Key v. Chrysler Motors Corp.
| Decision Date | 13 January 1995 |
| Docket Number | No. 14863,14863 |
| Citation | 1995 NMCA 4,889 P.2d 875,119 N.M. 267 |
| Parties | Jack KEY and Jack Key Motor Company, Inc., Plaintiffs-Appellees/Cross-Appellants, v. CHRYSLER MOTORS CORPORATION, Defendant-Appellant/Cross-Appellee. |
| Court | Court of Appeals of New Mexico |
On the court's own motion, the opinion filed on December 12, 1994 is withdrawn and the following opinion is substituted in its place.
Chrysler Motor Company (Chrysler) appeals from a judgment awarding Jack Key and Jack Key Motor Company (Key) $300,000 in damages under the New Mexico Motor Vehicle Dealers Franchising Act, NMSA 1978, Sections 57-16-1 through -16 (Repl.Pamp.1987 & Cum.Supp.1993) (the Act). Chrysler raises three issues on appeal; whether: (1) Key had standing to sue under the Act; (2) sufficient evidence existed to support the finding that Chrysler acted unreasonably in withholding its consent to the sale of the franchise and whether the trial court applied the proper legal standard in making this determination; and (3) Key's own negligence required reduction of the damages award. Key filed a cross-appeal, arguing that the trial court erred in refusing to admit certain evidence of Key's claimed future damages.
On Chrysler's direct appeal, we hold that: (1) Key had standing to sue; (2) the evidence was sufficient to support the finding that Chrysler acted unreasonably; and (3) Key's negligence, if any, did not require reduction of the damages awarded under the Act. On Key's cross-appeal, we hold that the trial court did not abuse its discretion in refusing to admit the evidence of claimed future damages. We thus affirm.
In 1988, Key entered into an agreement to purchase a Chrysler/Plymouth franchise from Borman Motor Company (Borman) in Las Cruces, New Mexico. The agreement was contingent upon Chrysler's approval of the transfer. Key already owned and operated a Jeep/Eagle franchise with Chrysler. Key sought Chrysler's approval of the proposed transfer under an application for an additional franchise.
Although Chrysler's Phoenix Zone Manager recommended approval of the transfer, Chrysler refused to approve the transfer because Key failed to meet his Minimum Sales Responsibility (MSR) for the Jeep/Eagle line of vehicles sold under his existing franchise. The MSR was designed by Chrysler to measure sales performance. Under the existing franchise between Chrysler and Key, the MSR was defined as the minimum number of vehicles a dealer must sell within one year to reach the average sales penetration of a particular line of vehicles in the relevant market. The MSR was based on a formula multiplying the new car or truck registrations in the dealership's locality with the line market share in the sales zone within the sales locality.
The trial court found that Chrysler's reliance on Key's MSR was unreasonable because certain economic and geographic factors rendered it inaccurate. The trial court also determined that both Key and Chrysler were negligent for failing to correct the inaccuracies. Reasoning that concepts of tort theory did not apply to the statutory cause of action, however, the trial court held that Chrysler was liable for all compensatory damages Key suffered for Chrysler's violation of the Act, without any offset for Key's purported negligence. These damages were based on Key's loss of the benefit of the bargain. During the course of the non-jury trial, the trial court refused to admit Key's evidence concerning future profits as proof of damages. Additional facts will be discussed as relevant to our discussion.
Chrysler asserts that Key, as a prospective purchaser of the Chrysler/Plymouth franchise, lacked standing under the Act to sue Chrysler for unreasonably withholding consent to the sale. Based on the plain language of the Act and considering the policy and purposes behind the Act, we determine that Key had standing to sue. In reaching this determination, we consider the language of the statutes at issue in the context of the entire Act, see State ex rel. Helman v. Gallegos, 117 N.M. 346, 353-54, 871 P.2d 1352, 1359-60 (1994), with our primary concern being to ascertain and give effect to the legislature's intent, State ex rel. Klineline v. Blackhurst, 106 N.M. 732, 735, 749 P.2d 1111, 1114 (1988). Unless the legislature indicates otherwise, we give the words of the statute their ordinary meaning. Id.
