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Published: Wednesday, 10/13/2010

Suit is filed by Taylor Cadillac on franchise

BY JON CHAVEZ
BLADE BUSINESS WRITER

Taylor Cadillac Inc. has sued two companies which were to provide the dealership with cars made in China.

The case, moved this week into U.S. District Court in Toledo, claims the two distributors made false representations in the dealer's attempt in 2007 to obtain a franchise in the Toledo area to sell Chinese cars.

The case, originally filed in Lucas County Common Pleas Court, has the local car dealer alleging that it paid a $95,000 franchise fee with the expectation it would be the sole franchisee in northwest Ohio and southeast Michigan to sell at least three brands of Chinese vehicles.

But later the two distribution companies - which had been working together - had a falling out unbeknownst to Taylor. In 2009, one of the companies began soliciting new franchisees in northwest Ohio, infringing on what Taylor thought was an exclusive arrangement, the lawsuit states.

The plaintiff is seeking a return of its $95,000 fee, plus damages in excess of $100,000, court costs, and attorneys' fees.

The defendants are China Car Distributors Inc. of Des Moines and Autokam Ltd. of Scottsdale, Ariz. China Car Distributors had an arrangement with Autokam to set up car dealer franchises in 13 Midwest states, including Ohio, with Autokam supplying the vehicles, the lawsuit claims.

Taylor was told it would have access to vehicles made by Great Wall Motors, Hafei Motors, and Brilliance Auto, the latter of which it was most interested in because of a joint venture between Brilliance and BMW.

In February, Taylor learned that another Toledo area dealer, the Ed Schmidt Automotive Group, was negotiating to become a Brilliance Auto dealer.

Executives of Taylor Cadillac were not available to comment Wednesday, and the company's staff counsel and chief financial officer, Peter Demczuk, had no comment on the lawsuit.

Local attorneys representing China Car Distributors and Autokam also did not return calls seeking comment.

Contact Jon Chavez at:

jchavez@theblade.com

or 419-724-6128.



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