Pence Holdings, Inc. v. Auto Center, Inc., 0007-94-2

• Decision Date: 21 February 1995
• Docket Number: No. 0007-94-2,0007-94-2
• Citation: 19 Va.App. 703,454 S.E.2d 732
• Parties: PENCE HOLDINGS, INC. v. AUTO CENTER, INC., d/b/a Southside Dodge, et al. Record
• Court: Virginia Court of Appeals

Page 732

454 S.E.2d 732

19 Va.App. 703

PENCE HOLDINGS, INC. v. AUTO CENTER, INC., d/b/a Southside Dodge, et al.

Record No. 0007-94-2.

Court of Appeals of Virginia Richmond.

Feb. 21, 1995.

[19 Va.App. 704] Edward E. Nicholas, III, Richmond (Jonathan S. Geldzahler, Wright, Robinson, McCammon, Osthimer & Tatum, on briefs), for appellant.

John K. Burke, Jr., Richmond (Gerard J. Roerty, Jr., David F. Peters, Claudia T. Farr, and Mays & Valentine, Hunton & Williams, on brief), for appellees Page Dodge, Inc., Chrysler Corp., and Auto Center, Inc.

James S. Gilmore, III, Atty. Gen. and Eric K.G. Fiske, Asst. Atty. Gen., on brief, for appellee Department of Motor Vehicles.

Present: BAKER, BENTON and FITZPATRICK, JJ.

OPINION

JOSEPH E. BAKER, Judge.

This is an appeal by Pence Holdings, Inc. (Pence) from a judgment of the Circuit Court of the City of Richmond (trial court) that affirmed a decision of the Department of Motor Vehicles (DMV) which denied Pence a hearing under Code § 46.2-1569(4). This appeal emanates from a May 28, 1993 letter by Pence addressed to DMV Commissioner Donald E. Williams advising that Pence had "received a letter from Chrysler Corporation, indicating a proposal to relocate Southside Dodge from its current Relevant Market Area into the R.M.A. occupied by my dealership, Al Smith Chrysler, Plymouth Dodge t/a Pence Chrysler Plymouth Dodge." ¹ The following protest was included in that letter:

Al Smith Chrysler, Plymouth Dodge t/a Pence Chrysler Plymouth Dodge hereby protests this intended relocation ² and requests a hearing under Section 46.2-1569(4) of the Code of Virginia (1950) as amended, to prohibit such additional Dodge dealership in my relevant market area unless the manufacturer can prove by clear and convincing evidence that the market will support all dealers, including Southside Dodge in that line-make.

The letter from Chrysler Corporation (Chrysler) referred to in Pence's May 28, 1993 letter provided:

Dear Mr. Pence:

The Washington Zone is in the process of recommending approval of a buy/sell proposal from Auto Center, Inc., DBA, Southside Dodge.

This proposal will result in the Dodge franchise being purchased by Mr. Lawrence Page and relocated to exclusive sales and service facilities at 6700 Mechanicsville Turnpike in Mechanicsville, Virginia.

On June 23, 1993, the DMV wrote to Pence, advising that after reviewing information provided by Pence and Southside Dodge, the DMV concluded as follows:

Based on this information, the planned sale and relocation of Southside Dodge to Mechanicsville, Virginia, appears to be the relocation of an existing dealership within that dealers [sic] existing area of responsibility. It also appears that the proposed relocation point will be more than ten miles distant from any other dealer of the same line make.

The DMV letter then stated that Code § 46.2-1569(4)(i) precluded Pence from a full hearing on the matter; however, the letter further advised that it would review any other information Pence might care to provide.

On July 7, 1993, attorneys for Pence wrote to the DMV and advised that they had been "engaged to represent the Pence Automotive Group in relation to the relocation of Southside Dodge to Mechanicsville, Virginia." In that letter, counsel further noted "that Chrysler was in the process of recommending approval for the sale and relocation of Southside Dodge as discussed above. The proposed new location is 6700 Mechanicsville Turnpike in Mechanicsville, Virginia." The letter contained several other references indicating that the question to be answered by the DMV involved a relocation of an existing dealership. Nothing in the letter raised as a concern the granting of a new dealership.

In a letter dated July 8, 1993, the DMV advised Pence's attorneys that the DMV had a copy of the sales agreement between Southside and Page showing Mechanicsville was the "Sale Locality Description" and added that Code § 46.2-1569(4)(i) did not apply to "the relocation of an existing dealer within that dealers [sic] relevant market area if the relocation site is to be more than ten miles distant from any other dealer of the same line-make; ..." The DMV letter noted that mileage measurements disclosed the relocation would be more than ten miles from Pence's dealership location and closed by stating that "[i]t appeared that the facts were clear and that the Code specifically addressed the issue being raised by Mr. Pence" which was clearly relocation of an existing dealership. The DMV concluded that "no further investigation or hearing was felt to be warranted."

Pursuant to the provisions of the Administrative Process Act (APA), Pence appealed to the circuit court. Appellees moved the trial court to dismiss the appeal, asserting that neither Pence nor Pence Automotive Group had standing to challenge the DMV decision. The trial court denied that motion on the ground that all parties had treated Pence as a proper party throughout the proceedings.

In the trial court, Pence argued that the sale of Southside to Page, and the establishment of the dealership in Mechanicsville, constituted the creation of a new franchise. ³ That issue was not presented to the DMV and the trial court held that Pence was estopped from raising it in...