Former Sears Hometown dealer Heidi Wood processed false refunds, made unauthorized withdrawals from bank accounts and took dozens of snowblowers, according to a lawsuit filed in U.S. District Court of Oregon.
The lawsuit accuses Wood, a former Ridgeview High interim volleyball coach, of fraud, breach of contract and conversion and seeks to recover at least $1.6 million, which she guaranteed through dealer agreements for stores in Madras, Prineville and Bend.
“I believe the lawsuit is to intimidate,” Wood said Tuesday. “I’m not dishonest. I haven’t done anything dishonestly.”
Wood said Sears Hometown acted aggressively after she objected in May to closing the stores in Prineville and Madras. Auditors came in, and she said her dealer agreements were revoked over “contract violations.”
According to the lawsuit, Sears Hometown personnel observed in April that the stores had an “unusually large number of returns, mark outs, and markdowns, as well as some unusual activity in the stores’ demand deposit bank accounts. The Sears Hometown personnel recommended that the stores’ activities be reviewed.”
Sears Hometown notified Wood on May 10 that stores would be audited the following week, the lawsuit says. The audit and inspection were conducted May 15 and 16, and the company terminated Wood’s dealer agreements June 6.
With the dealer agreements terminated, Wood asked store employees not to tell Sears Hometown that she’d moved 69 snowblowers to her home, according to the lawsuit.
Wood denies trying to keep the snowblowers a secret. She said she moved them to off-site storage with permission of a district manager.
The district manager, whom Wood declined to name, also approved merchandise mark-down procedures, she said.
She said she is still trying to understand the allegation about improper activity in the store bank accounts.
Sears Hometown’s Chicago attorney, Vincent Lazar of Jenner & Block LLP, did not return a phone call Tuesday.
The closings have been contentious. Wood locked Sears Hometown out of the Madras and Bend stores, and her Prineville landlord locked the doors of its building. Sears Hometown is also suing the Prineville landlord, BVG Enterprises LLC, in U.S. District Court of Oregon.
The owner of the building that houses the Bend store on S. U.S. Highway 97 has since unlocked the store, Wood said.
Wood said she tried to prevent Sears Hometown from liquidating the stores because she’s responsible for the building leases.
“All of the fixtures and all of the equipment belong to me. There’s a lot of personal property in those stores.”
Wood, a successful club volleyball coach, took over as Ridgeview’s head coach one game into the 2017 season. She led the Ravens to a No. 7 state ranking and spot in a state play-in game. Former Culver coach Randi Viggiano was named Ridgeview’s new coach after the season.
Sears Hometown & Outlet Stores Inc., based in Hoffman Estates, Illinois, is a spinoff of Sears that focuses on appliances, tools and equipment.
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