Hunter Automotive, Inc. v. Volkswagen United States, Inc., CAUSE NO. 1:93CV226-D-D (N.D. Miss. 10/__/1995), CAUSE NO. 1:93CV226-D-D.

CourtU.S. District Court — Northern District of Mississippi
Docket NumberCAUSE NO. 1:93CV226-D-D.
Decision Date01 October 1995

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CAUSE NO. 1:93CV226-D-D.
United States District Court, N.D. Mississippi, Eastern Division.
October __, 1995.


The court comes now to consider defendants' motion for summary judgment. The plaintiff has advanced several different claims including wrongful termination of plaintiff's dealership, fraud, violation of the Automobile Dealer's Day in Court Act (15 U.S.C. § 1221 et seq.) and the Mississippi Motor Vehicle Commission Law (Miss. Code Ann. § 63-17-51 et seq.), intentional interference with prospective and existing contractual relations, breach of contract, breach of fiduciary duty, duty of good faith and duty of fair dealing, and RICO violations (18 U.S.C. § 1961 et seq.; Miss. Code Ann. § 97-43-1 et seq.). In addition, the defendants claim the plaintiff infringed their trademark and is liable for damages.

In support of their motion for summary judgment, the defendants advance a plethora of arguments. Plaintiff has responded at length. Upon a thorough review of the record in this cause, the court is of the opinion that the defendants' motion for summary judgment should be granted in part and denied in part as set out below.


Defendant Volkswagen AG ("VWAG") manufactures automobiles and automobile parts. VWAG is the parent company of Volkswagen of America, Inc. d/b/a Volkswagen United States, Inc. ("VWoA"), the exclusive importer into the United States of Volkswagen products. Hunter Automotive, Inc. ("Hunter") is an automobile dealership that formerly sold Volkswagen vehicles in Tupelo, Mississippi. Hunter executed the dealer agreement at issue ("Dealer Agreement") with VWoA on January 2, 1992. The Dealer Agreement incorporated by reference the Dealer Agreement

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Standard Provisions ("Standard Provisions") and the Dealer Operating Standards ("Operating Standards").1 Defendants (hereinafter collectively referred to as "Volkswagen") argue that these Standard Provisions required minimum inventory levels, below which Hunter consistently fell.2 Since February 1992, Hunter had not purchased any current model year or later Volkswagens, nor did Hunter have any current model year Volkswagens in inventory from May 1992 through March 10, 1993, the alleged termination date.

On November 30, 1992, VWoA notified Hunter that the dealership would be terminated in accordance with the Dealer Agreement ninety (90) days from receipt of the notice letter.3 Hunter received the termination notice on December 10, 1992 and VWoA treated the notice as effective March 10, 1993.

Hunter contends that in the early 1990s, Volkswagen representatives stated to dealers, including Hunter, that updated models of its vehicles would be provided. Allegedly in reliance on those statements, Hunter ordered additional Volkswagens. When the shipment arrived, however, Hunter maintains the automobiles were identical to the previous year models and it refused to order any more vehicles until the promised updated models were delivered. See Plaintiff's Brief In

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Opposition to Defendants' Motion for Summary Judgment (hereinafter "Plaintiff's Brief"), Exhibit G, at 19. Hunter further alleges that the older model cars' vehicle identification numbers ("VIN") had been changed to indicate a later year.4 Volkswagen denies any such alterations took place and defines "re-vin" as merely an "early production model" or "bridge model." Plaintiff's Brief, at 10 n.5. In any event, Hunter's inventory level fell due to Hunter's refusal to order the allegedly re-vinned vehicles, thus leading up to VWoA's termination of the dealership agreement.

Pursuant to Miss. Code Ann. § 63-17-73(1)(d)(3) (1989 & Supp. 1994), Hunter filed a complaint with the Mississippi Motor Vehicle Commission ("MMVC") for wrongful termination. VWoA disputed whether the complaint was timely filed, but after a hearing the MMVC ruled that it was and set a date to hear the complaint on June 16, 1993. Hunter requested the matter be continued until July 21, 1993 and later moved to dismiss the complaint, which motion the MMVC granted. Hunter filed the present suit in this court on July 21, 1993.



Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." F.R.C.P. 56(c). The party seeking summary judgment carries the burden of demonstrating that there is an absence of evidence to support the non-moving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S. Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). Once a properly supported motion for summary judgment is presented, the burden shifts to the non-moving party to set forth specific facts showing that there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S. Ct.

