Gen. Motors LLC v. Kar Auto Grp. of Decorah, Inc.
| Decision Date | 23 May 2022 |
| Docket Number | 20-CV-2039 CJW-KEM |
| Citation | 604 F.Supp.3d 745 |
| Parties | GENERAL MOTORS LLC, Plaintiff, v. KAR AUTO GROUP OF DECORAH, INC., d/b/a Decorah Chevrolet Cadillac, an Iowa Corporation, Defendant. |
| Court | U.S. District Court — Northern District of Iowa |
Jacob F. Fischer, Pro Hac Vice, Mark Thomas Clouatre, Pro Hac Vice, Megan Mary Ratcliffe, Pro Hac Vice, Nelson Mullins Riley & Scarborough LLP, Denver, CO, Stephen E. Doohen, Whitfield & Eddy PLC, Des Moines, IA, for Plaintiff.
Aaron Thom, Pro Hac Vice, Thom Ellingson, PLLP, Minneapolis, MN, James H. Arenson, James W. Radig, John William Hofmeyer, IV, Arenson Law Group, PC, Cedar Rapids, IA, for Defendant.
TABLE OF CONTENTS
A. Summary Judgment Standard...750
B. Iowa Breach-of-Contract...751
C. Iowa Code Chapter 322A...751
D. Iowa Law Regarding Additional Line-Makes...753
A. The Applicability of Section 322A.22...755
B. Whether Section 322A.22 Voids the Contractual Provisions at Issue...757
This matter is before the Court on defendant's motion for partial summary judgment on Count I of plaintiff's complaint. (Doc. 98). Plaintiff timely resisted this motion. (Doc. 113). Defendant timely filed a reply. (Doc. 121). For the reasons described below, the Court grants this motion.
This dispute turns on whether the terms "prohibit" and "restrict" in Iowa Code Section 322A.22 void contractual terms between the parties that do not on their face limit a dealership from adding or continuing other line-makes of vehicles but nevertheless affect a dealer's ability to do so. Based on the text and structure of Section 322A.22, the Court finds that they do. As a result, the contractual terms that plaintiff seeks to enforce against defendant in Count I are void such that they cannot support a breach-of-contract claim. The Court thus grants summary judgment in favor of defendant on Count I.
Plaintiff General Motors, LLC ("plaintiff" or "GM") is a manufacturer and distributor of motor vehicles that is organized under Delaware law and maintains a principal place of business in Detroit, Michigan. (Doc. 63, at 1). Defendant KAR Auto Group of Decorah, Inc., d/b/a/ Decorah Chevrolet Cadillac ("defendant") is an automobile dealer in Decorah, Iowa, that is organized under Iowa law and maintains a principal place of business in Decorah, Iowa. (Id. ). In 2003, defendant entered into two dealer sales and service agreements (the "Agreements") with plaintiff. (Docs. 63, at 3; 113-1, at 1). Under the Agreements, defendant was authorized to sell and service two General Motors "line-makes" of vehicles, namely Chevrolet and Cadillac, from the premises identified in the Agreements (the "GM Dealership Premises"). (Docs. 63, at 2; 113-1, at 1). Defendant formerly operated a separate automobile dealership adjacent to its GM Dealership Premises. (Docs. 113-1, at 6). The adjacent dealership (the "CDJR dealership") sold the Chrysler, Dodge, Jeep and Ram ("CDJR") line-makes, which are manufactured by Fiat Chrysler. (Id. ). In March of 2020, the entity operating the CDJR dealership merged into defendant. (Doc. 113-1, at 7). On June 10, 2020, defendant merged its CDJR operations into the operations at the GM Dealership Premises. (Id. ). The combination of line-makes from different manufacturers at a single dealership is called "dualing." (Doc. 63, at n.5).
Plaintiff raised a claim for breach-of-contract arising out of specific terms of the Agreements.1 (Doc. 63, at 18). In its orders, the Court provisionally recognized that those terms appear void by Section 322A.22. (Docs. 24, at 20; 163, at 1).
Plaintiff moved for orders requiring defendant "to conduct Chevrolet and Cadillac Dealership Operations in accordance with the Dealer Agreements[,]" preventing defendant from "using the GM Dealership Premises for any purpose not approved by [plaintiff] in writing, by any court, or by any other governmental authority with jurisdiction, specifically including without limitation an injunction prohibiting CDJR dealership operations at the GM Dealership Premises[,]"—that is, an injunction preventing defendant from "dualing." (Doc. 63, at 26). At the Court's direction, plaintiff also moved to appear before an administrative hearing to show "good cause" as to why it should terminate or refuse to continue the Agreements with defendant. (See Doc. 114).
