PRZOOM - /newswire/ -
Birmingham, MI, United States, 2006/05/18 - After years of legal battles with Troy-based Ziebart Corporation, 27 of the company's current and former franchisees won a significant binding arbitration award, including nearly $2 million in damages.
After years of legal battles with Troy-based Ziebart Corporation, 27 of the company's current and former franchisees won a significant binding arbitration award, including nearly $2 million in damages for breach of contract and product liability as well as declaratory relief to guide the future actions of the parties. Norman Yatooma & Associates in Birmingham represented the Ziebart franchise owners covering nine states. This month, Ziebart made good on the final payment from the arbitration award.
In a lawsuit originally filed in Wayne County Circuit Court in August of 2001, the franchisees alleged that Ziebart violated its franchise agreements through overpricing of chemicals and other products. In particular, the suit alleged that Ziebart violated its contracts by not providing products to franchisees “at or below competitive market prices.” In addition, the franchisees alleged that Ziebart provided defective Formula Q, a rustproofing sealant, among other issues. Ultimately both parties agreed to submit the case to binding arbitration before the Honorable Barry L. Howard, former Chief Judge of the Oakland County Circuit Court.
Judge Howard’s award declared that the “at or below competitive market prices” term was ambiguous and therefore construed against Ziebart. The award declares that Ziebart may define the term but only if it is consistent with the license agreements between Ziebart and its franchisees. Judge Howard also declared that Ziebart breached its contracts from late 1998 through 2003 by charging the franchisees prices for Formula Q that were not “at or below competitive market prices.”
After initial failure to willingly pay off the Judgment, NYA secured a writ of execution against Ziebart and seized the company's property at its Troy, Mich. headquarters. Along with five court officers, three movers and two moving trucks, Yatooma entered Ziebart's headquarters to empty the facility. To stave off the closing of its headquarters, Ziebart's CEO Tom Wolfe remained over night with the court officers at the headquarters and accompanied them to his bank the next morning where he withdrew $200,000 of his funds.
Accordingly, Ziebart agreed to make monthly payments ranging between $50,000 to $70,000 plus interest, with such payment automatically doubling if Ziebart is one day late.
"The receipt of the final payment of this judgment and the judgment itself is a significant victory for the Ziebart franchisees as well as consumers who will enjoy lower prices," stated Yatooma.
Birmingham, Michigan-based Norman Yatooma & Associates, P.C. (normanyatooma.com) is a full-service law firm offering expertise in civil and criminal cases in its Oakland, Macomb and Emmett County offices. While the Firm has a wide range of practice groups and areas, it specializes in commercial litigation sounding in complex theories of contract and tort liability including franchise, class action, business and real estate law.