GM and GM Financial are facing a $20 million lawsuit from Borderland Chevrolet-GMC dealer Mark Mermis and general manager Kevin Walters, who allege discrimination, fraud, broken relocation promises and actions that made it difficult for the dealership to meet sales targets.

Dealer Says GM Promised a Relocation

Mermis and Walters were prompted by GM to purchase Borderland Chevrolet-GMC in Douglas, Arizona, in a deal completed in mid-2023 for $1.1 million. According to the lawsuit, the purchase was made under the premise that GM would allow the dealership to relocate to a “better” area.

The Douglas location, near the U.S.-Mexico border, was described as “economically distressed.” The lawsuit alleges that 70% of residents in the area received welfare or government support, while GM allegedly promised to assist the dealership with a relocation if needed.

According to the complaint, GM supported the deal with a promise that Borderland could relocate to Benson, Arizona, described as an “economically-growing area” that was a “far more prosperous and potentially profitable location.”

Benson is about 70 miles from Douglas. Mermis purchased the Benson location in Fall 2024 as a proposed new site, but the lawsuit says GM ultimately did not honor the relocation promise.

GM Rejected Two Relocation Requests

GM rejected the dealership’s relocation request in November 2024, according to the lawsuit. Mermis and Walters then submitted another request to move the dealership to a vacant Ford dealer in Silver City, New Mexico, about 140 miles from Douglas.

That request was also denied in March 2025. The complaint describes the decision as being made “for reasons that were unfair, inequitable, unjustified, in breach of promises and representations made to the plaintiffs, and in bad faith.”

The lawsuit alleges that GM “unjustifiably refused” to approve Borderland’s relocation requests. It also claims GM imposed “unreasonable sales quotas and working capital requirements on the dealership while depriving it of inventory.”

Lawsuit Alleges Discrimination and Reduced Allocations

The complaint says Borderland’s sales declined because of factors beyond the economic viability of its location. It also alleges that GM “discriminatorily and wrongly” reduced the dealership’s vehicle allocations, making its performance targets unattainable.

Another section of the complaint alleges that “GM was approving only Mermis as the sole operator so that it could be a ‘100 percent minority-owned’ dealership.” The lawsuit states that Mermis is of Latin American heritage.

GM Financial Also Named in Lawsuit

GM Financial, GM’s captive lender, is also named as a defendant. The complaint alleges “unreasonable floor plan financing requirements,” along with demands for unreasonable curtailments and diverted payments from GM for new-vehicle holdbacks and warranty reimbursement.

In January 2026, GM Financial placed Borderland under audit review, froze its new-vehicle floor plan and cut its used-car floor plan in half. According to the lawsuit, those actions severely affected the dealership’s ability to sell vehicles and meet the sales quotas imposed by GM.

The plaintiff theorized that GM was attempting to push the dealership out and install a new operator in its place while Borderland operated in what the lawsuit described as a growth-starved environment and faced sales targets and floor-plan requirements it considered unreasonable.

GM Sent Termination Notice

GM submitted a 60-day termination notice to Mermis in mid-August 2026, according to the lawsuit.

The complaint contends that GM violated the Federal Automobile Dealers Day in Court Act and Arizona’s dealer law. It also alleges fraud, civil conspiracy, breach of contract, violation of the federal Civil Rights Act, and breach of the covenants of good faith and fair dealing.

Lawsuit Seeks $20 Million and Additional Damages

The lawsuit seeks $20 million in economic damages, along with three times that amount and punitive damages from GM.

The claimed damages include money spent trying to make the dealership work, the dealership’s goodwill value and reputational harm the plaintiffs say they suffered because of the situation.

GM, through a spokesperson, has declined to comment on the lawsuit. The plaintiffs’ ongoing theory is that GM needed to meet a quota for minority dealers and made false promises to achieve that goal.