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Friday, August 20, 2021

Subaru of America suing Ocala Subaru to remove dealership’s authorization

An Ocala car dealership is being sued by an international manufacturer who alleges the business did not meet financial reporting requirements. 

Ocala Subaru, which is located at 4150 U.S. Highway 441, is being sued by Subaru of America, Inc. (SOA), in the U.S. Northern District Court of Florida. A complaint was filed with the court on Friday, July 16 to strip the local dealership of its authorization to sell new and authorized vehicles under the Subaru brand. 

This case arises out Ocala Subaru’s alleged breach of a September 30, 2020 Confidential Settlement Agreement and Release. According to the complaint, the settlement agreement provided that if Ocala Subaru failed to meet certain specific financial reporting requirements, its Subaru dealer agreement would terminate and the dealership would no longer be an authorized Subaru dealer. 

SOA, whose headquarters is based in New Jersey, says that Ocala Subaru agreed to the financial reporting requirements, failed to meet them, and is now denying that the authorized Subaru dealer agreement has been terminated. 

According to the complaint, SOA alleges that it issued a “Notice of Intent to Terminate Ocala Subaru” in January 2019. SOA says that the notice was based, in part, on Ocala Subaru’s “failure to maintain a uniform accounting system in the manner required by SOA.” The complaint further alleges that Ocala Subaru submitted “false and/or misleading monthly financial statements” to SOA.

After multiple amendments, responses, and discussions between the two organizations, the sides entered into a Settlement Agreement on September 30, 2020, according to the complaint, and a new dealer agreement was put into effect on November 1, 2020. 

SOA says that the agreement provided for specific requirements of Ocala Subaru, including having “four full-time service technicians and at least two service technicians who have completed SOA’s service technician training requirements.” 

The complaint further indicates that an attorney representing Ocala Subaru wrote in a June letter that the business “is conservatively worth $20,000,000 in goodwill value alone,” and that if SOA were to terminate the contract, it would expose itself to “liability for trebled damages of $60,000,000.”

Among other requests, the complaint is asking the court for a “permanent injunction” banning Ocala Subaru from selling “new Subaru vehicles and performing warranty repairs on Subaru vehicles,” as well as requiring the business to remove all of its Subaru signs, trademarks, and marketing materials.