Crain Volkswagen of Fayetteville in Arkansas has filed a lawsuit in opposition to Volkswagen Group of America, alleging that the licensing of a close-by VW dealership violates its franchise settlement and infringes on Crain VW’s retail territory.

The go well with was filed within the circuit court docket of Pulaski, Ark., in December and named VW of America because the defendant. Crain VW claims to have the appropriate, beneath its franchise settlement with VW of America and state regulation, to solely serve Washington and Benton counties in northwest Arkansas.

The licensing of Everett Volkswagen in Rogers, Ark., which is 20 miles away, encroaches upon its territory and violates the “good religion” settlement to “act in a good and equitable method towards one another” established by a franchise contract, the lawsuit alleges.

Click on right here for a map of the dealership areas.

The go well with additionally alleges that VW of America has been unable to realize “the business normal of 600,000 items per 12 months to assist its current supplier community” and in consequence would probably not be adequately capable of assist and provide each dealerships, a failure the grievance claims can be in violation of state franchise regulation.

Crain VW is suing VW of America for breach of contract, violation of state dealership safety regulation and breach of frequent regulation obligation.

VW of America “is violating its contractual, frequent regulation and statutory obligation of excellent religion and truthful coping with its dealership,” the go well with says. The automaker “doesn’t have enough market penetration in the USA as a way to assist any extra dealerships.”

Within the go well with, Crain VW outlines the investments it and its associates put into the present services, which moved from Springdale, Ark., in 2017. The funding, the go well with claims, was undertaken in consideration of “forecasts for future financial and market circumstances and supplier’s retail territory” — language cited immediately from Crain VW’s supplier settlement with VW of America.

Crain VW alleges $5 million in damages for every rely and asks the court docket to ban VW of America from distributing stock to Everett VW.

VW of America responded to the submitting of the go well with with a movement to dismiss the grievance. In a memo written in assist of this movement, representatives of VW of America doc that Everett VW was established in Might 2021 and legally obtained a licensing settlement with the Arkansas Motor Automobile Fee. The memo alleges that this passed off regardless of objections to the fee from Crain VW.

VW of America desires the grievance dismissed on the premise that it misleads the court docket by suggesting that Everett VW has not but been established and since it’s the jurisdiction of the fee to make selections on these issues.

Crain VW’s “claims on this case signify a blatant try to keep away from the established and unique procedures and treatments offered within the Arkansas Motor Automobile Fee Act,” VW of America’s representatives argue within the memo.

Within the authentic grievance, Crain VW alleges that VW of America didn’t correctly file the dealership settlement and to establish the “licensed location” with the fee.

As a ultimate level, the memo argues that beneath its franchise settlement with Everett VW and state regulation, VW of America is legally obligated to supply stock to the dealership, which the grievance seeks to halt. Because the grievance fails “to state a declare upon which reduction may be granted,” it must be dismissed, the memo argues.

A spokesperson for VW of America wrote in an e mail that the corporate doesn’t touch upon pending litigation. Everett VW, owned by Everett Automotive Group, declined to remark.

Crain VW didn’t instantly reply to requests for remark.

Crain Imports of Fayetteville ranks No. 113 on the Automotive Information record of the highest 150 dealership teams based mostly within the U.S., with retail gross sales of 8,758 new autos in 2022.

Crain Imports has no affiliation with Crain Communications, writer of Automotive Information.