Kia has issued an injunction to stop selling its dealer in California

A federal judge in California has issued a preliminary injunction in favor of Kia America Inc. and against the prospective seller and alleged buyer of a dealer in Palmdale.

US District Judge James Selna found that the potential for consumer confusion exists if Rally Auto Group franchisee and potential buyers Alam Khan and its Dalia Auto Group continue to use Kia’s trademark and other intellectual property.

“The temporary injunction means that the Dalia defendants are prohibited from continuing to operate the dealership,” said James Mulcahy, a franchise law expert in Irvine, California, who is not involved in the lawsuit.

Defense attorney Victor Danhi said: “Despite the successful sale of its GMC, Cadillac, Buick, Hyundai and Genesis franchises to Dalia Auto Group, with the agreement of those manufacturers, including Hyundai Motor Co., Kia’s parent company, withheld Kia authorized the Dalia Auto Group to sell Rally Kia to Dalia Auto Group, a successful dealer group owned and operated by Alam Khan.”

Danhi, of San Francisco, said: “Nothing in the court ruling requires Rally Auto Group to close or otherwise suspend its Rally Kia dealership operations. Rally Auto Group will continue to operate the dealership under its Kia dealer sales and service agreement.”

As Automotive News reported on Feb. 7 that Kia America twice rejected Rally Auto Group’s request to sell its store’s assets to Khan and Dalia, because their request made no mention of Khan’s “previous unsatisfactory ownership” of another Kia store.

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