CHARLESTON – Charleston attorney Harry Bell settled an $11 million class action suit against auto dealer Wally Thornhill for coupons worth less than $2 million after discovering that complete success would have pushed Thornhill into bankruptcy.
Now Bell wants Thornhill's dealership, Thornhill Superstores of Chapmansville, to pay his firm $2,418,978 for its work on the suit.
Bell's firm stands to collect the customary one third of the proceeds, but according to him the value of the class action includes more than the $400 coupons that 4,503 Thornhill customers will receive.
As a result of the suit, he argues, Thornhill stopped its "one dollar over invoice" promotion and pledged to tell customers if they owe more on their trade-in vehicles than the trade-ins are worth.
He set the value of those actions at $1,200 per customer, raising the benefit to $1,600 per customer.
He multiplied the benefit by the number of customers and came up with a total of $7,207,800.
He asked Kanawha Judge Charles King to award his firm one third of that, plus $16,378 in costs and expenses.
Defense attorney Johnnie Brown of Charleston opposed the fees. King heard arguments Oct. 10, and as of Oct. 18 he had not reached a decision.
Bell filed suit against Thornhill Superstores in 2003 on behalf of Patricia Jarrell of Madison and others, claiming the dealer violated its offer to sell for a dollar over invoice by manipulating trade-in values.
This summer King ordered Wally Thornhill to show Bell his personal financial statements and his company's financial statements and sales spreadsheets.
Bell hired expert Oliver Wood to review the numbers. Wood calculated Thornhill's overcharges at $11,066,988, or $2,457.70 per customer.
Wood also made a startling discovery that Thornhill Superstores carried an alarming load of debt.
He wrote, "Based upon my review of the financial statements produced by the defendants, there are inadequate personal assets to fund any monetary class settlement to class members because the defendants appear highly leveraged in their investments."
On Aug. 16, retired Circuit Judge Andrew MacQueen brought attorneys together for mediation. It took all day, but he guided them to an agreement.
Thornhill agreed to send out 4,503 coupons for $400 each, transferable and good for seven years on the purchase of Thornhill vehicles.
The agreement provided $1,500 each to Jarrell and plaintiffs David and Cortney Scragg of Hamlin.
Bell wrote in his application for fees that a coupon settlement was the only viable alternative.
He wrote, "Otherwise, success at trial would likely have resulted in the bankruptcy of defendants, loss of the General Motors franchise, and in turn, zero recovery for the class."
He wrote that attorneys worked since 2003, "without any payment, without any assurance of success, and without assurance of insurance coverage or personal assets to collect from."
Brown argued for Thornhill that Bell's fee calculation was speculative, unfair, grossly exaggerated and wholly unreliable.
He wrote to King that his firm billed $92,786 for its work on the case.