Jessica M. Karmasek Jun. 16, 2015, 1:45pm



BENTON, Ill. (Legal Newsline) - A class action lawsuit filed against a well-known transmission-repair franchisor, certain affiliates and its executives has been dismissed and is under mediation.




 




The lawsuit was filed against AAMCO Transmissions Inc. in 2013 by four former AAMCO franchisees and one existing franchisee, claiming violations of federal law against the company.




 




The plaintiffs -- Timothy Montileone, Rick A. Firmand, Thomas W. Furlong Jr., Kevin Bladow and Clayton Thygerson -- claimed the violations occurred during the process of purchasing franchises and the course of the franchise relationships.




 




AAMCO, represented by Atlanta law firm Parker Hudson Rainer & Dobbs LLP, filed a comprehensive motion to dismiss the case in the U.S. District Court for the Southern District of Illinois.




 




Rather than opposing the motion, the plaintiffs voluntarily dismissed their complaint and requested non-binding mediation under the dispute resolution provision of their franchise agreements, according to the law firm.




 




Judge J. Phil Gilbert dismissed the case against defendant and AAMCO CEO Malon Wilkus with prejudice, and dismissed the case against the remaining defendants without prejudice.




 




The court denied as moot the remaining motions in the case.




 




“We are pleased that the court granted the plaintiffs’ request to dismiss the claims,” said Ron Coleman, partner at Parker Hudson Rainer & Dobbs and lead counsel for AAMCO.  




 




However, another, similar lawsuit has been filed against the self-described “world’s leading transmission expert.”




 




That class action, filed Nov. 19, also in the Southern District of Illinois, claims a three-pronged “scheme” by the Horshman, Pa.-based AAMCO:




 




- First, it allegedly fraudulently induces franchisees to purchase centers by intentionally misrepresenting the contractual relationship between franchisee and franchisor and the financial prospects of the franchisee;




 




- Second, it allegedly willfully teaches and encourages franchisees to engage in deceptive business practices for profit; allegedly participates in “franchise churning,” or profit through frequent franchisee turnover; and allegedly charges the franchisees illegal, undisclosed and inflated fees; and




 




- Third, it allegedly conspired with fellow defendant Michael Ganjei -- the president of the National AAMCO Dealers Association -- to misrepresent material information to franchisees and mislead them about the health of the system.




 




Judge Michael J. Reagan is presiding over the case.




 




From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.


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