Big O Tire, Parent Firms Sued by Franchisees

…alleges various “breaches of franchise agreements, restraint of trade violations, interference with contractual rights, fraud in the inducement, negligent misrepresentation, violations of the Cartwright Act, violations of unfair competition law, and other misconduct.”

http://www.tirereview.com
March 31, 2010

Big O Tire, Parent Firms Sued by Franchisees

Some 20 current and former Big O Tire franchisees in California have sued Big O Tires and its parent companies.

The suit, filed on Dec. 2, 2009, in Los Angeles Superior Court, alleges various “breaches of franchise agreements, restraint of trade violations, interference with contractual rights, fraud in the inducement, negligent misrepresentation, violations of the Cartwright Act, violations of unfair competition law, and other misconduct.”

“The lawsuit sets forth 10 specific causes of actions and seeks declaratory relief as well as compensatory and punitive damages and legal costs in amounts to be determined,” the plaintiffs said in their news release.

Also named as defendants in the suit were Big O Tires parent TBC Corp., and its parents Sumitomo Corporation of America and Sumitomo Corp., as well as a series of named and unnamed individuals.

TBC denies the allegations.

The Dec. 2 “mass tort” suit followed two similar but separate suits filed in August and October 2009 by two other Big O franchise holders. Lawyers for the three parties are seeking to consolidate them into a single suit.

The 18 individuals/companies listed as plaintiffs in the Dec. 2 action have tagged themselves as the Tire Dealer Alliance of California, led by plaintiff Jan Talbott, who is serving as acting chair of the group. The TDA claims it has attempted to mediate its complaints with Big O, “however in recent communications attorneys representing TBC have rejected those proposals,” the group claimed.

In response to the suit, Brian Maciak, vice president and general counsel for the TBC Retail Group, based in Juno Beach, Fla., issued this statement:

“Although Big O typically does not comment on pending litigation, it is necessary to respond to the Mar. 26, press release issued by the Tire Dealer Alliance of California to ensure that the public record is described accurately.

“Three lawsuits have recently been filed in California by a splintered minority of franchisees operating as Tire Dealer Alliance of California, a group not recognized by Big O. Although the majority of Big O franchisees operate successfully and share a dynamic partnership with Big O, the small group of franchisees behind these lawsuits has failed to operate their stores well in the current economy and have resorted to baseless lawsuits. Big O denies all claims asserted against it in these suits.

“The Los Angeles Superior Court recently agreed with Big O, dismissing seven of the 12 claims brought by (one) former franchisee. The court also dismissed Big O’s affiliates TBC Corp. and Sumitomo Corporation of America from this suit because (the franchisee) had no viable claims against either entity. Big O has filed similar motions in the other two lawsuits and is optimistic it will receive similar rulings.

“In addition, Big O recently fared well in Federal Court in Colorado in a suit to enjoin a plaintiff in one of the California lawsuits. (The franchisee) refused to “de-identify” [e.g., stop using Big O Tires’ trademarks] after one of his franchise agreements expired. The court issued a temporary restraining order against (the franchisee) and ordered him to turn over his customer list and telephone numbers to Big O as required by his franchise agreement.

“Big O sincerely regrets being involved in litigation with any of its current and former franchisees. Nonetheless, Big O intends to vigorously defend each of these lawsuits, and will assert all affirmative claims/counterclaims where appropriate.”

[Editor’s Note: Tire Review has withheld the names of specific plaintiffs at this time, and has substituted descriptions noted in parentheses.]

http://www.tirereview.com/Article/72294/big_o_tire_parent_firms_sued_by_franchisees.aspx


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