A Houston Mercedes-Benz store must pay a $939 jury award for retaliating against an independent repair shop whose owner testified against the dealership in a customer arbitration case, the 5th U.S. Circuit Court of Appeals has ruled.
The court panel ordered the trial judge to reconsider an award of $110,000 in attorney fees.
Heights Autohaus had bought discounted Mercedes-Benz parts from Mercedes-Benz of Houston Greenway until 2012. That year, shop owner Mark Zastrow agreed to testify as an expert witness on behalf of an African-American couple in a racial and credit discrimination, contract and warranty arbitration against the store.
The couple had bought a 2006 CLK from the dealership.
"The day before Zastrow was to be deposed, he alleges that a Mercedes Greenway employee called him and told him not to testify, warning that he would regret it," the appeals court said.
The dealership claims it decided to sever ties after Zastrow's testimony criticized and disparaged it.
Zastrow had sought $108,000 in economic damages and $1.08 million in punitive damages. The outcome highlights the risks of not resolving conflicts early without litigation, said Zastrow's lawyer, Reginald McKamie of Houston.
"This is a perfect example of a dealership not being reasonable and not stepping away from the situation and saying, 'Did I do something wrong? Should I try to correct this situation now?'"
The appeals court said the dealership's statement about why it ended its business relationship with Heights Autohaus supported Zastrow's legal position. Dealership lawyers did not respond to requests for comment.