FEDERAL COURT UPHOLDS JURY VERDICT THAT SHELBY BREACHED LICENSING AGREEMENT WITH WILHELM MOTOR WORKS

WOODLAND HILLS, CA – May 22, 2007 – Carroll Shelby Licensing, Inc. received a setback in its ongoing lawsuit against Jon Wilhelm and Wilhelm Motor Works, when a federal court judge recently upheld the jury verdict of last January that Shelby breached its licensing agreement with Wilhelm. The same jury had also found that Shelby breached the covenant of good faith and fair dealing concerning its contractual dealings with Wilhelm. Shelby had attempted to overturn the jury’s verdict, arguing that Jon Wilhelm had tried to find a work-around after Shelby ’s breach, thereby negating Shelby ’s egregious behavior. The Quintana Law Group, attorneys for Wilhelm, argued that no legal or factual basis existed on the record to upset the jury’s verdict as to Shelby ’s breach of contract. The federal judge ruled in Wilhelm’s favor.

The Shelby vs. Wilhelm case went to trial last January. The case involved a license agreement given to Wilhelm by Shelby to convert an unlimited number of Ford Mustangs, bearing the Shelby name and marks (G.T.350C, G.T.500C, G.T.350CR, G.T.500CR – for convertibles and retractable hardtop Mustangs) along with associated products and memorabilia.  Five causes of actions went to the jury, which returned a verdict on January 30, 2007 . Wilhelm prevailed against Shelby on his claim that Shelby breached the licensing agreement and breached the implied covenant of fair dealing concerning the agreement. Wilhelm also defeated Shelby ’s invasion of privacy claim. While the jury found Wilhelm infringed on Shelby trademarks, Wilhelm is determined to reexamine that issue on appeal. “We are pleased that the federal judge upheld the jury’s verdict that Shelby breached its licensing agreement with my company”, says Jon Wilhelm, President of Wilhelm Motor Works, “and we look forward to further challenges at the appellate level.” Wilhelm’s team of attorneys from the Quintana Law Group of Woodland Hills , CA consisted of Andres Quintana, John Houkum, and Daniel Taylor. “I couldn’t be more pleased with my attorneys”, said Wilhelm. “We faced and overcame several adversities during the course of this litigation. My team did a great job.”

About Wilhelm Motor Works

Wilhelm Motor Works was founded to restore and build premium classic cars, including several variations of the G.T. Mustangs, for an exclusive clientele. Expert in all aspects of fabrication, restoration, design and development, the Companys team founded and created the continuation Mustang program, capturing worldwide attention and awards at prestigious auto shows and races. The Wilhelm Motor Works team of craftspeople fulfills the dreams of discerning collectors and enthusiasts at its West Coast facility. Wilhelm is currently working on retractable hardtop Mustangs as his own design. Additional information about Wilhelm Motor Works, products, services, and memorabilia is available at www.WilhelmMotorWorks.com.

About the Quintana Law Group, APC

The Quintana Law Group is a versatile, civil litigation firm representing diverse clients in local and multi-jurisdictional litigation and other high-stakes disputes. The firm specializes in intellectual property matters. For more information, please refer to www.QLGLaw.com.

Shelby vs. Wilhelm: The Conclusion?

Restomod Magazine – May 2007, Issue 3, Pages 14 & 15 – The case of Shelby vs. Wilhelm is over and the verdict is in. I have to be honest with you, I really don’t understand it. But here is the way it’s been reported to me. As I wrote in the last edition of Restomod Magazine, when the court case was over, the jury found Shelby guilty on 3 of the 4 counts that defendant Jon Wilhelm (Wilhelm Motor Works) was either being sued for or was counter-suing; specifically, the jury found Shelby guilty of breach of contract, violation of the implied covenant of fair dealing and of unfairly withholding approval of the G.T.350C. I’m told it was the breach of contract by Shelby, which the jury found Shelby guilty of, that set in motion the events that led to the lawsuit. Here’s a little recap before we go over Shelby’s side of the case.

After breaching the contract, Jon says that Shelby told him his contract was totally cancelled. Jon says he refused to accept the cancellation of the contract, because the contract had a clause in it requiring both parties to notify the other of any breach of contract actions and to give the other party notice in writing and 60 days to correct the problem before the contract could legally be cancelled. Since Shelby did not follow this point of the contract, Jon says he continued to work to promote the G.T.350Cs, because he still had a deadline he had to meet which was set in writing by the contract. During this time, Jon and Wilhelm Motor Works continued to promote the G.T.350C while trying to negotiate a resolution to the problem with Shelby. Then, in December 2005, just a few days before Christmas, Shelby filed suit against Wilhelm Motor Works in federal court on several charges that resulted in this lawsuit. That brings us up to the start of the court proceedings.

