On motions to strike in a franchise dispute arising from the post-bankruptcy restructuring of an automotive manufacturer, the court dismissed the entire claim against the U.S. parent entities and struck discrete allegations against the Canadian franchisor.
The court held that a franchisor’s associate is not liable under s. 3 of the Arthur Wishart Act unless it is also a party to the relevant franchise agreement, and further found the pleadings did not satisfy the statutory definition of franchisor’s associate.
The court also held that the pleadings did not justify piercing the corporate veil to impose contractual liability on the parent companies.
Allegations concerning misuse of government bailout funds and the defendants’ preference of their own interests were struck as irrelevant, scandalous, and abusive.
Leave to amend was refused.
