Legal battle between Mercedes and Sonic continues

The battle between the Mercedes and Sonic over local dealership is far from being over. Mercedes has already appealed the ruling of the N.C. Division of Motor Vehicles to the N.C. The rule announced the Mercedes can’t block Skipper Beck’s sale of Beck Imports to Sonic Automotive Inc.

Sonic sued Mercedes Benz USA in April when the company said it would not approve Sonic as a buyer for Beck until the chain resolved problems at its other Mercedes dealerships. Mercedes contends Sonic has failed to live up to a 2007 agreement on improvements at those dealerships.

Beck went to the N.C. Division of Motor Vehicles for a ruling on the deal in July. The agency says state law recognizes only three reasons a manufacturer can give for refusing to approve a franchise sale.The manufacturer can refuse if it finds the proposed buyer is not of good moral character, has insufficient business experience or lacks the financial ability to own and operate the franchise.

The state ruled Oct. 23 that Mercedes cited none of those reasons when it first refused to approve the sale. State law requires the specific reason in writing when the deal is rejected, and the state says Mercedes did not provide an acceptable reason in writing.

Mercedes asks Judge Ben Tenille to overturn the ruling and return the case to the state with a finding that it did cite an approved reason. It says Sonic lacks the moral character to operate the franchise because it violated the earlier agreement.Mercedes also asked the court to bar the state from further hearings until it rules on Sonic’s lawsuit and Mercedes’ counterclaims.

Source: Business Journal

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