FAYETTEVILLE, Ark. (KNWA/KFTA) — A Fayetteville car dealership has sued Volkswagen, saying that adding another dealership nearby is “not feasible” and would violate its contract.
Crain Imports of Fayetteville, doing business as Crain Volkswagen of Fayetteville, filed the lawsuit against Volkswagen of America in the Circuit Court of Pulaski County on December 22, 2022. It stated that VWOA’s intention to enter into a dealership agreement with Everett Automotive of Rogers for a new VW dealership “is a violation of VWOA’s obligations to Crain VW.”
The filing added that the new location would infringe on Crain VW’s market territory, in violation of the Arkansas Motor Vehicle Act, Crain VW’s dealership agreement with VWOA and “of the ‘good faith’ obligation implied in all contracts in Arkansas.” Crain VW is seeking injunctive relief and damages, attorney’s fees and punitive damages.
The complaint continued by explaining that Crain VW signed a dealer agreement with VWOA with the understanding that its retail territory was comprised of Washington and Benton Counties. It added that “since the Crain VW opened for business, VWOA has failed to provide adequate inventory.”
It specifically stated that the company has failed to deliver the “industry standard” of 600,000 units per year to support its existing dealer network.
“Under applicable Arkansas law, every Volkswagen dealer is entitled to a reasonable
quantity of inventory and within a reasonable time, any motor vehicle covered by the sales and
service agreement,” the motion said. “Opening an additional dealership in Rogers, Arkansas will violate this statutory requirement.”
On December 29, VWOA filed a motion to dismiss the complaint or, alternatively, for “a more definite statement.”
The motion cited “lack of subject matter jurisdiction and failure to state facts upon which relief can be granted” pursuant to federal rules of civil procedure. It also filed a separate memorandum in support of that motion.