Disloyalty Is Job One
Michael Maroone sits atop AutoNation, the largest automobile-retailing company in the world. When he's not starring in commercials with Dolphins quarterback Dan Marino, he's overseeing the growing empire of 412 car dealerships, which he joined after selling his own auto plaza to AutoNation boss Wayne Huizenga for $200 million in stock.
Bob Horvath, meanwhile, sits in his one-bedroom Hollywood apartment amid court papers that piece together his downfall. Horvath was formerly a prosperous and respected car dealer himself, a colleague of Maroone's and once poised to become the top Oldsmobile dealer in Dade County. Instead, Horvath lost everything.
Maroone is becoming one of the wealthiest men in Florida. Horvath, on the other hand, recently lost his house and two months ago filed for bankruptcy at about the same time Maroone was named AutoNation president. Each time Horvath's stock drops, it seems Maroone's rises.
It's no coincidence. The two car dealers' lives crossed in the late '80s when Horvath's dealership was crushed by General Motors to make way for Maroone's ascent. That's what Horvath contends and he says GM, into which Horvath put 35 years of his life's work, forced him out of business and canceled his wife Evelyn's health insurance while she was suffering from breast cancer. Evelyn later died, and Horvath still owes $100,000 in medical bills.
Horvath has been in a decade-long legal battle to make GM pay but has gotten nothing. He was recently told by a judge that he could refile his suit against GM, but Horvath's not sure he'll do it. He says he learned the hard way that it's almost impossible to fight mighty General Motors. At age 69 Horvath just wants to make his story known before it's too late to tell it.
Such a grim fate was unlikely for Horvath, the working-class son of a Firestone rubber worker in Akron, Ohio, where he became a basketball star. Horvath turned down pro sports offers because he had a good job selling cars, a profession that sated his competitive drive. He married Evelyn, a local beauty, and in 1953 they moved to Miami, which was seen as the promised land in the car business at the time. There he started with Dick Fincher Oldsmobile and later became the manager of Crippen Oldsmobile in North Miami Beach. At Crippen, sales competitions with Fort Lauderdale's King Oldsmobile reached a fevered and nearly fatal frenzy. During one contest Horvath had a stress attack, couldn't breathe, and says, "I ended up dying." Horvath was revived in a hospital, but he still remembers it as the time he died for GM.
In the '70s Horvath took a job as manager of Cooper Oldsmobile in Coral Gables. It was Horvath's golden age. Soon he was buying stock in Cooper and owned more than 25 percent of the business. When Cooper retired in 1986, Horvath struck a deal with GM that would have given Horvath full ownership of the dealership by 1991. Horvath was now a bona fide dealer and a GM partner. "It was the best day of my life," he says. But it was also the worst of times: That same year Evelyn was diagnosed with breast cancer.
At Cooper, Horvath soon began winning Oldsmobile contests, and this time he and Evelyn were the ones who reaped the benefits: free vacations to Tahiti, Hawaii, and London. His golden era, however, was about to end.
In 1987 Maroone -- who was initially put into business by his successful car-dealing father -- bought out Fincher dealerships in Miami and Hialeah. Maroone was using them as a steppingstone to the building of his 30-acre auto plaza in Pembroke Pines, which would become one of the largest dealerships in the country, selling tens of thousands of GM cars. "GM loved him because he was building that place," Horvath says. "He could do anything."
By franchise rules the Hialeah dealership was forbidden to sell new Oldsmobiles because it was in Horvath's territory as defined in written agreements made with Oldsmobile. Crowding a territory with the same new car can kill dealerships, so the only way any other dealer would be allowed to sell Oldsmobiles in Horvath's territory was with Horvath's written permission. But Oldsmobile, as part of a deal with Maroone, allowed Maroone to sell new cars in Horvath's territory behind Horvath's back -- a clear violation of franchise laws.
