My father was normally calm and laid back. It seemed nothing rattled him. But if my siblings and I pushed him too far, watch out! Apparently, Bill Oesterle has a similar temperament.
Oesterle, one of the co-founders of Angie’s List, is a longtime car collector. At his apex, he had over 250 cars in his collection, a number of which were Austin-Healeys. He came across an ad in a Healey newsletter for Healey Werks of Lawton, IA. Lawton is just outside of Sioux Falls, SD, about 650 miles from Oesterle’s home in Indianapolis, so he thought he would give them a try. That began a 10-year relationship that ended in litigation.
Over the years, Oesterle sent a number of cars to Healey Werks and its owner, Craig Hillinger. It’s hard to believe the relationship lasted as long as it did, given the major problems with the six cars involved in the lawsuit.
Maserati Ghibli
Oesterle paid $16,000 for a 1967 Maserati Ghibli that needed everything and then some, thinking it would be a fun restoration project. He gave the car to Hillinger to restore, and Hillinger estimated the restoration would cost “under $200,000” and would be done in two years. Five years later, Oesterle had been billed over $1 million for the yet-to-be-anywhere-near-completed restoration. He gave up, retrieved the pieces and sold the whole thing for $150,000 as an unfinished restoration project.
Austin-Healey 100/4 BN2
Oesterle’s previously restored BN2 had suffered minor damage to a door in a collision. He sent the car to Healey Werks for repair. Hillinger recommended a complete repaint as well as some minor mechanical repairs, which Oesterle authorized. Before he knew it, the car had been fully restored and Healey Werks presented its invoice for almost $300,000.
MGA Twin Cam
Oesterle’s MGA Twin Cam coupe was in significant disrepair, and he didn’t know if it was worth restoring. He gave it to Healey Werks to strip the paint and assess the situation. Without reporting back, Healey Werks started on a full restoration of the MGA. Oesterle balked, ordered the work to stop, and picked up the pieces to take home. They came with an invoice for just under $75,000.
Austin-Healey 100M and Healey Silverstone
Hillinger emailed Oesterle about how he had the opportunity to purchase two cars — an all-original, numbers-matching, factory 100M that was in pieces, and a Silverstone that was a “good clean usable car.” The only problem was he didn’t have the money to buy them. So he offered a partnership deal. Oesterle would buy the cars, and Hillinger would put in the roughly $10,000 of necessary work on the 100M and the roughly $20,000 needed for the Silverstone. Once they were done, the cars would be sold. Oesterle would get his investment back, Hillinger would get paid for his work, and the remaining profits would be split 50-50. Oesterle liked the idea and paid $50,000 to buy the 100M and $160,000 to buy the Silverstone.
The $10,000 of repairs on the 100M turned out to be $130,000. Even worse, Oesterle discovered that the 100M was not a true factory car as represented.
Meanwhile, the work on the Silverstone stalled. Hillinger suggested buying it from Oesterle, who decided he wanted to keep it. When Hillinger balked at giving it to him, Oesterle discovered that Hillinger had titled the Silverstone in Healey Werks’ name and then sold it to a third party, pocketing the cash.
Austin-Healey 100S
Hillinger had purchased a 100S that needed restoration for $290,000. He then sold it to Oesterle for $630,000, which included a full restoration. Hillinger promised to restore the car to concours level and to get it entered in the Pebble Beach Concours when completed.
That goal became impossible when Oesterle discovered that the engine-number plate had been removed, suggesting that the engine was not original. He also discovered that the engine rebuild, which was included in the $630,000 already paid, had been done incorrectly and with used parts. In addition, a number of parts were missing.
But what really confused Oesterle was when he learned that the previous owner had fully restored the car before selling it to Healey Werks, and that all it needed was some brake work.
Litigation
Oesterle grew concerned about the heavy bills coupled with a seeming lack of progress, so he sent his Indianapolis mechanics to Healey Werks to inspect the cars. They reported back to him that he had been billed for work that had not been done and parts that had not been incorporated into the cars. He had also been significantly overbilled for work that had been completed.
Oesterle consulted Anna Limoges, a partner in the regional Goosmann Law Firm. Limoges investigated Healey Werks and discovered that it had been sued multiple times by customers, with one of the larger claims brought by a California collector who had reached a settlement with Healey Werks.
That information led Oesterle to see Hillinger as a serial defrauder, and made him determined to do something about it.
Limoge’s firm filed suit against Healey Werks, Hillinger and a related entity, Anca Properties in Iowa District Court in Sioux City (case LACV 192052). The lawsuit alleged that all of these actions constituted fraud, as well as violations of the Iowa Motor Vehicle Services Trade Practices Act. The latter claim was the most important because it provides for two critical things. First, it gives the plaintiff the right to recover attorney fees. Second, it provides that whatever the plaintiff’s damages are, they get tripled.
Iowa’s statute is unusually consumer-oriented. First off, it is specifically geared toward auto-repair facilities. Many states don’t take that approach and rely on generalized consumer-protection statutes to cover the territory, with spotty results. Plus, the Iowa statute’s treble-damages provision is not the norm; this gives consumers a lot of leverage. Healey Werks’ billing discrepancies, failure to provide estimates and failure to properly account for the work it did fit right into the violations that are included in the law.
A questionable defense
Rather than admit liability and try to work something out before things got worse, Healey Werks tried to defend against the lawsuit. It argued that Oesterle waived his claims when he paid their bills. It denied that the Iowa statute applied to the situation. According to Limoges, it did everything it could to delay the case, apparently hoping that Oesterle would get tired and give up. Healey Werks changed counsel multiple times. It tried to settle the case, but with inadequate settlement offers. But all that strategy accomplished was to give Oesterle greater resolve, which is common when facing a well-heeled adversary who doesn’t have to worry about his litigation budget.
Eventually, as is always the case, the delay tactics expired and the case went to trial. The day before the trial was scheduled to begin, Hillinger and Anca Properties filed for bankruptcy, which stopped the lawsuit against them. But Healey Werks did not file, so Oesterle and his legal team appeared in court the next morning, on November 1, 2022. No one appeared on behalf of Healey Werks, so the matter proceeded to a default judgment. The judge accepted Oesterle’s damage claim in the amount of $2,390,962, which was then trebled, resulting in a final judgment of just under $7.2m. That judgment will be increased to include Oesterle’s legal fees once they are determined.
Limoges is in the process of filing a claim against Hillinger and Anca Properties in their bankruptcy cases. It is uncertain if there will be any recovery. But since the claims are based upon fraud, it is possible that Hillinger may not receive a discharge in the bankruptcy, which would mean that he still owes the damages to Oesterle.
Blood from a stone
While $7.2m is a huge judgment, collecting anything could be difficult. Healey Werks is out of business, so it isn’t going to have any future earnings to pay from. Oesterle can collect his judgment from anyone who owes any money to Healey Werks. He can also sell off any assets it may still own and apply the proceeds to the judgment. Beyond that, it becomes a “can’t get blood from a stone” situation.
According to Limoges, that’s okay with Oesterle. He never really expected to see the money. He was mad about how he was treated, and he was appalled to find that he was only one of many victims. He was convinced that Hillinger needed to be stopped — and that goal was accomplished. ♦
John Draneas is an attorney in Oregon and has been SCM’s “Legal Files” columnist since 2003. His recently published book The Best of Legal Files can be purchased on our website. John can be contacted at john@draneaslaw.com. His comments are general in nature and are not intended to substitute for consultation with an attorney.