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Jury Finds For Plaintiff In Lawsuit Against Irvine-based Capitalwerks, LLC
January 18, 2005 www.leasingnews.com
ARITON, ALABAMA- Construction contractor Carl Sutton went to work as usual on Martin Luther King Jr. day.
Even though Sutton Construction, based in Ariton, had just won a $9 million jury award against California equipment lease/brokerage firm CapitalWerks, LLC, Sutton said he had a lot of work to do Monday.
"It took me two and a half years to get them to court," Sutton said.
In the summer of 2002, Sutton said he was contacted by CapitalWerks via facsimile offering what he thought were good financial terms for the lease purchase of a high-lift fork lift.
"I thought if I could get one Lull lift and move it from job to job, I could save money," Sutton said.
Sutton is a specialty general contractor in the drywall, paint and floor covering market for multi-family apartment complexes.
Sutton testified before a Barbour County jury that he entered into an equipment agreement with CapitalWerks, bid five jobs in South Carolina and one in Auburn based on the terms of that agreement and then could not get the company to return his phone calls.
"The guy I was dealing with... he just became vacant," Sutton said. "We couldn't get up with him."
When contact was finally resumed, Sutton said the company refused to honor the original terms of the agreement, requiring a larger down payment and higher interest rate.
"It was a classic bait and switch," said Sutton's attorney Jock Smith, managing attorney of the Tuskegee office of Cochran, Cherry, Givens & Smith and national law partner of Johnnie Cochran.
"Sutton Construction factored having that equipment into multiple bids and construction contracts making the acquisition of the equipment absolutely necessary," Smith said. "Then, to capitalize on (Sutton's) vulnerability, CapitalWerks refused to honor the agreement unless Sutton Construction agreed to much less favorable terms."
Smith called the case "a perfect example of unlawful predatory lending practices."
On Jan. 6, the jury found CapitalWerks guilty of fraud involving leases on construction equipment and awarded Sutton Construction $4 million in compensatory damages and $5 million in punitive damages.
Sutton made claims for lost profits, increased labor costs, equipment rental, damage to the business reputation and emotional distress.
"They scared me," Sutton said. "I thought they'd drive me into bankruptcy."
Sutton said he feels vindicated by the verdict whether or not he collects on the award and has not yet heard if CapitalWerks plans to appeal.
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