Bobcat of Mandan Sues Bobcat Co.

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By: Joey Harris
Source: The Bismarck Tribune, N.D. (TNS)

One of North Dakota’s largest companies is facing a lawsuit from an equipment dealership based out of Mandan.

In late 2024, Bobcat of Mandan filed suit against Bobcat Co. after the construction and farm equipment giant terminated a sales agreement.

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The end of the contract means a loss of the products that make up around 80% of Bobcat of Mandan’s income, as well as a relationship of over 40 years between Bobcat Co. and the dealership, according to the complaint.

The Mandan dealership is seeking damages for a breach of contract, alleging Bobcat Co. had no good cause to end the agreement.

Bobcat of Mandan operates Bobcat dealerships out of Mandan and Dickinson and is owned by David Dinneen. He also owns Rapid Equipment, a non-Bobcat dealership in Box Elder, South Dakota, just outside of Rapid City, and has interest in Dakota Iron, another non-Bobcat dealer in Sioux Falls, South Dakota, according to filings.

In legal filings, Bobcat Co. said the decision to end the contract came in September 2024 after more than a year of alleged breaches by the Mandan dealership. Bobcat Co. said the breaches include the dealership marketing Bobcat equipment at the South Dakota stores, buying and selling another company’s equipment at the Mandan dealership, and falsifying a business record.

Bobcat Co. said it will face irreparable harm if it is required to continue its contract with Bobcat of Mandan, and that it had given the dealership a few months to find a new buyer.

The dealership maintains that it acted appropriately and that the examples laid out by Bobcat Co. do not constitute material breaches of the contracts. It is also asking that a judge declare that part of the contract that restricts Bobcat of Mandan from selling certain equipment is unenforceable.

By filing its legal challenge, Bobcat of Mandan attained an “automatic stay” for the contract termination until the case is resolved. This was affirmed in early July after South Central District Judge Bonnie Storbakken turned down Bobcat Co.’s request to dissolve the stay.

Bobcat Co. declined to comment, citing the ongoing litigation.

Bobcat of Mandan declined an interview, but in a statement said, “Bobcat of Mandan is involved in pending litigation against its distributor Doosan Bobcat North America, Inc. (“Doosan Bobcat”). Bobcat of Mandan brought this lawsuit against Doosan Bobcat and we feel strongly about the validity of Bobcat of Mandan’s claims. Due to the ongoing nature of the litigation, Bobcat of Mandan is limited in what it can share and discuss at this time. However, we do look forward to our day in court.”

Changing business structure preceded alleged contract violations

The conflict between the corporation and dealership stems in part from the South Korea-based Doosan Group—which owns Bobcat Co.—separating Bobcat Co. and Doosan Infracore into two separate companies in 2018.

Doosan Group then sold Doosan Infracore to Hyundia in 2021 and Hyundia rebranded the company as Develon in 2023.

Bobcat of Mandan has sold what are now known as Develon mini excavators since 2018. The dealership’s filings said Bobcat had asked the dealership to start selling the equipment around 2016.

In 2022, following the split of Bobcat Co. and Doosan, Bobcat Co.’s representatives began pressuring the dealership to stop marketing Develon products, according to legal filings from the dealership.

The next year, Bobcat Co. provided written approval for the Bobcat of Mandan dealership to buy its Dickinson store. This was around the time that the relationship between Bobcat Co. and the Mandan dealership started to get rocky.

The contract authorizing the Dickinson store purchase included a clause that said, “Bobcat of Mandan will not receive/order/sign contracts of competing lines at any of their stores, including the DEVELON line.” It also has clauses requiring the dealership to not sell Bobcat equipment at non-approved stores.

Rapid Equipment, owned by Bobcat of Mandan, and Dakota Iron—which Dinneen, Bobcat of Mandan’s owner, holds an interest in—are contractually Develon dealers. According to Bobcat of Mandan, it also has an agreement to market Develon products at the Mandan store.

In legal filings, Bobcat Co. said that Bobcat of Mandan violated its sales agreements by marketing Bobcat products at Rapid Equipment in 2023 and Dakota Iron in 2024.

After further investigation of the 2024 alleged violation, Bobcat Co. found that Bobcat of Mandan had ordered Develon equipment from its Mandan store and shipped that to South Dakota, filings said.

The corporation said it decided to prematurely end its contracts with the dealership after Dinneen allegedly falsified records when he sought to explain the Develon shipment.

Dinneen told Bobcat Co. that the Mandan dealership was given permission to make the Develon order a few years ago during supply chain shortages to maintain its fleet of rental equipment, according to Bobcat Co. filings. Dinneen sent in documentation showing the equipment had been bought in 2021, when permission to make the orders was still in place.

But the documents appeared to have been altered to change the shipping date to 2021. Dinneen later admitted to making changes to the document, according to filings.

Bobcat Co. called this “fraud.” The corporation said that if the dealership made the order after 2021, it would no longer have been eligible for financial protections that dealerships get from competition within their sales territory.

Filings from Bobcat of Mandan acknowledge the order being “backdated,” but argue the clause preventing the order from happening in the first place — written into the Dickinson contract — is unenforceable and illegal because it would essentially require Bobcat of Mandan’s existing contracts with Develon to be canceled. This would constitute “unlawful interference by a third party,” the dealership argued.

“(Bobcat of Mandan) openly sells Develon equipment on its lot in Mandan. It has advertised all of its equipment, including both Bobcat and Develon lines, in Super Bowl commercials. For Bobcat to allege in this action now that it was unaware that (Bobcat of Mandan) was selling Develon items is simply not accurate,” the dealership wrote in filings.

The dealership also contends that the alleged violations of Bobcat products being marketed at South Dakota stores were “minor and unintentional” and do not show that the contracts were breached in “any material manner.”

“In 2023, a third-party contractor listed a Bobcat machine for sale and in a second instance, a now terminated employee in the Box Elder store sent one quote for a Bobcat mini-track loader to a prospective buyer,” a filing said.

The case is set for a jury trial next spring.