Hartline Dacus Barger Dreyer LLP Successfully Defends Nissan Forklift Corporation in a Jury Trial Involving a Complex Dealership Agreement Dispute

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HDBD attorneys Jeff Patterson and Adrienne Russell successfully defended a manufacturing company in a jury trial in St. Louis, Mo., in a case involving the termination of a dealership agreement. After Defense Counsel demonstrated that the Plaintiff suffered no harm or lost profits, the jury returned a defense verdict and no damages were awarded.

We appreciate the hard work and talent of our trial team, as well as the Unicarriers representatives who worked so hard to win this case.

Hartline Dacus Barger Dreyer attorneys Jeff Patterson and Adrienne Russell successfully defended Nissan Forklift Corporation, North America (NFC) in a federal jury trial in St. Louis, Mo., involving the termination of a dealership agreement.

“Unicarriers Americas is very pleased with this verdict. It shows that our company has appropriate processes in place for evaluating our dealers, and that we can terminate dealers who don’t perform to our standards,” says James J. Radous lll, VP of Sales and Marketing at NFC.

According to court documents, in January 2010, Lift Truck Lease & Service, Inc. d/b/a A.D. Lift Truck (ADL) entered into a Dealer Agreement with NFC, authorizing ADL to serve as a Nissan dealer in the St. Louis market. NFC manufactures the equipment and parts, but relies on a nationwide network of authorized dealers like ADL to sell, lease and service its products. The agreement had a two-year term with a renewal option.

Before the end of the two-year term, NFC delivered a notice informing ADL that it was in default due to failure to meet its market-share and parts-purchase requirements, according to court records. Pursuant to a Missouri statute, the notice explained that ADL had 60 days to cure, and that any non-renewal or termination would be ineffective if cured. Otherwise, termination would occur in 90 days. ADL responded by filing a federal lawsuit 17 days into the cure period. ADL’s Complaint, filed in the United States District Court for the Eastern District of Missouri, alleged violations of the Missouri Franchise Act, the Illinois Franchise Act and the Missouri Power Equipment Dealer Act, in addition to tortious interference with business agreements.

Judge Charles A. Shaw granted NFC's motion to dismiss ADL’s claim under the Illinois Franchise Statute early in the litigation. ADL voluntarily withdrew its tortious interference claim shortly after receiving written discovery from the defense. Before trial, Judge Shaw granted NFC's Motion for Summary Judgment on ADL’s claim under the Missouri Franchise Act and partial Summary Judgment on ADL’s claim of unlawful termination under the Missouri Power Equipment Act. The sole issue remaining for trial was whether NFC had “good cause” to terminate, cancel, or not renew the dealer agreement.

According to the trial transcript, ADL’s counsel theorized that NFC never wanted ADL to serve as the dealer in Missouri in the first place. In addition, ADL claimed that NFC used ADL’s dealership as a “stop gap” until a “large, regional dealer” could take over the St. Louis market. ADL also claimed the market-penetration requirements were unreasonable given the hostility in the market, and that NFC did not treat ADL consistently with other dealers.

ADL originally sought more than $4 million in damages for sales department expenses, future costs, and miscellaneous costs. ADL reduced its demand to $2.4 million before trial.

According to court documents, Patterson and Russell argued that statutory good cause to terminate the agreement existed due to ADL’s failure to comply with the essential and reasonable requirements of its agreement, which NFC did not impose differently on similar dealers, either in their terms or in the manner of their enforcement. NFS's attorneys also argued that ADL’s consistent failure to meet NFC’s requirements for reasonable market penetration based on NFC’s experience in comparable market areas provided good cause to terminate the agreement. In response to ADL’s “stop gap” theme, Patterson and Russell presented witnesses who described their efforts to help ADL improve performance, the reasonableness of the requirements and the consistency of enforcement.

The turning point in the case occurred when Patterson showed that ADL used an unsupported methodology to calculate its damages. He argued that lost profits would have been the proper measure of ADL's alleged damages, but ADL presented no evidence of lost profits and suffered no harm because it returned to serving as an authorized dealer for TCM, the manufacturer it represented before its tenure as a Nissan dealer.

According to court documents, NFC presented testimony from several of its officers, directors and managers, as well as two experts: Larry Daniels on liability issues, and Rodney Sowards on damages.

James J. Radous lll of NFC credits the joint efforts of HDBD attorneys and company staff, “We appreciate the hard work and talent of our trial team, as well as the Unicarriers representatives who worked so hard to win this case.”

After five and a half hours of deliberation, the jury returned a unanimous defense verdict, awarding Plaintiff no damages.

“This was a challenging but fun trial. Adrienne Russell played a significant role as Second Chair and did a great job. I appreciate Judge Shaw and his staff, as well as the dedicated jurors of St. Louis,” says Jeff Patterson, Managing Partner at HDBD.

Hartline Dacus Barger Dreyer LLP is a Texas-based law firm specializing in civil litigation and trials, with offices in Dallas, Corpus Christi and Houston. The firm’s attorneys pride themselves on providing uncompromising excellence to their clients in a variety of areas, including products liability, commercial litigation, class action and multidistrict litigation, intellectual property, personal-injury defense, premises liability, labor and employment, insurance coverage, healthcare, construction, and dealer/franchise litigation. For more information about HDBD, visit http://www.hdbdlaw.com.

SOURCE: Hartline Dacus Barger Dreyer LLP
CAUSE/CASE NO: 4:12-CV-00153-CAS
COURT: United States District Court for the Eastern District of Missouri, Eastern Division
JUDGE: Charles A. Shaw - Senior United States District Judge

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Jeffrey S. Patterson

Mallory Wendel
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