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General Motors, LLC v. Ryan Motors, Inc.

Court of Appeals of Mississippi

November 13, 2018


          DATE OF JUDGMENT: 10/20/2016





          BARNES, J.

         ¶1. 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.


         ¶2. 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 that period.

         ¶3. 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 63-17-113(1) states:

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.

         Ryan's 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.[1] 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.

         ¶4. 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.

         ¶5. 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.

         ¶6. 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.

         ¶7. 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."

         ¶8. GM appeals the chancery court's reversal of the Commission's decision and requests that the agency's ...

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