Classic cars weren’t the only things damaged when storms blew down the tents at the Russo & Steele auction in Scottsdale, Ariz., in January. The president of Russo & Steele, Drew Alcazar, said his company sustained serious damage — financially and to its image — and has filed a lawsuit against the tent provider, Tri-Rentals, in an effort to recoup at least the financial portion of those losses.
In the suit, filed in Arizona Superior Court, Russo & Steele said that after 10 years in business, it was “on the verge of becoming much larger, and on the verge of entering new markets, new venues that would greatly enhance its visibility and market share.”
Several weeks before its auction in January, Russo & Steele announced plans for a joint venture with China Auto Logistics to develop a collector car auction business in China. Mr. Alcazar said in an interview that the China deal, as well as his plans to introduce two new auction venues in the United States, had been jeopardized.
“This is a major setback,” he said. “Instead of climbing a steep hill, now we face climbing out of a hole. These new projects require a lot of resources financially.”
Instead of making money on its auction in January, he said, when the tents came down, his company suffered “multiple millions in damages.” The suit claims “significant damages in an amount to be proven.”
In its suit, Russo & Steele charges Tri-Rentals with “negligence; gross negligence; breach of duty of good faith and fair dealing.” Further, it says, had the tent company complied “with the standards of care in the industry and its representations to Russo & Steele, the tents would not have failed and Russo & Steele would not have been damaged.”
Russo & Steele was able to resume a limited auction, but many of the more than 600 cars that had been under the tents had been damaged.
Mr. Alcazar said several car owners have filed suit against Russo & Steele over damages to their vehicles.
Mr. Alcazar said Tri-Rentals provided the tents for all the Arizona auctions in January. Tri-Rentals, with offices in Phoenix and Albuquerque, is a subsidiary of the Los Angeles-based Classic Party Rentals. A spokesperson for Classic Party Rentals said the company would make no comment at this time.