OF JUDGMENT: 10/20/2016
FORREST COUNTY CHANCERY COURT HON. JOHNNY LEE WILLIAMS TRIAL
ATTORNEYS FOR APPELLANT: THOMAS A. CASEY JR. J. ANDREW GIPSON
KAYTIE MICHELLE PICKETT
ATTORNEY FOR APPELLEE: S. ROBERT HAMMOND JR.
LEE, C.J., BARNES AND WESTBROOKS, JJ.
Ryan Motors Inc. (Ryan), a Chevrolet dealer in Hattiesburg,
Mississippi, filed an administrative complaint with the
Mississippi Motor Vehicle Commission (Commission) after
General Motors LLC (GM) approved the relocation request of
another Chevrolet dealer to a location ten miles from its
dealership. The complaint asserted that by failing to give
Ryan notice of the other dealer's relocation, GM violated
statutory authority and its franchise agreement with Ryan.
The Commission dismissed the complaint, finding that GM was
not required to provide notice and that there was no
violation. Ryan appealed the dismissal to the Forrest County
Chancery Court, which reversed the Commission's decision.
Finding the Commission's decision was not "arbitrary
or capricious" and was supported by the evidence, we
reverse and render the chancery court's judgment,
reinstating the Commission's findings.
AND PROCEDURAL HISTORY
Chevrolet dealer Pine Belt Motors (Pine Belt) was located in
Purvis, Mississippi, approximately thirteen miles south of
Ryan's location. Pine Belt and Ryan each had a franchise
agreement with GM, termed a GM Dealer Sales and Service
Agreement (SSA). The SSA assigns each dealer a specific
geographic territory known as an "Area of Primary
Responsibility" or "APR." Although the two
dealers' APRs were contiguous, they did not overlap.
Under Article 4.2 of the SSA, GM may revise a dealer's
APR "if [GM] determines that marketing conditions
warrant a change," but GM is required to give thirty to
sixty days' notice to the dealer and allow the dealer to
submit information either for or against the change during
In 2015, Pine Belt sought to move its dealership from Purvis
to a location outside of the Hattiesburg city limits on
Highway 98, ten miles west of Ryan's current location.
The proposed location was still within Pine Belt's APR.
On June 10, 2015, GM approved Pine Belt's request to
relocate its dealership. Aggrieved, Ryan filed a complaint
with the Commission on September 3, 2015, alleging GM had
violated Article 4.2 of the SSA and Mississippi Code
Annotated section 63-17-113 (Rev. 2013) by failing to give
Ryan notice of Pine Belt's relocation. Section
No person shall modify a franchise agreement during the term
of such agreement or upon its renewal if the modification
substantially and adversely affects the motor vehicle
dealer's rights, obligations, investment, or return on
investment without giving sixty (60) days['] written
notice of the proposed modification to the motor vehicle
dealer and without showing good cause to the commission.
argument was that GM's approval of Pine Belt's
relocation had effectively modified its SSA since GM may, in
the future, propose a change to Ryan's APR due to market
conditions, and the failure to give the dealer notice was a
violation of due process. GM denied that Ryan's SSA had been
modified, noting Pine Belt was merely relocating to an area
inside its existing APR; thus, it was not required to give
Ryan notice under the statute or the terms of the SSA.
The Commission held a hearing on November 18, 2015. Ryan
presented two witnesses: Mickey Ryan, the company's
president, and Joe Roesner, an expert witness in dealer
network analysis. Mickey Ryan testified that GM's
approval of Pine Belt's relocation would negatively
impact Ryan's sales. He also claimed that the relocation
of Pine Belt effectively modified Ryan's APR and SSA and
speculated that once Pine Belt began operations in its new
location, GM would change Ryan's APR. Roesner's
testimony concerned standard procedures typically utilized by
GM in determining whether to approve dealer relocation
requests, such as market analyses.
GM brought its Regional Network Manager, David Bott, to the
hearing but did not call any witnesses. Instead, GM submitted
Bott's affidavit into evidence, in which he testified
that Ryan's SSA had not been changed, and GM moved to
dismiss Ryan's complaint. On rebuttal, Ryan requested
that it be allowed to cross-examine Bott on his affidavit and
Roesner's testimony. The hearing officer said that
questions concerning Roesner's testimony would not be
allowed, but because Bott's affidavit was in evidence,
Ryan could cross-examine him on its contents. Ryan decided
not to cross-examine Bott and rested its case.
The Commission entered its order on December 16, 2015,
concluding there was no evidence that Ryan's SSA had been
modified. Although it did not "condone or approve of the
manner in which GM approved the relocation" of Pine Belt
in opposition to the other dealer's wishes, the
Commission found that GM did not violate section 63-17-113(1)
and dismissed the complaint.
Ryan filed an appeal with the chancery court, asserting the
Commission's findings were "arbitrary and
capricious." Noting the Commission's
"cryptic" disapproving language toward GM's
actions and its failure to allow Ryan the opportunity to
"adequately cross-examine" Bott, the court reversed
the Commission's decision and awarded Ryan attorney's
fees. Ryan filed a motion to amend the judgment, requesting
that the court "order GM to withdraw its permission for
relocation of Pine Belt," or alternatively, that the
court remand the case and require GM to show "it has
good cause to allow the relocation" of Pine Belt.
Opposing Ryan's motion, GM argued that Ryan's motion
was not proper under Mississippi Rules of Civil Procedure 59
or 60 and its "request to enjoin Pine Belt from
relocating [was] contrary to law." On February 6, 2017,
the chancery court denied Ryan's motion, finding its
request for injunctive relief "improper" because
the court was "sitting in an appellate posture, and not
as a fact finder."
GM appeals the chancery court's reversal of the
Commission's decision and requests that the agency's