USCA1 Opinion
August 5, 1992 UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 91-2319
BOSTON CAR COMPANY, INC.,
d/b/a ACURA OF BOSTON,
Plaintiff, Appellant,
v.
ACURA AUTOMOBILE DIVISION,
AMERICAN HONDA MOTOR CO., INC.,
Defendant, Appellee.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Mark L. Wolf, U.S. District Judge]
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Before
Breyer, Chief Judge,
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Lay,* Senior Circuit Judge,
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and O'Scannlain,** Circuit Judge.
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Robert C. Gerrard with whom Thomas S. Fitzpatrick and Davis, Malm
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& D'Agostine, P.C. were on brief for appellant.
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J. Donald McCarthy with whom Lyon & Lyon, P.C., Hope E. Melville,
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William H. Baker, Christopher R. O'Hara and Nutter, McClennen & Fish
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were on brief for appellee.
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* Of the Eighth Circuit, sitting by designation.
** Of the Ninth Circuit, sitting by designation.
O'SCANNLAIN, Circuit Judge: This diversity case arises
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from a dispute about the terms of an automobile franchise
agreement entered into by American Honda Motor Co.
("American Honda"), the distributor of the Acura line of
cars, and Boston Car Co., Inc. ("Boston Car"), holder of an
Acura dealer franchise. The district court ruled for
American Honda, and Boston Car appeals. We affirm.
I
In 1985, James Carney, the principal of Boston Car,
began discussions with the Acura Automobile Division of
American Honda with the object of obtaining an Acura
dealership. Damien Budnick represented American Honda in
these discussions.
On May 7, 1985, Carney signed a letter of intent
("LOI") setting forth the conditions under which American
Honda would grant Carney an Acura dealership, to be located
in the town of Newton in suburban Boston. In the vernacular
of the trade, Carney was to be granted the Newton "point,"
or dealership location. The LOI listed several other points
American Honda expected to establish as part of their
marketing plan for the Boston metropolitan area.
Carney was unable to secure a suitable location in
Newton but identified a fitting site in the Brighton area,
near Newton but within the city limits of Boston. Based on
this location, Carney sought the so-called "Boston point"
from American Honda. Since his prospective location
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remained close to Newton, Carney wanted the Newton point
deleted from American Honda's marketing plan. He also
expressed concerns about the Lexington and Natick points.
Both parties agree that several discussions ensued between
Carney and Budnick on the subject of the location and
planned opening date of other points in the Boston area.
Eventually, American Honda granted Carney the Boston
point as the first Acura dealership in the Boston
metropolitan area. The Newton point was dropped, and
replaced by a Dedham point. American Honda kept the
Lexington and Natick points, although it apparently agreed
to delay the opening of the Lexington point. The final LOI
issued by American Honda on August 2, 1985 and accepted by
Carney stated:
The primary market area that you have
applied for is only part of our market
representation plan. It is our intention
to establish additional Acura dealers in
the surrounding primary market areas:
Danvers, Lexington, Dedham, Natick, Norwood
and Norwell.
By January 1988, American Honda had filled four of the
six points mentioned in the LOI. The Norwood point was
filled by a dealership in the neighboring town of Walpole,
the Danvers point was filled by a dealership in the
neighboring town of Peabody, the Natick point was filled by
a dealership in the neighboring town of Framingham, and the
Norwell point was filled by a dealership in Norwell. In
each case, American Honda sent a letter to Boston Car
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informing it of the new dealership. Each letter stated that
"[t]his action is consistent with our previously stated
marketing plan as contained in your original Letter of
Intent dated August 2, 1985."
On April 27, 1988, American Honda issued an LOI to
William York to establish an Acura dealership in Revere.
This dealership was to replace the Dedham point because the
planned Dedham site turned out to be contaminated. On May
4, 1988, York signed the LOI. The following day, Budnick
hand delivered a letter to Boston Car and to other area
dealers giving notice of American Honda's intent to start a
dealership in Revere. This letter, unlike the previous
notice letters, did not state that establishment of the new
dealership was consistent with Boston Car's LOI.
