Tacoma Auto Mall, Inc. v. Nissan N. Am., Inc.

• Decision Date: 26 June 2012
• Docket Number: No. 41356–6–II.,41356–6–II.
• Citation: 169 Wash.App. 111,279 P.3d 487
• Parties: TACOMA AUTO MALL, INC., Appellant and Cross–Respondent, v. NISSAN NORTH AMERICA, INC., a foreign corporation, Respondent and Cross–Appellant.
• Court: Washington Court of Appeals

169 Wash.App. 111

279 P.3d 487

TACOMA AUTO MALL, INC., Appellant and Cross–Respondent,

v.NISSAN NORTH AMERICA, INC., a foreign corporation, Respondent and Cross–Appellant.

No. 41356–6–II.

Court of Appeals of Washington, Division 2.

June 26, 2012.

James A. Krueger, Attorney at Law, Lucy R. Clifthorne, Daniel C. Montopoli, Tacoma, WA, for Appellant.

James E. Howard, Samantha Ellen Funk, Dorsey & Whitney LLP, Seattle, WA, for Respondent/Cross–Appellant.

VAN DEREN, J.

[169 Wash.App. 116]¶ 1 Tacoma Auto Mall, Inc. (TAM), appeals the trial court's summary judgment order finding that it does not have standing to assert a claim against Nissan North America, Inc. (NNA) for violation-of the Washington Manufacturers' and Dealers' Franchise Agreements Act (Franchise Act), chapter 46.96 RCW. TAM also appeals the trial court's dismissal on summary judgment of its claims against NNA alleging promissory estoppel, breach of a unilateral contract, and violation of a third-party beneficiary's rights in its attempted purchase of a Puyallup Nissan dealership. NNA cross-appeals the trial court's (1) failure to grant summary judgment on TAM's claims of tortious interference and lost profit damages and (2) rejection of NNA's contention that the state Franchise Act precluded all of the purchaser's common law claims based on promissory estoppel, third-party beneficiary status, implied contract, tortious interference, and damages. We affirm the trial court's order granting summary judgment dismissal of TAM's claims of promissory estoppel, third-party beneficiary contract, unilateral implied contract, and violation of the Franchise Act. We reverse the trial court's denial of summary judgment on TAM's claims of tortious interference and lost profit damages and remand for dismissal of TAM's suit.

FACTS

¶ 2 TAM, formerly Tacoma Dodge, Inc., was formed in 1972 and operated for many years as a Dodge automobile dealership under a franchise agreement with Chrysler Motors, Inc. In June 2009, the dealership changed its name to Tacoma Auto Mall following Chrysler Motors's bankruptcy and termination of the Dodge franchise.

¶ 3 When TAM discovered that Puyallup Nissan was for sale, TAM's owner entered into an agreement with Puyallup Nissan's owner to purchase Puyallup Nissan's assets. Under the terms of the franchise agreement between Puyallup Nissan and NNA, NNA had to consent to the sale of the franchise to TAM.

¶ 4 NNA refused to consent to TAM as a Nissan franchisee and, therefore, refused to consent to the sale by Puyallup Nissan. TAM sued NNA, asserting that NNA unreasonably withheld consent to the sale by Puyallup Nissan. It alleged that NNA's actions violated the Franchise Act, specifically former RCW 46.96.200 (1994). It also alleged that NNA's actions constituted tortious interference with the contractual relationship between TAM and Puyallup Nissan, that NNA should be promissorily estopped from refusing consent, that TAM is a third-party beneficiary of the contract between NNA and Puyallup Nissan, that NNA breached an implied contract with TAM by refusing consent, and that TAM is entitled to specific performance of that implied contract.

¶ 5 The trial court granted NNA's summary judgment motion on TAM's claims of promissory estoppel, third-party beneficiary contract, unilateral implied contract, and violation of the Franchise Act. The trial court denied NNA's motion on TAM's claims of tortious interference and damages for lost profits and it rejected NNA's argument that the Franchise Act preempts TAM's common law tort claims. The trial court also certified that the order involved a controlling question of law as to which there is substantial ground for a difference of opinion and that immediate review of the order by the Court of Appeals may materially advance the ultimate termination of the litigation. Both parties successfully sought discretionary review of the trial court's orders.

ANALYSIS

I. Standard of Review

¶ 6 In reviewing a summary judgment order, we engage in the same inquiry as the trial court. King County Fire Prot. Dists. No. 16, No. 36 & No. 40 v. Hous. Auth. of King County, 123 Wash.2d 819, 825, 872 P.2d 516 (1994). “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.’ ” Atherton Condo. Apart.–Owners Ass'n Bd. of Dirs. v. Blume Dev. Co., 115 Wash.2d 506, 516, 799 P.2d 250 (1990) (quoting CR 56(c)). “A material fact is one upon which the outcome of the litigation depends in whole or in part.” Atherton, 115 Wash.2d at 516, 799 P.2d 250. We consider the evidence in the light most favorable to the nonmoving party. Gerken v. Mut. of Enumclaw Ins. Co., 74 Wash.App. 220, 224–25, 872 P.2d 1108 (1994).

