Nissan Division of Nissan Motor Corp. in U.S.A. v. Fred Anderson Nissan

434 S.E.2d 224, 111 N.C. App. 748, 1993 N.C. App. LEXIS 932
CourtCourt of Appeals of North Carolina
DecidedSeptember 7, 1993
DocketNo. 9210SC802
StatusPublished
Cited by3 cases

This text of 434 S.E.2d 224 (Nissan Division of Nissan Motor Corp. in U.S.A. v. Fred Anderson Nissan) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nissan Division of Nissan Motor Corp. in U.S.A. v. Fred Anderson Nissan, 434 S.E.2d 224, 111 N.C. App. 748, 1993 N.C. App. LEXIS 932 (N.C. Ct. App. 1993).

Opinions

McCRODDEN, Judge.

On 1 October 1991, certain amendments to the Motor Vehicle Dealers and Manufacturers Licensing Law (the Licensing Law), N.C. Gen. Stat. §§ 20-285 to -308.2 (1989 and Supp. 1992), became effective. The General Assembly amended Section 20-305 to provide for administrative review of an automobile manufacturer or distributor’s refusal to approve a dealer’s relocation of its facilities. Under the amended statute, after receiving written notice of a proposed relocation, a manufacturer must send the dealer written notice of its opposition to the relocation by registered or certified mail, return receipt requested, within 30 days, or any such opposition shall be considered waived. If the manufacturer gives notice of objection, the dealer may then file a petition for a hearing with DMV. At the DMV hearing, the manufacturer bears the burden of showing that the proposed relocation would be “unreasonable under the circumstances.” N.C.G.S. § 20-305(4).

Both DMV and the trial court applied the amended statute to this case, and that application forms the basis of plaintiff’s appeal. We address the following issues: (I) whether the trial court retroactively applied the amended version of Section 20-305, thereby depriving plaintiff of its right to block the relocation of a dealership; (II) whether the trial court erred in applying the statutes because, [752]*752according to plaintiffs argument, it unconstitutionally impaired plaintiffs contractual rights to control the location of its dealerships; and (III) whether the trial court erred in affirming the hearing officer’s determination that plaintiff had failed to give proper notice of its objection to defendant’s relocation.

I.

Plaintiff first argues that the trial court’s application of the amended version of Section 20-305 was unconstitutionally retroactive because it deprived plaintiff of its right to block the relocation of a dealership. We disagree.

In the recent case of Fogleman v. D&J Equipment Rental, 111 N.C. App. 228, 431 S.E.2d 849 (1993), this Court dealt with the issue of when the application of an amended statute acts to deprive a party of vested rights. In discussing the applicable law, we reiterated:

Ordinarily, statutes are presumed to act prospectively only, unless it is clear that the legislature intended that the law be applied retroactively. The application of a statute is deemed retroactive when its operative effect is to alter the legal consequences of conduct or transactions completed prior to its enactment.

Id. at —, 431 S.E.2d at 851 (quoting Gardner v. Gardner, 300 N.C. 715, 718, 268 S.E.2d 468, 471 (1980)) (citation omitted). Under this standard, we believe that the trial court in this case did not apply the statute retroactively. Defendant did not initiate the transaction to which the statute was applied, i.e., it did not give plaintiff notice of its proposed relocation, until after the statute became effective. Although plaintiff was aware that defendant had been negotiating with Meeker, defendant did not present its written proposal until after 1 October 1991, the effective date of the amendments. Plaintiff’s right to object to this proposed relocation, therefore, did not vest before the statute became effective.

Plaintiff contends, however, that the right to object vested when it became aware of defendant’s negotiations with Meeker. The evidence does not bear this out. Plaintiff itself informed defendant several times that any proposal for relocation was to be made in writing, clearly implying that it did not consider any of their correspondence to be an actual proposal. Only in response to the [753]*753formal proposal of 3 October 1991, did plaintiff unequivocally state that it would not approve the proposal.

Moreover, the Dealer Agreement set no limits on how. often a dealer might apply for permission to relocate or how many times the dealer might submit the same proposal. Hence, defendant could have requested the same relocation many times before 1 October 1991, and plaintiff could have vetoed each of those requests. Defendant would still have been free to give notice to plaintiff after 1 October 1991, and to have that proposal governed by the amended statute. We find that defendant did not make the proposal to relocate until after 1 October 1991, and that, therefore, the trial court’s application of the amended version of Section 20-305(4) was not retroactive. We overrule plaintiff’s first assignment of error.

II.

Plaintiff’s second argument is that the statute, as amended, is unconstitutional in that .it impairs plaintiff’s contractual rights, specifically, the exclusive right to control the location of its dealerships. We disagree.

In Mazda Motors v. Southwestern Motors, 36 N.C. App. 1, 243 S.E.2d 793 (1978), rev’d in part on other grounds, 296 N.C. 357, 250 S.E.2d 250 (1979), this Court considered the constitutionality of N.C.G.S. § 20-305(6), which required franchisors to give dealers written notice of termination of their franchise contracts. Although Mazda focused on a different subsection of N.C.G.S. § 20-305, its rationale is controlling.

The Court in Mazda expounded the standard for judging whether a statute acts to impair contracts unconstitutionally. Although the Constitution of the United States forbids states from impairing the obligations of contracts, “the ‘contracts clause’ grants a qualified and not an absolute right. Clearly, the right to make contracts is subject to the power of the General Assembly to impose restrictions for the benefit of the general public in areas of public interest and to prevent business practices deemed harmful.” Id. at 6-7, 243 S.E.2d at 798. In its statement of purpose to the Licensing Law, the General Assembly declared that the distribution of motor vehicles affects the public interest and welfare of the State of North Carolina, and that, in the exercise of its police power, the State may regulate persons involved in manufacturing and distributing vehicles. N.C.G.S. § 20-285. We presume “that the judgment of [754]*754the General Assembly is correct and constitutional, and a statute will not be declared unconstitutional unless this conclusion is so clear that no reasonable doubt can arise.” Mazda, 36 N.C. App. at 7, 243 S.E.2d at 798.

In deciding this issue, we must determine whether the law disturbs the “essential or core expectations arising from the particular type of contract... [and] such expectations are not disturbed unless the demoralizing effects of state legislation are so great as totally to discourage the parties and others from entering such contracts . . . .” Id. at 9-10, 243 S.E.2d at 800. After noting that any alteration of a contract involves an interference to some degree, the Mazda Court found that the challenged provision was a reasonable exercise of the State’s police power and was not an unconstitutional impairment of automobile franchisors’ contracts.

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434 S.E.2d 224, 111 N.C. App. 748, 1993 N.C. App. LEXIS 932, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nissan-division-of-nissan-motor-corp-in-usa-v-fred-anderson-nissan-ncctapp-1993.