Lupient Chevrolet, Inc. v. General Motors, LLC

Background

Lupient Chevrolet, Inc. operates a Chevrolet motor-vehicle franchise and sells and services General Motors products. The parties’ relationship is governed by a Dealer Sales and Service Agreement. That agreement assigned Lupient an Area of Geographical Sales and Service Advantage (AGSSA) and an Area of Primary Responsibility (APR). General Motors compared Lupient’s retail sales with sales opportunities in the applicable area, and satisfactory performance required a Retail Sales Index (RSI) of at least 100.

In August 2018, Lupient asked General Motors to remove 34 census tracts from its AGSSA. On February 8, 2019, General Motors notified Lupient that it would remove only three. Lupient brought this action, and after earlier claims were dismissed by stipulation, one claim remained: an alleged violation of Minnesota Statutes Section 80E.13(p). General Motors moved for summary judgment, which asks whether the evidence requires judgment for one side without a trial because no reasonable jury could find for the other side.

Whether the AGSSA Was Covered by the Statute

Section 80E.13(p) makes it unlawful and an unfair practice for a manufacturer to assign or change a dealer’s “area of sales effectiveness” arbitrarily or without due regard to the present pattern of motor-vehicle sales and registrations in the dealer’s market. The statute defines that area as a geographic area designated in a franchise agreement or related document where the dealer is responsible for effectively selling, servicing, and representing the manufacturer’s products.

General Motors argued that the statute covered Lupient’s APR, but not its AGSSA. The court rejected that distinction at this stage. The Dealer Agreement referred to the APR and AGSSA as alternatives for measuring performance, “whichever is applicable.” General Motors also described a change to Lupient’s AGSSA as a revision of its APR. Because General Motors conceded that the APR was an area of sales effectiveness, and the evidence indicated that the AGSSA was part of the APR, the court ruled that the AGSSA also qualified as an area of sales effectiveness under Section 80E.13(p).

Whether General Motors Made a Covered Change

General Motors argued that the statute was not triggered because Lupient had consented to removing the three tracts that General Motors actually removed, while the 31 additional tracts were not changed. The court rejected that narrow interpretation. The court held that the statute allows a dealer to challenge the decision-making process used to make a change, not only the particular tracts added or removed.

Lupient did not challenge the removal of the three tracts itself. Instead, it challenged the process General Motors used to decide to remove only three rather than all 34. The court held that this type of process challenge was permitted by the statute and denied General Motors’ motion for summary judgment on that basis.

Injury

The court then considered whether Lupient had shown an injury to its business or property, as required to prevail under Minnesota Statutes Section 80E.17. The court concluded that Lupient had not done so.

General Motors presented evidence that Lupient’s expert calculated that, without the disputed tracts, Lupient’s RSI for 2016 through 2020 would have increased from a range of 39.1 to 47.9 percent to a range of 57.3 to 70.2 percent. Because the Dealer Agreement required an RSI of at least 100 for satisfactory performance, Lupient would still have been classified as an underperforming dealer even without the disputed tracts.

Lupient argued that its low RSI score was itself an injury. It also asserted that the score caused it to be labeled unsatisfactory, placed in a dealer-improvement program, and denied certain opportunities and operational changes. The court found no record evidence showing that an RSI of 70.2 percent would have changed those outcomes. The court also found that the opportunities Lupient said it had not pursued would not have been available even without the disputed tracts. Finally, Lupient’s suggestion that its RSI might reach 100 in later years was speculative and did not establish a present injury.

Disposition

Because Lupient could not prevail under Section 80E.13(p) without proving injury to its business or property, the court granted General Motors LLC’s motion for summary judgment. The order directed that judgment be entered accordingly. Judge Wilhelmina M. Wright signed the order.