Christensen Motor Sales, Inc. v. American Motor Sales, Inc.

697 P.2d 442, 108 Idaho 102, 1985 Ida. LEXIS 434

• Court: Idaho Supreme Court
• Decided: March 5, 1985
• Docket: 15335
• Status: Published

Opinions

SHEPARD, Justice.

This is an appeal from a summary judgment in favor of defendant in an action by Christensen Motor Sales, Inc., resulting from the cancellation of Christensen’s motor vehicle dealership franchise issued to Christensen by defendant-respondent American Motor Sales Corporation. We affirm.

American Motor Sales, an automotive manufacturer, and Christensen Motors entered into a ten-year franchise agreement on May 20, 1978, which agreement generally provided that American Motor Sales would supply Christensen with motor vehicles, parts and accessories. The agreement stated:

“This agreement has been entered into by American with Dealer in reliance upon the personal qualifications of, and representations with respect thereto, of the persons named below, and also in reliance (i) upon the representation and agreement that the following person(s) will substantially participate in the ownership of Dealer:

Percentage Name of Interest

Dell P. Christensen................. 30%

Kent D. Christensen................ 35%

Milton P. Christensen............... 35%

and (ii) upon the representation and agreement that the following person(s) will actively and substantially participate in the management of Dealer and will have full managerial authority and responsibility for the operations of Dealer:

Name Title

Dell P. Christensen .........President

Kent D. Christensen.........Vice President

Milton P. Christensen.........Sec./Treas.”

That same agreement provided for a termination of the franchise agreement upon the occurrence of certain events, specifically: '

“(d) Upon the death or incapacity of any person named in Paragraph 3 of this Agreement, American may terminate this Agreement by giving written notice of such intention to Dealer. Unless extended as hereinafter provided, the effective date of such termination shall be the date specified in such written notice, which date shall be not less than sixty (60) days after the mailing thereof. Upon receipt of a written request from Dealer to extend the effective date of such termination, for the purpose of facilitating an orderly termination of business relationships or a liquidation of Dealer’s business, American shall, within thirty (30) days after the receipt of such request, extend the effective date of such termination for a period, to be determined by American in writing, of not less than ninety (90) days and not more than one (1) year after the mailing of such written notice of termination. This Agreement will then terminate at the expiration of such extended period without further written notice.”

On August 15, 1978, Dell Christensen died, and on September 19, 1978, American wrote Christensen a letter purporting to terminate the franchise agreement. Christensen requested, and was granted, an extension of the contract within the terms of the above-quoted termination section of the contract. Christensen thereafter filed this action against American, alleging cancellation of the contract in violation of I.C. § 49-2414(7)(f). I.C. § 49-2414 provides, in pertinent part:

“It shall be unlawful and a violation of this act, for the holder of any license issued under the terms and provisions hereof:

******

(7) It shall be unlawful and a violation of this act, for a manufacturer of motor vehicles, distributor, distributor branch or factory branch or other representative thereof to either induce or attempt to induce by means of coercion, intimidation, or discrimination any motor vehicle dealer:

******

(f) To unfairly without due regard to the equities of said dealer and without just provocation, cancel a franchise of any motor vehicle dealer. The nonrenewal of a franchise or selling agreement without just provocation or cause shall be deemed an evasion of this paragraph and shall constitute an unfair cancelation. In determining whether good cause has been established for modifying, replacing, terminating or refusing to continue a franchise, it shall be taken into consideration the existing circumstances ...” (Emphasis added.)

The trial court did not state any reasoning upon which it granted summary judgment for the defendant, but found only that there were no issues of material fact and that defendant should prevail on the law.

American Motor has argued that Christensen has no standing to bring this action, in that the relied-upon statute does not confer a cause of action upon a dealer for damages incurred upon wrongful termination of the franchise, and in that the enforcement of the statute is committed to the Department of Transportation, I.C. § 49-2403. Christensen, on the other hand, argues that statutes which on their face provide penal sanctions for their violation, also imply a private right of action in those persons for whose benefit the statute was obviously enacted. See, e.g., Diehl and Sons, Inc. v. International Harvester Co., 445 F.Supp. 282, 288-289 (D.C.N.Y. 1978); Willys Motors, Inc. v. Northwest Kaiser-Willys, Inc., 142 F.Supp. 469 (D.C. Minn.1956); Kuhl Motor Co. v. Ford Motor Co., 270 Wis. 488, 71 N.W.2d 420 (1955).

Since we hold in any event that Christensen has failed to plead or present any evidence in opposition to the motion for summary judgment which tends to prove or, by fair inference, indicate the presence of elements necessary for a finding of the violation of the statute, we decline to address American’s argument of lack of standing.

We note that the introductory language of I.C. § 49-2414 is an obvious attempt to prohibit certain acts of a licensee and that subsection (7) of that portion of the statute attempts to prohibit certain conduct of a manufacturer. A literal reading of the statute renders it absurd. Nevertheless, the intention of the legislature is clear from the content, which, to this Court, clearly reflects an attempt to declare certain listed acts by a manufacturer as being unlawful, if they are induced or attempted to be induced “by means of coercion, intimidation, or discrimination." Part (f) of subsection (7) is simply one of those designated violations, i.e., a cancellation of the franchise through means of “coercion, intimidation, or discrimination.”

Hence, we will construe the statute to achieve the most logical result and to preserve the common meaning of the language used therein. Nicolaus v. Bodine, 92 Idaho 639, 448 P.2d 645 (1968). See also, Farm Development Corporation v. Hernandez, 93 Idaho 918, 478 P.2d 298 (1970); Scharbach v. Continental Cas. Co., 83 Idaho 589, 366 P.2d 826 (1961); Hinsch v. Mothom, 44 Idaho 539, 258 P. 540 (1927).

The record presented on appeal contains no indication that the actions of American Motor in cancelling the franchise were the result of coercion, intimidation, or discrimination exercised against Christensen. Rather, it is asserted by American that the franchise was cancelled for good cause according to the terms of the contract, i.e., that the agreement was entered into by American in reliance upon the personal qualifications of, and representations of the continuation, of Dell P. Christensen in the business, and that absent his continuation in the business because of death, the agreement specifically authorizes termination of the franchise at the option of American.

We find the contract unambiguous and Christensen concedes that the contract specifically allows American to cancel under the existing circumstances. We will not rescue a contracting party from the consequences of what later appears to be a bad bargain, nor will we design for the parties terms which we deem more beneficial than those that the parties have agreed upon between themselves. J.R. Simplot Co. v. Chambers, 82 Idaho 104, 350 P.2d 211 (1960); Sorensen v. Larue, 43 Idaho 292, 252 P. 494 (1926).¹

The judgment of the district court is affirmed. Costs to respondent. No attorney’s fees on appeal.

DONALDSON, C.J., concurs. BAKES, J., concurs in the result.

1 . We note that, even were I.C. § 49-2414(7)(f) held to apply to this cause of action, we would probably hold that initial jurisdiction lies in the Department of Transportation under the policies and dictates of the doctrine of primary jurisdiction. See Grever v. Idaho Telephone Co., 94 Idaho 900, 499 P.2d 1256 (1972).