AKRON—Goodyear is suing 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 tires would make use of the Goodyear name, as well as Goodyear's Fuel Max and Fuel Max Technology trademarks and Sears' Weatherhandler trademark.
A Sears spokesman told Tire Business the company never comments on ongoing litigation.
On Jan. 5, 2014, Goodyear said, Sears submitted a forecast to Goodyear that Sears would buy more than 330,000 co-branded tires during the year.
Sears put its tire business out to bid in April 2014, and both Sears and Goodyear personnel expected Goodyear once again to win the bid, the complaint said. During that time, Sears continued to submit 12-month rolling tire supply forecasts to Good-year, according to the Akron-based tire maker.
However, on June 18, Sears informed Goodyear it had hired a new tire supplier and would accept no more tires from Good-year, according to the complaint.
This left Goodyear with 219,994 co-branded tires that Sears forbade it to sell, the tire maker 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.
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.
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.