King Coal Chevrolet Co. v. General Motors LLC

758 S.E.2d 265, 233 W. Va. 338, 2014 WL 1659238, 2014 W. Va. LEXIS 453
CourtWest Virginia Supreme Court
DecidedApril 24, 2014
DocketNo. 13-0675
StatusPublished

This text of 758 S.E.2d 265 (King Coal Chevrolet Co. v. General Motors LLC) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
King Coal Chevrolet Co. v. General Motors LLC, 758 S.E.2d 265, 233 W. Va. 338, 2014 WL 1659238, 2014 W. Va. LEXIS 453 (W. Va. 2014).

Opinion

Justice KETCHUM:

The United States District Court for the Southern District of West Virginia has submitted a certified question to this Court arising from a dispute between an automobile manufacturer, General Motors LLC (“General Motors”), and an automobile dealer, King Coal Chevrolet Company (“King Coal”). The issue before us is whether General Motors was required by W.Va.Code § 17A-6A-12(2) [2007] to provide King Coal with notice prior to entering into a new dealership agreement with another automobile dealer in King Coal’s “relevant market area.” The certified question submitted by the District Court is as follows:

Do the circumstances in this ease permit GM [General Motors] to avail itself of the safe harbor found in West Virginia Code section 17A-6A-12(4) or, instead, is it required to provide to King Coal the statutory notice commanded by section 17A-6A-12(2).

After thorough review, we find that General Motors may avail itself of the safe harbor contained in W.Va.Code § 17A-6A-12(4).1

[340]*340I.

FACTUAL AND PROCEDURAL BACKGROUND

King Coal is a motor vehicle dealer located in Oak Hill, West Virginia that sells Chevrolet motor vehicles. Chevrolet vehicles are manufactured by General Motors. Prior to 2010, Lewis Chevrolet Oldsmobile Cadillac (“Lewis Automotive” or “Lewis”) operated a Chevrolet dealership in nearby Beckley, West Virginia. Lewis Automotive sold Chevrolet vehicles in Beckley for approximately eighty years. These two competing Chevrolet dealerships, King Coal and Lewis Automotive, were located twelve miles apart and co-existed in the marketplace for approximately thirty-five years.2

On June 1, 2009, General Motors Corporation3 filed for bankruptcy and proposed a restructuring of its dealer network. General Motors described the restructuring process as follows:

GMCorp offered some poorly performing dealers “Wind-Down Agreements,” under which GM would make payments to the dealers and they would agree to cease operations on or before October 31, 2010. Under the dealer network plan, GM planned to consolidate some dealers and replace other poorly performing dealers with new owners in critical markets to continue the same Chevrolet dealership operations. As a result of Lewis’s history of poor performance, GMCorp offered Lewis a Wind-Down Agreement on June 1, 2009, which Lewis executed.

Pursuant to this “Wind-Down Agreement,” Lewis Automotive accepted a “substantial monetary payment” from General Motors in exchange for closing its Chevrolet operations. Lewis Automotive actually closed its Chevrolet operations on October 31, 2010. However, Lewis Automotive continued selling motor vehicles from manufacturers other than General Motors.

General Motors subsequently sought proposals to operate a Chevrolet dealership in Beckley, West Virginia, from candidates other than Lewis Automotive.4 On April 8, 2011, General Motors chose the proposal submitted by “Crossroads Chevrolet.”5 Crossroads signed its dealership agreement with General Motors on September 20, 2012, and has operated its Chevrolet dealership at the Beckley location since that date.6

Crossroads Chevrolet is located approximately 2.6 air miles from the former Beckley Chevrolet dealership, Lewis Automotive. Further, Crossroads is located approximately 10.3 air miles from King Coal. It is undisputed that Crossroads Chevrolet is located within the twenty mile “relevant market area” of King Coal as defined in W.Va.Code § 17A-6A-3(14).7

[341]*341King Coal sent a letter to General Motors on September 10, 2012, demanding that General Motors provide it with written notice, required by W.Va.Code § 17A-6A-12(2), of General Motors’ intent to “establish an additional dealer” so that King Coal could exercise its statutory rights and protect its interests under the West Virginia Motor Vehicle Dealers, Distributors, Wholesalers and Manufacturers Act (“Motor Vehicle Dealers Act ” or the “Act ”), W.Va.Code § 17A-6A-1 et seq. Once an existing dealer receives this statutory notice, it may file a declaratory judgment action to determine whether “good cause” exists for the opening of a new motor vehicle dealer of the same line-make within its relevant market area.8 General Motors replied to King Coal on September 14, 2012, asserting that it was exempt from providing notice to King Coal by the safe harbor provision contained in W.Va.Code § 17A-6A-12(4), because it was “re-establishing” a new motor vehicle dealership that had closed within the preceding two years.

King Coal filed a petition for injunctive relief9 against General Motors in the Circuit Court of Fayette County on September 26, 2012. General Motors removed the case to the United States District Court for the Southern District of West Virginia. On December 12, 2012, the District Court held a hearing to consider two motions: (1) King Coal’s motion for a preliminary injunction, and (2) General Motors’ motion to dismiss King Coal’s complaint for injunctive relief. In a memorandum opinion and order entered on May 23, 2013, the District Court denied both motions without prejudice and certified a question of law to this Court. Thereafter,, this Court accepted the certified question.

II.

STANDARD OF REVIEW

When this Court is called upon to resolve a certified question, we employ a plenary review. “A de novo standard is applied by this Court in addressing the legal issues presented by a certified question from a federal district or appellate court.” Syllabus Point 1, Light v. Allstate Ins. Co., 203 W.Va. 27, 506 S.E.2d 64 (1998); accord Syllabus Point 1, Bower v. Westinghouse Elec. Corp., 206 W.Va. 133, 522 S.E.2d 424 (1999) (“This Court undertakes plenary review of legal issues presented by certified question from a federal district or appellate court.”). With this standard in mind, we proceed to examine the parties’ arguments.

III.

ANALYSIS

This certified question requires us to analyze the Motor Vehicle Dealers Act, W.Va.Code § 17A-6A-1 et seq. The purpose of the Motor Vehicle Dealers Act is set forth in W.Va.Code § 17A-6A-1. It states:

The legislature finds and declares that the distribution and sale of motor vehicles [342]*342in this State vitally affects the general economy and the public welfare and that in order to promote the public welfare and in the exercise of its police power, it is necessary to regulate motor vehicle dealers, manufacturers, distributors, and representatives of vehicle manufacturers and distributors doing business in this State in order to avoid undue control of the independent new motor vehicle dealer by the vehicle manufacturer or distributor and to ensure that dealers fulfill their obligations under their franchises and provide adequate and sufficient service to consumers generally.

The certified question submitted by the District Court is as follows:

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758 S.E.2d 265, 233 W. Va. 338, 2014 WL 1659238, 2014 W. Va. LEXIS 453, Counsel Stack Legal Research, https://law.counselstack.com/opinion/king-coal-chevrolet-co-v-general-motors-llc-wva-2014.