Sears owner files countersuit
Former local Sears owner Heidi Wood filed a counter lawsuit last week in response to legal action taken against her by Sears Hometown Stores last month.
Wood owned stores in Prineville, Madras and Bend until the corporation terminated her dealer agreements for each location in early June and demanded she close the stores. She was initially told to close the Madras and Prineville stores because they were underperforming, and when she refused and argued that the Prineville store was profitable, Sears Hometown conducted an audit of all three stores. The company claimed the inspections uncovered dishonest and deceitful operation of the stores, and demanded Wood close all three locations.
The corporation then sued her for damages totaling no less than $1.616 million for multiple accusations involving alleged theft of merchandise, refusal to give Sears Hometown confidential and sensitive customer information and more.
In the counter suit, Wood denies many of the allegations made by Sears Hometown and cites multiple counterclaims of deceit, negligence, fraud and breach of contract. She is seeking $4.057 million in damages, including $2 million for slander and defamation of character and $1 million for emotional distress as well as $766,336 in damages related to the Prineville store, $219,494 associated with the Bend location, and $68,100 in connection with the Madras store.
Regarding her refusal to close the Madras and Prineville stores, and the audit that followed, Wood claims "the sole purpose of the audit was to create a justification for termination of the contract between the parties so that (Sears Hometown) could gain control of (Wood's) stores and close them."
The store owner went on to make several claims about faulty computer systems that made it difficult to keep accurate inventory control. The countersuit states that Sears Hometown's system did not process voided transactions properly and inaccurate and false inventory reports by the corporation resulted in overages in excess of $90,000 at two of the Central Oregon stores.
"(Sears Hometown's) systems are outdated and false," the lawsuit reads. "Systems have often double-charged customer accounts, lost customer information on warranties, refunds have failed to process, and inventory counts are inaccurate on a day-to-day basis."
Wood filed 18 separate fraud claims, several of which suggest her district manager was not competent and that Sears Hometown did not adhere to all of its policies as written. She said that the district manager failed for years to complete inter store transfers and that the corporation told her to "enter fraudulent inventory counts because (Sears Hometown) failed to complete transfers from October 2016 for June 2017 inventory."
The countersuit claims that the district manager processed fraudulent visit reports and that Sears Hometown committed a fraudulent audit.
Another counterclaim, one of 20 Wood made for negligence, states that Sears Hometown required her to extend the lease for her new Madras Highway location until 2023 while knowing it had plans to close the store.
"(Sears Hometown) worked with the building owners and (Wood) on construction criteria and lease … and also required (Wood) to move the store and spend in excess of $30,000 in relocation expenses."
The countersuit went on to claim that Sears Hometown asked Wood to "get out of the lease" and "walk away from the lease" less than 10 days after she had opened in the new Prineville location.
Wood also filed 11 claims of slander and defamation of character. She denies claims by the corporation that she stole snow throwers and kept them on her personal property, stating that her district manager had given her permission to store them off site.
Sears Hometown claimed in its lawsuit against Wood that she conducted unauthorized mark-outs and mark-downs, but she once again said she was given authorization to do so from her district manager.
Wood goes on in other counterclaims to stress that she has never operated any of her three stores in a deceitful or dishonest matter.
"Prior to refusing to close two stores as requested, (Wood) was considered a good owner," the countersuit states. "(She) always went above and beyond for (Sears Hometown). (She) did whatever she was asked and if ever corrected on anything, she would make the change immediately. (Wood) never had a bad audit and had good inventories."
Attempts to reach Sears Hometown for comment regarding the countersuit were not successful by press deadline.