Mahindra & Mahindra, Ltd. v. Holloway Motor Cars of Manchester, LLC

• Decision Date: 30 September 2014
• Docket Number: No. 2013–452,2013–452
• Parties: MAHINDRA & MAHINDRA, LTD. v. HOLLOWAY MOTOR CARS OF MANCHESTER, LLC & a.
• Court: New Hampshire Supreme Court

166 N.H. 740
103 A.3d 1170

MAHINDRA & MAHINDRA, LTD.
v.
HOLLOWAY MOTOR CARS OF MANCHESTER, LLC & a.

No. 2013–452

Supreme Court of New Hampshire.

Argued: April 16, 2014
Opinion Issued: September 30, 2014

Shaheen & Gordon, P.A., of Concord (Steven M. Gordon and Benjamin T. Siracusa Hillman on the brief), and King & Spalding, LLP, of Atlanta, Georgia (L. Joseph Loveland on the brief and orally), for the petitioner.

Holmes Law Offices PLLC, of Concord (Gregory A. Holmes on the brief and orally), for the respondents.

CONBOY, J.

166 N.H. 742

The petitioner, Mahindra & Mahindra, Ltd. (Mahindra), appeals a decision of the Superior Court (Smukler, J.) affirming a default judgment by the New Hampshire Motor Vehicle Industry Board (Board) in favor of the respondents, Holloway Motor Cars of Manchester, LLC, Peters Auto Sales, Inc., and Crest Chevrolet, Inc. (collectively "dealers"). Mahindra argues that the trial court erred by finding that the Board had personal jurisdiction over Mahindra and subject matter jurisdiction to adjudicate the dealers' claims against Mahindra. We vacate the order of the superior court and remand with instructions to remand to the Board for further proceedings consistent with this opinion.

I. Background

The following facts are drawn from the trial court's order, the record, or are otherwise undisputed on appeal. On July 12, 2011, the dealers filed a protest with the Board alleging that Mahindra, a motor vehicle manufacturer based in Mumbai, India, violated RSA chapter 357–C. See generally

166 N.H. 743

RSA 357–C:3, :7 (2009 & Supp.2013). The dealers asserted that Mahindra entered into a distributor agreement with Global Vehicles, U.S.A. Inc. (Global Vehicles) by which Global Vehicles became the exclusive distributor of Mahindra's motor vehicles in the State of New Hampshire. They further alleged that the dealers paid a fee to Global Vehicles in order to become dealers of Mahindra's motor vehicles. The dealers claimed that Mahindra "violated RSA [chapter] 357–C by its wrongful termination of the Distributor Agreement with Global [Vehicles], its announced intention not to honor the franchise agreements held by the dealers, and its refusal to provide motor vehicles to Global [Vehicles] and the dealers in accordance with its agreement and state law." Although the dealers had entered into agreements only with Global Vehicles, they brought their protest against both Mahindra and Global Vehicles.

The Board issued a notice of pre-hearing conference to the dealers, Global Vehicles, and a senior vice president of Mahindra U.S.A., a subsidiary of Mahindra, in Kennesaw, Georgia. The notice to Mahindra U.S.A. was returned. Mahindra did not participate in the pre-hearing conference.

103 A.3d 1174

After the conference, the dealers attempted service of the protest on Mahindra through a variety of means. They sent copies of the protest by certified mail to Mahindra's counsel in Georgia and to the president of Mahindra's automotive and farm equipment sector at an address in Houston, Texas. The dealers also sent a copy of the protest to the same Mahindra sector president at an address in Mumbai, India, which was delivered by United Parcel Service. In addition, the dealers sent a copy of the protest to the sheriff's office in Marietta, Georgia, for service on the senior vice president of Mahindra USA Automotive. The sheriff's return stated that the individual could not be found.

