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TRO against auto dealer insurer extended pending arbitration

TRO auto dealership

A temporary restraining order issued against an auto dealership insurer that was set to expire Monday has been extended by a U.S. District Court pending resolution of arbitration proceedings in the case.

The U.S. District Court in Flint, Michigan, extended the TRO in a ruling issued Thursday in Ally Risk Services Inc. v. Harco National Insurance Co.

Detroit based-Ally, formerly known as GMAC Risk Services Inc., had agreed to partner with Rolling Meadows, Illinois-based Harco, a unit of IAT Insurance Group Co., in 2012, as its exclusive agent to offer Harco insurance products to the auto dealership industry, according to the complaint in the case.

The complaint said under the agency-company agreement, which terminated June 1, 2019, Harco was prohibited from soliciting auto dealership customers with which Ally had an insurance relationship that predated the agreement or were sold by Ally during the relationship.

The June 27 complaint charge that Harco and improperly solicited customers that “rightfully belong” to Ally.

The court had agreed to issue a TRO pending expedited consideration of a preliminary injunction on July 3.

In its latest ruling in the case, the court said Ally has demanded arbitration, an arbitration panel has been selected and a hearing on Ally’s motion for a TRO and/or preliminary injunction is set to be heard by arbitrators Aug. 1.

“The Court concludes that extending the terms of its temporary restraining order through the scheduled hearing date of Ally’s arbitration motion is appropriate,” said the ruling.

“This modest extension of the temporary restraining order is appropriate because it will permit the arbitration panel to make the key decisions concerning each party’s position on the merits and whether extended preliminary injunctive relief is appropriate.”

The order also states “The Court does not anticipate extending its restraining order past August 1, 2019. It is the Court’s current intention that from that point forward, the arbitration panel decide whether any additional injunctive relief is warranted.”