Case :-cv-00 Document Filed // Page of Page ID #: 0 Colm A. Moran (Bar No. ) Colm.moran@hoganlovells.com Avenue of the Stars, Suite 00 Los Angeles, CA 00 Telephone: (0) -00 Facsimile: (0) -0 Attorneys for Plaintiff VOLVO CARS USA, LLC VOLVO CARS USA, LLC, v. Plaintiff, ENVY HAWAII LLC d/b/a VOLVO CARS HONOLULU, UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA Defendant. SOUTHERN DIVISION Case No. -cv-0 COMPLAINT FOR DECLARATORY JUDGMENT, RESCISSION, REFORMATION, AND DAMAGES Plaintiff Volvo Cars USA, LLC ( Plaintiff ), by its undersigned attorneys, for its Complaint against defendant Envy Hawaii LLC d/b/a Volvo Cars Honolulu ( Defendant or Dealership ), alleges as follows: NATURE OF ACTION. This is an action for a declaratory judgment that Plaintiff is not liable to Defendant for alleged violations of the Automobile Dealer s Day in Court Act, U.S.C. et seq. (the ADDCA ), and Section of the Federal Trade Commission Act (the FTC Act ), U.S.C.. In a demand letter dated November 0, (the November 0 Letter ), Defendant alleged that Plaintiff has violated the ADDCA, the FTC Act, and other federal and state laws and demanded that Plaintiff pay Defendant over $0 million as a result.
Case :-cv-00 Document Filed // Page of Page ID #: 0. This is also an action for rescission and/or reformation of an agreement executed by the parties in or about July. The agreement was intended to be an update of Defendant s Volvo Authorized Retailer Agreement, a standard form contract that Defendant had signed twice before, in connection with the transfer of the business of Volvo Cars of North America, LLC ( VCNA ) to Plaintiff, VCNA s subsidiary. Plaintiff has recently learned, however, that Defendant surreptitiously and fraudulently altered certain standard provisions of the agreement before sending a signed copy back to Plaintiff s office in Irvine, California for countersignature. Defendant s allegation in the November 0 Letter that Plaintiff violated the ADDCA is based in part on Plaintiff s refusal to comply with the altered provisions of the agreement. Plaintiff also seeks damages for Defendant s fraud and breach of contract.. In addition to seeking declaratory relief that Plaintiff is not liable to Defendant under the ADDCA and the FTC Act, Plaintiff seeks a declaratory judgment that it is not liable to Defendant under Haw. Rev. Stat 0- et seq. (Hawaii s Little FTC Act ), E- et seq. (the Hawaii Franchise Investment Act), and -(a)() (a provision of the Hawaii motor vehicle franchise law), as Defendant alleges in the November 0 Letter. Defendant s claims under these Hawaii statutes are based on the same alleged facts as Defendant s claims under the ADDCA and the FTC Act. THE PARTIES. Plaintiff is a limited liability company organized and existing under the laws of the State of Delaware with its principal place of business in Rockleigh, New Jersey. Plaintiff s Western Regional office is in Irvine, California, where many of the transactions and occurrences alleged in this Complaint took place.. Plaintiff is the successor-in-interest to the business assets of its direct parent, VCNA, including all contracts referred to herein. Both Plaintiff and VCNA are wholly-owned subsidiaries of Volvo Car Corporation, the manufacturer of - -
Case :-cv-00 Document Filed // Page of Page ID #: 0 Volvo products. Because Plaintiff is the successor to VCNA s rights, this complaint will use the word Plaintiff to refer to VCNA with respect to events occurring prior to January,.. Upon information and belief, Defendant is a limited liability company organized and existing under the laws of the State of Hawaii, with its principal place of business in Honolulu, Hawaii. JURISDICTION AND VENUE. This Court has subject-matter jurisdiction, under U.S.C., over Plaintiff's claims for declaratory judgments that it is not liable to Defendant under the ADDCA and the FTC Act because they arise under the laws of the United States. This Court has subject-matter jurisdiction over Plaintiff's other claims pursuant to U.S.C., in that those other claims are so related to the claim within this Court's original jurisdiction that they form part of the same case or controversy.. This Court also has subject-matter jurisdiction under U.S.C. (a), because the matter in controversy exceeds the sum or value of $,000, exclusive of interest and costs, and is between either citizens of different states or citizens of a State and citizens or subjects of a foreign state.. This Court has personal jurisdiction over the Defendant because Defendant has transacted business and engaged in conduct in the State of California out of which the claims arise, including introducing itself to Plaintiff in Irvine, California, seeking business opportunities from Plaintiff in the State of California, and effecting its fraud in the State of California by sending the surreptitiously altered Volvo Authorized Retailer Agreement for countersignature to Plaintiff in the State of California. 0. Venue is proper under U.S.C. (b)() because a substantial part of the events or omissions giving rise to the claim occurred in this judicial district. - -
