Mitsubishi is being sued by a dealership in Missouri for after the company blocked the sale of the dealership.
Oakes Auto of Kansas City has reportedly filed a multimillion-dollar lawsuit against Mitsubishi Motors North America. The suit lists six claims against the automaker, half of which Mitsubishi recently filed a motion in federal court to dismiss, and seeks in excess of $6 million in damages.
Among the allegations according to the published report is that Mitsubishi mistreated its dealers by making false promises, unfair vehicle allocation practices, failure to provide agreed-upon financing for a required renovation, and blocking the negotiated sale of the dealership to a proposed buyer.
Lawsuit Details
In asking for $6 million, Oakes Auto wants more than $2.4 million for breach of fiduciary duty and violation of the Automobile Dealers Day in Court Act; approximately $3.5 million for the bungled dealership sale; and about $219,000 for Mitsubishi’s failure to follow through on post-termination obligations per its own franchise agreement.
The actions comes despite Oakes Auto meeting the franchise goals set by the Japanese automaker—Mitsubishi established a minimum per-location sales target of 70 new vehicles three years ago. The Missouri exceeded that figure with 121 units sold in 2021 ranked among the top half of the district’s dealerships the following year.
The lawsuit alleges Mitsubishi forced Oaks to buy “unreasonable advertising display” to receive vehicle allocations, routinely failed to provide it with sufficient vehicles and that the brand blocked a deal for the dealer to sell 64 vehicles to an Enterprise affiliate to be used for Alamo, Enterprise, and National rental fleets.
Mitsubishi Acted in “Bad Faith”
The issue between the dealer and the automaker reached the breaking point when Oakes Auto received a termination notice in June 2023 despite having a perfect sales and satisfaction index score, according to dealership officials.
The dealer group didn’t challenge the termination as “Oakes Auto no longer wishes to do business with Mitsubishi, given its tortious actions taken in bad faith.”
The dealership termination went into effect on September 20, 2023.
