A 3-year-old lawsuit against BMW of North America by a Highland Park woman who claims she bought a used car the automaker knew was a lemon is scheduled for trial on June 6.
Dallas County District Judge Eric V. Moyé said he chose the earliest possible date on his calendar to bring to an end what he called “a sustained, concerted, bad faith effort” by BMW and its Dallas counsel, Hedrick Kring Bailey, “to throw obstacle after obstacle in front of the plaintiff” to deny her a day in court.
In 2017, Whitney A. Walker bought a used 2014 BMW i3, a small electric hatchback no longer in production, from a third-party dealer not affiliated with BMW. Her suit, filed in February 2020, contends that BMW auctioned the vehicle for resale on the used-car market knowing it “had a long list of defects and problems” that BMW concealed.
In a blistering April 28 order, Judge Moyé sanctioned BMW and Hedrick Kring Bailey, ordering them to pay Walker’s lawyer, Jonathan C. Scott, more than $773,000 for his firm’s fees and expenses to fight what the judge called an endless string of “frivolous and groundless” defense maneuvers intended to thwart the production of records sought by Scott through discovery.
“The court finds that virtually every pleading filed in this case by HKB on behalf of BMW related to responding to plaintiff’s discovery requests was made in bad faith,” Judge Moyé wrote.
“This case is an example of a wealthy client and its law firm using delay, misdirection, and both rejected as well as frivolous arguments to make litigation unfairly difficult and expensive for its opponents,” he added. “Unfortunately, this sort of conduct is not uncommon in our court system. Sadly, it was unusually egregious and persistent here.”
The sanctions followed a March 13 order in which Judge Moyé found BMW in contempt of court — for the second time in two years — for what he called chronic discovery abuses.
Jacob B. Kring, the HKB partner heading BMW’s trial team, declined to comment on the sanctions.
In court filings, he has said his client complied with discovery requests whenever it could. Many of the plaintiff’s requests, he said, were overbroad or improperly submitted, or sought documents that either don’t exist or aren’t in BMW North America’s possession.
“A party is not in contempt of a court order for not producing documents it does not have,” he wrote.
Elsewhere, he wrote: “BMW NA is fully committed to complying ‘to a T’ with every order of this court and meeting its discovery obligations.”
The judge does not agree.
After concluding that BMW’s persistent “obstreperousness” was “specifically calculated to delay the ultimate trial of this matter,” Judge Moyé ordered that trial to begin at the first opening on his court calendar – even if that precludes some last-minute requests for discovery and depositions that he might otherwise have entertained.
“The actions and inactions of the defendant have put this court in an untenable posture,” he said at a pretrial hearing on Wednesday. “There will be no further discovery in this case.”
Nor is he likely to grant further delays. The lawsuit, a dispute over the sale of one used car, has dragged on for three years, thanks, the judge said, to BMW and its lawyers who have “not only wasted plaintiff’s time and resources” but also those of the public.
“I am disgustingly aware of what is going on in this case,” he said Wednesday. “I have spent more time on this case than any other case I’ve got.”
At that hearing, he denied a request for even a short continuance from a co-defendant, AutoNation Inc., the parent company of BMW of Dallas. AutoNation’s lawyer, Mark A. Bankston of Johnson DeLuca Kurisky & Gould in Houston, said he’s due in Austin the week of June 6 on an unrelated matter. Judge Moyé’s advice: Get your Austin case continued.
The trial setting may yet prove moot. Kring said Wednesday that BMW is trying to reach a settlement with Walker and that a deal may be close. The parties are meeting this week with a mediator — an earlier mediation, in 2021, proved fruitless — and “we’re in the bottom of the ninth inning,” Kring said. Scott declined to comment on the prospects of a settlement.
Should the case proceed to trial, BMW will argue that it met its legal obligation to disclose that the car was classified as a lemon before it was offered for auction. (The original buyer returned the i3 to BMW with just over 11,000 miles on it, claiming it was defective.) Walker, the defense notes, signed a form acknowledging she’d been told the i3 was lemon when she bought it for $22,700, a bargain price.
