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Jayco suing National Indoor RV Centers for selling outside territory

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Jayco Sues Dealer for Selling Outside Territory | RV Business

Jayco sues Texas dealership for allegedly selling motorhomes in unauthorized...

SOUTH BEND — Jayco is suing a chain of RV dealerships in the southern United States after a sting operation showed it was selling Entegra Coach motorhomes outside its contracted territory in Texas.

The lawsuit was filed June 13 in U.S. District Court in South Bend claiming National Indoor RV Centers is improperly selling Entegra Coach models, which are a luxury class motorhome line produced by Thor Industries-owned Jayco, from a dealership in Lewisville, Texas.

The dealership chain has agreements with Jayco to sell Entegra Coach models, which are priced from $400,000 to $700,000, from its locations in Arizona and Georgia. However, Motorhome Specialists in Dallas, Texas, owns an exclusive agreement from Jayco to sell Entegra Coach motorhomes throughout that part of Texas.

Because other dealerships with contracted franchises to sell Entegra Coach motorhomes are complaining to Jayco about the improper sales from National Indoor RV Centers in Texas, Jayco claims the situation is “causing harm to Jayco and the goodwill associated with the Entegra Coach brand,” the lawsuit says.

Jayco also claims the improper sales are creating a confusing situation for customers, who don’t know which dealership is the authorized sales representative in Texas.

Jayco sent a private investigator to National Indoor RV Centers’ dealership in Texas on May 9 to verify the improper sales of Entegra Coach motorhomes were taking place. The investigator posed as a potential Entegra Coach buyer and claims the dealership indeed was selling new Entegra Coach models in Texas.

The investigator wrote in an affidavit filed with Jayco’s lawsuit that she was put in contact with a dealer named Angie Morell at the Texas dealership. Morell made comments throughout their conversation that would indicate she knew Entegra Coach models should not have been sold there, such as why she couldn’t display Entegra Coach brochures in public areas of the dealership and why the investigator would have to travel to another dealership to pick up the motorhome after the sale was completed.

“They have attempted to cover up what they are doing because they know it is illegal,” Jayco’s lawsuit says.

Still, Morell, who also is named as a defendant, offered to negotiate the price of a new Entegra Coach model at the Texas dealership and complete the entire transaction there, according to the private investigator. She noticed a whiteboard in the dealership naming salesmen and models that showed at least 12 Entegra Coach transactions had occurred there recently.

Jayco’s lawsuit says the manufacturer twice confronted officials at National Indoor RV Centers about improperly selling new models from the Texas location, but the dealership refused to stop.

Jayco is seeking a restraining order and an injunction from the court prohibiting National Indoor RV Centers from selling Entegra Coach motorhomes in Texas. Jayco also is seeking an undisclosed financial settlement for trademark infringement, profits from the improper sales and other damages – with interest included.

A judge on June 19 denied Jayco's request for a temporary restraining order against National Indoor RV Centers because Jayco couldn't prove that the dealership selling new Entegra Coach models in Texas would cause "irreparable harm." Jayco also didn't seek a preliminary injunction along with the request for a restraining order, as required by local court rules.

National Indoor RV Centers had not replied to Jayco’s specific claims by Monday. Instead, the dealership asked the court to dismiss the lawsuit because Jayco filed it in the U.S. District Court for the Northern District of Indiana, which lack jurisdiction over the area from where the dispute is arising.

The dealership has asked the court to stop the lawsuit from proceeding until a judge decides whether the case should continue in the South Bend federal court.

A hearing on Jayco's request for a preliminary injunction forcing National Indoor RV Centers to stop selling Entegra Coach models in Texas has been scheduled for July 25. There is no timetable for when the court will rule on Jayco’s request for a restraining order and injunction or National Indoor RV Centers’ request to throw the case entirely.

Re: Jayco suing National Indoor RV Centers for selling outside territory

Reply #1 –
It's going to be interesting to see how this plays out.

On one hand you have NIRVC which has an excellent reputation for customer service On the other hand you have MHSRV which is a very large volume dealer and important to Jayco's parent, Thor.

While customers speak highly of NIHRV, I think that by following the money and the territorial franchise agreement it's not that difficult to understand the pressure MHSRV placed on Jayco to file this lawsuit. If I had a crystal ball I can only guess that NIHRV will have to reimburse MHSRV for the sales credited within its contracted territory. In the meantime, If I was running Newmar, I'd be very nice to the folks at NIVRC.

On a somewhat related note, is MHSRV a servicing Entegra dealer or do they just do sales?
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Re: Jayco suing National Indoor RV Centers for selling outside territory

Reply #2 –
Quote
It's going to be interesting to see how this plays out.
Need some popcorn!

You wonder how much of this "boil over" is due to recent events and heightened friction between the interested parties.

- Thor acquires Jayco
- NIRVC picks up Tadd Jenkins from Jayco/Thor after his departure
- NIRVC hires one of MHSRV's senior sales people
- NIRVC hires former Jayco executive Shaun Huxford as its COO

MHSRV must be a very large customer for Thor, more so then they were with Jayco alone.  I don't think NIRVC's "sales" of Entegra coaches, out of their DFW location, is anything new.  There are many recommendations to go to their DFW site on the Interweb.  Their customer service and support of Entegra through rallies, service, feedback videos, etc has earned them a good reputation / relationship with customers and Entegra.