On Shelby’s side, the jury found that Wilhelm Motor Works had violated the Shelby trademark on 6 counts: Wilhelm sold two t-shirts with the Shelby name and logo on each, and he tried to sell 2 cars on eBay, both of which were built here at Mustangs Plus. Shelby claimed the cars were shown and offered for sale without Shelby’s permission. According to the jury, all had infringed on Shelby’s trademark. As I wrote in the last issue, this all centered around the Route 66 Show in San Bernardino, California in September 2005. All the other charges that Shelby had filed against Wilhelm Motor Works were thrown out, dropped, or defeated during the court proceedings. When the dust settled, this is what the jury had to fix damages on for both sides.

That brings us to the second part of the lawsuit, which was the penalty phase. The penalty phase is where the jury awards damages to each side based on what they had found each party guilty of. I went back to Los Angeles and was called to the stand by Wilhelm Motor Works. I told how Jon had asked us if we would like to be involved in the building of the Prototype G.T.350C and possibly the production G.T.350Cs. I told how, to Jon’s specifications, we had built the Prototype and the other two G.T.350Cs that Jon had ordered from us while the contract with Shelby was valid. I also told of the other 20 plus Mustangs we had waiting back at Mustangs Plus to build into Shelby Continuation cars and of all the dollars we, as well as Jon Wilhelm, had spent on the project. In all, I was on the stand for about a 45 minutes. Shortly after my testimony, the case was handed back to the jury for their decision.

As soon as the case was handed back to the jury, I left to return to Stockton which is 360 miles north of Los Angeles. I understood that what was probably going to happen was that Shelby was going to get some sort of award from the jury and that Wilhelm was going to get some sort of award from the jury. Then, the lower award would be deducted from the higher award, and that would be how damages were settled. The balance of the awards would have to be paid by the one who was awarded the lesser damages.

As I’ve heard people say many times, “you never know what a jury will do” and that truly was the case here. After all the dust had settled, the evidence presented, the finger pointing over, the jury awarded Shelby $250,000 in damages and Wilhelm $250,000 in damages: The exact same amount for each. Somehow, this jury found that the breach of contract by Shelby was worth the exact same amount as Jon Wilhelm using the Shelby trademark to sell $25 of merchandise, even though he was a licensee of Shelby with a contract when he sold the merchandise in question. As I said at the beginning of this column, to be honest with you, I really don’t understand it.

But the jury wasn’t done yet. They also found that each party should pay the other’s attorney's fees. Jon tells me that since Shelby’s attorney's fees were substantially higher than his attorney’s fees, Wilhelm Motor Works will probably end up with a six figure bill to pay on top of losing all the money spent on the contract. So, as the saga of the Shelby G.T.350C ends, there will not be such a car in the Shelby Registry, and the three G.T.350Cs that we built here at Mustangs Plus, while Jon had his contract with Shelby, will remain in the Bramlett stable, their future unknown. As for my feelings on the whole messy matter, I’m sad that two companies that I have a great deal of respect and fondness for couldn’t work together to do something that would be positive for the Mustang hobby. We all, as Mustang, Shelby and automobile enthusiast, lose a little something in our hobby.

SHELBY COUNTER SUED FOR $250+ MILLION BY WILHELM MOTOR WORKS

Legendary Automaker Receives Massive Counter Suit in Trademark Infringement Case

WOODLAND HILLS, CA – September 1, 2006 – Carroll Shelby International, Inc. received a setback in its trademark infringement case against Jon Wilhelm and Wilhelm Motor Works since a federal court judge has allowed a 250+ million dollar counter suit to proceed against Carroll Shelby Licensing and the Carroll Hall Shelby Trust. The case hinges on whether Wilhelm and his company infringed on trademark laws in the fall of last year and whether or not Shelby acted fairly in its attempts to withdraw the licensing rights given to Wilhelm.

In June of 2005, Wilhelm received, as a settlement to a prior lawsuit, a lucrative license from Shelby to make an unlimited number of Continuation Shelby Mustangs – modified and restored classic Ford Mustang vehicles from 1964 to 1970 that are detailed to replicate, in appearance and operation, Shelby Mustangs from the same era. Wilhelm's license included the manufacturing and marketing of the Shelby G.T.350C, G.T.500C, G.T.350CR, and G.T.500CR vehicles on an "exclusive" basis. Other notable vehicles of this program include the G.T.500E "Eleanor" and the G.T.350SR.

Less than five months later, Shelby informed Wilhelm that his multi-million dollar license had been revoked. The purported reason: Wilhelm had distributed less than 100 marketing flyers that Shelby claims were unapproved and had shown the prototype vehicles before they were completed. "The claims in the Shelby case against me and subsequent press release that I was offering 'knock-offs' blatantly disregard the license I received from Shelby to produce these cars and related products. A public company should not be able to disregard the law and damage a small entrepreneur this way."

Wilhelm's federal counterclaim alleges, among other things, that Shelby breached the licensing agreement, interfered with Wilhelm's contractual and business relationships, and failed to support and promote Wilhelm as an official Shelby licensee.

Trial is set for January of 2007.

Jon Wilhelm of Wilhelm Motor Works and Andres Quintana of Quintana Law Group, APC, are confident that a jury will find that their claims have merit and that Wilhelm has been unjustly damaged by the actions of Shelby. For more information on either party, please refer to www.WilhelmMotorWorks.com or www.QLGLaw.com.