Disputes and litigation
Litigation is rarely a welcome occurrence for dealerships, which is why our counsel is focused on preventive measures and early, cost-efficient settlement of disputes.
When litigation is not avoidable, you have a strong bench of tested trial and appellate attorneys and litigators to defend your rights and protect your investments in the areas that dealerships most frequently see claims, including:
- Franchise protests and litigation
- Partnership and shareholder disputes
- Employment litigation
- Commercial litigation
- Finance & insurance (F&I) / truth in lending act (TILA) litigation
- Lemons laws, consumer and product defect litigation
Franchise protests and litigation
We have represented numerous dealerships in their protests against new dealerships, and we regularly manage the unique issues that arise in automotive franchisor-franchisee relationships and the federal and state laws governing those relationships.
Our industry depth helps us exert your full rights, including rights of recovery. In addition, claims of antitrust, fraud and lender recourse are among the many business disputes we have managed for dealer clients. A representative sample of lawsuits we have resolved includes:
- Won a three-week civil bench trial against manufacturer attempting to disapprove of franchise transfer and recovered attorney’s fees
- Won a franchise termination protest which declared manufacturer’s sales performance metric invalid
- Won a franchise relocation protest against manufacturer attempting to relocate franchise within 2 miles of client – only second successful protest of its type in the history of the New Motor Vehicle Board
- Defended dealers against retail lender's claim of recourse of entire loan portfolios obtaining complete victory and recovery of attorney’s fees
- Obliterated claims by credit union against dealer for quiet title and conversion
- Represented franchise dealers in claims protesting termination, cancel and transfer of dealership
- Resolved franchise purchaser dispute with seller
- Led dealers in making fraud and collusion claims against captive finance companies and manufacturers
- Guided wholesale parts distributors in an action for fraud and violation of state antitrust laws against parts manufacturer and other wholesale parts distributor
- Defended company against vendor claims of breach or anticipatory repudiation of contract
Partnership and shareholder disputes
As advisors to dealerships, we know that business partnerships are dynamic and can change over time. Frequently, there are complex family and interpersonal relationships to consider. Scali Rasmussen manages this dispute area efficiently, with an eye to securing the future protections important to our clients, keeping our eye on the prize – the continued viability of the corporate asset. We have smoothly led clients through corporate dissolutions and managed claims by minority shareholders for involuntary dissolution, to name a few key matters in our experience background.
We are ardent advocates for dealerships who find themselves facing workplace claims. Our comprehensive labor and employment counsel helps minimize the reputational and profitability risks that lawsuits pose for dealers.
Working in a range of courtroom and settlement forums, our attorneys have built a track record for the strategic resolution of employment disputes and litigation, both individual and mass actions, in workforce disputes involving:
- Arbitration and mediation of discrimination, harassment and wage and hour claims
- Civil rights litigation
- Class action defense, including meal and rest break, wage and hour
- COBRA and CalCOBRA
- Disability advice and litigation (ADA, ADEA, OWBPA, FEHA, etc.)
- Discrimination and harassment claims, investigations and litigation
- EDD, Labor Commissioner hearings
- EEOC and Department of Fair Employment and Housing (DFEH) investigations and claims
- Employee benefits compliance and litigation
- Employee privacy rights
- Family and Medical Leave (FMLA) and California Family Rights Act (CFRA) litigation
- Sexual harassment and discrimination defense
- Unfair competition and non-compete litigation
- Trade secrets litigation
- Wrongful discharge, wrongful termination and whistle-blowing defenses
F&I / Truth in Lending Act (TILA) litigation
Whether dealers are challenged by an individual consumer claim or a more complex class action, Scali Rasmussen strategizes the right defense. Related claims we have defended our dealer clients on include:
- Government fee lumping
- Tire fees
- Optional DMV Electronic Filing Fee
- 10-day payoff
- Single Document Rule
- “Rolling in” of negative equity in lease or sale agreements
- Failure to disclose prior damage
- Advertising representative actions
Our depth of experience means we can identify conditions when a settlement is in your best interest and how to position you favorably. Should continued litigation be your best defense, we represent you at every stage, protecting your rights as we approach resolving the dispute efficiently and effectively.
In the case of class action threats, we have succeeded at knocking down claims at their earliest stage, which not only saves costs but prevents long-term reputational harm and the uncertainty of a verdict.
In addition, we use arbitration techniques skillfully, and have experience with class action waivers and the arbitrability of claims under the arbitration provision in the LAW553-CA-ARB form. Several of our attorneys are commenting on the evolution of arbitration in this area and contributing to the development of new laws.
Our extensive knowledge of the laws governing creditors rights and secured transactions under Article 9 of the Uniform Commercial Code provides retail auto dealers with deep resources. Our background extends to the bankruptcy courts, including proceedings for the sale of companies as debtors in possession, and these areas of commercial litigation:
- Breach of contract claims
- Commercial claims on secured transactions
- Bank claims against guarantors
- Claims by guarantor’s cross-claims for failure to act commercially reasonably in providing notice and disposing of collateral.
- Claims for possession of collateral and recovery
- Allegations of breach of the terms of flooring lines of credit and capital loans
- Flooring lender workouts
Lemons laws and product defect litigation
We are versed in California's lemon laws, including the Song-Beverly Consumer Warranty Act and the Tanner Consumer Protection Act, and routinely defend dealers sued for purported warranty law violations.
While manufacturers defend many of these cases, manufacturers often refuse to defend claims involving breach of implied warranty on used vehicles or claims involving allegations of negligent repair and resulting personal injury or wrongful death. Our attorneys have successfully defended dealers on these claims, including wrongful death and asbestos cases brought against dealers.