Russo & Steele Fraud and Breach case
 

In 2009 I consigned a car to Russo & Steele. Since that time I have been in legal proceedings against them until now. The case has gone through arbitration (their rules) and the arbitrator with American Arbitration Assn. has ruled. The ruling is now public record in Maricopa county Arizona.

I am going to tell the readers digest version but I suggest that if you have an interest in knowing the truth in detail that you email me directly at jdcobra427@sbcglobal.net. The actuall ruling is 28 pages and tells the entire story form a legal standing.

At the auction Russo & Steele allowed an unvetted or qualified buyer bid and purchase 16 cars totalling 1.3 million. By the end of day two or friday night they knew about his deceit and course of action which was to "kick" the cars for various reasons. All of the car owners but one were left hanging for weeks while Russo went after their commisssions but NOT the sales. One car owner was piaid for his car. The rest were told that they had to take them back which they did. When they told me this three weeks later I refused.

I went after the buyer and in the process I found out the truth of the whole thing. I filed suit against Russo for the following:

1. Failing to adequately determine buyers ability and fitness to bid on and pay for the vehicle despite representing they would.
2. Allowing the buyer to rescend the purchase on false petenses.
3. concealing and/or failing to disclose material information within a reasonable time that the buyer was unfit or unable. since they knew the very day of the sale.
4. Damaged the vehicles paint and body following the sale.
5. Placed Ruysso's interest ahead of clients interest.
6. Fraud
7. Breach of fiduciary reponsibilities.

The Arbitrator found the following( some of them)

" In light of the foregoing, the arbitrator finds that the weight of the evidence supports the conclusion that respondent breached its fiduciary duty to claiment". "And further, respondent misrepresented and concealed the true facts from the claimant."

"arbitrator further finds that the clear and convincing evidence supports that the repondent misrepresented ( fraud) the true facts to cliamant as what had transpired with his vehicle at the auction, its services with respect to its agency relationship with claimant and continues to conceal and fail to disclose acts and events following the auction(a fraud)"

"The arbitrator finds that the claimants evidence satisfies the requisite elements of common law fraud".

"The arbitrator finds the repondent to have breached the consignment agreement with claimant and the related duties owed to its principle, to have made representations to claimant and concealed or failed to disclose material information to claimant and, in those matters, committed fraud against claimant as its principle".

Sorry for the length but is was a 2 1/2 year battle. The actual 28 pages is much better reading.

Needless to say, BEWARE

Jay

So,

How much did it cost you? fees + repair
How much time did you put into it?
How much compensation were you awarded?

Anthony no repairs, Russo has to take the car. The repaint would have been 35,000. I'm out a little over 200k in fees and only 100k being repaid plus I have to go after the payment awarded. In all I will lose about 125k to prove a point and maybe save someones rear.

They have been doing this for too long.

Jay

Jay,
What car of yours was this all about ?
Glad you caused them some pain.

Fred this was a custom 41 Cabriolet that I had bought. It was called The Masterpiece by some car magazines.

It wasn't just my car. it was the entire scam and attitude of the company. They have pulled stuff like this for ten years.

Here's a quote from their last written closing statement and on the last page last paragraph " this case reeks of surrogate littigation, funded by one of Russo & Steele's died-in-the-wool competitors".

I'm amazed that no one wants to have the award sent to them. Even though its 28 pages it IS the ruling and tells all.

Jay

email heading your way.

Things like that are whats wrong with the collector car business, its a shame that people are out money and time for the love of a car, or lack of.

Jay,

I'm sorry to hear about your experience. Been there, done that, several times, but not with cars. Believe me, I understand your frustration, anger, hopelessness of the system.

Actually, it's things like that are what's wrong with business in general, in the US. The rules are designed, written, and approved into law by our politicians, ie lawyers. They have really screwed our system badly for everybody but themselves.

The "big dollar, high roller" auction companies have been dirty for a long time. Shill bids, poor seller payment records, misrepresentation of auction block crossing times, etc.

