Fixed Ops Journal - December 2021 - F21

FIXED OPS JOURNAL
LEGAL LANE
Suit over engine fi re, destroyed
truck in federal court's hands
A federal court will resolve a suit accusing a
now-defunct dealership and Ford Motor Co. of
negligently servicing a West Virginia fi re department's
2004 F-550 Super Duty with a defective
turbo. Its V-8 diesel engine caught fi re soon
after being repaired, destroying the vehicle.
Th e suit by the Aurora Volunteer Fire Department's
insurer, Arch Insurance Co., seeks damages
for negligent
repair, misrepresentation,
breach of contract and breach of warranty from
Shaff er Ford Sales in Oakland, Md., and for negligent
design or manufacture of the turbo, misrepresentation
and breach of warranty from Ford.
Here's what happened, according to the
suit: Th e Fire Department brought the truck to
Shaff er Ford in March 2019 because it " made
a loud pop, lost power and emitted black
smoke. " Th e store replaced the turbo with a rebuilt
one, performed a diesel lube and
changed the oil, air fi lter and fuel fi lter.
Th e suit claims the store did no road test
" despite representations to the contrary " because
the truck had the same mileage when
brought in and picked up.
After it was driven back to the fi re station, it
emitted an " unusual odor, " with oil on the turbo
and dripping on the fl oor, the suit claims. It
burst into fl ames en route to Shaff er Ford for
further work.
Ford and the former dealership deny wrongdoing,
and their lawyers declined to discuss
the case. Court records show mediation is
slated for August and a trial is scheduled for
October if the suit is unresolved.
Store's warranty reimbursement
dispute with Toyota will go to trial
A Gaithersburg, Md., dealership can pursue
most of its claims against Toyota Motor Sales
USA in a dispute over reimbursement rates for
warranty parts, a federal judge held.
Fitzgerald's Lakeforest Toyota claims the automaker
under-reimbursed it by almost $1.5
million for warranty parts between 2016 and
2020, and by at least $286,000 for audio navigation
units it replaced between 2017 and 2020.
Toyota, which disputes the allegations,
twice rejected Fitzgerald's request for an increased
retail parts markup. It criticized the
store's documentation as defi cient because
many repair orders were for routine maintenance
rather than warranty work, for non-Toyota
parts and for non-customer-paid repairs.
U.S. District Judge Catherine Blake ruled in September
a jury should decide whether the store's
requested markup percentage was accurate.
" Toyota has a legitimate business interest,
paying MSRP rather than a higher retail markup
for warranty repairs, and the record provides
some support for Toyota's good-faith
belief that the law was on its side, " Blake wrote.
But she found a trial necessary to determine
whether Toyota acted in bad faith. She dismissed
one claim relating to the audio navigation
replacement parts.
A Toyota spokesman said the company believes
the dealership's claims are " without
merit given that the parts parity submissions
at issue in this case failed to comply with the
requirements of the relevant statute. "
- Eric Freedman
foj@autonews.com
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DECEMBER 2021 PAGE 21

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Fixed Ops Journal - December 2021

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