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Owners of Failed O.C. Dealership Win Nissan Suit

TIMES STAFF WRITER

A Superior Court jury in Los Angeles awarded $3 million Friday to owners of a failed Orange County Nissan dealership who claimed that the car company forced them out of business in favor of another dealer.

Carson-based Nissan Motor Corp. U.S.A. said it plans to appeal.

The verdict, which came after a 2 1/2-week trial in Los Angeles, marks one of the few times a dealer has prevailed in a dispute over dealership location, according to industry observers. Usually, these disputes are heard by a state trade council, the New Motor Vehicle Board, which many dealers believe favors the auto manufacturers.

Superior Court Judge Ricardo A. Torres initially rejected the suit by the dealership owner, HWB Automotive Group Inc., and sent it to the state board for a hearing. But HWB appealed and the state appellate court ordered a trial.

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“This is a case that will be watched and cheered by many dealers,” said Alton Buchalter, Irvine-based attorney for HWB Automotive Group Inc., which owned Nissan of Cypress from 1991 until closing it in October 1992.

In the HWB case, jurors found that Nissan deliberately concealed a desire to close the Nissan of Cypress dealership when Orange County businessmen Randy Hix, Jim Brakke and Robert Wells acquired the facility in 1991. They had planned to move the dealership from Cypress to Westminster.

Instead, Nissan approved HWB’s purchase and then helped a rival Nissan dealership move to a location that effectively prevented HWB’s relocation plans. The two dealerships would have been so close together that they would have violated franchise agreements prohibiting one Nissan dealer from encroaching on another’s sales territory.

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Evidence in the trial, Buchalter said, showed that Nissan paid $1.5 million to help the other Nissan dealer relocate. Nissan also did not tell HWB about an internal study that had earmarked the Cypress dealership for closure because there were too many Nissan dealerships in Orange County at the time, he said.

Jurors awarded HWB $2.7 million in actual damages and interest and $300,000 in punitive damages.

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