Saturday, November 25, 2017

Role Reversal

Beartooth Ford, House file third party complaint against Ford Motor Co.

The defendant has now become a plaintiff in the lawsuit involving Beartooth Ford and owner Tonya House.
A third-party complaint was filed on Oct. 12 in 22nd Judicial District Court by Ann Davey, the lawyer representing House and Beartooth Ford. (Beartooth Ford and House are the third-party plaintiffs in the new complaint, and the defendant is Ford Motor Company.)
A third-party complaint can be served by a defendant on a nonparty who is or may be liable for all or part of the claim against the defendant in the original lawsuit, according to the Cornell Law School Legal Information Institute.
The complaint alleges that “Ford knew, or with reasonable inquiry could have known, that Columbus Spartan did not intend to, and was unwilling or unable to match the exact terms of House’s agreement with RFJ and nevertheless assigned the right of first refusal to Columbus Spartan.”
It is also alleged in the complaint that Ford Motor Company intends to close Beartooth Ford, meaning Ford is unable to exactly match the contract House had with RFJ, and the exercise of first refusal should be terminated.
House’s counsel claims that Ford Motor Company is the guarantor of the right of first refusal, and as such “shall pay the full purchase price to House and Beartooth Ford.”
In regards to the employment agreement, schedules, and appraisal disputed by Columbus Spartan in the initial lawsuit, the third-party complaint explains that, while the documents were not sent to Ford along with the Dealership Asset Purchase Agreement (APA) and Real Estate Contract (REC) in February, the documents were referenced to in the APA and REC.
House was not contacted by Ford with any questions regarding the schedules and employment agreement, and Ford representatives declined the opportunity to obtain copies when notifying House of the exercise of the right of first refusal in March, according to the court document.

BACKGROUND
On Feb. 13, 2017, House made an agreement to sell Beartooth Ford, in Columbus, to RFJ Auto Partner Holdings, the company that owns the Dave Smith dealership in Idaho. This agreement was made following months of discussions between the two parties.
On March 15, 2017, Ford Motor Company assigned its right of first refusal to Columbus Spartan, a limited liability company recently created by the owners of Laurel Ford and Archie Cochran Ford in Billings, according to court documents and a press release.
When the right of first refusal is assigned to a third-party, the original contract must be honored.
About six weeks after accepting the right of first refusal, Columbus Spartan filed a lawsuit against House and Beartooth Ford regarding the specifics of the contract and what portions fall under the right of first refusal.
Specifically, two schedules – one that provides the values of Beartooth Ford’s fixed assets and one that lists an assumed contracts schedule – are being disputed by Columbus Spartan.
Columbus Spartan claims it did not receive the schedules before the right of first refusal was exercised. More so, the group alleges the schedules do not conform with the written terms and conditions of the APA, according to court documents.