by "LJ909" (lj909)
Published 05/24/2017 at 16:11
by "LJ909" (lj909)
Published 05/24/2017 at 16:11
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In a crazy story, a Nissian franchise owner in Santa Ana, CA won a suit against Nissan alleging that Nissan had a secret plan to put him out of business. He claimed that Nissan committed fraud to foreclose on his dealerships after he defaulted on loans back in 2009.
I’m on the fence about this ruling. The owner admits to being late on payments, but states he eventually paid them, yet he wins a suit against Nissan for them trying to foreclose due to him not paying. This is weird especially considering that he fell behind on his payments again. But maybe I might be missing something but you guys can read about the whole thing here.
"MasterMario - Keeper of the V8s" (mastermario)
05/24/2017 at 16:19, STARS: 0
Sounds like he had some evidence showing Nissan agreed to give him more time to pay back the loans but then went ahead and foreclosed on him before that time was up. That’s the best I can come up with based on the article.
"Roadster Man" (roadsterman)
05/24/2017 at 16:23, STARS: 4
All you need to read is “jury awards...”
The money award from the verdict will be reduced A LOT after Nissan appeals. I thought only Florida juries were crazy enough to do this kind of stuff.
"LJ909" (lj909)
05/24/2017 at 16:24, STARS: 0
I kind of came to that conclusion too. But was that worth a quarter of a billion dollars? Even if they had said “ok we will give you another 6 months” and then 3 months into that 6 months they start to foreclose, I would think that would be worth at least a $10 million judgement.
"Party-vi" (party-vi)
05/24/2017 at 16:27, STARS: 0
I see what you did there.
"MasterMario - Keeper of the V8s" (mastermario)
05/24/2017 at 16:27, STARS: 0
Yea, the amount seems a bit out there.
"Roadster Man" (roadsterman)
05/24/2017 at 16:28, STARS: 1
Did I accidentally make a pun?
"Textured Soy Protein" (texturedsoyprotein)
05/24/2017 at 17:22, STARS: 2
I believe the key part of the article is:
Kahn was late with payments, but he eventually paid them. He alleged that a Nissan executive had promised flexibility on the payments and that Kahn would receive financing to keep his dealerships afloat through 2009. However, Kahn alleged the company actually had a “secret plan” to “pull the plug” after squeezing as much money out of him as possible.
After his dealerships again came up short on loan payments, Nissan foreclosed and began selling off Kahn’s assets, including his Orange County home and other property he’d put up for collateral to raise more money.
So basically...Nissan offered a payment plan which they then reneged on. Allegedly.
"haveacarortwoorthree2" (haveacarortwoorthree2)
05/24/2017 at 18:56, STARS: 1
He had 7 dealerships, not just one, so any numbers have to take that into account. Additionally, because the dealer was able to assert a fraud claim, he could get punitive damages. Looks like the jury awarded $122m in compensatory damages and $135m in punis. Looking at the compensatory damages, that’s about $17.4m per dealership — likely a lost profits measure of damages supported by expert testimony. I saw one 2016 article noting the average Nissan dealer makes about $1m in profits annually, so the damages number seems a bit aggressive but there are a lot of unknown factors so I don’t think we can draw any conclusions (apparently this dealership group had around $500m in revenues in 2007). Then the jury awarded punis on essentially a 1:1 basis, which again seems reasonable (assuming that there is evidence to support an award in the first place).
If you are really interested in the background, here’s the court of appeals opinion from 2014 — the court reversed a judgment for Nissan because the trial court originally blocked the dealer from submitting his fraud evidence/claim. https://dlbjbjzgnk95t.cloudfront.net/0502000/502120/nissan.PDF
"LJ909" (lj909)
05/24/2017 at 19:14, STARS: 0
Thank you for this.