Judge issues summary judgment in family business case

Family squabbles over business interests have torn apart one Maryland family of auto dealers. Earlier this month, a Montgomery County circuit court judge issued a summary judgment in the case of Darvish v. Darvish, which pitted a father and his sons against his daughter and their half-sister in a civil case.

The judge’s ruling followed a hearing last month in the 2015 lawsuit plaintiff filed after being ousted from the family-run DARCARS Automotive Group. Plaintiff was well known in the industry as a champion to get franchisees reinstated with their dealerships after the numerous bankruptcies filed by Chrysler Group and General Motors.

The plaintiff says that she spent the past three decades working for the family business, according to court documents, on the contingency that she would one day receive a third of the ownership of the family business upon her father’s retirement. The other two-thirds ownership would go to her half-brothers from plaintiff’s father’s second marriage.

The plaintiff alleged also that the half-siblings would not be permitted to shut her out of the daily operational decisions, as they would need unanimous consent and not a majority. The judge, however, determined that plaintiff’s case did not have the evidence needed to support her allegations.

The father’s succession plan that he drafted in 2014 detailed an equal ownership, court documents claim. The plaintiff alleges that her half-brothers were hostile towards her, demanding that she sign off on a “side agreement” handing the control of the family business over to them and exerting pressure on their father to renege on verbal promises to plaintiff. He eventually conceded and removed his daughter from her executive vice president position and stripped away all operational control from her, which prompted her lawsuit.

The case is a good example of why verbal promises are not always sufficient when a dispute arises. It is far better to enter into a written contractual agreement over employment and ownership terms to protect one’s interests in the event of a dispute.

Source: Automotive News, “Judge rules against Tammy Darvish in succession case,” Jamie LaReau, June 07, 2016