Remember the Ferrari F430 owner who was awarded $5.8 million in punitive damages via a court ruling that found the dealership that sold the car guilty of business fraud?
As it turns out, the jury’s decision was too good to stand. U.S. District Judge P.K. Holmes lowered the award from $5.8 million to $500,000 on Thursday, after the defendant’s lawyers argued the punitive damages were unlawful and excessive.
The judge agreed in part and reduced the punitive damages award, citing precedent and constitutional law. However, the compensatory and incidental damages ($6,835 and $13,366, respectively) were maintained. Despite the fact that he reduced the punitive damages more than tenfold, the judge issued a harsh condemnation of Silverstar Automotive, the company that sold Hamid Adeli the defective Ferrari F430.
“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,” Holmes wrote in his ruling cited by Autonews. He argued that a substantial punitive award was still necessary because of the potential safety issues the F430’s fuel leak could have had — such as a life-threatening fire.
The buyer paid $90,000 for the F430 without physically visiting the dealership
“The fact that those dangers never materialized into physical harm does not make Silverstar’s conduct any less reprehensible. Though the actual harm here was economic, the potential for physical harm was significant,” the judge added.
While the punitive damages have been reduced significantly, the sum Virginia resident Hamid Adeli will receive is still about four times the market value of a 2007 Ferrari F430. As a reminder, Adeli bought the Ferrari from Silverstar Automotive’s Mercedes-Benz of Northwest Arkansas store in 2016, paying $90,000 for it. Interestingly, he didn’t visit the dealer, instead relying on phone calls, text messages and video chats with dealership employees.
At the time, the seller told Adeli the car had no issues, despite the fact that it was aware of a crack in the exhaust manifold. After taking delivery of the car, the buyer noticed the smell of fuel and had the car taken to a Ferrari specialist in Maryland.
The examination revealed several issues, including a leaky fuel pump, suspension problems, and the aforementioned cracked exhaust manifold. Since Silverstar refused to pay for the issues, Adeli sued the dealer for breach of warranty, fraud, and deceptive trade practices.