Rent-A-Wreck Wins at Trial in Attempted Company Buy-Out Case

By: Rent-A-Wreck of America | 3 Shares 182 Reads

$750,000 Punitive Damages Awarded in Controversial Case

June 22, 2007 // Franchising.com // Rockville, MD–In the Circuit Court for Montgomery County, Maryland, Rent-A-Wreck of America, Inc. scored a victory against deceit and sharp business practices. On June 5, 2007, after a two week trial, the jury returned a verdict against Thomas L. Gruber, and his corporation, San Diego Car Rentals, Inc. (SDCR) for having fraudulently induced Rent-A-Wreck into a merger agreement with SDCR in October 2005. On June 5, 2007, the jury awarded Rent-A-Wreck, $750,000 in punitive damages against Gruber and SDCR.

The jury apparently discredited the testimony of David Schwartz and William O. Fleischman on Gruber's behalf, instead finding that Gruber had lured Rent-A-Wreck into the SDCR merger agreement using false personal financial statements. Oddly, Schwartz and Fleischman still joined forces with Gruber to acquire Rent-A-Wreck despite the fact that Schwartz had filed a lawsuit against Rent-A-Wreck in a California Federal Court to prevent Gruber from merging SDCR and RAWA in November 2005. Surprisingly, Schwartz testified that he and Fleischman were paying Gruber's legal fees.

"I'm pleased the jury was able to see through all the obfuscation and get at the truth," said Jack Fitzgerald, President of, Rent-A-Wreck's parent company.

Rent-A-Wreck was represented in court by George W. Shadoan of the Rockville, Maryland law firm, Shadoan, Michael & Wells while Gruber and SDCR were represented by Robert Shaffer of Baltimore, Maryland. The jury found Gruber and SDCR liable on all counts for fraudulent inducement and breach of contract and Rent-A-Wreck scored a victory against dishonest business practices by defending the integrity of the Company.

"As the new owner of Rent-A-Wreck, we will get the company growing again now that it is free of Gruber, Schwartz and Fleischman. Their actions only hampered the ability of a good company and its franchisees to grow their businesses together," said Fitzgerald.

Rent-A-Wreck of America, Inc. is not affiliated with Rent-A-Wreck Car Rental Canada.

About Rent-A-Wreck

Founded in 1968 and franchising since 1973, Rent-A-Wreck is one of the best-known neighborhood car rental companies in the world. Striving to provide customers with a locally owned and operated neighborhood alternative to major car rental companies, Rent-A-Wreck provides low cost rentals and high quality customer service across the United States and internationally. Visit www.rentawreck.com for more information.