A major provider of dealership management software programs and services is suing Rick Case Automotive Group, of Sunrise, Fla., for allegedly breaching its licensing agreement and misappropriating trade secrets.
Integrated Vehicle Solutions Group, which provides software and support services to dealerships, also accuses the dealership group, a number of its dealerships in Florida, Ohio and Georgia, and co-owner Rita Case of unjust enrichment and wrongfully refusing to return about 150 proprietary software programs after failing to pay monthly licensing fees for the past year and a half.
“These important and very profitable programs, clearly licensed under a written license agreement, have been appropriated,” said the software provider’s lawyer, Ian Kukoff, of Miami. “The Rick Case dealerships have refused to pay licensing fees and locked my clients out of their own programs.”
“We believe those damages are in the millions of dollars,” Kukoff said.
However, defense lawyer Aaron Horowitz, of Fort Lauderdale, Fla., said, “My clients deny the allegations of IVSG’s complaint, and we will be defending the case vigorously.” The Rick Case defendants have not yet filed their answer to the complaint.
Rick Case Automotive Group has 17 dealerships and ranks No. 39 on Automotive News‘ list of the top 150 dealership groups based in the U.S., with retail sales of 21,913 new vehicles in 2017.
Integrated Vehicle Solutions Group partners with CDK Global, one of the two primary providers of dealership management systems in the U.S. Reynolds and Reynolds Co. is its major competitor.
According to the suit, filed June 11 in Broward County, Fla., Circuit Court, the Rick Case dealerships were licensed to use Integrated Vehicle Solutions Group programs for sales, service, accounting, parts and payroll management. From late 2010 until 2016, the dealership group and its stores accessed more than 1,395 individual modules “without incident, complaint or challenge” to Integrated Vehicle Solutions Group’s ownership of the programs, the suit said.
In 2016, Integrated Vehicle Solutions Group upgraded the platform at the dealership group’s request at a charge of $37,400, with a $16,000 discount conditioned on a new two-year minimum license agreement.
The dealership group paid the discounted amount, $21,400, but has refused to sign the new agreement or pay the $16,000 balance, the suit contends. The dealership group stopped making monthly license payments in February 2017 and has not complied with Integrated Vehicle Solutions Group’s demand to remove the programs from its CDK dealership management system platform, it claims.
‘Removed and purged’
According to the suit, Rita Case claimed that the group had paid a software engineer to “redevelop identical programs with the same functionality of the IVSG programs.”
But Integrated Vehicle Solutions Group spokesman Greg Euston said, “There is no evidence to support that claim and, regardless, that sort of duplication would also be a breach of the licensing agreement.”
The suit seeks compensatory and punitive damages, as well a court order requiring Integrated Vehicle Solutions Group’s programs to be “removed and purged.”
Kukoff said, “One of the things so puzzling to us is the actions taken by the Rick Case dealerships are indefensible — there doesn’t seem to a rational basis for them.”