Lift Truck Lease and Service, Inc. v. Nissan Forklift Corporation, North America

Filing 92

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that defendant Nissan Forklift Corporation, North Americas motion for summary judgment is GRANTED in part and DENIED in part; the motion is GRANTED as to the claims for violation of the notice provis ions of the Missouri Franchise and Power Equipment Acts in Counts I and III, and DENIED as to the claim for violation of the goodcause termination requirement of the Missouri Power Equipment Act in Count III. [Doc. 67] An appropriate partial judgment will accompany this Memorandum and Order. Signed by District Judge Charles A. Shaw on 6/12/2013. (KSH)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

LIFT TRUCK LEASE AND SERVICE, INC., )
d/b/a A.D. LIFT TRUCK,
)
)
Plaintiff,
)
)
v.
)
)
NISSAN FORKLIFT CORPORATION,
)
NORTH AMERICA,
)
)
Defendant.
)

No. 4:12-CV-153 CAS

MEMORANDUM AND ORDER
This diversity matter is before the Court on defendant Nissan Forklift Corporation, North
America’s (“Nissan”) motion for summary judgment on Counts I and III of plaintiff Lift Truck
Lease and Service, Inc.’s First Amended Complaint (“Complaint”) pursuant to Rule 56, Federal
Rules of Civil Procedure. ADL opposes the motion and it is fully briefed. For the following
reasons, the motion will be granted in part and denied in part.
Factual and Procedural Background
This case arises out of a business relationship between plaintiff, which does business as A.D.
Lift Truck (“ADL”), and Nissan. ADL is in the business of selling new and used lift trucks
(forklifts) and other industrial transportation equipment, and supporting parts and service, in various
counties in Missouri and Illinois. Nissan is in the business of manufacturing lift truck and other
industrial transportation equipment under the Nissan Forklift and Barrett Industrial Trucks marks
that are resold through a nationwide network of dealers.
In January 2010, the parties entered into several agreements: a Nissan Forklift Dealer
Agreement of indefinite term (the “Standard Agreement”), which appointed ADL as the exclusive

authorized dealer of Nissan Forklift products in certain counties in Illinois and Missouri; a Nissan
Forklift Dealer Term Sales and Service Agreement (the “Term Agreement”) which expired by its
terms as of February 1, 2012; and a Dealer Sales Agreement of indefinite term (the “Barrett
Agreement”), for the sale of Barrett Industrial Trucks products.
The three Agreements imposed certain performance obligations and sales goals on ADL.
On January 10, 2012, Nissan sent a letter to ADL giving notice of its intent not to renew the Term
Agreement, and to allow it to expire as of February 1, 2012 (the “Notice Letter”). The Notice Letter
asserted that ADL was in default of its obligations with respect to three sections of the Term
Agreement. The Notice Letter also gave notice of Nissan’s intent to terminate the Barrett
Agreement because ADL “has not provided adequate sales coverage as outlined in Section 11(a).”
The Notice Letter stated, “This letter is your 90-day notice of non-renewal and termination for both
Agreements and [ADL] will no longer be a Nissan or Barrett Dealer as of 4/15/12.” The Notice
Letter also stated that if ADL cured the default by achieving specific target goals within 60 days of
the date of the letter, “the non-renewal and termination will not go into effect and [Nissan] will offer
[ADL] a new 12-month Term Agreement.” Id.
ADL filed this action on January 27, 2012 and amended its complaint on February 10, 2012.
The amended complaint contained five counts; the remaining three counts assert claims against
Nissan under the Missouri Franchise Act, § 407.405, Mo. Rev. Stat. (Count I); the Missouri Power
Equipment Act, § 407.753, Mo. Rev. Stat. (Count III); and for preliminary and permanent injunctive
relief (Count V).1