In response to notice of the Revere LOI, the principal
of the Peabody dealership formally notified American Honda
on May 26, 1988, of its intent to file suit. The Peabody
dealership also informed Boston Car that, in order to sue
under the Massachusetts franchise law, Boston Car would have
to give notice within thirty days of American Honda's notice
of intent to establish the Revere dealership. On June 28,
1988, Carney sent a letter to American Honda objecting to
the new franchise in Revere. The letter did not state an
intention to sue American Honda, however. The Peabody
dealership proceeded to file suit. That suit was settled in
the fall of 1988.
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On January 24, 1989, Boston Car filed this action
against American Honda in state court, alleging violations
of the Massachusetts automobile franchise law, Mass. Gen. L.
Chap. 93B, misrepresentation and breach of contract.
American Honda removed the case to federal court on the
basis of diversity of citizenship.1 American Honda also
brought a counterclaim seeking a declaratory judgment that
it had the legal right to establish a dealership in Revere.
American Honda moved for summary judgment. Judge Wolf
heard oral argument on the motion, but then requested
testimony from Carney and Budnick. Thus, the summary
judgment proceeding turned into something like a short bench
trial, after which the judge made findings of fact.2
Following these proceedings, on November 25, 1991,
Judge Wolf issued an oral opinion granting judgment for
American Honda. In a thorough and lucid opinion, Judge Wolf
ruled that the LOI between Carney and American Honda was an
enforceable agreement. Nonetheless, he concluded, the
listing of future points was not a promise but merely a
statement of American Honda's present intention. Further,
Judge Wolf found no evidence that American Honda had acted
in bad faith or misrepresented its true present intentions
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1 Boston Car is a citizen of Massachusetts, while
American
Honda is a citizen of California.
2 Neither party has objected to this procedure. We
assume, without deciding, that it was proper. Because the
judge resolved disputed issues of fact, we will review as we
would an ordinary bench trial pursuant to federal Rule of
Civil Procedure 52.
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at the time the letter was executed, and he therefore
rejected Boston Car's misrepresentation claim.
Regarding Boston Car's claim under Chapter 93B, Judge
Wolf found that Boston Car had waived any cause of action
under the statute, because it had failed to give notice to
American Honda of its intention to sue within thirty days of
receiving notification of the new franchise. Judge Wolf
found that American Honda's letter of May 5, 1988
constituted the statutorily required notice to existing
franchisees of a proposed new franchise, and that Boston Car
had failed to give notice of intent to sue within thirty
days of receipt of that letter. Boston Car filed a timely
notice of appeal.
II
We must first determine if we have jurisdiction over
this appeal. Boston Car filed its notice of appeal on
December 4, 1991. On December 20, 1991, this court issued
an order to show cause why the appeal should not be
dismissed for lack of jurisdiction, noting that the order
appealed from did not expressly dispose of American Honda's
counterclaim. The parties then filed with the district
court a "Joint Motion For Amended Order and Entry of Final
Judgment On All Claims," asking the district court to amend
its order of November 25, 1991, to grant judgment for
American Honda on its counterclaim. Judge Wolf granted the
joint motion of the parties and adopted their proposed order
on January 30, 1992. No new notice of appeal was filed.
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We conclude that the November 25 order was final and
appealable and that we have jurisdiction over this appeal.
Judge Wolf's order stated that American Honda's motion for
summary judgment was granted. The motion requested "summary
judgment on all issues in this case." Although American
Honda's counterclaim was not specifically mentioned in the
accompanying opinion, it was necessarily resolved by the
November 25 order.
Nor did the subsequent Joint Motion undermine the
effectiveness of Boston Car's notice of appeal. True, under
Rule 4(a)(4) of the Federal Rules of Appellate Procedure, a
notice of appeal filed prior to the disposition of a timely
motion to alter or amend judgment pursuant to Rule 52(b) or
Rule 59 is a nullity. However, the Joint Motion, if
construed as a Rule 52 or Rule 59 motion, was not timely.