Lie with the snakes and you are likely to get bitten. It makes good TV to watch on Speed with a beer and a snack, but is a p!ss poor way to sell your car in many cases.

Thanks for sending it. That was a VERY interesting read.

1st - Is that the same '41 that you had for a while ? Candy Apple Red ?


I REALLY enjoyed it when the Arbitrator got to the Punitive question.:LOL:

He really got them nailed when he said (to paraphrase) they where evil,low life,lying scum and then levied a 50% level on the award.:cool:

You came out short on what I think the money should have been but you did the right thing.

I salute you Jay.

Thanks Fred
 

No I sold the red car about 5 years ago. I still miss it.

The bad thing about Russo is the 14 other consignors that didn't stand up to them. By the way all were sent copies of the ruling in todays snail mail:D

As well as every major auction company and every auto publication I could think of.;)

What is it that they say about payback?

Jay

How about 60 Minutes, 20/20 and those type shows, they just might be interested..........
Sorry to hear about your problems with them Jay......

David

hey David
 

Nah, those shows won't do bits with people this slimey. Besides, that death would be way too fast. I am more in favor of the long drawn out painful route.

Jay

Call Me- Please!
 

Jay,

I need to ask your advice on Cobra matter!

Please call me - 512-788-3346.

99 times out of a 100....
 

I swear it seems like 99 times out of 100 the auction house comes out ahead and the auto enthusiast gets screwed. The auction house makes tremendous margin from both the seller and the buyer and has very little if any exposure.

I went to the BJ auction here last week in Orange County just to experience an auction first hand. I read the buyer and seller agreements and could not believe how much they totally protected BJ from ANY and I mean ANY liability for anything. They take absolutely no responsibility for anything. A seller can very easily misrepresent a car as being original this or that and BJ could care less as they are not responsible for anything. All they want to be sure of is that your money is good. Buyer Beware 15 ways to Sunday! Several cars went across the auction block with BJ saying: “the title is in transit” What the hell? They don’t even have a clear title on the car they are selling at auction? Un F’ing believable!!

For the most part I think these high end auctions are generally for guys with more money than brains, spending plain stupid money on cars because they have more money than brains and simply have no true sense for value. I mean after all whoever buys a car at FMV plus 12%? If the auction selling price is FMV and then you have to pay a 12% sales commission isn't that just plain stupid? BJ also collects another 10% from the seller so they walk away with a clean 22% gross margin. Man oh man what a sweet business to be in! Don't get me started about having to pay $200 for the right to spend money there.

Car auctions are clearly just one big rip off plain and simple and I don’t care who the auction house is.

fyi "title in transit" is normal in auctions. It means that the seller state may have not completed title transfer to consigner if he purchased it shortly before consigning. I do this sometimes at our regional auctions. The company will Not run the vehicle unless the state transfer form is furnished.
And you are right. The ONLY thing that they will guaranty Is the title.

Don't get me wrong. I do a lot of auctions with no problems and have little if any problems. Maybe it is because I understand them a liitle more because of the shear number that I go to. (ex. I bought 12 cars at Bj 07)

This thead only exists due to Russo & Steele' s attitude and ego. Also because even tough they tried to pull off this crap with 15 other people, I just happen to be the kind of guy that says NO to certain principles.

Most common folk have to put up with the fraud and breaches because the can't foot the 2-300,000 bill to fight it. No matter how much against their principle it is.

Thanks for your feedback.

Jay

Well done, buddy.

Professional crooks rely on the large margin of protection they are afforded by the high cost it takes for the average person to defend himself. It is a pure business decision based on calculated risk/reward.

Of course this only lasts until the word gets out that they are crooks and the business dries up. I hope that is the case here.

I wouldn't mess with a Texan...expecially one that's been shot at, blown up, experienced life threatening issues like cancer and heart issues, and believes in and lives by the "Golden Rule". R&S, how do you spell GRIT?

You forgot taquilla and raki snortin...