Hoak Motors files suit against GM - KTIV News 4 Sioux City IA: News, Weather and Sports

Hoak Motors files suit against GM


SIOUX CITY, Iowa (KTIV) -- Last month, General Motors told 1,100 dealers that their franchise contract would not be renewed come October 2010.

Hoak Motors in Sioux City was one of the dealerships, but owners say the move was made for the wrong reason. Now, the dealership is filing a lawsuit against General Motors.

Just six weeks into the new year, Hoak Motors was struck by fire -- a fire authorities are blaming on a Chevy Tahoe that spontaneously combusted while being serviced by Hoak at the time of the blaze.

Three months later, and with millions of dollars in losses, Hoak was told by General Motors that their contract would not be renewed in 2010, a move Eric Hoak has said is because their bottom line looked less than desirable due to the expense of the fire.

Now, Hoak along with their insurance company and the owner of the Chevy Tahoe are suing General Motors saying they're liable for the fire. Court documents say GM breached their duties when it failed to design, manufacture and sell a vehicle that would not spontaneously ignite through no fault of the user.

As a result of the fire, the dealership suffered extensive damages which Hoak has said totaled around $3 million. According to court documents the plaintiffs are seeking an amount in excess of $25,000.

Due to the pending lawsuit, Erik Hoak could not comment and NewsChannel 4 has not heard back yet from the other plaintiffs in the case.

Online Reporter: Rebecca Sunshine.

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