The Eleventh Circuit on Wednesday upheld a $16 million verdict for a Florida dealership over its contract dispute with Hyundai Motor America about the automaker's separation of dealer networks to include new, luxury vehicles under Genesis. REFLECTION : The award was upheld by the appeals court and Hynundai's bid to overthrow it quashed.

Hyundai $16M Dealership Verdict : Right of First Refusal Dispute

The suit, filed by Action Nissan Inc., an Orlando auto dealership doing business as Universal Hyundai along with its owner William Nero, was centered on a 2009 agreement that allowed them to open Genesis dealerships in eight Florida counties if they first met certain conditions. Nero said Hyundai broke the agreement by talking to other dealerships about joining its Genesis network without extending Nero's right of first refusal.

Hyundai argued that the 2009 agreement stated three conditions precedent had to exist at same time in order for control over Nero could be acquired. The automaker claimed that the jury should have been informed as much, but the Eleventh Circuit rejected its argument. Let the jury decide on Hyundai's reading of the once Pierce case, court rules.

How Florida's Licensing Laws Play into This

Hyundai's defense revolved around the Florida Department of Highway Safety and Motor Vehicles' denying separate licensing for the Genesis line. Because, Hyundai has retorted in court papers, no “open points” — new franchised auto dealerships—remained thanks to the state’s regulatory decision and therefore it was never obligated to give Nero a right of first refusal. But the Eleventh Circuit said Hyundai could have anticipated that in 2009, when it inked its agreement with customers or even before.

Hyundai $16M Dealership Verdict : Ongoing Legal Battle

The legal battle began in 2006 when Nero first filed suit against Hyundai for advertising assessments. The right-of-first-refusal clause stems from a 2009 settlement, which started the REIT dispute that led to this litigation. Hyundai began moving to elevate Genesis into its own luxury line in 2018, a move that led Nero to sue the automaker for violating their contract.

Nero's lawyer, Nicholas Bader said he was pleased with the Eleventh Circuit decision and "this is what an expert and jury determined those dealerships were worth.” As of press time, Hyundai Motor America has not responded to the decision.