Auto Erratic

SunCor filed a lawsuit, and wound up getting slapped with a $28.6 million jury verdict

 SunCor is known within the real estate industry for its integrity and fairness. Our tenants and buyers are treated as partners, and we are dedicated to providing lasting value they can depend upon.

-- From SunCor Web site

Duplicity is a dangerous game, especially when Michael Manning is in the ballpark.

Michael Manning: "The level of fraud here was amazing."
Casey McKee
Michael Manning: "The level of fraud here was amazing."

The Phoenix barrister is to law what Randy Johnson is to pitching. When facing Manning, it's best to screw your helmet on tightly, tread lightly in the batter's box, take a couple of meager cuts, then go sit in the dugout.

On second thought, the Big Unit analogy isn't precisely apt, because Manning's game isn't all power. He possesses Greg Maddux's guile, too. He's studious, disciplined. No fine detail goes unnoticed. If you're a dangerous fastball hitter, Manning will finesse you, rock you to sleep with some wicked junkball, induce you into a meek grounder to second.

Whichever incarnation of Michael Manning trots from the bullpen, chances are, you're going to make an out.

Manning is the lawyer who mowed down Charles Keating in what was then the largest commercial litigation in U.S. history. The case generated 50 million documents, and Manning recovered nearly $300 million for the Federal Deposit Insurance Corporation.

He got the FDIC $140 million in the Western Savings & Loan case.

He beaned notorious bank swindler Mario Renda, who wound up in prison.

He retired the State Bar's director for sexual harassment -- after no other lawyer in the city would take the case.

He got an $8 million settlement from Maricopa County for the survivors of jail inmate Scott Norberg.

In bankruptcy court, he recently won an $18 million judgment against J. Fife Symington III.

And on March 16, Manning won the largest punitive-damages award in a commercial fraud case in Arizona history -- $26 million from SunCor, a development company.

After a three-week trial, a jury deliberated for just two and a half hours, then gave Manning's client exactly what Manning asked for -- $28.6 million in all, counting actual damages.

The fact that his case was a counterclaim against SunCor, which had sued Manning's client, makes the verdict even more astonishing.


John Bergstrom, Manning's client in the SunCor case, is a soft-spoken, friendly, Midwestern kind of guy -- not unlike Manning himself, who hails from Kansas City.

Bergstrom is a car dealer from Wisconsin. He was born, raised and still resides in Neenah, a city of about 20,000 located a half-hour south of Green Bay.

Bergstrom, 54, left his hometown to attend college at Marquette University in Milwaukee. He graduated in 34 months, then returned to Neenah and went to work for a Chevrolet dealer. He married and had three children. In 1982, he and his brother, Dick, scraped together enough to open their own dealership.

Since then, his business has steadily expanded. The Bergstroms now own 19 dealerships, all in Wisconsin, all in relatively small communities. His shop in Neenah was recently cited as the most outstanding Saturn dealership in the nation.

In January 1996, while attending a convention in Florida, Bergstrom was approached by James Mullin, a real estate broker who was marketing a revolutionary concept -- a used-car auto mall. Mullin represented SunCor, a 14-year-old Phoenix development company headed by John Odgen. SunCor is a subsidiary of the publicly traded Pinnacle West Capital Corporation, which is also the holding company of Arizona Public Service, the state's largest utility.

SunCor, which claims a net worth of $300 million, had developed the Tempe Autoplex, an 80-acre cluster of new-car dealerships that line a broad loop road near I-10 and Elliott in Tempe. Mullin pitched Bergstrom on Autoplex II, 54 acres east of the new-car auto mall across Priest Drive. Autoplex II was to be dedicated to used-car dealers and other automotive businesses.

Bergstrom bit. It's tough to sell autos in winter in the Midwest, and he planned to move used cars from his Wisconsin dealerships to Tempe. He bought three lots within Autoplex II in September 1996 for $1.5 million and broke ground on a $15 million Drivers Mart dealership.

But SunCor, a cash cow for Pinnacle West, had misrepresented its intentions for Autoplex II. Six months before Mullin began enticing Bergstrom, SunCor granted Judson Ball, an office developer, an option to purchase 37 acres within Autoplex II. SunCor ultimately backed out of its deal with Ball, who testified that Ogden bluntly told him: "[T]his is the way it's going to be. Times have changed." Ogden, named the Valley Partnership's "Developer of the Decade" in 1997, denies making such a statement.

SunCor sold 22 acres to an insurance company, General American, which would eventually construct office buildings, not used-car shops, in Autoplex II.

The auto mall premise hinges on volume and variety. It's supposed to be a high-traffic, one-stop shopping site for car buyers. The concentration of different dealers is the lure.

The fact that SunCor was abandoning its exclusive auto mall concept put Bergstrom in a precarious position. His big investment in Autoplex II represented half the worth of his entire company. And SunCor's deviation from the plan gravely compromised that investment. Bergstrom strenuously objected to SunCor's veer away from the used-auto mall concept.

SunCor agreed to pay Bergstom $1 million for his trouble. SunCor would contend that Bergstrom was required to use that $1 million to market his used-car shop and the Autoplex in general. In fact, the written agreement says nothing specific about how the $1 million was to be spent; it merely gave SunCor the right to approve Bergstrom's marketing plan, which it did.

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