Dealers and suppliers file lawsuits against the local electric
carmaker
As lawsuits pile up against them in San Benito County Superior
Court, perhaps even more distressing for Corbin Motors is the loss
of their community cheerleader and chief fundraiser.
As lawsuits pile up against them in San Benito County Superior Court, perhaps even more distressing for Corbin Motors is the loss of their community cheerleader and chief fundraiser.
Retiree Neal Hinds, who for years appeared in public in his Corbin dress shirt embroidered with the electric Sparrow car, has distanced himself from the company that is now the target of what courthouse observers say is more lawsuits than any other local entity.
As a state Department of Motor Vehicles investigation into dealership and manufacturing licenses proceeds, several more suits have been filed in recent weeks against Corbin Motors for allegedly taking millions in cash and parts from dealers, suppliers and investors, but delivering next to nothing.
The biggest was filed last week by Dr. Andrew Carver, a Bay-Area podiatrist who wants back the $281,585 he paid for 13 dealerships, plus millions more in punitive damages.
All-the-while Tom Corbin says the electric car startup is doing the best it can in a failing economy.
“America is experiencing some of the worst economic times as a nation since the early 1940s and the 1930s Depression,” Tom Corbin wrote in an email, declining an oral interview in favor of written questions. “We are proud to have pushed so hard and to be so close to having created a profitable business in times with so much economic turmoil.”
Over the years Hinds has convinced locals to invest hundreds of thousands of dollars in the company, which he now says has been mismanaged in everything from exaggerated salaries, leased Bentleys and company financial bailouts of problems in Tom Corbin’s personal life.
“The other day the old-timers told me we don’t have many crooks in Hollister,” said Hinds. “They said we get one every eight to 10 years and they come in and fleece everyone, then they leave. They said the Corbins are just the latest.”
Carver says he received only a fraction of the electric cars for which he paid, which resulted in the suit against Corbin alleging fraud and breach of contract. Carver has managed to hold on to only his San Rafael dealership.
Carver has also lobbed a lemon-law violation into the suit, claiming that Corbin Motors sold him a defective vehicle. Unknowingly, he in turn sold it to a client and ended up getting sued for $22,500. Carver said most of the cars he received had major problems.
“I could have taken back dozens,” said Carver in an interview this week. “But when you send them back a bad car, it will sit there for months.”
The makers of the groovy one-person electric three-wheeled Sparrow, which retails for $16,900, have been under fire since early 2002 when dealers, suppliers, investors and individual clients became increasingly frustrated by the company’s alleged mishandling of funds and the inability to provide cars for which the company had been paid.
The DMV has declined to comment on the ongoing investigation.
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Since the late 1990s, company heads Mike and Tom Corbin have been pitching their egg-shaped mod-colored Sparrow to the eco-conscious commuter and venture capitalist. Many of Corbins’ backers are small-time investors from San Benito County who took pride in the fact that their ag-based community was home to such an environmentally sound and innovative industry. Others who fell in love with the design and concept of the Sparrow hailed from as far away as the East Coast.
The father-and-son team took in about $10 million from investors, would-be Sparrow owners and dealers, but since 1999 they have produced only 285 cars. About 215 of those had to be recalled and retrofitted with new parts. Seventy are still mothballed in storage in the company warehouse awaiting new AC controllers.
The Corbins further exacerbated hard feelings from Sparrow owners by what many see as dropping their Sparrow obligations and debts and turning their attention toward their latest project, the hybrid gas/electric-powered Merlin Roadster.
The Corbins say they are banking on the success of the one-person Merlin to fuel the assembly line for the new Sparrow II, which they say is a more streamlined, less problematic version of its predecessor Sparrow I.
Throughout 2000 and 2001, Carver says he bought 13 Sparrow dealerships from Miami to San Diego to Portland in the form of cash deposits on Sparrows. According to his attorney, he has yet to receive more than 10 cars.
“They don’t send the cars, and the few they do send don’t work,” said Carver.
At one point Carver considered organizing with other Sparrow dealers around the nation in filing a class action lawsuit against Corbin Motors to get refunds or cars. But now the would-be dealer just wants to recoup his investment as quickly as possible.
“This goes beyond reason,” said Carver’s attorney, Gerard Rose of Carmel, who said he has been approached by other Sparrow dealers looking for representation. “This is scary.”
Tom Corbin says Carver can’t make up his mind whether to stick with the car company or sue it.
“Andrew Carver is very erratic in his behavior,” wrote Corbin. “Sometimes he calls and he is very upset and yells and screams. One time he said he hated the Roadster and it was for rednecks, and then a couple months later he calls demanding to be put on the Roadster list to get a Roadster because everyone wants to buy a Roadster from him.”
Corbin later e-mailed a story published recently in the San Francisco Chronicle on the subject of sports doctors who fudge the truth about treating celebrity athletes in order to gain fame and patients. Carver was used as an example.
“Any erratic behavior was on their part — not returning phone calls, not returning my money,” Carver said. “This is very simple and it has nothing to do with my medical practice. It’s a pack of lies.”
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Carver is not the only former Corbin Motors investor who says he put money into the green company, then ultimately felt ripped off. On Dec. 2, 2002, Advanced DC Motors, Inc. filed a civil suit against Corbin in San Benito County Superior Court to recoup $119,230 that the company says has been owed for three years. Advanced DC Motors supplied Corbin with electric controllers – the heart of the electric Sparrow car – but Corbin management decided to use a different controller in mid-production of their new electric get-about. In their suit, Advanced DC Motors claim they were never paid, but a lawyer for the company declined to comment on the case.
Other claims have been filed within the last several months, including one for $1,816 from General Electric Capital Corp., owed for four years, and another for $2,693 from O’Connor-Ravell Associates, Inc., a New Jersey-based collection agency, owed for two years.
Last year, Corbin Motors tried to sue 46 stockholders of a company it had merged with in 1998. Judge Harry Tobias threw the case out in mid-2002. The Corbins appealed, but the case has yet to go back to court.
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Hinds, the one-time fan of the company who arranged tours for potential stockholders, has $75,000 invested in Corbin Motors on Tom Corbin’s promise that the company soon would go public. That was more than three years ago. He and his wife, Maria, don’t expect to see the money again.
“No, I don’t think it’s any good,” said Hinds when asked if he thought his Corbin shares had any value. “You can’t believe anything Tom says. I use to think he was an optimist, but now I know he’s a plain liar. Mike seems to have lost interest in the electric car and what concerns me is that Tom is using the company funds as his personal checking account. “They call him Teflon Tom. Everything just rolls off his back.”
Corbin took the criticism in stride.
“Everyone is entitled to their own view,” wrote Corbin. “I am sorry to hear this is Neal’s view. I consider him to be a good friend. We are working very hard to bring our two new products to market, and we are very close.”
When Tom Corbin was asked via e-mail whether he and his father are still taking $182,500 annually in salaries, he avoided the question.
“Corbin Motors is creating jobs in Hollister during these tough economic times,” he wrote, “and endeavoring to bring a new form of transportation to the marketplace to help reduce our oil consumption and reduce air pollution.”
Hinds said he’s heard it all before.
“My allegiance is to the stockholders,” added Hinds. “If there’s anything salvageable, I’d like to see the stockholders benefit.”
In response, Tom Corbin flashed his hallmark optimism.
“I tend to assess the situation and take the next positive step forward even if the economy did not do what I thought it would do. Fortunately, the interest in our vehicle products is very high and much of the tooling is just about completed. Now we can begin building vehicles for a profit!”
