How does $5.8 million become $500,000?
Last December we reported about a somewhat unusual situation involving a Ferrari F430 buyer and an Arkansas-based Mercedes-Benz dealership where the owner was awarded $5.8 million in punitive damages. That figure has now been reduced by a judge to $500,000, according to Automotive News. To recap, Hamid Adeli bought a used 2007 Ferrari F430 (not the F430 pictured here), sight unseen, from this dealership, and following a series of emails, texts, and video chats, a $90,000 price was agreed upon. The Mercedes dealer, part of the respected Superior Automotive Group, then sent the F430 for a final inspection at a Texas Ferrari dealer prior to shipping it to Adeli in Virginia.
As he was driving home in his new ride, Adeli smelled gasoline and the following day his own Ferrari mechanic discovered a leaky fuel pump, suspension issues, and a cracked exhaust manifold. Superior Automotive refused to pay for any of those issues and said the car was sold as-is. Adeli sued and the jury, amazingly, awarded him $5.8 million in punitive damages. However, a US District Judge agreed with Superior Automotive’s appeal claiming the original punishment was excessive and unlawful. He lowered the punitive damage amount to $500,000 but also had some harsh words for the dealership. "Making an affirmative misrepresentation about a car's condition, especially when the condition gives rise to safety concerns, is often considered one of the more reprehensible acts of business fraud,” Judge P.K. Holmes wrote in his ruling.
Holmes did, however, uphold the original ruling’s compensatory and incidentals damage amounts of $6,835 and $13,366, respectively. Only the punitive damages figure was (drastically) reduced. Still, half a million dollars in damages is quite generous considering the car itself cost $90k. Holmes also felt a substantial punitive award was warranted because of the potential safety issues involving a fuel leak. Fortunately, Adeli can now buy himself a brand new Ferrari and still have over six-figures left over. All’s well that ends well.