trial in Johnston County in at least the last 20 years.

Verdict Report

Type of action: Civil action for fraud, unfair and deceptive trade practices, and abuse of process

Case name: Security Credit Corporation v. Michael S. Barefoot, et al.        

Case number: 08 CVS 142

Court: Johnston County Superior Court

Judge: Hon. Richard T. Brown

Verdict or settlement: Jury verdict

Date: March 1, 2010

Amount: $2,007,332 for the plaintiff; $1,262,202 for the defendant                           

Experts: For the defendants – Robert Earnhardt, REE, LLC (Greenville)

Were liability and/or damages contested? Yes

Was the opposing party represented by legal counsel? Yes

Has the plaintiff been successful in actually collecting the judgment? Collection activity has not yet commenced.

Defendant’s attorney: Willie D. Gilbert II (Wilson)

Editor’s note: The information in Lawyers Weekly’s verdicts and settlements reports was submitted by the counsel for the prevailing party and represents the attorney’s characterization of the case.