Case :-cv-00 Document Filed // Page of Page ID #: 0 ALLEGATIONS OF FACT A. Background. Plaintiff is the exclusive distributor of Volvo brand vehicles, parts and accessories ( Volvo Products ) in the United States.. Plaintiff distributes Volvo Products in the United States through a network of independently-owned dealers who purchase Volvo Products from Plaintiff at wholesale and resell Volvo Products to, and service Volvo Products for, retail customers.. Plaintiff appoints dealers to sell and service Volvo Products at designated dealership locations by entering into a Volvo Authorized Retailer Agreement (an ARA ) with each such dealer.. In the ARA, Plaintiff is referred to as Company and the dealer is referred to as Retailer. B. Pre-Contractual Discussions and Negotiations with Defendant. In or about February, Defendant s principals, Mikhail ( Mike ) Fedotov and Eric Roubentz, initiated conversations with Plaintiff s Western Regional office in Irvine, California concerning the possibility of acquiring an authorized Volvo dealership in Santa Monica or Beverly Hills, California.. Fedotov and Roubentz advised Plaintiff that they were seeking dealership opportunities for the Envy Auto Group, which owned and operated new car dealerships in Russia.. In response to their request, Plaintiff provided Fedotov and Roubentz with information concerning the automobile market in Southern California. They, in turn, provided Plaintiff with information concerning their background and experience.. As a result of the foregoing communications, Defendant learned of an opportunity to purchase Jackson Volvo, an authorized Volvo dealership in Honolulu, Hawaii. - -
Case :-cv-00 Document Filed // Page of Page ID #: 0. On or about June,, Defendant entered into an Asset Purchase Agreement (the APA ), pursuant to which it agreed to buy the Volvo dealership assets of Jackson Volvo, subject to the approval of Plaintiff.. Pursuant to Plaintiff s standard procedures, Jackson Volvo submitted the APA, and Defendant was required to submit an application, along with various related documents and information, to Plaintiff for its consideration in deciding whether or not to approve the proposal to sell the dealership to Defendant (the Proposal ).. During the application process, which lasted through November, Plaintiff and Defendant had numerous communications, at meetings and by telephone and email, concerning the conditions under which Plaintiff was willing to approve the Proposal. The meetings took place at, and Defendant s communications were sent to, Plaintiff s Western Regional office in Irvine, California.. In November, Plaintiff and Defendant executed agreements setting forth the terms and conditions under which Plaintiff would agree to approve the Proposal and appoint Defendant as an authorized Volvo dealer in Honolulu. C. The Authorized Retailer Agreement. On or about December 0,, Defendant closed on its APA with Jackson Volvo and signed an Authorized Retailer Agreement (or ARA ) with Plaintiff (the December ARA ).. The ARA is a standard form contract that Plaintiff enters into with each of its authorized dealers. It consists of introductory language, a Preamble, and numbered sections, and may contain attachments, schedules, and/or addenda.. While the introductory language and Sections through of the ARA contain information concerning the specific dealer signatory, Sections through contain standard terms and conditions that apply to all Volvo dealers.. Plaintiff does not negotiate or modify the standard terms and - -
Case :-cv-00 Document Filed // Page of Page ID #: 0 conditions in Sections through for any of its dealers, for a number of reasons, including that (a) Plaintiff believes that all of its authorized dealers should operate on the same terms and conditions; and (b) the relationship between motor vehicle distributors such as Plaintiff and their authorized dealers is heavily regulated by the statutory law of the 0 states, and many of these state laws require distributors to afford the same terms and conditions to all of their dealers.. Moreover, it is common knowledge in the industry that the standard provisions of a manufacturer s or distributor s dealer agreement are just that, standard, and are typically not subject to modification on an individual dealer basis.. In or about September, Defendant advised Plaintiff that it was considering a change in the ownership structure of the Dealership.. On or about February,, Plaintiff issued a revised ARA to Defendant (the February ARA ), which Defendant signed in the form issued by Plaintiff. The only differences between the February ARA and the December ARA were in Section, relating to the ownership of Defendant, and in the signature line, in which Fedotov (rather than Roubentz) signed for Defendant. All of the standard language in Sections through of the February ARA is identical to that in the December ARA. 0. In November, Plaintiff notified all of its dealers that it was making changes in the trademark provisions of its standard ARA (the Trademark Revisions ). Plaintiff incorporated the Trademark Revisions into any ARAs executed thereafter. D. Defendant s Fraudulent Alteration of the July ARA. On or about January,, VCNA transferred its business assets, including all of its agreements referred to above, to Plaintiff.. Plaintiff thereafter determined that, in connection with updating its Hawaii business license, its ARA with Defendant should be updated to reflect Plaintiff's status as the contracting party. - -
