Used Car Dealership Wins Nearly $10 Million Against Hyundai After Court Finds Automaker Destroyed Evidence and Lied
Image Credit: WFTV Channel 9/YouTube.
If you’ve ever felt like the little guy getting steamrolled by a big corporation, this one’s for you. Because a Pittsburgh used-car dealership just walked away with nearly $10 million after a Pennsylvania judge essentially told Hyundai Motor America to sit in the corner and think about what it did.
Between early 2018 and mid-2019, Knight Motors and its sister business Doman Auto & Marine Sales — both out of Pittsburgh and both owned by the same person — purchased 628 used Hyundai Sonatas (model years 2011–2014) at auction. And these weren’t random clunkers; they were part of a massive recall involving Hyundai’s notoriously problematic Theta II engines, which affected over 1.6 million Hyundai and Kia vehicles. The dealerships did exactly what the recall process allows: they brought the cars to Hyundai’s own franchised dealers for engine replacements or buybacks.
Perfectly legal. Perfectly logical. American capitalism at its finest, actually — which is a phrase we’ll come back to shortly.
Rather than honoring the recall obligations like any responsible automaker would, Hyundai apparently looked at the volume of claims coming from Knight and its peers, decided something smelled fishy, and in May 2019 made what the judge later called a “stunning decision” to deny every single claim tied to Knight Motors — all at once, no nuance, no individual review. Hyundai internally referred to Knight and similar dealerships as the “Frequent Buyback Club” and “repeat offenders,” and took steps to reduce or deny their payments.
Then, in a bold move that one can only describe as extremely confident for someone about to get caught, Hyundai sued the dealerships for fraud in 2019, after already paying out more than $5 million in buybacks.
Image Credit: Harrison Keely – Own work, CC BY 4.0, Wikimedia.
Allegheny County Court of Common Pleas Judge Philip Ignelzi had 16 years on the bench when this case went to trial. By the end of it, he said Hyundai’s conduct was among the most egregious examples of evidence destruction and courtroom abuse he had ever seen in all those years. That’s a remarkable thing to say about a major automaker.
What did Hyundai do, exactly? First reported by Automotive News, the court found that the company crushed hundreds of the recalled vehicles (the very vehicles at the center of the lawsuit), effectively destroying key physical evidence. Emails from a Hyundai case manager were also deleted. The judge called this “rampant spoliation,” which is the legal term for destroying evidence, and is generally considered a very bad look in court.
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Ignelzi also found that Hyundai’s own witnesses weren’t exactly forthcoming with the truth, and that multiple inspections of Knight’s vehicles — including ones Hyundai itself commissioned — found zero evidence of any tampering or manipulation.
His ruling didn’t mince words: Hyundai, he wrote, had used the court system to commit the very fraud it was accusing the dealerships of. The automaker, in his assessment, found it cheaper to manufacture a legal case than to simply honor its recall obligations.
As a sanction specifically for the destruction of evidence, Judge Ignelzi ordered Hyundai to pay Knight Motors $9,784,075. That figure represents storage costs Knight racked up keeping 163 recalled vehicles — all titled in Knight’s name — on its lot for nearly seven years, at $25 per car per day. Hyundai also has to come collect those cars.
All of Hyundai’s original fraud claims were thrown out. The dealerships’ counterclaims — including fraud, breach of contract, intentional interference, and abuse of legal process — were all ruled in their favor. A future trial may still determine additional damages.
Hyundai has appealed the ruling, and a judge granted a stay of the order in early March. The dealerships’ attorney, Jason Archinaco, says he’s confident the ruling will hold.
This wasn’t an isolated situation. In a separate Florida case, Hyundai went after a franchised dealership over similar Theta II recall claims. A magistrate in that case noted that Hyundai had, among other things, bungled the recall with faulty tests, delayed replacement engines, and persistent misinformation. That case went to trial in January 2023 and ended with no damages awarded on either side — a much quieter conclusion than what just happened in Pittsburgh.
For Knight Motors, nearly seven years of fighting a company with considerably deeper pockets just paid off — literally. And for the rest of us watching from the sidelines, it’s a useful reminder that “we recalled the car, now stop asking questions” is not, in fact, a complete legal defense.
