GM sued by used-car dealer for damages from 'dangerous' car inventory

From wire and Crain News Service staff reports

LITTLE ROCK, Ark. (June 4, 2014) — A used-car dealer in Arkansas is seeking compensation from General Motors Co. for being saddled with an inventory of “highly dangerous vehicles” that includes cars not yet recalled over ignition-switch defects.

According to the lawsuit, Nettleton Auto Sales Inc. demanded actual and punitive damages on behalf of all U.S. car dealerships that “sold or leased a defective vehicle or retained a defective vehicle in their inventory” before Jan. 31, 2014.

The suit was filed May 23 in U.S. District Court in Little Rock, and GM disclosed the case June 2 in U.S. Bankruptcy Court in Manhattan.

According to the litigation, Nettleton's principal business location is in Jonesboro, Ark. The retailer's website indicates it is a used car dealership.

Mike Duncan, owner of Nettleton Auto Sales, could not be reached for comment as he was on a fishing trip and without cell phone service, according to a person answering the phone at the dealership June 3. His lawyer, David Slade of the law firm Carney Bates & Pulliam P.L.L.C. in Little Rock, did not return a call from Automotive News seeking comment.

In the suit, Nettleton contends GM “actively” concealed the ignition-switch defect until this year. GM has recalled 2.59 million cars to repair the switches while blaming 13 deaths on the defect, which could unintentionally cut engine power and deactivate air bags. Safety advocates contend the death toll will be higher.

“Plaintiff believes that there are other GM vehicles which suffer from the same or substantially similar ignition switch defects as the defective vehicles identified” on GM's recall list, Nettleton's suit said. The additional vehicles will be added later to the list of cars causing the dealer losses, according to the complaint.

“In the ordinary course of business, plaintiff presently owns three defective vehicles — Chevrolet HHR — which were manufactured, sold, distributed, advertised, marketed and warranted by defendants (GM),” the suit said.

GM doesn't comment on litigation, spokesman Kevin Kelly said by phone.

The lawsuit is entitled: Nettleton Auto Sales Inc. v. General Motors LLC, 14-cv-00318, U.S. District Court, Eastern District of Arkansas (Little Rock).

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Bloomberg News and Automotive News reporters contributed to this story, which appeared on autonews.com, the website of Automotive News, a Detroit-based sister publication of Tire Business.