Lawsuit over car dealership sale dismissed

A federal judge has dismissed a lawsuit filed by a Rochester-area auto dealer accusing Ford Motor Co. of breach of contract and discrimination.

Mary Catherine “Kitty” Van Bortel and her brother, Howard Van Bortel, originally filed the complaint in state court in November 2021. Ford subsequently had the case moved to U.S. District Court in Rochester.

The Van Bortels own a Ford dealership in East Rochester. In the fall of 2021, they allegedly had an oral agreement with Ford to buy Henderson Ford, in Webster.

“Ford allegedly promised Van Bortel that Ford would exercise its contractual right to purchase Henderson Ford and assign the purchase and sale agreement (PSA) to plaintiffs,” according to a decision released Wednesday by U.S. District Court Judge David G. Larimer.

“In a nutshell, that never occurred. The Henderson dealership ended up being sold to another Ford dealer, West Herr Auto Group,” according to the decision.

The lawsuit claimed that Ford broke a verbal contract and that “Ford discriminated against her on the basis of her sex by reneging on its promise and approving the sale … to West Herr, which is owned by a man,” according to the decision.

Ford filed a motion to dismiss the lawsuit and oral arguments were heard by Larimer in June.

The Van Bortels own several car dealerships in New York state. In September, a Ford representative contacted Kitty Van Bortel and told her that Henderson Ford was going to be sold.

Under the terms of Ford’s agreement with dealers, when a Ford dealer proposes the sale of a dealership Ford has the right to approve or disapprove the sale. Ford also has a right of first refusal (ROFR), which gives Ford the right to purchase the dealership under the same terms offered to the prospective buyer. Ford may also assign the ROFR to a third party.

According to the Van Bortel’s complaint, the Ford representative told Van Bortel that, if interested, Ford would exercise its ROFR and assign the PSA to them.

“Van Bortel claims that she ‘accepted’ and agreed,” Larimer wrote.

She signed a nondisclosure agreement with Ford in the form of a letter from Ford stating that “Ford is prepared to consider you, as the potential assignee of Ford Motor Company’s right of first refusal in regard to the proposed transaction involving … Henderson Ford,” according to the decision.

The letter included “requirements with regards to confidentiality and non-disclosure of information.”

The final sentence of the letter stated: “Neither this letter nor any efforts you may or may not make to pursue such a transaction shall not, in any way, obligate either party to the above-mentioned transaction,” Larimer noted.

Van Bortel signed the letter, under the heading: “AGREED AND ACCEPTED.”

On Sept. 17, 2021, Ford representatives called Van Bortel and told her that Ford had decided not to approve the Henderson Ford PSA.

“There was thus no contract of sale to assign,” Larimer wrote.

On Oct. 25, 2021, Ford told Van Bortel that Henderson Ford had entered into a PSA with another dealer.

A few days later Van Bortel spoke with another Ford official and told him how she had “fought to establish herself as a successful female Ford dealer,” according to the decision.

The Ford official responded that “minority dealers are not a priority right now” for Ford, according to the decision.

Van Bortel claims in the complaint that Ford agreed to sell the dealership to her.

“What is glaringly absent from the complaint … is any allegation about what plaintiffs agreed to do in return,” Larimer wrote.

“On its face, then, Van Bortel simply agreed that she would not divulge to third parties any information she became privy to in connection with Ford’s consideration of whether to assign plaintiffs the PSA for Henderson Ford. That is all. Nothing in the letter suggests that in exchange for that agreement, Ford promised to assign the PSA to plaintiffs. Van Bortel’s agreement to keep all data and information confidential may have been a condition of Ford’s willingness to consider assigning plaintiffs the PSA, but it was plainly not consideration for Ford’s promise to actually do so; the NDA expressly disclaimed any such promise,” Larimer wrote.

“The Court concludes that the contract claim is facially meritless and must be dismissed. I also deny plaintiffs’ request for leave to file a second amended complaint to include additional allegations relating to this claim, since the proposed second amended complaint would still be subject to dismissal for failure to state a claim upon which relief can be granted,” Larimer wrote.

“I conclude that plaintiff’s allegations fail to state a claim under the (Human Rights Law) … Although plaintiff was not assigned the PSA as she had hoped, there are no allegations indicating that her sex had anything to do with that,” Larimer wrote.

The fact that West Herr is owned by a man is not enough to establish a claim of sex discrimination, he wrote.

“If it were, then the owner of West Herr could presumably state a facially valid HRL claim, if Ford had assigned the PSA to plaintiffs instead. In other words, faced with two competing dealerships, one male-owned the other female-owned, Ford would find itself subject to potential liability under the HRL, no matter what choice it made, according to plaintiff’s reasoning,” Larimer wrote.

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