The U.S. Court of Appeals for the Eleventh Circuit upheld a $16 million jury verdict awarded to a Florida dealership, Action Nissan Inc., in a contract dispute with Hyundai Motor America (HMA) regarding the establishment of Genesis luxury vehicle dealerships. The court rejected Hyundai’s argument that the jury should have been instructed differently, affirming the lower court’s handling of the case.
A 2009 agreement between Hyundai and Action Nissan, which does business as Universal Hyundai, granted owner William Nero a right of first refusal to establish Genesis dealerships in two of eight Florida counties, provided three specific conditions were met.
Hyundai argued the conditions precedent in the agreement, which included the establishment of a new luxury "line-make" and the existence of "open points" or new dealership opportunities, had to occur simultaneously. The automaker contended the jury should have been instructed to consider this interpretation.
However, the Court of Appeals ruled Hyundai’s interpretation was not unambiguously required and the issues of fact were rightly decided by the jury.
"Because HMA's interpretation was not unambiguously required, the district court did not abuse its discretion when it refused to give HMA's proposed instruction to the jury and left the interpretative task to the factfinder," the court said in its decision.
The court further noted that even if the jury had accepted Hyundai’s interpretation, there was sufficient evidence to support the finding that the conditions precedent did occur simultaneously in March 2018.
The legal battle between Nero’s dealership and Hyundai traces back to 2006, when Nero sued Hyundai over advertising assessments. The two parties reached a confidential settlement in 2009, which included the right-of-first-refusal clause that led to the current dispute. When Hyundai began to implement plans to spin off the Genesis line as a separate luxury brand in 2018, Nero claimed Hyundai breached the 2009 agreement by failing to honor his right of first refusal.
The case, Action Nissan Inc. et al. v. Hyundai Motor America et al., is now concluded, barring any further appeals. Hyundai’s legal team did not provide a comment on the decision.
