The Canadian Automobile Dealers Association will provide financial support to help some rejected dealers wage a legal battle against General Motors Canada Ltd., a dealer plaintiff in the suit says.
In a lawsuit filed Nov. 26 in Ontario Provincial Court in Toronto, 12 dealers accused GM Canada of breaching dealer agreements when it sent them e-mails saying the company will not renew sales and service agreements that expire Oct. 31, 2010.
"They recognize that the issue we're challenging GM on could affect all dealers with franchise agreements across Canada," says Robert Slessor, one of the plaintiffs in the lawsuit and owner of Robert Slessor Pontiac-Buick Inc. in Grimsby, Ontario.
Slessor declined to say how much money CADA has committed. But he says it is "significant" and matches the plaintiffs' financial outlay so far "dollar-for-dollar."
CADA representatives were not available for comment.
GM Canada sent the e-mails to about 240 dealers, including the 12 plaintiffs on May 20, according to the complaint and the dealers' lawyer, Jonathan Lisus.
The suit seeks to stop GM Canada from terminating the dealers' agreements as well as $1.5 million Canadian (about $1.4 million U.S.) in punitive damages and unspecified compensatory damages.
The complaint also asks for additional damages for plaintiffs who sell Pontiac. It says that GM Canada paid cash to continuing dealers who had Pontiac based on the number of Pontiac vehicles sold in 2008, but refuses to pay the same thing to rejected dealers with Pontiac franchises.