Key based his claim for damages on allegations that Chrysler violated NMSA 1978, Section 57-16-5(L) (Repl.Pamp.1987). This section makes it unlawful for a manufacturer to:
prevent or attempt to prevent by contract or otherwise any motor vehicle dealer or any officer, partner or stockholder of any motor vehicle dealer from selling or transferring any part of the interest of any of them to any other person or party; provided, however, that no dealer, officer, partner or stockholder shall have the right to sell, transfer or assign the franchise or power of management or control thereunder without the consent of the manufacturer, distributor or representative except that consent shall not be unreasonably withheld.
Id. As stated, this provision prohibits a manufacturer from unreasonably withholding its consent to the sale, transfer or assignment of a franchise. The question before us is whether Key, as a prospective purchaser of an automobile dealership, had standing to pursue a claim under Section 57-16-5(L) against Chrysler, a manufacturer, who withheld its consent to the transfer of the franchise. Chrysler contends that the language of this section and the underlying intent of the legislature was to protect only the selling dealer, in this case Borman, and not a prospective buyer. Thus, Chrysler argues that Key, as a prospective buyer, lacked standing to sue. We disagree.
NMSA 1978, Section 57-16-13 (Repl.Pamp.1987), which defines the right of action for damages under the Act, states:
In addition to any other judicial relief, any person who shall be injured in his business or property by reason of anything forbidden in this act may sue therefor in the district court and shall recover actual damages by him sustained, and the cost of suit, including a reasonable attorney's fee.
(Emphasis added.) This section does not limit a right of action to the selling dealer; rather, it expressly protects "any person who shall be injured in his business or property." (Emphasis added.) Additionally, the Act applies "to all persons, manufacturers, representatives distributors and dealers." NMSA 1978, Sec. 57-16-2 (Repl.Pamp.1987) (emphasis added). A "person" is defined as "every natural person, partnership, corporation, association, trust, estate or any other legal entity." NMSA 1978, Sec. 57-16-3(C) (Repl.Pamp.1987). Based on the plain language of the Act, because Key is a "natural person," and therefore is "any person," we conclude that he has standing to sue Chrysler under the Act. Consequently, we are not persuaded by Chrysler's argument that the legislature intended to protect only selling dealers from violations of this provision of the Act because we find nothing in the language of Section 57-16-5(L) that specifically limits a cause of action to the selling dealer only.
Our conclusion that Key, as "any person," has standing to sue under the Act is supported by our Supreme Court's decision in General Motors Acceptance Corp. v. Anaya, 103 N.M. 72, 703 P.2d 169 (1985). There, the Court interpreted Section 57-16-13 to confer standing on individual retail buyers of an automobile who sought damages against the manufacturer for breach of warranty under the Act. Id. at 76, 703 P.2d at 173. The Court based its conclusion on the statutory language, the overall purpose of the Act, and the legislature's intent to provide a remedy for warranty abuse. Id. Thus, in Anaya, our Supreme Court did not limit the right to sue under the Act to the selling franchise dealer only. Rather, based on the policy of the Act, the Court specifically concluded that a retail buyer "had standing to invoke the protection of the Act." Id.
We find the rationale of Anaya helpful here. As did our Supreme Court in Anaya, we conclude that the policy of the Act implicitly evinces an intent to prohibit manufacturers from unreasonably withholding consent to the sale of a franchise. The legislature declared its policy for the Act as follows:
The distribution and sale of motor vehicles in this state vitally affects the general economy of the state and the public interest and welfare of its citizens. It is the policy of this state and the purpose of this act to exercise the state's police power to ensure a sound system of distributing and selling motor vehicles and regulating the manufacturers, distributors, representatives and dealers of those vehicles to provide for compliance with manufacturer's warranties, and to prevent frauds, unfair practices, discriminations, impositions and other abuses of our citizens.
NMSA 1978, Sec. 57-16-1 (Repl.Pamp.1987) (emphasis added); see also Anaya, 103 N.M. at 76, 703 P.2d at 173. The Act's declaration of policy specifies the prevention of "unfair practices, discriminations, impositions and other abuses" as a priority. See id. at 76, 703 P.2d at 173 (...
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