A Willoughby, Ohio, dealership has accused Fiat Chrysler Automobiles of bad faith and violating the state dealer law in a suit charging the automaker with wrongful chargebacks of $433,163 in sales incentive payments.
The suit, filed in December by Adventure Chrysler-Jeep-Dodge-Ram, seeks to block the chargebacks, described in text as a "money grab," and asks for double damages.
The dispute arose from a routine sales incentive audit in February 2017 that initially assessed $438,188 for the "alleged failure of Adventure to comply with the terms and conditions of FCA's various sales incentives claims policies and procedures," according to the suit filed in Lake County Court of Common Pleas in Painesville, Ohio.
That amount was reduced to $433,163 after three principals of the store attended an audit appeal meeting at FCA US' suburban Detroit headquarters and submitted voluminous supporting documentation, the suit said.
The dealership believes it owes only $9,900, said its lawyer, Christopher DeVito of Cleveland, adding that the FCA auditor was "overly aggressive."
The suit charges that FCA failed to act in good faith by trying to enforce an audit more than one year after Adventure submitted its claims. DeVito said more than $100,000 of the chargebacks are tardy under that time limit set by the Ohio Dealer Act.
For many of the chargebacks, the suit asserts, FCA missed the 30-day deadline the law gives automakers to disapprove incentive claims after they're submitted.
Other unjustified chargebacks after the audit include those stemming from challenges as to the validity of leases to a taxi company and the employee status of some dealership personnel, despite supporting documentation, DeVito said.
"FCA has not alleged any valid grounds" for the chargebacks, the suit reads, "and there has never been an allegation of fraud, misrepresentation or material missing document which would entitle FCA to charge back or debit the money paid to Adventure."
However, in court papers responding to the suit, the automaker denies violating the dealer law and said it "acted with honesty and the observance of reasonable commercial standards of fair dealing in connection with the sales incentive audit."
The chargebacks are "valid and proper," the automaker argued, because the dealership's incentive claims "lacked material documentation and/or were false, were misrepresentations and/or were potentially fraudulent."