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Ford sues one of its own Utah dealers

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Ford Motor Credit Co. has filed a lawsuit in federal court against the Sandy dealership that has touted itself as the largest volume Ford dealer in any single location in the state.

The company alleges that Butterfield Ford has failed to return wholesale payoff balances required as part of a shared financing arrangement.

On Wednesday Ford Credit asked U.S. District Judge Bruce Jenkins for a temporary restraining order prohibiting Butterfield from "encumbering, selling, transferring, delivering or disposing" of any new or used vehicles on wholesale inventory and collateral lists without assuring Ford Credit of their payoff.

It also asked for an order allowing representatives of Ford Credit "to be on the physical premises" of the dealership and have control over titles, manufacturers statements of origin and auxiliary keys "to assure no sales occur without the actual purchase monies being immediately and directly paid to Ford Credit upon sale of a vehicle."

Owner Brent Butterfield told the Deseret News he could not comment on the specifics of the case, but said the dealership was "working with Ford Credit to work it out."

"We've been impacted by a lot of things in recent years," Butterfield said, citing the construction related closure of the 9000 South I-15 offramp near the dealership and a general "economic slowdown" as contributing to a "lull" in sales.

In June, Ford Motor abandoned its three-year experiment in owning a stake in its own retail dealerships — selling its retail stores, including those in Utah, which operated under the name Utah Auto Collection.

The original rationale for the partnership was that Ford dealers' biggest competition came from other Ford dealers, and that by banding together, they could eliminate that competition and offer no-haggle pricing and unified service centers.

But Butterfield Ford was one of the local dealerships that chose to stay independent.

In 1999, Butterfield told the Deseret News that the Auto Collection created an uncomfortable tension.

"My competitor is my supplier and vice versa. Which hat does Ford wear on which day?" he said.

But the independence of dealerships like Butterfield also allowed them to undercut the Auto Collection's prices.

In May, Butterfield opened a newly remodeled showroom and service facility — a $12 million expansion that was 18 months in the making.

E-MAIL: mtitze@desnews.com