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The Franchise Memorandum

Posts from August 2013 - Issue 170.

When a dealership franchise was terminated following litigation between the manufacturer and dealers, the Minnesota Court of Appeals found that the termination created new issues and new litigation was not barred. North Star Int’l Trucks, Inc. v. Navistar, Inc., 2013 Minn. App. Unpub. LEXIS 447 (Minn. App. May 20, 2013). The dealership franchisee, North Star International Trucks, had previously brought suit against Navistar in 2009, alleging eight claims, including that Navistar threatened termination of its franchise in bad faith. Though the jury made advisory findings ...

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Posted in Contracts

The United States District Court for the Southern District of Indiana recently ruled that an integration clause barred certain claims by a dealer that were premised on an alleged preagreement misrepresentation by the supplier/distributor. Volvo Trucks N. Am. v. Andy Mohr Truck Ctr., 2013 U.S. Dist. LEXIS 83881 (S.D. Ind. June 14, 2013). Mohr Truck alleged that it entered into a dealer agreement with Volvo in reliance on a preagreement oral representation by Volvo that Volvo would also grant Mohr Truck a separate Mack Truck dealership, which Volvo never awarded. Citing the alleged ...

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Posted in Contracts

The United States Court of Appeals for the Eighth Circuit affirmed a district court award of summary judgment in favor of a Minnesota supplier, finding that the supplier did not breach its contract with the appellant distributor. Watkins Inc. v. Chilkoot Distrib., Inc., 2013 U.S. App. LEXIS 13716 (8th Cir. July 8, 2013). The parties had entered into a series of two agreements through which Chilkoot became a Watkins sales associate in Canada. Chilkoot then recruited a new sales associate, the Lambert Group, which became a profitable part of Chilkoot’s downline sales network ...

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The United States District Court for the District of Massachusetts recently explained the meaning of “community of interest” as it relates to Massachusetts franchise law. C.N. Wood Co. v. Labrie Envtl. Grp., 2013 U.S. Dist. LEXIS 78977 (D. Mass. June 5, 2013). C.N. Wood Company entered into an exclusive distributorship agreement with Labrie Environmental Group, under which Wood served as Labrie’s exclusive distributor in Massachusetts and Rhode Island. The agreement had an initial term of one year, which automatically renewed unless a party gave notice of its intent to ...

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Posted in Terminations

The Eastern District of Missouri recently ruled on a number of issues in a dealer’s claims for wrongful termination. In the first decision, the court granted the manufacturer’s motion for summary judgment on a claim that it violated Missouri’s Franchise Act by failing to provide 90 days’ notice of its intent to terminate the dealership, but the court denied the supplier’s motion as to the claim that it violated the Missouri Power Equipment Act by terminating the agreement without “good cause.” Lift Truck Lease & Serv., Inc., v. Nissan Forklift Corp., 2013 U.S. Dist ...

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Posted in Antitrust

The Ninth Circuit recently affirmed summary judgment in an antitrust suit involving the sale of aftermarket automotive parts. In Gorlick Distribution Centers v. Car Sound Exhaust, 2013 U.S. App. LEXIS 14635 (9th Cir. July 19, 2013), the appeals court agreed that Gorlick had failed to raise a genuine issue of fact regarding its claim that its competitor, Allied Exhaust Systems, knowingly received discriminatory pricing in violation of the RobinsonPatman Act. Although it was clear that Allied did in fact know it was receiving favorable pricing from its supplier, Car Sound Exhaust ...

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The Franchise Memorandum is a collection of postings on summaries of recent legal developments of interest to franchisors brought to you by Lathrop GPM LLP. 

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