Goodyear sues Sears for breach of contract

AKRON (Nov. 7, 2014) — Goodyear has sued Sears, Roebuck & Co. and two Sears subsidiaries in Akron federal district court, alleging breach of contract in the matter of nearly 220,000 co-branded tires Goodyear made for sale in Sears stores.

According to Goodyear's complaint— filed Oct. 27 against Sears, Roebuck; Sears Holdings Corp; and Sears Holdings Management Corp. — the tire maker and Sears signed an agreement in 2009 for Goodyear to manufacture co-branded tires to be sold exclusively by Sears.

The tire maker seeks damages equal to the agreed-upon price of the co-branded tires. Goodyear estimates these damages at more than $18.9 million.

However, on June 18, Sears informed Goodyear it had hired a new tire supplier and would accept no more tires from Goodyear, according to the complaint. This left Goodyear with 219,994 co-branded tires that Sears forbade it to sell, Goodyear said.

“Sears' refusal to purchase the remaining inventory of co-branded tires constitutes a breach of contract and a breach of the covenant of good faith and fair dealing,” Goodyear said in its complaint.

Goodyear also seeks prejudgment and post-judgment interest on the $18.9 million in damages; $600,000 in damages for Sears allegedly taking improper discounts on the tires, plus prejudgment and post-judgment interest; and all court costs and attorneys' fees.

A Sears spokesman told Tire Business the company never comments on ongoing litigation.