NASHVILLE -- A state appeals court in Ohio has sided with a local Nissan dealer's argument that Chevrolet's unusual popularity in his market makes Nissan's sales expectations for him unrealistic.
Nissan had moved to terminate Warren, Ohio, dealer Billy Sims after labeling his dealership the worst-performing Nissan store in his 13-state region.
But Sims sued Nissan, saying it had failed to take into account his market's unique challenge: Sims sells in the area around General Motors' large assembly plant in Lordstown, Ohio, which has 4,500 workers and has built Chevrolets for decades.
Sims argued that the result of GM workers raising families locally, retiring and receiving a steady flow of employee family discounts was a fierce market loyalty to the Detroit brand.
After a lower court agreed with Sims last year, lawyers for Nissan North America appealed to the Ohio Court of Appeals. That court upheld Sims' argument this week, also ruling that Nissan must pay Sims' lawyers' fees and $57,700 in expenses for Sims' two expert witnesses.
Sims' lawyer, Chris DeVito of Cleveland, said both decisions have implications beyond Sims and Nissan for auto dealers around the country.
"Automakers usually have very nice contracts that promise to take all sorts of factors into consideration in reviewing a dealer's performance, but in reality they seldom do," DeVito said. "This ruling is significant for upholding the idea that you can't apply the same rote standard to every dealer in every market. There are unusual circumstances in different markets that have to be taken into account."
He said the court's ruling that Nissan must pay for Sims' expert witnesses "will give dealers a little legal backbone that they can afford to defend themselves in court against much larger auto companies."
The National Automobile Dealers Association and the Ohio Automobile Dealers Association filed a friend of the court brief arguing in favor of Sims being reimbursed for the expense of his expert witnesses.
A Nissan spokesman declined to comment. Sims, who is also a Buick-GMC dealer, took over the Nissan point in 2001 after its previous owner closed.
Sims received warnings from the factory that he was underperforming. By the time Nissan moved to terminate him in 2009, the store was selling only 13 or 14 new cars a month.
Evidence presented in the case showed that Chevrolet's market share around Warren is double the brand's state average, while Toyota, Nissan and Honda typically perform at half of their normal average for Ohio.
DeVito said the court ruling prevents Nissan from terminating Sims. But he noted that Sims' market situation remains challenging.
"He will probably continue to get deficiency notices from Nissan," the lawyer said. "But they'll leave him alone now."