An Omaha dealership has unsuccessfully challenged DaimlerChrysler Corp. over an award of a Jeep franchise to a competitor three miles away.
There was no violation of the challenger's franchise agreement because the new Jeep franchise is in a suburb that is not listed as part of Jim Earp Chrysler-Plymouth Inc.'s 'sales locality,' the Nebraska Court of Appeals has ruled.
In 1997, Chrysler Corp. notified Earp, which already was selling Jeep vehicles, that it intended to grant a Jeep franchise to Grube Chrysler-Plymouth Inc. in Papillion. Papillion is not mentioned in Earp's sales and service agreement, but it borders a community that is.
Earp filed a protest with the Nebraska Motor Vehicle Industry Licensing Board. Grube and Chrysler objected to the protest, arguing that Earp could not contest the franchise award because Papillion is outside its sales territory.
The board upheld the protest, but Lancaster County District Judge Karen Flowers ruled against Earp.
At that point, Grube began carrying Jeeps. Grube later was sold and now operates at the same location under the name Performance Chrysler-Plymouth-Jeep Inc.
Earp appealed, but the appeals court unanimously agreed with DaimlerChrysler and Grube, holding that Earp's sales and service agreement clearly does not include Papillion.
'Earp asks this court to read the language of the franchise agreement to ignore municipal boundaries and include Papillion in Earp's community because of Papillion's proximity to Omaha,' the court said in an opinion by Judge Everett Inbody. 'This is not a reasonable interpretation of Earp's franchise agreement.
'Earp's franchise agreement described Earp's area of responsibility by reference to eight specific communities. The franchise does not list Papillion among them,' the court said.
Omaha lawyer William Riley, who represents Earp, said allowing Grube to sell Jeeps has hurt his client.
'Jim had just spent more than a half-million dollars renovating his store' two months before Chrysler notified him of the Grube franchise, Riley said. 'He's told me he's lost a lot of sales to this franchise three miles away.'
Earp hasn't decided whether to pursue a further appeal, he said.
Grube's lawyer, Stephen Nelson of Omaha, said the proximity of the two dealerships was not a legal issue because Nebraska dealer law 'does not have any mileage provision.'