Case :-cv-00 Document Filed // Page of Page ID #: 0. Accordingly, on or about July,, Plaintiff shipped three spiralbound, duplicate originals of the ARA (the July ARA ) to Defendant for execution. The only differences in the standard terms and conditions between the February ARA and the form of the July ARA shipped to Defendant were to Plaintiff's entity name, the Trademark Revisions, and certain minor revisions to the ARA s Preamble.. After receiving the duplicate originals of the July ARA, Defendant surreptitiously made material changes to certain of the standard terms and provisions of the agreement before signing it.. Upon information and belief, Defendant undid the spiral binding of the duplicate originals and substituted certain pages of the documents with new pages, prepared in the same typeface, which altered material terms and conditions of the ARA. Defendant then redid the spiral binding to prevent Plaintiff from detecting that the documents had been tampered with.. Defendant signed and returned the altered ARA to Plaintiff s regional office in Irvine, California, for countersignature without advising Plaintiff that it had made changes to the standard terms and conditions of the agreement.. In addition, before returning the altered ARAs to Plaintiff, Defendant emailed a copy of the signature page to Plaintiff s office in Irvine, California, without disclosing that Defendant had altered, or intended to alter, other pages of the document.. After Plaintiff received the altered July ARAs at its Western Regional Office in Irvine, California, Plaintiff s Regional Vice President, Michael Cottone, reasonably believing that the documents were in the same form as the agreements that Plaintiff had sent to Defendant for execution, countersigned the three documents for Plaintiff without knowledge that Defendant had made alterations to the standard terms and conditions of the ARA.. Plaintiff thereafter returned a countersigned copy of the altered July - -
Case :-cv-00 Document Filed // Page of Page ID #: 0 ARA to Defendant. 0. Plaintiff did not learn that any alterations had been made to the July ARA until Defendant started to demand that Plaintiff pay the transportation charges for shipping vehicles to Defendant, purportedly pursuant to Sections (D)(i) and (F) of the ARA. The standard terms of Sections (D)(i) and (F) provide exactly the opposite: i.e., as is custom and practice in the industry, all dealers are responsible for the cost of transporting vehicles to their dealerships.. As a result of Defendant s demands that Plaintiff pay the transportation charges, Plaintiff discovered that Defendant had altered Sections (D)(i) and (F) of the July ARA. Plaintiff thereafter examined the document and found that Defendant had surreptitiously made a number of other material alterations to the standard terms and conditions that had never been discussed with or agreed to by Plaintiff.. The alterations made by Defendant included the following: (a) (b) (c) (d) in the second sentence of Section (D)(i), the standard form of which provides that Retailer will pay to the Company the applicable destination charges that the Company established for Retailer for Company Vehicles delivered to Retailer that are in effect at the time of shipment, Defendant switched the positions of the words Retailer and Company ; in the first sentence of Section (F), the standard form of which provides that Retailer is responsible for, and will pay all charges, for demurrage, storage and other expenses accruing after shipment to Retailer, Defendant inserted the word not before responsible for and substituted is not required to for will ; in the second sentence of Section (F), the standard form of which provides that [i]f diversions of shipments are made upon Retailer s request, or are made by the Company because of Retailer s failure or refusal to accept shipments of Retailer s orders, Retailer will pay all additional charges and expenses incident to such diversion, Defendant changed the word will to may ; in Section 0(A)(vii), the standard form of which provides that Volvo may immediately terminate the ARA based on a [w]illful misrepresentation by Retailer, or any of its agents or employees, in any claim or application for reimbursement by, or payment from the Company, Defendant deleted the words or - -
