Car dealer sues Mercedes over faulty $1.7 million CLK-GTR

When Los Angeles car dealer Mark Johnston forked over $1.7 million to buy one of only five special Mercedes Benz CLK-GTR roadsters produced in the world, he could not have predicted the long struggle he was about to face. Johnston claims he and his brother couldn't get it to travel more than ten blocks. Accordingly, he has filed suit in Los Angeles Superior Court seeking a full refund from the manufacturer and its affiliates. The defendants named in the suit are DaimlerChrysler and its Mercedes-Benz subsidiary.

Mr. Johnston's suit, brought by law firm Fulbright & Jaworski L.L.P., accuses the defendants of breaching their contractual and warranty obligations to provide a defect-free car, in this case a Mercedes AMG CLK-GTR Limited Edition Roadster, which Mr. Johnston intended to sell through his dealership. The complaint also alleges negligent misrepresentation and breach of the implied warranty of good faith and fair dealing. Mr. Johnston seeks full reimbursement of the vehicle's purchase price, along with the other costs incurred as a result of attempts to repair it.

The silver AMG Roadster is a product of DaimlerChrysler's long collaboration with H.W.A. and Mercedes-AMG, two German manufacturers of racing and high-end performance vehicles. Only five of the AMG roadsters were reportedly made; Mr. Johnston owns the only one in North America. The AMG CLK-GTR is listed in the Guinness Book of World Records as the most expensive production car ever made. The two-door sports car is made of carbon fiber monocoque with an integrated steel roll cage and front energy absorbing crash box. The 6.9-liter engine has a 12-cylinder, 60 degree V-motor, enabling the car to go from zero to 124 mph in 9.9 seconds and reach a top speed of 198.4 mph.

Mr. Johnston and his brother Ernest own Grand Prix Motors, a car dealership in the Mar Vista section of Los Angeles. The two former auto mechanics have extensive experience working on Ferraris and other top performing vehicles and are very knowledgeable about collectible cars. Grand Prix contracted to purchase the Mercedes AMG in 2002 for the hefty price tag of $1.7 million. Their intention was to sell the vehicle through their dealership, as they had done with other rare and vintage automobiles.

"The car was absolutely gorgeous and we were excited about offering what we thought was a true gem to our customer base," Mark Johnston explained. "Unfortunately, the car turned out to be 'exotic' in the worst possible way. When we took it off the lot in 2004 for its first customer test drive, Ernie drove the car all of ten blocks with a prospective buyer when the oil light came on. We've been trying to get it fixed ever since, but the Mercedes folks have refused to stand behind the car as promised in our contract."

According to the complaint, the roadster's transmission failed to shift properly. Additionally, the hydraulic jack system failed and the windows became unglued. In 2005, the defendants dispatched a technician from Germany to examine the car in 2005; after dismantling it, the mechanic returned to Germany with a number of parts that were never reinstalled. Mr. Johnston asserts that the defendants later instructed Grand Prix to transport the non-working car to a Mercedes facility in Lake Park, Florida, which Grand Prix did at an additional cost of $10,000.

Although the Mercedes technicians determined that the car suffered an oil-pressure related engine failure and needed a new engine, the defendants were unwilling to make any repairs. The complaint asserts that the defendants were aware that several of the other Mercedes AMG roadsters in circulation had oil pressure-related problems.

"Mr. Johnston has exhausted himself trying to get Mercedes and the other defendants to recognize their warranty obligations," said John O'Malley, the Fulbright & Jaworski partner in Los Angeles who is representing Grand Prix Motors. "You'd think you'd be able to drive a $1.7 million car more than 10 blocks."

"We continue to be dumbfounded by the unwillingness DaimlerChrysler, Mercedes and the other defendants have shown in owning up to the problems of their vehicle -- the other manufacturers we deal with would never operate this way," explained Mr. Johnston. "It's unfortunate the defendants have forced us to bring a lawsuit in order to have our contract honored. We obviously cannot sell the car in its current condition, which right now represents nearly $2 million of scrap metal."