Temsa legal battles reach coast to coast

The Temsa divorce from distributor CH Bus Sales has moved across the country with two new civil suits—one filed against Temsa and the other against executives of CH.

The legal skirmishes began on March 20, when Temsa gave notice that it was terminating CH’s distribution agreement, alleging violations including delinquency on $7.7 million in payments for motorcoaches and parts. CH had distributed Temsa motorcoaches in the U.S. since 2012.

In an Aug. 14 motion filed in U.S. District Court for Delaware, Temsa additionally charged that CH has sold or leased 51 motorcoaches for which it has not paid the manufacturer.

CH’s counterclaim, filed Aug. 24 in the Wilmington court, denied those allegations and requested damages for alleged defects in motorcoaches and interference in attempts to sell CH to another company and distribute another manufacturer’s shuttle bus.

The case is undergoing arbitration through the American Arbitration Association in New York City, according to an Oct. 9 court order issued in the Delaware court. CH has disputed Temsa’s claim that it is entitled to arbitration under their distribution agreement. The CH request to enjoin arbitration has been stayed by U.S. District Judge Richard G. Andrews.

On Aug. 21 the dispute moved to St. Paul, Minn., where CH sued former president Duane Geiger and REV Group. CH contended that Geiger broke an employment contract and took proprietary information to vehicle manufacturer and distributor REV. Geiger, now general manager of REV Coach, states in his counterclaim that he left CH Bus to avoid participation in illegal transactions.

This suit was filed in the U.S. District Court for Minnesota. CH Bus headquarters are in Faribault, Minn. The parties have continued to exchange motions in the court, which has scheduled an “early settlement conference” for May 2, 2019. If the parties cannot resolve the dispute, a jury trial is scheduled Feb. 17, 2020.

The parties now are engaged in U.S. District Courts in Nevada and California.

Temsa filed suit on Sept. 7 against CH Bus Chairman Michael Haggerty, his wife Olga and son John, who are residents of Nevada. The suit also names bus operator TC Nevada, of which Olga and John are listed as owners.

Temsa’s suit seeks “redress for, among other things, TC Nevada’s unlawful use and possession of certain motorcoaches in which Temsa has exclusive ownership and a first position security interest and in which TC Nevada has no legal interest or right to possession.”

The suit continues, “Temsa has learned that the Individual Defendants working in concert and with each other and TC Nevada, have engaged in unlawful conduct to deprive Temsa of its ownership of and security interest in certain motorcoaches by improperly leasing, loaning, selling or transferring motorcoaches in to TC Nevada in express violation of Temsa’s rights.

“Moreover, TC Nevada is improperly using several motorcoaches that are the property of Temsa (to) run shuttle services in and around Las Vegas . . . thereby rendering them unsellable as new motorcoaches.”

Temsa alleges that “TC Nevada is improperly in possession of at least seven motorcoaches, and as many as 30 motorcoaches, thereby causing damage to Temsa ranging in magnitude from $1,463,000 to $9,800,000.” Temsa says it is entitled to treble damages of $4.4 million to $29.4 million.

As of deadline for this issue, the Haggerty family has not filed their response with the court.

Temsa is the subject of a suit filed Oct. 19 by charter operator Navaho Tours in U.S. District Court for Northern California in Oakland. Navaho, based in Los Angeles, seeks class action status for complaints of alleged defects in TS45 motorcoaches.

“These defects include, but are not limited to, significant vibration during operation. These mechanical and electrical defects are so significant that the subject vehicle is deemed highly unreliable for service,” states the suit, which complains of breaches of warranty, negligent design and failure to warn.

The court has issued a summons to Temsa that required it to file a response by Nov. 12. The judge also assigned the case to the court’s Alternative Dispute Resolution program and set deadlines for the parties to file responses before a case management conference on Jan. 22, 2019.

Temsa, of Adana, Turkey, has incorporated “Temsa North America Inc.” in Tennessee. At a recent meeting of International Motorcoach Group members, an executive of the new company said Temsa has shipped parts and new motorcoaches to a facility in Orlando, Fla.

He said 20 former CH employees have joined Temsa North America.

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