Subaru of New England Inc. has won a battle in what is becoming a long legal war with some of its dealers and ex-dealers.
Five dealerships and two former dealerships sued the independent distributor in March 1999. They accused Subaru of New England Inc. and its owner, Ernie Boch, of 'packing cars with unwanted options and of violating racketeering laws.
'We think we have done nothing wrong,' Boch said in a phone interview last week.
After the complaint was filed last year in U.S. District Court in Manchester, N.H., Subaru of New England moved to terminate two of the dealerships that were plaintiffs and a third that was not. The third dealership, however, said in court documents that it was a strong supporter of the lawsuit.
The three dealerships asked the court to stop the terminations, contending that they were being terminated in retaliation for the lawsuit.
The court ruled on that request Oct. 18, generally in Subaru of New England's favor.
Here are the details:
The two dealerships that were part of the original lawsuit are Subaru of Wakefield (Mass.), whose president and co-owner was Richard Kalika; and Bald Hill Subaru, Warwick, R.I., owned by Robert and Ann Hagan.
The third dealership, not a plaintiff in the original case, is Tri-State Subaru of Brewster, Mass., owned by Peter Krause.
Subaru of Wakefield settled its dispute with the distributors last summer, and Kalika no longer is co-owner of the dealership, according to Phil Lustbader, vice president of operations for Subaru of New England. The details of the settlement were sealed, Lustbader said.
In the case of Bald Hill Subaru, the distributor said the owners had distributed stock in the dealership to family members without notifying the distributor, which allegedly violated their franchise agreement. In court documents, the family said their actions were legal under state law.
Finally, Subaru of New England accused Tri-State Subaru of cheating on a sales contest by attributing a couple of retail sales to the dealership that won the contest, when the sales took place at another dealership that belongs to the same owner. Krause said in court documents that the dealership did nothing improper.
In the Oct. 18 ruling, Chief Judge Paul Barbadoro said the three dealerships had failed to show they were being terminated solely out of retaliation for the original lawsuit against Subaru of New England.
On the other hand, Bald Hill and Tri-State will not be terminated right away. Lustbader said the question of terminating Bald Hill Subaru has been postponed until the original lawsuit is concluded.
The original lawsuit, minus Subaru of Wakefield, is proceeding.
In a separate action, the six remaining plaintiffs are seeking class-action status for their lawsuit. Lustbader said if they fail to get class-action status, Subaru of New England will go ahead with terminating Tri-State Subaru.
If the plaintiffs get class-action status, he said the outcome of that termination will have to wait until after the original lawsuit.
Of the Oct. 18 ruling, Lustbader said: 'We regard this as a major victory.'
Special Correspondent Eric Freedman contributed to this report