Quote
territorial franchise agreement
Indeed this will be the key to the entire thing and how restrictive it is in terms of sales and delivery territories.

Re: Jayco suing National Indoor RV Centers for selling outside territory

Reply #3 –
NIRVC had a pretty close relationship with Entegra and it appears they (Jayco/Entegra) gave them a bit more latitude in what they allowed.  Surprising that when asked to stop, as the article indicates, that they refused, not sure how that is a good idea.  If they can't enforce their territory agreements, what good are they to begin with.

Re: Jayco suing National Indoor RV Centers for selling outside territory

Reply #4 –
Looks like the filing was back on 6/13 .... just hitting the main news yesterday.  I'd guess the talks between Thor and NIRVC would have been going on for months before that.

https://www.pacermonitor.com/public/case/21681803/Jayco,_Inc_v_National_Indoor_RV_Centers,_LLC 

Its interesting that under defendants they specifically call out one sales person and the all the rest are the various LLC's of NIRVC,?

I think Thor should allow NIRVC Texas to be an authorized dealer, its not like NIRVC and MHSRV are next door to each other, they are on opposite sides of Fort Worth,  well over an hours drive from one another on a good day.  Territory agreements that are based on map distance vs population density seem dated.  Seriously just one dealer for all of DFW (plus warranty / service work ?)

Re: Jayco suing National Indoor RV Centers for selling outside territory

Reply #5 –
Full story from them as well: Jayco sues National Indoor RV Centers | RV Daily Report

Seems like it would be difficult to show the "loss of significant business and harm to the company"  that Jayco claims  ... Harmed them by forcing them to build more coaches to met growing customer demand?  If what was going on was a violation of the Texas franchise laws why would they not look to enforce those laws.

Greg Gerber chimed in with his thoughts on the matter: Opinion: Sour grapes or legitimate Jayco complaint? | RV Daily Report

Re: Jayco suing National Indoor RV Centers for selling outside territory

Reply #6 –
For all the legal beagles or just those pretending to be one (hey its the internet)  >:D  Attached is the full complaint that was filed for your reading enjoyment.

I'm curious if you purchased an Entegra from NIRVC, say in Arizona, and you were traveling through Texas and had an issue, is NIRVC Texas an approved warranty center or even an approved service center ?  Does MHSRV do service / warranty work?

Re: Jayco suing National Indoor RV Centers for selling outside territory

Reply #7 –
I guess it all boils down to is when is a sale a sale.

If paperwork and money exchanges hands in Atlanta or Arizona then the sale occurred there and not in Texas. I doubt any paperwork is completed in Texas and it all originates is Atlanta or Arizona, but I'd imagine you sit in the Texas office and fill out forms.

With multi state very large RV dealers, NIRVC, RVONE just to name a couple, plus the Internet sales, it seems that secured franchise areas are going to be under greater pressure.  Best price and Service is a powerful business model.

Re: Jayco suing National Indoor RV Centers for selling outside territory

Reply #8 –
I believe the way Entegra handles service work at NIRVC (Lewisville) is that they (EC) will approve having the service done BUT you have to pay the NIRVC bill yourself and then you submit to Enterga for your reimbursement.

If it was still under warranty, MHSRV is an authorized Entegra service center.  They don't do basic service things like oil changes etc, (AFAIK) nor do they do any chassis work, but house/coach level fixes they do.

Re: Jayco suing National Indoor RV Centers for selling outside territory

Reply #9 –
Latest update (7/17) was that the motion to dismiss for Lack of Jurisdiction was denied.

Quote
ORDER granting Motion to Continue Preliminary Injunction Hearing. The hearing is RESET for 8/24/2017 at 9:00 AM (EDT) in US District Court - South Bend before Judge Robert L Miller Jr. Signed by Judge Robert L Miller, Jr on 7/17/17. (ksp)

Let the fun continue.

Re: Jayco suing National Indoor RV Centers for selling outside territory

Reply #10 –
The comments seem to indicate that Texas franchise laws play a role in this suit, but the suit was filed in Indiana, not Texas.  I would imagine that the fact that the RV business is the mainstay of Northern Indiana may play a role in the location.  On the other hand, most contracts state a location where a suit must be filed if one is to be filed.

Re: Jayco suing National Indoor RV Centers for selling outside territory

Reply #11 –
Per the Elkhart newspaper, an Indiana judge has dismissed Jayco's lawsuit against NIRVC, but a suit filed in Texas by National against Jayco remains and is supposed to go to trial in early 2018

Re: Jayco suing National Indoor RV Centers for selling outside territory

Reply #12 –
I have to believe there is a lot more to this whole suit than any of us know.  Big companies don't go suing one of their largest dealers without reason and a great deal of forethought.  I have no idea what else may be behind the suit, but I've just got a hunch that there is much that does not meet the eye on this action.

Re: Jayco suing National Indoor RV Centers for selling outside territory

Reply #13 –
I agree!  Certainly seems like some bad blood is brewing between them. 

Between each bring lawsuits to one another and the movement of key Entegra personnel to NIRVC, I don't see how any of it is "good" for Entegra Owners.