It was filed January 2, 1992, more than thirty days after
entry of judgment. Because motions under Rules 52(b) and 59
must be served within ten days, if the Joint Motion were
brought under these rules it was untimely and had no effect
on the notice of appeal. See Flint v. Howard, 464 F.2d
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1084, 1086 (1st Cir. 1972) ("an untimely motion for
reconsideration . . . is a nullity").
In any event, we think it more reasonable to construe
the Joint Motion as a request for correction of an error
arising from oversight or omission, pursuant to Rule 60(a).
Rule 60 motions can be brought at any time, and do not
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disturb a notice of appeal previously filed. We therefore
conclude that, because the order was final and appealable
and the notice of appeal was effective, we have jurisdiction
and may proceed to the merits.
III
Boston Car contends that the district court erred in
holding that American Honda was not bound by the recitation
of its market plan in the August 1985 LOI. We must
determine whether the district judge properly considered
evidence of the party's intent beyond the four corners of
the LOI, and if he correctly determined that the listing was
not a promise. Our standard of review on these questions is
bifurcated. "The determination of whether a contract
provision is ambiguous is a question of law subject to
plenary review." ITT Corp. v. LTX Corp., 926 F.2d 1258,
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1261 (1st Cir. 1991). If the contract provision is
ambiguous, "a finding as to the meaning of a writing will be
reviewed under the clearly erroneous standard." Gel
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Systems, Inc. v. Hyundai Eng. & Constr. Co., 902 F.2d 1024,
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1027 (1st Cir. 1990).
The document's denomination as a letter of intent does
not determine whether it was binding upon the parties. In
Massachusetts, a letter of intent is binding to the extent
the parties so intend. See Schwanbeck v. Federal-Mogul
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Corp., 592 N.E.2d 1289, ____ (Mass. 1992). The parties do
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not dispute that the LOI was in some respects binding. We
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are asked to determine here only whether one specific
provision, the market plan listing, was promissory or
informational.
"Under Massachusetts law, parol evidence may not be
admitted to contradict the clear terms of an agreement, or
to create ambiguity where none otherwise exists." ITT
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Corp., 926 F.2d at 1261. However, we have recognized that:
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in order to utilize extrinsic evidence of
the parties' intent, a court need not
invariably find facial ambiguity. The
Massachusetts courts have said:
When the written agreement, as
applied to the subject matter, is in
any respects uncertain or equivocal
in meaning, all the circumstances of
the parties leading to its execution
may be shown for the purpose of
elucidating, but not of contradicting
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or changing its terms.
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Keating v. Stadium Mgmt. Corp., 508 N.E.2d
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121, 123 (Mass. App. Ct.), review denied,
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511 N.E.2d 620 (Mass. 1987).
ITT Corp., 926 F.2d at 1264.
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Thus, the threshold question is whether the term at
issue is ambiguous, or at least uncertain or equivocal. The
disputed provision of the LOI states:
The primary market area that you have
applied for is only part of our market
representation plan. It is our intention
to establish additional Acura dealers in
the surrounding primary market areas:
Danvers, Lexington, Dedham, Natick,
Norwood and Norwell.
On its face, the language appears clear: American Honda is
merely stating its "intention" to establish certain
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additional dealerships. On the other hand, the context may
impart uncertainty. The remaining provisions of the LOI set
forth a detailed list of binding conditions on the grant of
the dealership. Moreover, the market plan roster is quite
specific, naming six particular towns where dealerships will
be located. On balance, we are persuaded that Judge Wolf
did not err in considering parol evidence with respect to
the parties' intentions for the purpose of elucidating the
terms of the LOI.
Considering the language of the provision and the
testimony of Carney and Budnick, Judge Wolf's finding that
the market plan listing was merely an expression of American
Honda's present intentions rather than a binding promise is
not clearly erroneous. As just stated, the language
supports the view that the provision is merely a statement
of present intention. Indeed, the provision states, "[i]t
is our intention . . . ." This language stands in
conspicuous contrast to the other provisions of the LOI,
which are couched in promissory terms such as "we agree" and
"you shall."
