Kizzier Chevrolet Co., Inc., of Scottsbluff, Neb. v. General Motors Corp., Oldsmobile Div.

• Decision Date: 04 May 1983
• Docket Number: No. 82-1484,82-1484
• Citation: 705 F.2d 322
• Parties: KIZZIER CHEVROLET COMPANY, INC., OF SCOTTSBLUFF, NEBRASKA, and Dwayne Kizzier, Appellants, v. GENERAL MOTORS CORPORATION, OLDSMOBILE DIVISION, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 322

705 F.2d 322

KIZZIER CHEVROLET COMPANY, INC., OF SCOTTSBLUFF, NEBRASKA, and Dwayne Kizzier, Appellants, v. GENERAL MOTORS CORPORATION, OLDSMOBILE DIVISION, Appellee.

No. 82-1484.

United States Court of Appeals,

Eighth Circuit.

Submitted Feb. 14, 1983.

Decided April 22, 1983.

Rehearing Denied May 4, 1983.

Robert G. Simmons, Jr. of Wright, Simmons & Selzer, Scottsbluff, Neb., for appellants.

David A. Svoboda, Lyman L. Larsen, Kennedy, Holland, DeLacy & Svoboda, Omaha, Neb., for appellee; Otis M. Smith, Gen. Counsel, and Timothy C. McCann, General Motors Corp., Detroit, Mich., of counsel.

Before LAY, Chief Judge, and BRIGHT and ROSS, Circuit Judges.

BRIGHT, Circuit Judge.

Kizzier Chevrolet Company, Inc., brought this action against General Motors Corporation (GM), alleging violation of the Automobile Dealers Day in Court Act, 15 U.S.C. Secs. 1221-1225, and breach of a dealer sales and service agreement. The district court ¹ entered judgment for GM, and Kizzier appeals. For the reasons outlined below, we affirm the judgment of the district court.

I. Background.

On November 4, 1975, S & T Motors of Scottsbluff, Nebraska, entered into a franchise agreement with GM for the Oldsmobile motor vehicle line manufactured by GM. An explosion and fire destroyed the business premises of S & T Motors on May 4, 1977, to the extent that it was no longer possible for S & T Motors to operate as a dealership. On May 11, 1977, S & T Motors contracted with Dwayne Kizzier, the owner and general manager of Kizzier Chevrolet Company, Inc., for the sale of the assets of S & T Motors, excluding the real estate. The agreement was expressly conditioned upon Kizzier's receiving approval of the transfer from both the Oldsmobile Division of GM and the Nissan Motor Corp., the manufacturer of Datsuns, which were also sold by S & T Motors.

For the purposes of receiving this approval, Robert R. Slie, the managing partner of S & T Motors, and Dwayne Kizzier went to Denver, Colorado, on May 11, 1977, to see Charles J. Bretz, the Denver zone manager for the Oldsmobile Division, and L.W. Melton, Jr., the Denver zone manager for the Chevrolet Division. Neither zone manager was receptive to the idea of Kizzier's obtaining the Scottsbluff Oldsmobile dealership, and no application forms were given to or requested by Kizzier for the purpose of applying for the dealership. Kizzier and Slie returned to Scottsbluff that same day. Nevertheless, they announced the sale of S & T Motors to Kizzier the following Friday, and, on Monday, May 16, Kizzier began operating as the Oldsmobile dealership.

In early August 1977, GM orally informed Kizzier Chevrolet and S & T Motors that it would not approve the May 11, 1977, transfer of the Oldsmobile dealership. Thereafter, Kizzier pleaded with GM orally and in writing his reasons for wanting approval of the transfer. GM responded, explaining its preference to award the Oldsmobile dealership to Dalton Buick, the Buick dealer in Scottsbluff, because Dalton Buick was in need of an increased gross profit opportunity in order to continue to operate successfully, and that, in contrast, studies of the Chevrolet Division indicated there was a sufficient profit opportunity in the community to support a single-line Chevrolet dealership.

On August 22, 1977, GM filed an application with the Nebraska Motor Vehicle Industry Licensing Board (licensing board) for permission to terminate its dealer agreement with S & T Motors. Prior to any action by the licensing board on GM's application, S & T Motors relinquished its motor vehicle dealers' license to the board. The licensing board held an evidentiary hearing participated in by Kizzier on October 18, 1977. On December 21, 1977, the licensing board granted GM's application, finding that the sale of assets of S & T Motors did not constitute a transfer of the Oldsmobile dealership and did not obligate GM to award an Oldsmobile franchise to Kizzier; that it would be substantially detrimental to the distribution of GM vehicle products in the community if the board were to order the Oldsmobile Division to enter into a franchise with Kizzier; and that Dalton Buick of Scottsbluff, Nebraska, was qualified to sell and service Oldsmobile motor vehicles. The findings and order of the board authorized GM to proceed to select a replacement for S & T Motors' dealership. On January 6, 1978, GM sent a letter to Slie with copies going to Kizzier and the licensing board, terminating its dealer agreement with S & T Motors.