Case :-cv-00 Document Filed // Page of Page ID #: 0 (e) (f) (g) (h) (i) (j) any of its agents or employees ; in Section 0(A)(xiii), the standard form of which provides that Company may immediately terminate the ARA based on a [r]efusal or inability by Retailer to pay any amount Retailer owes to the Company within thirty (0) days after the Company demands payment from Retailer, Defendant changed thirty (0) days to ninety (0) days ; in Section 0(B)(iv), the standard form of which provides that the Company may terminate the ARA if the Retailer fails, within sixty (0) days of receiving written notice from Company, to improve, alter, or modify its Retailer Facility to meet the requirements in the Company Facilities Guide or other Company Policies, or which Retailer had agreed or represented to the Company that Retailer would make or do, Defendant deleted the word improve and inserted the words subject to prior landlord approval and applicable state laws and the end of the section; in Section 0(B)(viii), the standard form of which provides that Company may terminate the ARA if the Retailer fails, within sixty (0) days of receiving written notice from Company, to maintain an inventory of new Company Vehicles of the latest model in accordance with the objectives agreed to by Retailer and the Company, Defendant substituted the word unsold for new ; in Section, the standard form of which provides that Company will, within sixty (0) days of termination of the ARA, repurchase [a]ll current model year demonstrator vehicles (as defined by the Company) and registered Volvo service loaners which are no more than one year old, Defendant substituted the word two for the word one ; in Section, the standard form of which provides that, prior to making any changes in the ownership or management of the Dealership, Retailer agrees to obtain the Company s written approval, which shall not be unreasonably withheld, Defendant substituted the words may agree for agrees ; and in Section (B), the standard form of which requires that the Company be notified within thirty (0) days that the Principal Owner(s) or General Manager of the Retailer has died or become incapacitated, Defendant extended the deadline to sixty (0) days. Attached as Exhibit A hereto is the July ARA that Plaintiff sent to Defendant for signature; attached as Exhibit B hereto is a redline in which Plaintiff has attempted to capture and display the changes that Defendant surreptitiously made to the ARA. - -
Case :-cv-00 Document Filed // Page 0 of Page ID #:0 0. Upon information and belief, Defendant made the foregoing surreptitious changes in a fraudulent attempt to excuse its continuing and/or anticipated breaches of the provisions which it altered. Some of those breaches are described below. E. Defendant s Breaches of Its Obligations. One of the principal topics of discussion during Defendant s application process in was the Jackson Volvo facility, which failed to comply with Plaintiff s standards. Defendant informed Plaintiff that, rather than remain in the Jackson Volvo facility on a long-term basis, Defendant planned to build a new facility in accordance with Plaintiff s standards. Defendant proposed to negotiate a short-term extension of the lease on the Jackson Volvo facility and renovate, redesign and refresh that facility while Defendant searched for a long-term facility solution.. In agreements executed in November, Defendant agreed, among other things, that: (a) the current facility did not meet Plaintiff s requirements and, accordingly, Defendant would make specified improvements to the facility by October, ; (b) Defendant would develop and secure a plan for an all-new facility acceptable to Plaintiff by October,, and would be operating in the all-new facility by May, ; (c) Defendant would use both the current and planned future locations exclusively for Volvo operations; (d) Defendant would maintain a $ million floor plan for the purchase of new Volvo vehicles; and (e) Defendant would meet agreed levels of sales performance and customer satisfaction for sales and service.. Since becoming an authorized Volvo dealer in December, Defendant has failed to honor the foregoing commitments.. Defendant has (a) failed to make the promised improvements to the current facility and (b) been unable to pursue an acceptable long-term, all-new facility solution. - 0 -
Case :-cv-00 Document Filed // Page of Page ID #: 0. In addition, Defendant has failed to address certain serious deficiencies in the current facility, such as the repair of broken car lifts and the installation of new lifts in its service department and the upgrade of its bathroom despite promises to Plaintiff that it would promptly address these deficiencies.. Defendant has also repeatedly breached its agreement to use the existing facility solely for its Volvo operations. 