Michelin North America Inc. filed a lawsuit in the U.S. District Court for the District of South Carolina against Sudduth Tire Co. of Long Beach, Calif., claiming the tire dealership “knowingly defrauded the company of money under a Michelin sales program.”
According to Law 360, the suit alleges Sudduth Tire Co. and its executives David Obenauer and Jeanne Sudduth intentionally provided fraudulent sales information to Michelin from 2012 to 2014, taking unfair advantage of Michelin’s government sales program, which gives the tire manufacturer’s dealers certain financial incentives to sell Michelin tires to government entities.
According to reports, Michelin’s audits of Sudduth revealed unverified government sales claims for 71,204 tires submitted by Sudduth, which allowed the dealer to illegally pocket over $3.2 million in credit from Michelin.
“Sudduth Tire used this fraudulently obtained credit to obtain $3,246,421.97 worth of tires from Michelin that Sudduth Tire did not pay for as a result of its fraudulent claims,” the complaint stated.
The suit includes claims for breach of contract, negligence and unfair trade practices, and requests punitive and compensatory damages.
When asked for comment, Michelin said, “this suit is a matter of public record and it is the company’s normal practice not to comment on ongoing litigation.”