Carney's own testimony confirms this understanding.
Carney conceded that he understood at the time he signed the
provision that the number and location of dealerships as
stated in the letter was not irrevocably fixed, but was
subject to change as market conditions changed. Carney
clearly realized that the precise locations of the listed
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points were subject to change: he himself had insisted on
changing the location of his original point, and three of
the four subsequently filled points were established in
towns other than those listed in the LOI, with no objection
from Carney.
Boston Car makes much of the fact that Carney and
Budnick had extensive discussions regarding where the other
Boston area points would be located and when they would
open. Boston Car argues that these discussions demonstrate
the binding nature of the provision setting forth the
points, because sophisticated businessmen would not waste
their time negotiating a non-binding term. An equally
plausible account, however, is that Carney indeed was
concerned about the number and location of the other Boston
area points, that he and Budnick talked extensively on the
subject, but that ultimately American Honda, which was
unwilling to bind itself to an inviolable plan, prevailed.
In any event, the mere fact of negotiations on the number
and location of the Boston points does not persuade us that
the statement of intention regarding such points is binding.
IV
Boston Car also appeals the rejection of its claim
under Chapter 93B of the Massachusetts General Laws.
Chapter 93B forbids the grant of a new franchise by an
automobile manufacturer or distributor "arbitrarily and
without notice to existing franchisees." Mass. Gen. L. ch.
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93B, 4(3)(l). Notice must be provided at least "sixty
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days prior to granting such franchise" to all existing
dealers within a twenty-mile radius of the proposed new
franchise. Id. An existing dealer may bring an action
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under this section to challenge the grant of a new
franchise, but only if it "first give[s] written notice of
its intention to do so . . . within thirty days from the
date on which it received notice of such intention to grant
or enter into the additional franchise or selling
agreement." Id. American Honda contends, and the district
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court found, that Boston Car failed to give notice of its
intention to sue within thirty days of receiving word of the
new Revere franchise, and that accordingly Boston Car's
statutory claim was barred. Boston Car argues that it never
received proper notice from American Honda of the intent to
grant the Revere franchise, and hence could bring its
statutory claim anytime before the franchise actually began
business.
The district court determined that American Honda's May
5, 1988, letter to Boston Car informing it of the execution
of an LOI for a new Revere dealership was the statutorily
required sixty day notice. It is undisputed that Boston Car
did not respond to this letter until June 28, 1988, well
past the thirty day limit for giving notice of intent to
sue. Moreover, Boston Car's response did not state an
intention to sue, but merely expressed generalized
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opposition to the Revere dealership. If American Honda's
May 5 letter was effective notice of the proposed new
franchise, therefore, Boston Car's Chapter 93B claim is
barred by its failure to issue a timely notice of intent to
sue.
Boston Car argues that the franchise was effectively
granted by the LOI, and consequently the May 5 letter did
not provide sixty days notice of the new franchise. Boston
Car contends that the LOI entered into with York amounted to
the grant of a franchise because it obligated American Honda
to grant a sales agreement if York fulfilled all of the
listed conditions.3
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3 Boston Car suggests for the first time on appeal that
the issue of whether the LOI constituted the grant of a
franchise within the meaning of Chapter 93B should be
certified to the Supreme Judicial Court of Massachusetts.
We decline to certify this question. We have previously
noted that failure to request certification in the district
court "considerably weakens" the case for certification on
appeal. Fischer v. Bar Harbor Banking and Trust Co., 857
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F.2d 4, 8 (1st Cir. 1988). We agree with the Eighth Circuit
that "[t]he practice of requesting certification after an
adverse judgment has been entered should be discouraged.
Otherwise, the initial federal court decision will be
nothing but a gamble with certification sought only after an
adverse decision." Perkins v. Clark Equipment Co., 823 F.2d
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207, 210 (8th Cir. 1987). Boston Car does not cite any
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Chapter 93B defines a franchise as an agreement in
which a manufacturer or distributor grants a dealer a
license to use the manufacturer's trade name or service
mark, "and in which there is a community of interest in the
marketing of motor vehicles or services related thereto."