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2505, 2511, 91 L.Ed.2d 202 (1986); Brothers v. Klevenhagen, 28 F.3d 452, 455 (5th Cir. 1994). "Where the record, taken as a whole, could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 89 L.Ed.2d 538 (1986); Federal Sav. & Loan Ins. v. Krajl, 968 F.2d 500, 503 (5th Cir. 1992). The facts are reviewed drawing all reasonable inferences in favor of the party opposing the motion. Matagorda County v. Russel Law, 19 F.3d 215, 217 (5th Cir. 1994).


Volkswagen urges this court to dismiss with prejudice Hunter's state law claims,5 contending that they are barred by Hunter's failure to exhaust its administrative remedies. The Mississippi Motor Vehicle Commission Law ("MMVCL"), Miss. Code Ann. § 63-17-51 et seq., itself does not explicitly require that a plaintiff exhaust the administrative remedies provided under the statute before filing in court for redress. The relevant statute, Miss. Code Ann. § 63-17-73 (Supp. 1994), states:

Any motor vehicle dealer who receives written notice that his franchise or selling agreement is being terminated or cancelled or who receives written notice that his franchise or selling agreement will not be renewed, may . . . file with the commission a verified complaint for its determination as to whether such termination or cancellation or non-renewal is unfair within the purview of the MMVCL . . . .

Miss. Code Ann. § 63-17-73(1)(d)(3) (Supp. 1994) (emphasis added). However, the doctrine of exhaustion of administrative remedies could apply "even in the absence of an express statutory command of exclusiveness." McClendon v. Jackson Television, Inc., 603 F.2d 1174, 1176 (5th Cir. 1979); see also United States Postal Serv. v. Notestine, 857 F.2d 989, 994 (5th Cir. 1988). In such a case, "courts should be guided by congressional intent." Meliezer v. Resolution Trust Corp., 952 F.2d 879, 882 (5th Cir. 1992). Volkswagen submits that the legislative history evidences an intent that the remedies provided before the MMVC be exhausted before a party may file suit on such a

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claim. This court disagrees for the following reasons.


Specifically, Mississippi law provides that "[w]here no adequate administrative remedy is provided, the exhaustion doctrine is not applicable." Miss. Dep't of Envt'l Quality v. Weems, 653 So. 2d 266, 277 (Miss. 1995). In the case at bar, Hunter is requesting a monetary award for which the statute does not provide. Hence, it would be fruitless for the plaintiff to have exhausted the administrative avenue. Also, Miss. Code Ann. § 63-17-101 (1989) specifically provides that actions for money damages be brought in court and not before the Commission.

Any licensee suffering pecuniary loss because of any willful failure by any other licensee to comply with any provision of the Mississippi Motor Vehicle Commission Law or with any rule or regulation promulgated by the commission under authority vested in it by said law may recover reasonable damages and attorney fees therefor in any court of competent jurisdiction.6

Miss. Code Ann. § 63-17-101 (1989). Therefore, in light of § 63-17-101 and the fact that the plaintiff is requesting money damages, the prerequisite that administrative remedies be exhausted before the plaintiff may avail itself of other avenues of redress is not applicable here.


In addition to the reasoning set out above, Federal Rule of Civil Procedure 8(c) requires that affirmative defenses be specifically set forth in a responsive pleading. Fed. R. Civ. P. 8(c). The general rule is that when such a defense is not pled, it is considered waived. See Marine Overseas Servs. v. Crossocean Shipping, 791 F.2d 1227, 1233 (5th Cir. 1986). Failure to exhaust

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administrative remedies is an affirmative defense. Orloff v. Willoughby, 345 U.S. 83, 85, 73 S. Ct. 534, 536 (1953) ("Answering the petition for habeas corpus, the respondent raised as [an] affirmative defense[ ] . . . that petitioner had failed to exhaust his administrative remedies."); Adams v. Gunnell, 729 F.2d 362, 366 (5th Cir. 1984) ("[Defendants'] only substantial affirmative defense was that the plaintiffs had not exhausted available administrative remedies."); Dougherty County School Sys. v. Bell, 694 F.2d 78, 80 (5th Cir. 1982) ("Failure to exhaust administrative procedures is not a jurisdictional defect, which the court would be obliged to note sua sponte, but an affirmative defense. . . ."). The Fifth Circuit has adopted a rule that "[a]n affirmative defense may be raised on a motion for summary judgment only if that motion is the first pleading responsive to the...

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