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By Memorandum and Order of September 7, 2012, the Court granted Nissan’s motion to
dismiss ADL’s claim under the Illinois Franchise Disclosure Act (Count II). See Docs. 41, 42. On
October 2, 2012, the Court granted ADL’s motion to voluntarily dismiss without prejudice ADL’s
tortious interference with business expectancy claim (Count V). See Doc. 50.
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In Count I, ADL alleges that Nissan violated the Missouri Franchise Act by failing to provide
at least ninety (90) days’ advance notice that it was terminating or failing to renew the franchise
Agreement between the parties. In Count III, ADL alleges that Nissan violated the Missouri Power
Equipment Act by (1) terminating the parties’ Agreements without good cause, and (2) failing to
provide at least ninety (90) days’ advance notice that it was terminating or failing to renew the
Agreements between the parties.
Legal Standard
The Eighth Circuit recently clarified the appropriate standard for consideration of motions
for summary judgment, explaining as follows:
Summary judgment is proper if the pleadings, the discovery and disclosure materials
on file, and any affidavits show that there is no genuine issue as to any material fact
and that the movant is entitled to judgment as a matter of law. The movant bears the
initial responsibility of informing the district court of the basis for its motion, and
must identify those portions of the record which it believes demonstrate the absence
of a genuine issue of material fact. If the movant does so, the nonmovant must
respond by submitting evidentiary materials that set out specific facts showing that
there is a genuine issue for trial. On a motion for summary judgment, facts must be
viewed in the light most favorable to the nonmoving party only if there is a genuine
dispute as to those facts. Credibility determinations, the weighing of the evidence,
and the drawing of legitimate inferences from the facts are jury functions, not those
of a judge. The nonmovant must do more than simply show that there is some
metaphysical doubt as to the material facts, and must come forward with specific
facts showing that there is a genuine issue for trial. Where the record taken as a
whole could not lead a rational trier of fact to find for the nonmoving party, there is
no genuine issue for trial.
Torgerson v. City of Rochester, 643 F.3d 1031, 1043 (8th Cir. 2011) (en banc) (internal citations
and quotation marks omitted). “Although the burden of demonstrating the absence of any genuine
issue of material fact rests on the movant, a nonmovant may not rest upon mere denials or
allegations, but must instead set forth specific facts sufficient to raise a genuine issue for trial.”
Wingate v. Gage Cnty. Sch. Dist., No. 34, 528 F.3d 1074, 1078-79 (8th Cir. 2008).

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Facts
With the foregoing standard in mind, the Court finds that the following facts, limited to the
issue of statutory notice, are uncontroverted for purposes of the instant motion for summary
judgment:
1. In January 2010, the parties entered into a Nissan Forklift Dealer Agreement of indefinite
term (the “Standard Agreement”), which appointed ADL as the exclusive authorized dealer of
Nissan Forklift products in certain counties in Illinois and Missouri; a Nissan Forklift Dealer Term
Sales and Service Agreement (the “Term Agreement”) which expired by its terms as of February
1, 2012; and a Dealer Sales Agreement of indefinite term (the “Barrett Agreement”), for the sale of
Barrett Industrial Trucks products.
2. The three Agreements imposed certain performance obligations and sales goals on ADL.
3. On January 20, 2012, Nissan’s Director of Distribution Management & Sales Intelligence
hand-delivered a Notice Letter to ADL that placed ADL on a 60-day cure period.
4. The Notice Letter provided ADL with 90 days’ notice of Nissan’s intent not to renew the
parties’ Term Agreement because of ADL’s failure to substantially comply with essential and
reasonable requirements of the Term Agreement. The Notice letter sets forth specific deficiencies
in ADL’s market share performance and parts purchase requirements under the Term Agreement.
5. ADL’s cure period began on January 10, 2012, and was to end 60 days later.
6. If ADL cured its default by meeting its fiscal year goals for market share performance and
parts purchases, the non-renewal and termination would not go into effect and Nissan would offer
ADL a new 12-month Term Agreement.