We conclude that this definition does not encompass the
relationship established by the LOI between American Honda
and York. The major premise of Boston Car's argument, that
the LOI obligated American Honda to enter into a dealership
agreement with York, is fatally flawed. The LOI was
entirely contingent. Significantly, it specifically stated
that American Honda was not obligated to grant the franchise
if legal problems developed. Although American Honda's
freedom to opt out of a dealership agreement was somewhat
circumscribed by the LOI, the franchise was not a fait
accompli once the LOI was executed. American Honda remained
free to decline to enter a dealership agreement if it
appeared that establishment of a new dealership would
violate Chapter 93B.
Boston Car cites Ricky Smith Pontiac v. Subaru of New
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England, 440 N.E.2d 29 (Mass. App. 1982), in support of its
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compelling reason for certification. There is no split of
authority, the words of the statute itself provide
sufficient guidance that our decision will not be merely
conjectural, and we do not find the question particularly
close.
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contention that the issuance of an LOI constitutes the grant
of a franchise within the meaning of Chapter 93B. In dicta,
Ricky Smith states that section 4(3)(l) "plainly
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contemplates written notice to existing dealers of a
manufacturer's or distributor's intent to appoint a new
dealer within their relevant market area followed by
discussion between the parties of the reasons which warrant
the appointment." Id. at 43. According to Boston Car,
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unless notice is given before the LOI is issued, such
discussions will be reduced to an empty formality. We
disagree. As already pointed out, the LOI issued to York
expressly conditioned the grant of a sales agreement on the
absence of any legal bar to establishment of the dealership.
Nothing in the LOI, therefore, would forestall American
Honda from terminating its agreement with York if
discussions with existing dealers showed that Chapter 93B
would bar the grant of the Revere franchise. Moreover, the
notice sufficiently predated the projected opening date of
the Revere dealership to allow for effective negotiations,
with both York and existing dealers, on the exact location
of the new dealership, or other accommodations. Discussions
engendered by the notice would not necessarily be futile
gestures.4
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4 We need not decide for purposes of this appeal
precisely what action, event, or document did or would
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We also reject Boston Car's argument that even if
American Honda's letter of May 5 constituted effective
notice, American Honda was required to renew that notice
when it extended the projected opening date for the Revere
dealership from January 1989 to January 1990. American
Honda never abandoned its plan to establish a Revere point,
nor was Carney ever given to understand that the Revere
point would be dropped. The existing dealers were already
on notice and had been given an opportunity, which they
exercised, to protest the new dealership. Requiring
republication of the notice when opening of that dealership
was delayed would serve no purpose.
This case is readily distinguishable from Smith's
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Cycles, Inc. v. Alexander, 219 S.E.2d 282 (N.C. App. 1975),
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upon which Boston Car also relies. In Smith's Cycles, the
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distributor served notice that it would grant a new
dealership on or before a certain date. When that date
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passed, the notice lapsed by its own terms, and existing
dealers were entitled to assume that no new dealership was
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constitute the grant of a franchise to York within the
meaning of Chapter 93B. We hold only that issuance of the
LOI was not the grant of a franchise, and that American
Honda's letter of May 5 satisfied its obligation to provide
notice of its intention to grant a franchise. Accordingly,
Boston Car's failure to comply with the notice of intent to
sue provision of Chapter 93B bars its claim under that
chapter.
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contemplated. The distributor could not, therefore, rely on
the earlier notice when it opened a new dealership more than
a year after the date stated.
By contrast, American Honda's notice of intent to grant
a Revere franchise stated that the new franchise would open
no earlier than January 1, 1989. It did not state or imply
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that if the new dealership did not open on that date it
should be considered abandoned. The delays in opening the
Revere dealership did not require republication of the
notice.
For the foregoing reasons, the judgment of the district
court is
Affirmed.
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