S & T Motors, as franchisee, and Kizzier Chevrolet, as an interested party, appealed the order of the licensing board to the district court of Lancaster County. The district court affirmed the order of the board on February 28, 1978. S & T Motors and Kizzier appealed that decision to the Supreme Court of Nebraska without filing a supersedeas bond.

On March 6, 1978, after the district court affirmed the board's decision, but before the expiration of the time for filing a motion for a new trial or a supersedeas bond, GM granted the Oldsmobile franchise to Dalton Buick. On April 24, 1979, more than a year later, the Supreme Court of Nebraska reversed the judgments of the district court and the board, holding that notwithstanding the terms of the franchise agreement, sections 60-1430 and 60-1429(2) R.R.S.Neb. (Reissue 1978) required GM to give effect to the transfer of the Oldsmobile franchise to Kizzier Chevrolet, unless GM had satisfied its burden of proving in the hearing before the board that the change in ownership from S & T Motors to Kizzier would be "substantially detrimental" to the distribution of the Oldsmobile line in the Scottsbluff community. The Nebraska Supreme Court held that GM failed to satisfy this burden of proof. S & T Motors v. General Motors Corp., 203 Neb. 188, 277 N.W.2d 701 (1979).

After the Nebraska Supreme Court's reversal, the district court reversed its judgment and remanded to the licensing board. On August 6, 1979, the board reversed its original decision and denied GM's application for termination. In accordance with the licensing board's reversal, GM, on September 20, 1979, entered into a dealer sales and service agreement with Kizzier Chevrolet for an Oldsmobile franchise.

On November 26, 1979, Kizzier Chevrolet filed an application with the licensing board, requesting the board to order GM to stop selling Oldsmobile motor vehicles to Dalton Buick and order Dalton Buick to stop operating as an Oldsmobile dealership until GM complied with the provisions of sections 60-1422 and 60-1424, relating to the establishment of an additional franchise in a community. On April 13, 1980, after an evidentiary hearing, the board denied the application, finding sections 60-1422 and 60-1424 inapplicable, because on March 6, 1978, the date on which GM executed the Dalton Buick-Oldsmobile franchise, no other dealer in the Scottsbluff community was selling Oldsmobile motor vehicles and products. Kizzier Chevrolet appealed this denial to the district court of Lancaster County. The record in this case does not disclose the disposition of that appeal.

On April 11, 1980, Kizzier Chevrolet filed suit against GM and Dalton Buick in the district court of Scottsbluff County, alleging that the failure of GM and Dalton to comply with the provisions of sections 60-1422 and 60-1424 before entering into a franchise agreement for an Oldsmobile dealership deprived Kizzier Chevrolet of the benefit of its purchase and of its property without due process of law. Kizzier requested an order enjoining GM from delivering to Dalton Buick and Dalton Buick from selling Oldsmobile motor vehicles or products until there had been compliance with these provisions of the licensing act. Prior to any decision by the district court, GM renewed both the Dalton Buick and the Kizzier Chevrolet agreements, effective November 1, 1980.

On January 20, 1981, the district court of Scottsbluff County granted Kizzier's request for injunctive relief. GM appealed that decision to the Supreme Court of Nebraska and filed a supersedeas bond. The Supreme Court of Nebraska reversed the decree and dismissed the action as a collateral attack on the April 13, 1980, adverse decision of the licensing board. State of Nebraska ex rel. Kizzier Chevrolet Co., Inc. v. General Motors Corp., 211 Neb. 626, 319 N.W.2d 735 (1982).

Prior to the decision of the state district court, Kizzier commenced this lawsuit against GM, alleging that GM violated the Automobile Dealers Day in Court Act, 15 U.S.C. Secs. 1221-1225, by failing to act in good faith in performing or complying with the terms of the November 1, 1975, dealer agreement entered into between S & T Motors and GM and subsequently purchased by Kizzier and in terminating the agreement. The complaint also set forth breach of contract claims, alleging that GM, from May 11, 1977, to September 20, 1979, refused to perform any of its obligations under the November 1, 1975, franchise agreement, and after September 20, 1979, continued to breach the agreement by maintaining the Dalton Buick-Oldsmobile franchise without first complying with the Licensing Act. Kizzier requested $755,551 in damages. The district court rejected these contentions and found for GM. Thereafter, the district court denied Kizzier's motion for a new trial. Kizzier timely filed this appeal.

II. Discussion.

On appeal, Kizzier argues that it is entitled to damages for GM's failure to comply with the franchise agreement. ² Kizzier contends that GM made a contractual commitment to comply with Nebraska law with respect to any requirements of that law which contravened the responsibilities and obligations of the parties as set forth in the dealer agreement and that GM breached this commitment. Specifically, Kizzier alleges four separate breaches by GM. First, Kizzier alleges a breach from May 11, 1977 to September 20, 1979. These are the dates from when Kizzier purchased the assets of S & T...