News story

CROWN SUES FLORIDA LIFT SYSTEMS, TMHU

Thursday, 12 February 2004 ( #144 ) - NEW BREMEN, OH, United States
Crown Equipment Corp has filed US District Court lawsuits against a central Florida dealer and Toyota Material Handling USA Inc (TMHU).

Crown forwarded a 60-day notice of termination to dealer Florida Lift Systems Inc (FLS) on January 12 and sued FLS in Dayton, Ohio, on January 13, alleging a breach of agreement. In response, Tampa, Florida-based FLS demanded a jury trial.

Subsequently, Crown sued TMHU on February 4 in Toledo, Ohio, seeking a jury trial and alleging that TMHU, of Irvine, California, had caused FLS to breach its Crown dealer agreement.

Court documents indicate substantial differences between the parties.
New Bremen-based Crown has been aggressive in wanting to control sales of its equipment through factory-owned distributors in large markets. Central Florida remains one of the few key markets that Crown does not control directly.

FLS has represented Crown in Florida's Orlando and Tampa regions since February 1996. Crown extended its agreement with FLS four times, most recently in January 2003 until February 28, 2005.

FLS began representing TMHU in Orlando in September 2002, before Crown's latest extension with FLS. At the time, Crown did not object to FLS adding TMHU products for Orlando, according to TMHU.

FLS expanded its business to become a TMHU dealer in Tampa on January 5, 2004, and drew Crown's legal ire less than a month later.

"Crown is trying to take from FLS what it rightfully must pay for," said TMHU attorney Ronald Roensch. "FLS has taken an under-performing Crown market and turned it into a jewel with its 43% (retail order) market share. Rather than fairly pay to buy out FLS, Crown has undertaken a course of conduct to obtain that value from FLS under the guise of a termination."

Cleveland law firm Reminger & Reminger Co LPA has been retained to represent FLS and TMHU's interests in both cases. "TMHU will stand by FLS and assist FLS in defending against the inappropriate actions of Crown," Mr Roensch said.

Established in 1952, FLS employs 150 people and has a long-time involvement with the US Material Handling Equipment Distributors' Association.

FLS operates three distribution and service sites in central Florida, in Tampa, Orlando and Winter Haven, and has annual sales in the mid-USD40 million range.

In addition to Crown and Toyota, FLS distributes primary and auxiliary equipment for Komatsu Forklift USA Inc, Daewoo Heavy Industries America Corp, Linde Lift Truck Corp, Load Lifter Manufacturing Ltd, Drexel Industries LLC and others.

Jeff Fischer, FLS president and chief executive officer, would not comment about the litigation.

In January, Crown acquired a Crown forklift distributor, Shannon Corp, of Grand Prairie, Texas, and opened a factory-owned branch to serve the Dallas-Fort Worth market. Shannon was formed in 1970 and had served north Texas from a warehouse in Grand Prairie and a branch in Waco, Texas.

In early 2003, Crown acquired some assets of another Crown lift truck distributor, Material Handling Equipment Co, of Salt Lake City, Utah, and opened a factory outlet to serve the Utah market.

Brothers Carl and Allen Dicke founded Crown in 1945, and the firm started manufacturing materials handling equipment in the 1950s. Jim Dicke II is Crown chairman and chief executive officer, and Jim Dicke III, a fourth-generation member in the family-owned business, is president.

Crown representatives did not respond to inquiries about the litigation.
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