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7. The Notice Letter further provided ADL with notice of Nissan’s intent to terminate the
Barrett Agreement because of ADL’s failure to meet Nissan’s requirements for reasonable market
penetration. ADL’s specific deficiencies and the cure requirements were recited in the letter.
8. The Notice Letter expressly advised ADL that any non-renewal or termination would not
go into effect until April 15, 2012.
9. On January 27, 2012, ADL filed this action, seventeen days after receiving the Notice
Letter.
10. On April 13, 2012, after the cure period expired, Nissan sent ADL’s owner, Rudy
Dodorico, another letter. This second letter stated that the cure period had ended and ADL had
failed to meet its market share and parts performance requirements. The second letter stated that
ADL’s dealer agreement would be terminated, but not on the previously indicated date of April 15,
2012. Instead, in an attempt to allow the parties to reconcile their legal dispute, Nissan stayed
ADL’s termination for 90 days.
11. ADL continued to be a Nissan dealer through July 15, 2012. Through that time it
continued to use the Nissan name, it kept up its Nissan advertising, and Nissan continued to accept
orders and ship parts and equipment at ADL’s request.
Discussion
A. Count I - Missouri Franchise Act
Count I of the ADL’s Complaint alleges that Nissan violated the Missouri Franchise Act,
§ 407.405, by failing to provide ADL with at least ninety (90) days’ notice that it was terminating
or failing to renew the franchise Agreement between the parties. The statute provides in pertinent
part:

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No person who has granted a franchise to another person shall cancel or otherwise
terminate any such franchise agreement without notifying such person of the
cancellation, termination or failure to renew in writing at least ninety days in advance
of the cancellation, termination or failure to renew . . . .
§ 407.405, Mo. Rev. Stat.
Nissan moves for summary judgment on this claim, asserting it is entitled to judgment
because (1) the Missouri Franchise Act does not apply to ADL’s claims, because regulation of
power equipment dealer practices is governed instead by the Missouri Power Equipment Act, §
407.753; and (2) even if the Franchise Act were applicable, ADL cannot show that Nissan failed to
provide 90 days’ notice of termination in compliance with § 407.405.
The Court does not address Nissan’s first argument, because it finds the second argument
dispositive. Assuming for purposes of summary judgment that the Missouri Franchise Act applies
to the parties’ business relationship, the Court concludes that Nissan’s written notice to ADL met
the statute’s requirements. It is uncontroverted Nissan gave written notice to ADL on January 10,
2012 that it intended to terminate the parties’ Agreements effective April 15, 2012, unless ADL
cured the deficiencies identified in the letter within the next 60 days. The Notice Letter of January
10, 2012 thus gave ADL more than 90 days’ notice of the impending termination. Although the
Term Agreement was set to expire on February 1, 2012, the Notice Letter expressly advised ADL
that any non-renewal or termination would not go into effect until April 15, 2012, and thus
continued in effect the parties’ franchise relationship.2
In addition, on April 13, 2012, Nissan gave ADL a second letter notifying ADL that (1) the
cure period had ended and ADL had failed to meet its market share and parts performance

2

It is uncontroverted that the two other agreements between the parties, the Standard
Agreement and the Barrett Agreement, were of indefinite term.
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requirements, and (2) ADL’s dealer agreement would be terminated, but not on the previously
indicated date of April 15, 2012. In an attempt to allow the parties to reconcile their legal dispute,
Nissan stayed ADL’s termination for 90 days. As a result, ADL continued to be a Nissan dealer
through July 15, 2012. Through that time it continued to use the Nissan name, it kept up its Nissan
advertising, and Nissan continued to accept orders and ship parts and equipment at ADL’s request.
ADL argues that Nissan violated the Franchise Act when it delivered the Notice Letter on
January 10, 2012, giving notice of Nissan’s intent not to renew the franchise on April 15, 2012,
where the Term Agreement by its own terms expired February 1, 2012. Because of the intervening
expiration of the Term Agreement, ADL contends that Nissan actually gave it only 22 days’ notice
prior to termination, rather than 90 days as required by the statute.
Although the Court denied Nissan’s motion to dismiss this claim, on summary judgment
ADL’s argument does not raise a genuine issue of material fact for trial. The statute requires that
a franchisee be given 90 days’ written notice in advance of the cancellation, termination or failure
to renew of a franchise. Based on the uncontroverted facts, it is undisputed ADL received the
written Notice Letter on January 10, 2012, which stated that the parties’ franchise agreement would
be terminated on April 15, 2012, if ADL did not cure the identified deficiencies. This notice
complied with the Franchise Act’s requirement. The fact that the Term Agreement called for an
expiration date of February 1, 2012 does not mean that the parties’ franchise relationship ended on
February 1, 2012, because the Notice Letter expressly stated that any non-renewal or termination
would not take effect until April 15, 2012. ADL actually continued to be a Nissan dealer through
and after April 15, 2012. Further, Nissan gave ADL a second 90-day notice letter April 13, 2012,
that continued the parties’ franchise relationship through July 15, 2012, and ADL actually continued