Oldsmobile executives also came to Horvath in 1987 and asked him to "play ball." A new dealership, American Oldsmobile, was being proposed in the Kendall area -- again, in Horvath's territory. With both Maroone and American poaching, Horvath knew his business would be crushed. But GM, according to internal Oldsmobile memos, made a promise: When American opened, Maroone would pack up and move to Broward County. "Our main goal is to move Mr. Maroone to Broward County," Horvath says he was told. The former point guard played ball.
Maroone, however, was delayed when King Oldsmobile protested his move into Broward. When American Oldsmobile had its grand opening on April 1, 1988, Maroone was continuing to sell new cars in Miami and Hialeah. Horvath says he was getting squeezed out of business.
While admitting that he was permitted to sell new cars in Hialeah, Maroone downplays the negative impact on Horvath. "I was selling 20, maybe 25 cars a month there," Maroone says. Horvath says he was told by a former Maroone manager that it was twice that. At the time American was also selling 50 cars a month. That adds up to between 75 to 100 lost car sales -- or roughly $50,000 -- per month that Horvath's business was losing.
On June 23, 1988, Horvath wrote Oldsmobile demanding that Maroone stop selling new cars. Oldsmobile did nothing, he says. Horvath also complained to Maroone and got a letter back from Maroone's lawyer stating that Maroone would stop selling new cars in Hialeah by January 1, 1989. According to Oldsmobile memos, Maroone actually stopped on February 15, 1989. Maroone Oldsmobile in downtown Miami, meanwhile, didn't close until April 14, 1989 -- more than a year late. By the time Maroone was gone, Horvath estimates that Cooper Olds had lost $600,000.
Rather than help Horvath back on his feet, GM turned its back on him, terminating his contract after $150,000 worth of checks bounced. When Horvath refused to close willingly the business in which he'd invested almost all his money, GM sent the Coral Gables Police Department -- sirens blaring -- to shut him down on August 18, 1989. Horvath, whose interest in the company was once worth nearly $1 million, got nothing. "They put me out on the street," he says.
But that wasn't the worst part. When GM cut off Evelyn's health insurance, no other company would pick her up because of her preexisting condition. Horvath contends that GM broke federal laws, known as COBRA, that mandate employers extend health insurance to employees for 18 months after termination. Gus Benz, public relations director for Oldsmobile, said he couldn't comment on Horvath's case because he wasn't aware of it.
In order to make ends meet, Horvath took out two mortgages on his home. He then sued GM, beginning a long, fruitless fight. In the middle of it, on March 2, 1992, Evelyn died. "She was the love of my life," he says, adding, "Nobody from GM was at the funeral, nobody sent flowers. The people that were supposed to be there for me and my wife seemed to vanish from the earth."
A year after his wife's death, Horvath lost his case against GM on summary judgment. The issue wasn't whether or not he'd been wronged by GM -- it was whether or not he had standing, as a minority shareholder in Cooper Oldsmobile, to sue in the first place. In the end Horvath never got his day in court against GM. He also lost a legal malpractice suit against an attorney in 1997 -- the same year Maroone made his $200 million deal with AutoNation. One judge described Horvath in court records as a "fine man, a great salesman, who had spent a lifetime in the automobile business, had a heart of gold, and was well-liked." But the judge still ruled against him. Horvath says being a good man backfired on him in the car business.
"You have to be treacherous; you have to be really mean. You have to be a bad, bad person to be successful in [the car] business," Horvath says. "Maroone trampled on everybody he could to get to where he is today."
Maroone, of course, denies he trampled on anybody. He agrees Horvath is a nice guy but says that his downfall was nobody's fault. "I do not believe that General Motors put him out of business -- the lack of demand for Oldsmobiles put him out of business," Maroone says.
And Horvath doesn't blame Maroone.
"GM gave him permission to do what he did," Horvath says. "If a bank gives somebody permission to rob it, you can't blame the robber."
Contact Bob Norman at his e-mail address:
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