0. In June, Plaintiff discovered, through the Dealership s own website and Facebook site, that Compagna T-Trex motorcycles and three-wheel bikes were being showcased in the Volvo showroom. When Plaintiff notified Defendant that this was a breach of its obligations, Defendant promised that the motorcycles and the bikes would be removed and that such a breach would not occur again.. Notwithstanding Defendant s promise, when Plaintiff s Marketing Manager visited the dealership on September,, he discovered two motorcycles being displayed on the showroom floor. The Marketing Manager advised Defendant once again that the display was a breach of the Dealership s obligations, and Defendant once again promised that it would use the facility exclusively for its Volvo operations.. In November, however, Plaintiff learned that the Dealership was operating a car rental company called Envy Rent out of the Dealership facilities in violation of its exclusivity obligation.. Defendant also failed to maintain the agreed-upon floor plan financing it needed to acquire and stock an adequate inventory of new Volvo vehicles for resale.. On or about August,, Bank of America, Defendant s floor plan lender, placed the Dealership on finance hold, meaning that the Bank would not advance funds for Defendant s purchase of any additional Volvo vehicles.. Defendant remained without any flooring line until on or about - -
Case :-cv-00 Document Filed // Page of Page ID #: 0 December,, when the Dealership obtained an inadequate temporary flooring line of $ million.. Defendant did not obtain a flooring line in an adequate amount until on or about February,, when it obtained a new flooring line with the Bank of Hawaii.. On January,, however, the Bank of Hawaii notified Plaintiff that it was temporarily suspending the Dealership s flooring line. The Bank consequently rejected Plaintiff s requests for payment for several vehicles that Plaintiff had shipped to the dealership.. In April, the Bank of Hawaii rejected VCNA s request for payment of $0,000 for a new Volvo XC0 vehicle that Plaintiff had shipped to the Dealership. Defendant thereafter refused to write a check to Plaintiff for the XC0 on the ground that $0,000 was a big amount for the Dealership.. On or about April,, Defendant notified Plaintiff that it had switched its floor plan from the Bank of Hawaii to Next Gear Capital. Defendant continued, however, to maintain a Bank of Hawaii account from which Plaintiff was to be paid any amount that Defendant owed Plaintiff on its parts account at the end of each month. 0. In September, Fedotov complained to Plaintiff that the Dealership s account with the Bank of Hawaii was overdrawn by $,000 because its monthly parts account statement with Plaintiff showed a debit of $,000. Fedotov demanded that Plaintiff write an apology letter for Defendant to show to the Bank. Plaintiff informed Fedotov that the account statement was correct and refused to issue the requested apology.. In October, the Bank of Hawaii rejected Plaintiff s request for payment of a $0 debit in the Dealership s parts account on the ground of insufficient funds.. Upon information and belief, Defendant made certain of the - -
Case :-cv-00 Document Filed // Page of Page ID #: 0 surreptitious alterations in the July ARA in an attempt to (a) excuse Defendant s continuing failures to improve its facility, to maintain an adequate flooring line and consequently an adequate inventory of new Volvo vehicles, and to timely pay charges for which it is responsible, and (b) avoid termination for misrepresentations made by its agents or employees. F. The Dealership Demands $. Million from Plaintiff. On November,, Michael Cottone, Plaintiff s Regional Vice President, and Brad Moorhead, Plaintiff s Regional Retail Development Manager, made an unannounced visit to the Dealership to review its performance and to deliver a notice of default concerning the unauthorized addition of the Envy Rent business to the facility.. When Cottone outlined the reasons for the visit, Fedotov asked Cottone and Moorhead to leave the Dealership. Cottone and Moorhead complied with Fedotov s request and consequently did not leave the notice of default with the Defendant.. The next day, Plaintiff received the November 0 Letter, from attorneys for Defendant. A copy of the November 0 Letter is attached hereto as Exhibit C.. Apparently believing that an aggressive offense is the best defense, Defendant accused Plaintiff of violating various federal and state laws and demanded that Plaintiff pay Defendant $. million by reason of the alleged violations.. Defendant alleged, among other things, that Plaintiff had breached its statutory obligation under the ADDCA to act in good faith in performing or complying with any provision of the franchise. See U.S.C. (e),.. In the November 0 Letter, Defendant alleged that Plaintiff had failed to act in good faith by (among other things) violat[ing] Section (D)(i) of the Authorized Retailer Agreement, which requires [Plaintiff] to pay applicable - -
