Missouri dealership can pursue Ferrari lawsuit
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A high-end St. Louis dealership that's accusing Ferrari North America of reneging on a promised franchise will be able to pursue most of its claims.
But the federal judge who allowed the case to go forward dismissed allegations that Ferrari violated Missouri's dealer law because the dealership never had a written franchise agreement.
The dealership, St. Louis Motorsports, became an authorized Maserati dealer in 2003 and a service-only provider for Ferrari vehicles in 2005, according to the lawsuit. Until around 2005, Ferrari North America imported and distributed Maserati and Ferrari vehicles, the suit says.
St. Louis Motorsports and its sole shareholder, Bentley Holdings, claim that in 2003-04 they were fraudulently induced to buy "poor-performing and overpriced Maserati vehicles to resell at a loss" in exchange for eight "very profitable" Ferrari vehicles and a franchise.
The offer was part of a Ferrari strategy "to overcome U.S. Maserati dealers' hesitation to purchase new Maserati vehicles," the lawsuit alleges. Maserati had stopped selling vehicles in the United States from 1991 to 2002, in part because of customer complaints about reliability issues, according to the suit.
Robert Zarco of Miami, a lawyer representing St. Louis Motorsports, said his clients relied on promises from a senior Ferrari representative "and expended millions of dollars in order to live up to their side of the bargain," including buying property for a showroom.
He added: "My clients developed that enormous goodwill value of the Ferrari brand in the flourishing St. Louis market."
Motorsports also sells Rolls-Royce, Aston Martin, Lamborghini, Lotus and Bentley vehicles.
The suit accuses Ferrari North America of breach of oral contract, negligent misrepresentation, fraudulent inducement, civil conspiracy, breach of Missouri's motor vehicle franchise law and related claims, and seeks compensatory and punitive damages.
The count alleging violation of Missouri dealer law accused Ferrari of bad faith, refusing to supply new vehicles to Motorsports and inequitably distributing vehicles among its dealers.
Ferrari denied liability and countered that it never planned or promised a franchise in the St. Louis area. It also argued that the statute of limitations had expired and asked U.S. District Judge Rodney Sippel to throw out the case.
The judge found sufficient facts for most of the suit to proceed.
But he said the plaintiffs lack legal standing for the dealer law claim because they never had a written Ferrari dealership agreement.
"To the contrary," the judge said, "their entire complaint is based on the argument that Ferrari allegedly reneged on its oral promises and failed to provide such a written agreement." The judge also said the plaintiffs' conspiracy claim lacks merit because there was no allegation that Ferrari and its representatives conspired with anybody outside the corporation.
Zarco, the plaintiff's lawyer, said discovery now will proceed and a trial could come at the end of 2013.
A Ferrari spokeswoman says the company can't comment because the dispute is in litigation.
Where it stands: A federal judge said no but dismissed claims of Missouri dealer law violations and conspiracy.
You can reach Eric Freedman at freedma5@msu.edu.