Scott, who has married his client since signing on as her lawyer, said BMW’s “disclosure” was laughably inadequate: It said merely that the car’s original owner complained of a “battery concern,” which had been remedied by charging the battery. BMW’s own records, he will argue, show that the car had a long history of flaws beyond a battery that needed charging. Had Walker known the truth, he says, she wouldn’t have bought the electric lemon at any price.
Since she purchased the car, her lawsuit says, it’s has been out of service “for substantial periods of time,” including nearly half of 2018, when it was in the shop at BMW of Dallas. Among other problems, the suit says, she and others experienced electrical shocks if they were touching the car’s door sill while its charging cable was unplugged.
In a sworn statement filed with the court last month, Walker said the car is sitting in her backyard, unusable and unsaleable, while she continues to pay off a loan on it, as well as keeping up its insurance and registration.
Though the case is not a class-action, Scott claims he can show that BMW regularly — and fraudulently — resells its lemons to used-car dealers without disclosing the extent of the vehicles’ problems or the complaints of their original owners.
In addition to the full repair history of Walker’s car, Scott has demanded through discovery — and Judge Moyé has said he’s entitled to — the same records for hundreds of lemons BMW has resold in Texas. For each of those cars, he’s also getting the disclosure forms BMW is required to submit to the Texas Department of Motor Vehicles before it can offer a lemon for resale. By law, he said, the disclosure must include a complete and accurate description of the lemon’s defects, the concerns that led the original purchaser to return the car to its manufacturer for a refund and what repairs were made to correct the defects.
None of that information, Scott said, was provided to Walker.
The jury trial should take a week and change — at most. Scott said he’ll need four days to present his case.
“You’ve never tried a case in my court. It won’t take four days,” said Judge Moyé, who maintains one of the leanest active dockets in the county by moving cases along quickly (a relative term in civil litigation).
Throughout Wednesday’s pretrial hearing, Judge Moyé castigated Kring personally — and pointedly — for his conduct in the BMW case. At various times, he called Kring’s actions “reprehensible,” said the defense lawyer was mischaracterizing documents that had been turned over to the plaintiff, upbraided him for trying to re-litigate matters that had already been decided and accused him of lying to the court.
He reminded Kring of a previous hearing related to attorneys’ fees at which Kring argued that the hourly rate claimed by Scott was excessive. Yet when asked how Scott’s rate compared to his own, Kring said he didn’t know what he was billing per hour for this case, an assertion the judge found preposterous. When Kring started to say Wednesday that he now had that information and would gladly provide it to the court, the judge cut him off.
“No!” he said. “You don’t get two chances. You cannot unring that bell.”
He accused Kring of making “a material misrepresentation to this court” by asserting that the trial will be bifurcated, with exemplary damages to be determined in a second evidentiary phase only if the jury awards the plaintiff compensatory damages and finds a defendant liable for exemplary damages in the first phase.
In fact, Judge Moyé pointed out, there has been no decision on whether the trial will be bifurcated. Kring, the judge noted, filed a motion on May 12 requesting bifurcation; but only the court can order it – and Judge Moyé has yet to rule on Kring’s motion.
“Why you would continue to lie to this court is beyond me,” the judge told the attorney. He added, “I am staggered by your mendacity.”
When he noticed Kring looking down at his desk, Judge Moyé fairly shouted: “Look at me when I talk to you!”
Kring declined to comment after the hearing on Judge Moyé’s statements.
The matter of bifurcation arose during a discussion of financial statements BMW of North America has been ordered to produce. The records, which would show, in essence, how much BMW North America is worth, are only pertinent to a decision on the amount of exemplary damages to be awarded in a second trial phase; if the jury finds against Walker in phase one, there is no phase two. Therefore, Kring suggested, Judge Moyé should await the first-phase outcome before forcing BMW to reveal details of its finances.
Judge Moyé responded that BMW must hand over the financial statements before the trial starts, “unless a giant meteor strikes BMW North America’s headquarters, and the offices of their CPA, and your law office.”
If the records aren’t produced on time, he said, “the most draconian sanctions this court can imagine will befall whoever is responsible.”