The Michigan Court of Appeals threw out an award of $68,700 in attorney fees against a dealership whose service department failed to properly tighten the lug nuts on a wheel during a tire rotation. The lawsuit was filed by a passenger who was hurt when the left front wheel came off the vehicle two blocks from Betten Chevrolet in Muskegon in October 2013. The lug nuts were found at the scene.
The dealership acknowledged that its service technician had been negligent but disputed the passenger's claim that it had also violated the state's Motor Vehicle and Repair Act. That law makes repair facilities liable for plaintiffs' attorney fees and court costs in addition to damages.
In a unanimous ruling, the three-judge appeals panel let stand the $40,000 jury verdict for negligence but cleared Betten Chevrolet of the passenger's lawyer fees.
The Michigan law prohibits shops from charging for repairs "that are in fact not performed." The court said the purposes of the law "include regulating the practice of servicing and repairing motor vehicles and proscribing unfair and deceptive practices."
In this case, the court said, Betten did perform the tire rotation. The judges found no evidence that the technician failed to "remove the tires and replace them on different axles or sides of the vehicle," even though he negligently forgot to use the torque wrench to tighten the lug nuts.
The plaintiff's lawyer, Donald Fulkerson, of Westland, Mich., told Fixed Ops Journal that he will ask the court to reconsider the decision. He said the panel failed to consider whether the dealership violated the state law by "making an untrue or misleading statement."
A lawyer for the dealership, Caryn Ford of Detroit, declined to comment on the case.
Dealership found not biased against fired service adviser
A suburban Philadelphia dealership won a federal age and disabilities bias suit filed by a longtime service adviser who was terminated at age 61.
U.S. District Judge Jan DuBois dismissed the case, finding insufficient evidence that Videon Chrysler-Dodge-Jeep in Newtown Square, Pa., discriminated against Richard Hamilton. The adviser was hired by the store's previous ownership in 1998. He had a heart attack on the job in 2011 and returned to work several months later.
Hamilton worked under the current ownership until September 2012, when he and another 61-year-old service writer were discharged, the court decision said. The dealership kept its third service adviser, who was 43 years old, and hired an adviser in his 30s to replace the two who were terminated.
The dealership contended that it fired Hamilton because of his difficulty using its computer system and because the service manager, a new sales manager and other employees perceived him as "slow and/or not sufficiently responding to customers' needs," the decision said. The judge said Hamilton failed to offer enough evidence about whether the store used Hamilton's computer problems and inadequate responsiveness to customers as a pretext for discrimination.
"Although he was not terminated until after he developed a heart condition, he has not presented any other evidence showing a logical connection between this timing and the possibility of age discrimination," the ruling said.
Hamilton hasn't appealed the decision, said dealership lawyer Kathryn Chandless, of Newtown Square.
Retailer dealt unfairly with techs' union, judge rules
After a dealership group acquired two Chicago-area stores with unionized service technicians, it committed unfair labor practices in its dealings with the International Association of Machinists and Aerospace Workers, an administrative law judge ruled.
Zeigler Auto Group's violations included unilaterally changing employee health insurance and retirement benefits, eliminating weekly minimum pay, making side deals with favored workers, discharging two technicians for union activities and installing surveillance cameras, National Labor Relations Board Judge Charles Muhl said. The company is appealing the ruling.
Muhl also found that dealer principal Aaron Zeigler improperly refused to sign labor contracts that technicians had ratified until two weeks before a hearing in the case.
In 2018, Zeigler bought Grossinger Auto Group and McCarthy Ford, operating the dealerships as Zeigler Ford of North Riverside, Zeigler Buick-GMC of Lincolnwood and Zeigler Cadillac of Lincolnwood, all in Illinois. With 28 new-vehicle dealerships, Zeigler Auto Group, based in Kalamazoo, Mich., ranks No. 58 on Automotive News' list of the top 150 dealership groups based in the U.S.
The judge ordered Zeigler Auto Group to retroactively fund benefits it had cut, restore previous health care benefits, bargain in good faith and reinstate the technicians it discharged with seniority and back pay.
Lawyer James Hendricks, of Oak Brook, Ill., said that Zeigler is taking the case to the full NLRB. He added: "If we don't get a positive decision from the NLRB, the next step is the U.S. Court of Appeals."
Body shop whistleblower can keep arbitration award
A body shop manager at a Texas dealership, who was fired in retaliation for reporting possible criminal conduct, is entitled to a $334,922 arbitration award, the Texas Court of Appeals unanimously ruled.
The court rejected a bid by Central Houston Nissan to overturn the award in favor of Chris Singleton, who was hired by the dealership in February 2016 under a one-year contract to open and manage its collision repair center.
The court said Singleton found evidence that people at the Nissan store and a related company "were engaged in what he believed to be insurance fraud. The fraud involved the submission of fraudulent claims to insurance companies for reimbursement of repairs not actually performed."
Singleton showed a spreadsheet that summarized allegedly fraudulent insurance invoicing to his immediate supervisor and told the store's owner and controller about it, the court said. Central Houston Nissan fired him the day after he told management he "was unwilling to participate in these activities," according to the ruling.
Singleton took the case to arbitration under his employment contract. The arbitrator ruled against Central Houston Nissan, concluding that it terminated Singleton because he refused "to participate in illegal and fraudulent activity."
The appeals court said it found no basis to overturn the arbitration award, rejecting the dealership's argument that it conflicted with public policy in Texas as an "employment at will" state. The court also rejected the assertion that Singleton's reporting of misconduct wasn't legally protected because the dealership's management did not explicitly ask him to do anything illegal.