Case :-cv-00 Document Filed // Page of Page ID #: 0 destination charges for the delivery of vehicles to [Defendant].. When Plaintiff received the November 0 Letter, Plaintiff considered the allegation concerning destination charges to be frivolous since the ARA provides exactly the opposite, i.e., that the Retailer is responsible for paying destination charges. Following Plaintiff s receipt of the November 0 Letter, however, Defendant repeated its demand that Plaintiff pay the destination charges in emails dated December,, and December,. The emails specifically referred to Sections (D)(i) and (F) of the ARA. It was not until December,, that Plaintiff examined Sections (D)(i) and (F) in the July ARA and discovered that Defendant had fraudulently altered their contents. Plaintiff thereafter examined the July ARA and found the fraudulent alterations listed in paragraph above. 0. Defendant s principal allegation in the November 0 Letter was Plaintiff had violated the ADDCA, the FTC Act, and certain Hawaii statutes by allegedly coercing Defendant to punch cars, a term Defendant uses to describe programs offered by Plaintiff under which a Volvo dealer can earn incentives by retailing a new vehicle to itself for use as a demonstration vehicle ( demo ) or a service loaner.. Contrary to Defendant s allegations, Plaintiff never required or coerced Defendant to punch cars. Plaintiff s incentive programs are voluntary, and Defendant made its own decisions to transfer vehicles into demo or loaner status so that it could receive the incentives offered by Plaintiff.. Defendant was not damaged by transferring cars into demo or loaner status. To the contrary, Defendant profited by receiving the incentives offered by Plaintiff.. The November 0 Letter also alleges that the incentive programs are deceptive to consumers because the transfer to demo or loaner status allegedly prematurely commences consumer warranty periods. While such a transfer does - -
Case :-cv-00 Document Filed // Page of Page ID #: 0 commence the warranty period, there is no consumer deception because, under Plaintiff's program rules, the dealer must disclose to the customer that the vehicle is used and provide the date on which the warranty period began to run.. The November 0 Letter further alleges that Plaintiff required [Defendant] to dispose of its profitable used car facility and thereafter withdr[ew its] support for Defendant s plan to establish a showroom at a brand-new mall. These allegations are false. Plaintiff never asked, much less required, Defendant to dispose of the used car facility, and Plaintiff s approval of Defendant s mall showroom plan was dependent on Defendant satisfying certain conditions that Defendant failed to satisfy.. The November 0 Letter also alleges that Plaintiff treated Defendant less favorably than other Volvo dealers and/or failed to discriminate in favor of Defendant to accommodate for the alleged higher costs of doing business in Hawaii. In fact, Plaintiff has not discriminated against Defendant and has made numerous accommodations to Defendant in consideration of its location.. As a specific example of alleged discrimination, the November 0 Letter alleges that [Plaintiff] has discriminated against [Defendant] by providing all dealers in [Defendant s] regional market, except [Defendant], with roughly $,000 in Wheel Bonus incentive monies ($00 per car). In fact, the incentive program to which Defendant refers was a specific program offered only to dealers in the Los Angeles Designated Market Area; it was not a regional program. In addition, because Defendant does not compete for sales with Volvo dealers in Los Angeles, there was no competitive harm to Defendant.. The November 0 Letter also alleges that Plaintiff threatened Defendant with non-exclusivity in the State of Hawaii and attempted to implement this threat through proposed revisions to the ARA. In fact, Defendant was never granted exclusivity in the State of Hawaii and Plaintiff has never threatened to take away any such alleged exclusivity, either through proposed ARA - -
Case :-cv-00 Document Filed // Page of Page ID #: 0 revisions or otherwise.. In addition to claiming that Plaintiff's alleged conduct violates the ADDCA and the FTC Act, the November 0 Letter claims that Plaintiff's alleged conduct violates Haw. Rev. Stat. 0- et seq., E- et seq., and - (a)(). In the November 0 Letter, Defendant demands that Plaintiff pay Defendant $,,00 as a result of these alleged violations. Plaintiff denies that it is liable to Defendant for any of these alleged violations. Accordingly, there is an actual controversy between the parties with respect to these claims. FIRST CLAIM FOR RELIEF. Plaintiff repeats and realleges each and every one of its allegations in paragraphs through above as if fully set forth herein. 0. There is an actual controversy between Plaintiff and Defendant concerning whether Plaintiff is liable to Defendant under U.S.C., which permits an automobile dealer to recover damages against an automobile manufacturer for the failure to act in good faith in performing or complying with any of the terms or provisions of the franchise.. In U.S.C. (e), good faith is defined for purposes of the ADDCA as the duty of each party to a franchise, and all officers, employees or agents thereof to act in a fair and equitable manner towards each other so as to guarantee the one party freedom from coercion, intimidation, or threats of coercion or intimidation from the other party.. Plaintiff has not failed to act in good faith as that term is defined in the ADDCA.. By reason of the foregoing, Plaintiff is entitled to a declaratory judgment that it is not liable to Defendant for any alleged violation of the ADDCA. SECOND CLAIM FOR RELIEF. Plaintiff repeats and realleges each and every one of its allegations in paragraphs through above as if fully set forth herein. - -
