Don't expect a flood of dealer terminations, even though Nissan Motor Corp. U.S.A. has won a state's approval to ax a dealer for a racial slur and discourteous behavior.
The case against Virginia dealer Bobby Crumpler is extraordinary, says Nissan spokesman Kurt Von Zumwalt. 'Bobby Crumpler had a history of discourteous actions,' Von Zumwalt says. 'We are not going to use this as a club.'
On April 10, the commissioner of the Virginia Department of Motor Vehicles agreed that Nissan could terminate Crumpler for calling an employee a 'nigger' and for a pattern of discourteous and unethical behavior. Nissan also had accused Crumpler of warranty fraud, but that charge was barely mentioned in the decision.
Dealer attorneys argue that if the state decision holds up on appeal, it sets a dangerous precedent for dealers. 'The manufacturers already have enough ways to influence a dealer's behavior,' says Joel Aronson, a Washington dealer attorney. 'There wasn't a level playing field to begin with. Now it's slightly more tilted.'
Nissan's dealer agreement allows the company to terminate a dealer for conduct that injures the reputation of Nissan, Nissan's products, or the dealer. The clause forbids dealers from being discourteous to customers.
Jane Lightfoot, a franchise attorney with the American Automobile Manufacturers Association in Detroit, says similar ethics clauses are standard in dealer agreements. But she has not heard of other automakers using the clause to terminate a franchise.
Crumpler, owner of Denbigh Nissan Ltd. in Newport News, Va., was videotaped making the racial slur. The video ran on local TV. The incident touched off Nissan's termination proceedings in December 1996.
Crumpler challenged the termination before the Virginia Department of Motor Vehicles last year. Commissioner Richard Holcomb sided with Nissan this month.
A LEGAL FIRST
Legal experts believe the case represents the first time a factory has tried to terminate a dealer for racial slurs and discourteous behavior. The dealer has filed an appeal in the Virginia Circuit Court at Hampton.
Bill Lehner of Richmond, Va., Crumpler's attorney, argues that the state decision was based on emotion, not the law. He says Nissan also breached its contract by giving Crumpler just two days to apologize to his community for the racial slur and to improve his treatment of customers. The Nissan agreement promises that the factory will give dealers a 'reasonable opportunity' to address grievances.
Nissan says there was nothing Crumpler could do to correct his behavior because the damage had been done.