CORAL GABLES, Fla.--(BUSINESS WIRE)--The law firms of Arent Fox LLP and Colson Hicks Eidson recently filed a lawsuit in Miami federal court on behalf of two Braman BMW dealerships—Braman Motors BMW of Miami and Braman Motorcars BMW of West Palm Beach—against Defendant BMW of North America, LLC for violating Fla. Stat. §§ 320.60-320.70 (The “Florida Dealer Act”) and for breach of contract and the implied covenant of good faith and fair dealing.
The lawsuit asserts that BMW has undermined and violated the contractual franchise rights of its dealers, including Braman, borne from BMW’s desire to take control over day-to-day dealership and decision-making operations traditionally under the purview of franchised dealers. These unlawful actions stem in part from BMW’s need to dump thousands of unsold and unwanted BMW vehicles clogging ports across the country.
BMW forced modifications of Braman’s franchise agreement that fundamentally altered the dealer/manufacturer relationship and what it means to be a BMW dealer. Through the so-called “Added Value Program,” BMW has coerced dealers and shifted costs and risks onto dealers in violation of Florida law. Through BMW’s AVP program, the lawsuit alleges, BMW has modified the entire dealership relationship by creating four separate, onerous programs. Chief among these is a brand new and unusual method of tracking customer loyalty—in a move rife with privacy concerns and a high chance of error—that penalizes Braman if customers defect to other brands, even if that defection is to buy a pickup truck or a minivan. BMW’s actions have violated Florida law, the parties’ Dealer Agreements, and Braman’s common law rights.
Next, needing to deal with an overflow of unsold vehicles from foreign markets toward the end of 2015, BMW engaged in wrongful, illegal and unreasonable acts that harmed Braman. BMW desired to artificially inflate sales of new vehicles and to pile unwanted BMW vehicles upon BMW’s American dealerships. BMW did so by engaging in a wrongful, coercive scheme of requiring Braman to “punch” retail delivery reports, in violation of Florida law, the parties’ Dealer Agreement, and Braman’s common-law rights. This “punching scheme” damages Braman by raising inventory costs and requiring Braman to accept additional inventory that Braman did not order and did not want to carry on its floor plans.
Additionally, the complaint alleges BMW demanded real-time access to a critical asset of Braman—its database of customer information, sales leads and service records—and threatened to cut Braman off from financial incentives Braman needs to stay competitive if Braman refused to provide such access. BMW’s economic coercion to force Braman into signing data sharing agreements violates multiple provisions of Florida law and BMW’s duty of good faith and fair dealing.
“Braman has been forced to bring this action because of BMW’s unfair business practices, which through coercive incentive and bonus programs seek to accomplish end goals that are unlawful under Florida law and the parties’ agreements,” said Russell P. McRory, a partner at Arent Fox LLP and co-lead counsel for the Plaintiffs along with Bob Martínez, partner at Colson Hicks Eidson. Added Mr. Martínez: “This lawsuit seek to enforce the contractual obligations of the franchise agreements and send a loud message to other manufacturers/distributors that they have an obligation to their dealers to act fairly and in good faith.”
****Complaint and interviews available upon request ****
