A Pulaski County Circuit Court judge on Wednesday awarded an $18 million judgment to Auto Dealership Partners LLC, led by Larry Crain Jr. and Heath Campbell, against Ford Motor Co. of Dearborn, Michigan, saying that Ford “engaged in deceit and fraud” in its dealings with the LLC.
A Ford spokesman told Arkansas Business on Thursday that it will appeal the decision. “We believe Ford complied with the law and its contractual obligations,” the spokesman said.
In 2022, ADP of Little Rock sued Ford for improper use of its right of first refusal in a dealership transaction, which unfairly blocked ADP’s purchase of a Ford dealership in Benton, according to a news release from the law firm of James House Swann & Downing of Little Rock, which represented ADP through attorneys Patrick James and Charley Swann.
ADP had planned to buy a Ford and Chrysler dealership, both in Benton, from Landers Auto Sales in 2018. The manufacturers had the right of first refusal to each dealership sale.
ADP had planned to pay $4 million for goodwill for the Ford dealership and nothing for the Chrysler one. But some Ford officials didn’t want Crain to buy the dealership. When the Ford Memphis region general sales manager learned that Crain was involved in the deal, the manager sent an email to the Ford contracts manager.
“The buyer, as feared, is Larry Crain, JR.,” the email said, which was quoted in Pulaski County Circuit Timothy Davis Fox’s 23-page judgment and findings of fact and conclusions of law filing. “His family is nearly entirely responsible for our failures in Little Rock. I can’t imagine a circumstance where he could (or should) be approved.”
Ford then insisted that the goodwill amount be reallocated, with $2 million assigned to each dealership.
Since Crain thought he was buying both dealerships, it didn’t matter to him, so he did it.
Ford then exercised its right of first refusal and blocked the dealership purchase.
Meanwhile, the purchase of the Chrysler dealership went forward, resulting in ADP having to pay an additional $2 million for it. The dealership is now called Campbell Chrysler Dodge Jeep Ram in Benton.
“False and deceitful representations were made by agents and employees of Ford,” Fox wrote “The false and deceitful representations were material in influencing ADP’s decision; and ADP sustained damages as a result of such false and deceitful representations.”
Fox awarded ADP $18 million, which includes $16 million for punitive damages.
Crain Jr., who is also dealer principal of the Crain Automotive Group of Sherwood, said in the news release he was happy with the judgment.
“This verdict upholds the principles of fairness in the automotive industry and ensures that manufacturers cannot manipulate transactions to the detriment of dealers,” Crain said. “We appreciate the court’s careful review of the evidence and its decision to hold Ford accountable for its actions. This ruling is not just a win for ADP but a victory for all dealerships that expect honesty in their dealings with manufacturers.”
Still, Crain said he is supportive of the Ford brand. The Crain Automotive Group operates 16 franchised auto dealerships in Arkansas, including Ford dealerships in Jacksonville and Little Rock.
Ford was represented by attorney Elizabeth McNellie of the Columbus, Ohio, office of Baker & Hostetler.
Fox dismissed ADP’s claims against Everett Ford Inc. of Benton. The company was represented by David S. Mitchell Jr. of the Rose Law Firm in Little Rock.
A previous version of this story incorrectly stated that David S. Mitchell represented Ford Motor Co. in the case.
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