¶ 7 A defendant in a civil action is entitled to summary judgment if he can show that there is an absence or insufficiency of evidence supporting an element that is essential to the plaintiff's claim. Young v. Key Pharms., Inc., 112 Wash.2d 216, 225, 770 P.2d 182 (1989). “ ‘In such a situation, there can be no genuine issue as to any material fact, since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial.’ ” Young, 112 Wash.2d at 225, 770 P.2d 182 (internal quotation marks omitted) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322–23, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986)). The plaintiff may not rely on the allegations in the pleadings but must set forth specific facts showing that a genuine issue exists. Young, 112 Wash.2d at 225, 770 P.2d 182.

II. Standing

¶ 8 TAM first asserts that the trial court erred in dismissing its claim that NNA violated former RCW 46.96.200. We first determine whether TAM has standing to assert a violation of the Franchise Act under these circumstances.

¶ 9 Washington courts apply a two-part test to determine whether a party has standing. Nelson v. Appleway Chevrolet, Inc., 160 Wash.2d 173, 186, 157 P.3d 847 (2007); Grant County Fire Prot. Dist. No. 5 v. City of Moses Lake, 150 Wash.2d 791, 802, 83 P.3d 419 (2004). First, we ask whether the interest asserted is within the zone of interests the statute in question protects. Nelson, 160 Wash.2d at 186, 157 P.3d 847;Grant County, 150 Wash.2d at 802, 83 P.3d 419. Second, we consider whether the party seeking standing has suffered an injury in fact. Nelson, 160 Wash.2d at 186, 157 P.3d 847;Grant County, 150 Wash.2d at 802, 83 P.3d 419. “Both tests must be met by the party seeking standing.” Branson v. Port of Seattle, 152 Wash.2d 862, 875–76, 101 P.3d 67 (2004); High Tide Seafoods v. State, 106 Wash.2d 695, 702, 725 P.2d 411 (1986) (noting that even if the plaintiffs could show adequate injury, they would fail the zone of interest test).

¶ 10 When evaluating whether a party's interests are within the zone of interests a statute protects, we look to the statute's general purpose. Branson, 152 Wash.2d at 876 n. 7, 101 P.3d 67. If the statute in question was not designed to protect a party's interests, it is not within the zone of interest and its assertion of standing fails. Grant County, 150 Wash.2d at 803, 83 P.3d 419.

¶ 11 The legislature set forth the purpose of the Franchise Act as follows:

The legislature finds and declares that the distribution and sale of motor vehicles in this state vitally affect the general economy of the state and the public interest and public welfare, that provision for warranty service to motor vehicles is of substantial concern to the people of this state, that the maintenance of fair competition among dealers and others is in the public interest, and that the maintenance of strong and sound dealerships is essential to provide continuing and necessary reliable services to the consuming public in this state and to provide stable employment to the citizens of this state. The legislature further finds that there is a substantial disparity in bargaining power between automobile manufacturers and their dealers, and that in order to promote the public interest and the public welfare, and in the exercise of its police power, it is necessary to regulate the relationship between motor vehicle dealers and motor vehicle manufacturers, importers, distributors, and their representatives doing business in this state, not only for the protection of dealers but also for the benefit for the public in assuring the continued availability and servicing of automobiles sold to the public.

The legislature recognizes it is in the best interest for manufacturers and dealers of motor vehicles to conduct business with each other in a fair, efficient, and competitive manner. The legislature declares the public interest is best served by dealers being assured of the ability to manage their business enterprises under a contractual obligation with manufacturers where dealers do not experience unreasonable interference and are assured of the ability to transfer ownership of their business without undue constraints. It is the intent of the legislature to impose a regulatory scheme and to regulate competition in the motor vehicle industry to the extent necessary to balance fairness and efficiency. These actions will permit motor vehicle dealers to better serve consumers and allow dealers to devote their best competitive efforts and resources to the sale and services of the manufacturer's products to consumers.

RCW 46.96.010 (emphasis added). The express purpose of the Franchise Act is to regulate the relationship between manufacturers and “their dealers” in order to protect those dealers and benefit the car-buying public. RCW 46.96.010.

¶ 12 Moreover, the specific provision of the Franchise Act that TAM asserts NNA violated, former RCW 46.96.200, expressly provided for administrative review of the “reasonabl[eness]” of the...