A Ford dealer called Jones West Ford in Reno, Nevada has finally won a case against Ford Motor Company in court. Ford wanted the dealer to expand its service area into California. Ford Motors notified Jones West in December 2010 that it was adding Sierra County, California, to the dealer’s responsibilities.
One of the dealership owners, Richard West, protested Ford’s move saying that it would have a substantial adverse effect on the obligations the dealership faced to provide sales and service support to customers. The Department of Motor Vehicles agreed with Jones West Ford and ruled that Ford Motors didn’t establish a good cause for expanding the franchise’s territory.
The district court agreed to deny Ford Motor Company’s petition for Judicial review, and the automaker then appealed to the Nevada Supreme Court. Once the case landed there, this week, the State Supreme court sided with the DMV and the district court, stating that “it is reasonably certain that Jones West would suffer substantially adverse effects on its investment and sales and service obligations.”
The court also ruled that evidence supported the finding that the expansion would expose Jones West to increased legal and financial uncertainty and would open the dealership up to California Tax liability. An expert witness testified that the dealership would have to make investments and incur more obligations to train personnel in California regulations and warranty laws.
The order also noted that Ford had rejected an offer from the dealership that would have avoided litigation despite having cost Ford nothing. The court ruled that Ford owed the dealerships $1.4 million in attorney’s fees and $90,744 in costs.
Source: Nevada Appeal