On May 22, 2012, the Board issued a notice of hearing to the dealers, Global Vehicles, and Mahindra's sector president in Houston, Texas. Mahindra's attorney in Georgia sent a letter to the Board (the "letter") responding to the hearing notice and requesting that all claims against Mahindra be dismissed. The letter was filed "for the limited purpose of raising three objections:"

First, Mahindra respectfully submits that it is not subject to the Board's jurisdiction because Mahindra was never served with the July 12, 2011 Protest. Second, Mahindra also is not subject to the Board's jurisdiction because Mahindra does not manufacture or assemble new motor vehicles for use and operation on the public highways of New Hampshire. Third, as set forth further herein, [the dealers'] protest improperly asks this Board to interject itself into a private contractual dispute between Global Vehicles and Mahindra. This dispute was decided in Mahindra's favor earlier

166 N.H. 744

this year following an international arbitration that Global Vehicles initiated in London pursuant to a binding arbitration clause in the Mahindra–Global Vehicles Distributor Agreement. Accordingly, even if the Board had jurisdiction over the contract dispute between Global Vehicles and Mahindra (it does not), that dispute was subject to an arbitration where Global Vehicles' claims have been soundly rejected.

With respect to the third objection, relating to the arbitration with Global Vehicles, the letter explained:

Even if the Board finds that it has jurisdiction over Mahindra, Mahindra observes that [the dealers'] Protest consists primarily of allegations about the Mahindra–Global Vehicles Distributor Agreement, to which [the dealers] are not parties....

In the arbitration, Global Vehicles had claimed that Mahindra engaged in certain conduct in violation of the Distributor Agreement.... [T]he arbitral tribunal rejected Global Vehicles' claims, including the claim that Mahindra wrongfully terminated the Distributor Agreement. Instead, the tribunal found that the Distributor Agreement automatically terminated on June 11, 2010 according to its own terms, and that Mahindra had not otherwise violated any state or federal dealer laws that may govern the relationship between Mahindra and Global Vehicles.

[The dealers] have not alleged that they entered into any separate contracts with Mahindra. To the extent [the dealers] intend to re-litigate Global Vehicles' claims against Mahindra on Global Vehicles' behalf in this forum, any issues relating to the prior dispute between Global Vehicles and Mahindra—including but not limited to any issues related to the performance and termination of a Distributor Agreement to which [the dealers] are not parties—should be off-limits in this forum. Those disputes were subject to Section 60(b) of the Distributor

103 A.3d 1175

Agreement and have already been decided in a binding overseas arbitration.

The Board concluded that, because neither Global Vehicles nor Mahindra appeared for the final hearing despite being properly noticed, they had defaulted. The Board additionally found and ruled "that Mahindra and Global [Vehicles] ha[d] violated RSA 357–C:3 and RSA 357–C:7" and barred Mahindra from doing business in New Hampshire until it "appears before th[e] Board to answer to th[e] protest."

Mahindra filed a motion asking the Board to vacate the default judgment, arguing that, because India and the United States are parties to the Hague

166 N.H. 745

convention on Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, Nov. 15, 1965, 20 U.S.T 361 (Hague Service Convention), the dealers could have effectuated service of process on Mahindra only by complying with its requirements. Mahindra argued that the methods of service attempted by the dealers did not comply with the Hague Service Convention and sought dismissal of the protest for lack of service. The Board denied the motion.

Mahindra appealed the Board's order to the superior court in accordance with RSA 357–C:12, VII (2009), arguing that the dealers did not serve Mahindra in accordance with the Hague Service Convention. Mahindra also asserted that the Board lacked subject matter jurisdiction over the dispute because Mahindra did not manufacture motor vehicles for sale or operation in New Hampshire. The court affirmed the Board's decision, finding that, notwithstanding the applicability of the Hague Service Convention, the third objection in the letter to the Board "raise[d] a defense to the protest, the ground of preclusion." The trial court, therefore, concluded that "Mahindra waived service and submitted to the jurisdiction of the [Board]." The trial court also found that the dispute was within the scope of RSA 357–C:2 (2009), such that the Board had subject matter jurisdiction to hear the protest. Mahindra's motion for reconsideration was denied, and this appeal followed.

II. Standard of Review

The trial court's review of the Board's decision is governed by RSA 357–C:12, VII, which provides:

All findings of the board upon all questions of fact properly before the court shall be prima facie lawful and reasonable. The order or decision appealed from shall not be set aside or vacated except for errors of law. No additional evidence shall be heard or taken by the superior court on appeals from the board.

Our review of the trial court's decision is similarly limited: we will not set aside or vacate the trial court's decision except for errors of law. See Strike Four v. Nissan N. Am., 164 N.H. 729, 735, 64...