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Dealer Law


Mr. DeVito represents automobile, truck, motorcycle, and recreational vehicle dealers in complex commercial transactions, business and franchise disputes, operational issues, and litigation. He has the knowledge and experience to address a wide range of business and legal issues, with the goal of effectively achieving his clients immediate and specific needs economically, while also counseling with creative and strategic solutions for issues that will arise in the future for the business.

Mr. DeVito has successfully litigated against manufacturers attempts to terminate, relocate, and add same-line competing franchises into a dealership’s relevant market area. Below is an example of some the dealer matters won for dealers:

SAMPLE VERDICT, DECISIONS, AND SETTLEMENTS

Sims Nissan v. Nissan of North America, Inc., 2013-Ohio-2662

(Termination Protest before Board affirmed by the Tenth District Court of Appeals)

Dealership defeated Nissan’s Notice of Termination alleging it to be the worst sales effective dealership in the state of Ohio and one of the worst in the Midwest Region. Court held Nissan’s regional sales performance standard average (“RSE”) was not reasonable and failed to account for unique local market conditions of domestic manufacturer bias because of the nearby General Motors Lordstown facilities. On appeal, answering a legal question of first impression, the Tenth District held the Ohio Dealers Act remedy section included the payment of expert witness fees, in addition to reasonable attorney fees, witness fees, and any other costs incurred, in order to make the dealer whole and promote the policy behind the ODA.

Lou LaRich Chevolet v. General Motors, LLC (May 14, 2010)

(Termination Protest before AAA pursuant to Section 747 of Public Law 111-117)

Dealership defeated General Motors termination attempt in the first federal arbitration case litigated, after the manufacturer’s bankruptcy petition for protection, pursuant to the factors enumerated by Congress in the Consolidated Appropriations Act of 2010. The tribunal held that the dealer was satisfactorily selling vehicles and that the balance of interests supported keeping the dealership in the network of dealers serving the area.

[See also, Dunn Chevrolet-Olds, Inc. v General Motors, LLC, (June 30, 2010), the Dunn dealership defeated General Motors termination attempt of the Buick brand pursuant to the factors enumerated by Congress in the Consolidated Appropriations Act of 2010.]

Andy Chevrolet Company v General Motors Corporation (2006)

(Termination Protest before Ohio Motor Vehicle Dealers Board)

Dealership defeated General Motors’ Notice of Termination alleging it to be the worst sales effective dealership in the state of Ohio, out of 205 dealers, for five years. The Board held General Motors state sales performance standard average (“RSI”) was not reasonable and failed to apply the Dealers Sales and Service Agreement contract terms for evaluating the dealerships performance in a metropolitan market. The Board also held other required factors for consideration weighed in favor of dealer and against termination based solely on desire of manufacturer to sell more vehicles. Dealer was awarded and collected all of its litigation costs, including attorney fees, expert witness fees expenses, and trial expenses.

Durnell’s Indian Hallow, Inc. v R-Vision (2006)

(Termination Protest before Ohio Motor Vehicle Dealers Board)

Dealership successful prevailed on constructive termination and lack of good faith claims against recreational vehicle manufacturer’s wrongful conduct. The Board case was the first decision in Ohio establishing a cause of action for constructive termination, under the Ohio Dealer Act provisions and protections, even if not specifically enumerated by the legislature. Dealer was awarded and collected all of its litigation costs, including attorney fees, expert witness fees expenses, and trial expenses.

General Motors v. Joe O’Brien Chevrolet, Inc., 118 Ohio App.3d 470, 693 N.E.2d 317 (1997)

(Relocation Protest before Board affirmed by Tenth District Court of Appeals)

Dealership defeated General Motors attempt to relocate a competing Chevrolet franchise within ten (10) miles of its current facility. The manufacturer failed to meet its burden of proof to demonstrate that the dealer was not properly servicing the area. Dealer was awarded and collected all of its litigation costs, including attorney fees, expert witness fees expenses, and trial expenses.

SPEAKING ENGAGEMENTS AND PRESENTATIONS

Litigating and Preparing for Sales Performance, Price Discrimination, and Facility Cases after Beck Chevrolet (October 24, 2016)

The New York high court recently held in the Beck Chevrolet v. General Motors case that the industry standard (really only the manufacturer standard) measure of dealer sales performance was unfair and unreasonable under New York law because it did not take into account most local market conditions including brand popularity. The issue was presented to the New York high court on a certified question from the Second Circuit.

The presentation will discuss the ramifications of Beck Chevrolet for dealers and attorneys going forward, how to defeat manufacturer arguments and the Urban Science witness on rotely applied averages used as performance standards, and how this all plays in to incentive programs and facility requirements that impact every dealer.

2016 National Automobile Dealer Counsel Fall Convention Brochure

Facility Manufacturer Performance Standards – A Statistical Analysis (April 30, 2013)

Manufacturers continue to place an increased emphasis on dealership sales effectiveness scores (RSI, MSR, etc.), often relying on them as evidence that a dealership is not fulfilling its sales and service obligations. This may put a dealership at risk of losing its franchise or certain franchise benefits. There are, however, several weaknesses and fatal flaws to the sales effectiveness metric used by the majority of manufacturers. This presentation will provide an introduction to the sales effectiveness metric and illustrate the weaknesses and flaws that are inherent in its use. Actual case histories highlighting potential dealer defenses will be used.

2013 National Automobile Dealer Counsel Annual Convention Brochure

Facility Image Programs: Strategies for Countering Excessive or Unnecessary Factory Demands (April 30, 2012)

This presentation will reconcile dealer rights and remedies with the new wave of manufacturer demands for facility image programs. Do Taj Mahals sell more cars? Do factory programs violate price discrimination statutes? Are factory subsidies guaranteed or can compliant dealers be left holding the bag? With the promulgation of state franchise law amendments, existing Dealer Agreement provisions, along with the recent findings of an NADA commissioned industry study, this area of dealer-factory relations has become one of the “Hot-Button” issues of 2012 . The panelists will discuss practical ways to address conflicts on the controversial topic and offer solutions to counsel confronted with dealer-clients who have important decisions to make.

2012 National Automobile Dealer Counsel Annual Convention Brochure

E-mail cdevito@mydealerlawyer.com

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