Plano dealership fires back at Jaguar distributor with counter claim

By Michelle Massey, East Texas Bureau | Sep 2, 2009

DALLAS � Just a few days after a Jaguar distributor filed a lawsuit accusing Millennium Jaguar of Texas of warranty and incentive fraud, the car dealership has responded by filing its own lawsuit and placing responsibility on three former employees and the manufacturer.

Millennium, a Plano dealership, is claiming that the former employees conspired together to conceal information and misstate performance statistics, and that the manufacturer allowed this to continue.

Millennium Jaguar filed a lawsuit against Jaguar Land Rover North America, a warranty administrator, a service technician and a service manager on Aug. 28, in the 298th Judicial District of Dallas County District Court.

"For the first nearly four years of his employment, Plaintiff believed that he was a suitable employee," the lawsuit states.

However, the car dealership claims that beginning in 2008, it found the service manager had allegedly concealed material information and misstated performance statistics. Millennium believes the others "aided and assisted in this scheme."

In 2008, Jaguar preformed an audit of Millennium's records. Millennium believes that "Jaguar had its mind made up before commencing the audit and searched to uncover a predetermined result."

According to the lawsuit, in the initial audit findings letter, Jaguar claimed it was improperly charged over $600,000 for inadequately documented and non-performed warranty claims, and sales incentive program violations.

Jaguar states that the Plano dealership submitted warranty claims that they knew were unnecessary, improperly and incompletely performed, or never performed at all.

Millennium states that after investigating Jaguar's allegations it provided a payment of approximately $99,000.

The car dealership disputes the other charges and argues that Jaguar has not provided it with "all supporting information and details, has withheld certain information" and has not provided a way for the dealership to investigate and respond to the allegations.

Millennium also states, "It is apparent that Jaguar is seeking compensation based upon, in part, superficial and highly technical paperwork problems � such as customer signatures being in the wrong location on paperwork � and based on policies and procedures which Jaguar had previously accepted."

Jaguar is insisting that Millennium terminate its franchise and pay cash concessions. According to the dealer agreement, Jaguar can terminate contract prior to expiration, if there is "submission by dealer of false reports, statements or claims on a repeated basis, or of any fraudulent report, statement or claim."

The plaintiff believes this request to for it to terminate or sell its dealership a breach of good faith and fair dealing and "amounts to unlawful discrimination, including discrimination against a franchised dealer or otherwise treating Plaintiff differently as a result of a process intended to gauge performance."

Millennium asserts that its former employees are liable for fraud, fraud by non-disclosure, and negligent misrepresentation by making material misrepresentations and omissions and by attempting to collect additional compensation that was not earned.

The plaintiff believes these actions amounted to a civil conspiracy and caused the plaintiff actual, consequential, incidental, special, and exemplary damages.

Millennium is asking the court to make a declaration for Jaguar to provide evidence for all charges it is attempting to collect prior to Millennium paying and prior to Jaguar exercising any actions under the parties' dealer agreement including termination.

In a recent press release, Millennium's attorney, Brian Melton, stated, "Based on what Jaguar Land Rover has provided to us, most of their findings are related to superficial paperwork problems. We are extremely confident that a complete examination of the facts will vindicate David Stephens and the Millennium dealership."

Millennium emphasizes, "At no time were customers charged for unnecessary or unperformed warranty repairs or service."

Dallas attorneys Brian D. Melton and Joe Chumlea of Shackelford, Melton, and McKinley LLP are representing Millennium Jaguar in its allegations.

Case No. 09-10644

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