Company sues Honda to force approval of the transfer of Tyler dealership

By Michelle Massey

TYLER, TX – January 26, 2011 – (Motor Sports Newswire) – A Tyler businessman has filed a lawsuit against Honda in an attempt to force the company to approve the sale and transfer of a Honda motorcycle dealership.

Brad Watson and Bella Corp., doing business as Broadway Powersports, filed suit against American Honda Motor Co. Inc. on Jan. 18 in the Eastern District of Texas, Tyler Division.

According to the lawsuit, Bella Corp. entered a sale/purchase agreement with Reale Atocha Inc. to purchase McKinnon Honda of Tyler in June 2009.

The suit states that an agreement was reached, earnest money was paid and the purchase was set for closing. The purchase agreement was sent to American Honda Motor Co. for approval.

Before American Honda would approve the sale and transfer, it required Bella Corp. to increase its floor space and asked for additional proof of adequate capitalization. Bella Corp. states it addressed the concerns but Honda still refuses to approve the sale.

Honda is accused of “intentionally and willfully tortuously” interfering with the contract by using illegal reasons.

Bella Corp. argues that Honda can only reject its application if it was due to a moral character issue or failure to meet uniformly applied, reasonable, and written standards for business experience and financial qualifications.

“Here, Honda unreasonably withheld approval and interfered with the subject contract when it refused to approve the dealership transfer for reasons that were illegal and not justified under Texas law,” the lawsuit states.

The plaintiffs are asking for an award of actual and exemplary damages for lost profits, court costs, attorney’s fees, and interest.

The plaintiffs are represented by Jeffrey T. Embry of Hossley & Embry in Tyler.

A jury trial is requested.

U.S. District Judge Leonard E. Davis is assigned to the case.

Case No. 6:11-cv-00035

SOURCE: The Southeast Texas Record