Case :-cv-00 Document Filed // Page of Page ID #: 0. There is an actual controversy between Plaintiff and Defendant concerning whether Plaintiff is liable to Defendant under U.S.C., which prohibits certain unfair methods of competition in or affecting commerce and unfair or deceptive acts or practices in or affecting commerce.. Defendant does not have a private right of action against Plaintiff under U.S.C... By reason of the foregoing, Plaintiff is entitled to a declaratory judgment that it is not liable to Defendant for any alleged violation of U.S.C.. THIRD CLAIM FOR RELIEF. Plaintiff repeats and realleges each and every one of its allegations in paragraphs through above as if fully set forth herein.. Defendant fraudulently altered certain standard provisions of the July ARA, including the alterations listed in paragraph above. 0. Defendant had a duty to disclose to Plaintiff the fact that it had made the alterations because Defendant knew that Plaintiff was about to countersign the July ARA under a mistake of fact, i.e., the reasonable belief that Defendant had signed the July ARA in the same form in which Plaintiff had sent it to the Defendant.. Defendant also had a duty to disclose to Plaintiff the fact that it made the alterations because, under the customs of trade and the other objective circumstances, Plaintiff would reasonably expect a disclosure of that fact.. Defendant failed to disclose to Plaintiff the fact that it made the alterations.. Plaintiff signed the July ARA without reading the provisions that Defendant had surreptitiously altered in the mistaken but reasonable belief that the document was in the same form in which Plaintiff had sent it to the Defendant for signature. - -
Case :-cv-00 Document Filed // Page of Page ID #: 0. By reason of the foregoing, Plaintiff requests (a) rescission of the July ARA; or (b) in the alternative, rescission of the altered provisions and reformation of the July ARA to conform the altered provisions to the standard provisions set forth in the December ARA and February ARA; and (c) a declaratory judgment that Plaintiff is not bound by any of the provisions of the July ARA that Defendant altered. FOURTH CLAIM FOR RELIEF. Plaintiff repeats and realleges each and every one of its allegations in paragraphs through above as if fully set forth herein.. Defendant's failure to disclose to Plaintiff the fact that it made material alterations in the July ARA was done with the intent to induce, and did induce, Plaintiff to countersign the document.. In countersigning the document, Plaintiff reasonably relied on Defendant s failure to disclose that Defendant had made material alterations to its terms and conditions.. Plaintiff has suffered damages as a result of Defendant s fraud.. By reason of the foregoing, Plaintiff is entitled to an award of damages against Defendant in an amount to be determined at trial. 00. By reason of the foregoing, Plaintiff is also entitled to an award of punitive damages against Defendant in an amount to be determined at trial. FIFTH CLAIM FOR RELIEF 0. Plaintiff repeats and realleges each and every one of its allegations in paragraphs through 00 above as if fully set forth herein. 0. The relationship between Plaintiff and Defendant is governed by the standard provisions of the ARA. 0. Section of the ARA provides that Company and Retailer each recognize the importance of dealing with each other in an open and honest manner. - -
Case :-cv-00 Document Filed // Page of Page ID #: 0 0. Section of the ARA further provides that Retailer will not engage in any unfair, deceptive, misleading, unethical, fraudulent or otherwise prohibited practice. 0. The ARA also contains an implied covenant of good faith and fair dealing. 0. Defendant breached its obligations under Section, as well as its implied covenant of good faith and fair dealing, by surreptitiously altering certain of the standard provisions of the July ARA and failing to disclose to Plaintiff the fact that it made such alterations. 0. By reason of the foregoing, Plaintiff has suffered damages in an amount to be determined at trial. 0. By reason of the foregoing, Plaintiff is also entitled to recover its reasonable attorney s fees and litigation expenses incurred in this action. SIXTH CLAIM FOR RELIEF 0. Plaintiff repeats and realleges each and every one of its allegations in paragraphs through 0 above as if fully set forth herein. 0. There is an actual controversy between Plaintiff and Defendant concerning whether Plaintiff is liable to Defendant under Haw. Rev. Stat. E- et seq., also known as the Hawaii Franchise Investment Law.. The Hawaii Franchise Investment Law applies only to relationships in which, among other things, the franchisee is required to pay, directly or indirectly, a franchise fee, as that term is defined in Haw. Rev. Stat. E-.. The relationship between Plaintiff and Defendant is not a franchise covered by the Hawaii Franchise Investment Law because, among other things, Defendant is not required to pay a franchise fee.. By reason of the foregoing, Plaintiff is entitled to a declaratory judgment that it is not liable to Defendant for any alleged violation of the Hawaii Franchise Investment Law. - -