A. Summary Judgment Standard
Summary judgment is appropriate when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). When asserting that a fact is undisputed or is genuinely disputed, a party must support the assertion by "citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations ..., admissions, interrogatory answers, or other materials." FED. R. CIV. P. 56(c)(1)(A) ; see Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Alternatively, a party may show that "the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." FED. R. CIV. P. 56(c)(1)(B). More specifically, "[a] party may object that the material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence." FED. R. CIV. P. 56(c)(2).
A fact is "material" if it "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (citation omitted). "An issue of material fact is genuine if it has a real basis in the record." Hartnagel v. Norman , 953 F.2d 394, 395 (8th Cir. 1992). It is also genuine "when a reasonable jury could return a verdict for the nonmoving party on the question," Woods v. DaimlerChrysler Corp. , 409 F.3d 984, 990 (8th Cir. 2005) (internal quotation marks omitted). Evidence that presents only "some metaphysical doubt as to the material facts," Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986), or evidence that is "merely colorable" or "not significantly probative," Anderson , 477 U.S. at 249–50, 106 S.Ct. 2505, does not make an issue of fact genuine. In sum, a genuine issue of material fact requires "sufficient evidence supporting the claimed factual dispute" that it "require[s] a jury or judge to resolve the parties’ differing versions of the truth at trial." Id. at 249, 106 S.Ct. 2505 (citation and internal quotation marks omitted).
The party moving for summary judgment bears "the initial responsibility of informing the district court of the basis for its motion and identifying those portions of the record which show a lack of a genuine issue." Hartnagel , 953 F.2d at 395. The plaintiff may not then simply point to allegations made in her complaint but must identify and provide evidence of "specific facts creating a triable controversy." Jaurequi v. Carter Mfg. Co. , 173 F.3d 1076, 1085 (8th Cir. 1999) (internal quotation marks omitted). When considering a motion for summary judgment, "[t]he court need consider only the cited materials, but it may consider other materials in the record." FED. R. CIV. P. 56(c)(3). Even so, the moving party does not meet its burden by simply providing a massive record, and the Court "will not sort through a voluminous record in an effort to find support for the plaintiff's allegations." Howard v. Columbia Pub. Sch. Dist. , 363 F.3d 797, 800 (8th Cir. 2004).
The moving party's burden of production turns on its burden of persuasion at trial. If the moving party bears the burden of persuasion on the relevant issue at trial, it must support its motion with credible evidence available under Rule 56(c) that would entitle it to a directed verdict if not challenged at trial. Celotex Corp. , 477 U.S. at 331, 106 S.Ct. 2548 ; Firemen's Fund Ins. Co. v. Thien , 8 F.3d 1307, 1310 (8th Cir. 1993). But, if the moving party does not bear the burden of persuasion at trial, it has two options to satisfy its Rule 56 burden of production. First, it may submit affirmative evidence that negates an essential element of the nonmoving party's claim. Celotex Corp. , 477 U.S. at 331, 106 S.Ct. 2548 ; see also Bedford v. Doe , 880 F.3d 993, 996 (8th Cir. 2018). Second, it may show that the nonmoving party's evidence is insufficient to establish an essential element of the nonmoving party's claim. Celotex Corp. , 477 U.S. at 331, 106 S.Ct. 2548 ; see also Bedford v. Doe , 880 F.3d at 996.
Once the moving party meets its burden of production, the nonmoving party must go beyond the pleadings and show by depositions, affidavits, or other evidence "specific facts which create a genuine issue for trial." See Mosley v. City of Northwoods , 415 F.3d 908, 910 (8th Cir. 2005) (internal quotation marks omitted). In determining whether a genuine issue of material fact exists, courts must view the evidence in the light most favorable to the nonmoving party, giving that party the benefit of all reasonable inferences that can be drawn from the facts. Tolan v. Cotton , 572 U.S. 650, 651, 134 S.Ct. 1861, 188 L.Ed.2d 895 (2014) ; Matsushita , 475 U.S. at 587–88, 106 S.Ct. 1348 (citation omitted); see also Reed v. City of St. Charles , 561 F.3d 788, 790 (8th Cir. 2009). A court does "not weigh the evidence or attempt to determine the credibility of the witnesses." Kammueller v. Loomis, Fargo & Co. , 383 F.3d 779, 784 (8th Cir. 2004). Rather, a "court's function is to determine whether a dispute about a material fact is genuine." Quick v. Donaldson Co. , 90 F.3d 1372, 1377 (8th Cir. 1996).
B. Iowa Breach-of-Contract
The Court hears plaintiff's...
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