Case :-cv-00 Document Filed // Page of Page ID #: 0 SEVENTH CLAIM FOR RELIEF. Plaintiff repeats and realleges each and every one of its allegations in paragraphs through above as if fully set forth herein.. There is an actual controversy between Plaintiff and Defendant concerning whether Plaintiff is liable to Defendant under Haw. Rev. Stat. 0-, which prohibits certain unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.. Subdivision (d) of 0- provides that No person other than a consumer, the Attorney General or the director of the office of consumer protection may bring an action based upon unfair or deceptive acts or practices declared unlawful by this section.. Plaintiff is not a consumer, the Attorney General, or the director of the office of consumer protection.. By reason of the foregoing, Plaintiff is entitled to a declaratory judgment that it is not liable to Defendant for any alleged violation of 0-. EIGHTH CLAIM FOR RELIEF. Plaintiff repeats and realleges each and every one of its allegations in paragraph through above as if fully set forth herein.. There is an actual controversy between Plaintiff and Defendant concerning whether Plaintiff is liable to Defendant under Haw. Rev. Stat. - (a)().. In pertinent part, -(a)() prohibits a motor vehicle manufacturer or distributor from (i) requiring any dealer in the state of Hawaii to enter into an agreement, or to perform any act not required by the reasonable requirements of the franchise agreement, by threatening to cancel the franchise agreement, threatening to refuse to enter into a new franchise agreement, or threatening to award a franchise to another person in the relevant market area of the dealer; or (ii) discriminating between dealers in the state of Hawaii with respect to - -
Case :-cv-00 Document Filed // Page of Page ID #: 0 transportation charges, vehicle prices or transportation benefits.. Plaintiff has not required Defendant to enter into any agreement, or to perform any act not required by the reasonable requirements of the franchise agreement, by making any threat prohibited by -(a)().. Plaintiff has not discriminated against Defendant in violation of - (a)(), and could not have done so because there is no other franchised Volvo dealer in the state of Hawaii.. By reason of the foregoing, Plaintiff is entitled to a declaratory judgment that it is not liable to Defendant for any alleged violation of Haw. Rev. Stat. -(a)(). WHEREFORE, Plaintiff demands judgment as follows: (i) on the First Claim for Relief, a declaratory judgment that Plaintiff is not liable to Defendant for any alleged violation of the Automobile Dealer s Day in Court Act, U.S.C. et seq.; (ii) on the Second Claim for Relief, a declaratory judgment that Plaintiff is not liable to Defendant for any alleged violation of the Federal Trade Commission Act, U.S.C. ; (iii) on the Third Claim for Relief, (a) rescission of the July Authorized Retailer Agreement; or (b) in the alternative, rescission of the altered provisions and reformation of the July Authorized Retailer Agreement to conform to the standard provisions set forth in the December Authorized Retailer Agreement and February Authorized Retailer Agreement; and (c) a declaratory judgment that Plaintiff is not bound by any of the provisions of the July Authorized Retailer Agreement that Defendant altered; (iv) On the Fourth Claim for Relief, an award of damages and an award of punitive damages in amounts to be determined at trial; (v) On the Fifth Claim for Relief, an award of damages in an amount to be - -
Case :-cv-00 Document Filed // Page of Page ID #: 0 (vi) (vii) determined at trial, and an award of reasonable attorney s fees and litigation expenses in an amount to be determined by the Court; On the Sixth Claim for Relief, a declaratory judgment that Plaintiff is not liable to Defendant for any alleged violation of Haw. Rev. Stat. E- et seq.; On the Seventh Claim for Relief, a declaratory judgment that Plaintiff is not liable to Defendant for any alleged violation of Haw. Rev. Stat. 0-; (viii) On the Eighth Claim for Relief, a declaratory judgment that Plaintiff is (ix) not liable to Defendant for any alleged violation of Haw. Rev. Stat. -(a)(); and Any related preliminary and/or permanent injunctive relief, interest, costs, and such other and further relief as the Court deems just and proper. Dated: December, By: /s/ Colm A. Moran Colm A. Moran Avenue of the Stars, Suite 00 Los Angeles, CA 00 Tel.: (0) -00 - -