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to be a Nissan dealer through that date. ADL therefore received all of the notice required under the
Franchise Act.
Accordingly, Nissan’s motion for summary judgment should be granted as to the Franchise
Act claim in Count I.
B. Count III - Missouri Power Equipment Act
Count III of ADL’s Complaint alleges violations of the Missouri Power Equipment Act,
§ 407.753, Mo. Rev. Stat., which provides that:
Any manufacturer, wholesaler or distributor of industrial, maintenance and
construction power equipment . . . who enters into a written or parol contract with
any person, firm, or corporation engaged in the business of selling and repairing
industrial, maintenance and construction power equipment . . . shall not terminate,
cancel, or fail to renew any such contract without good cause. “Good cause” means
failure by the retailer to substantially comply with essential and reasonable
requirements imposed upon the retailer by the contract if such requirements are not
different from those requirements imposed on other similarly situated retailers either
by their terms or in the manner of their enforcement. In addition, good cause shall
exist whenever:
....
(8) The retailer has consistently failed to meet the manufacturer’s, wholesaler’s or
distributor’s requirements for reasonable market penetration based on the
manufacturer’s, wholesaler’s, or distributor’s experience in other comparable
marketing areas.
2. Except as otherwise provided in this section, a supplier shall provide a a retailer
at least ninety-days prior written notice of termination, cancellation, or nonrenewal
of the contract. The notice shall state all reasons constituting good cause for
termination, cancellation or nonrenewal and shall provide that the dealer has sixty
days in which to cure any claimed deficiency. If the deficiency is rectified within
sixty days the notice shall be void. The notice and right-to-cure provisions under this
section shall not apply if the reason for termination, cancellation or nonrenewal is for
any reason set forth in subdivisions (1) to (8) of this section.
§ 407.753.1-.2, Mo. Rev. Stat.
ADL’s Complaint alleges that Nissan violated the Power Equipment Act by (1) failing to
comply with the statute’s requirement to provide at least ninety days’ prior written notice of
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nonrenewal of any of the Agreements; and (2) terminating the Agreements without good cause as
defined under the statute.
Nissan moves for summary judgment on Count III, arguing that (1) its January 10, 2012
Notice Letter to ADL complied with the statute’s ninety-day notice and right to cure requirements;
and (2) there is no evidence it lacked good cause to terminate, cancel or not renew the Agreements,
because ADL consistently failed to meet its requirements for reasonable market penetration based
on Nissan’s experience in other comparable markets, ADL failed to meet the essential and
reasonable requirements of the Agreements, and similarly situated dealers were not treated
differently.
Nissan is entitled to summary judgment on ADL’s Power Equipment Act claim to the extent
it is based on an alleged violation of the statute’s notice provision, for the reasons discussed above
with respect to the Franchise Act claim.
The Court finds, however, that genuine issues of material fact exist that preclude summary
judgment on ADL’s Power Equipment Act claim based on termination without good cause,
including but not limited to whether Nissan’s sales goals for ADL were “essential” or “reasonable;”
whether ADL failed to substantially comply with those goals; whether Nissan treated ADL
differently than other similarly situated retailers; and whether ADL “consistently” failed to meet
Nissan’s requirements for “reasonable market penetration” in “comparable marketing areas.”
Conclusion
For the foregoing reasons, the Court will grant defendant Nissan’s motion for summary
judgment on plaintiff ADL’s claims in Counts I and III for violation of the notice provisions of the
Missouri Franchise Act and the Missouri Power Equipment Act. The Court will deny Nissan’s

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motion for summary judgment on ADL’s claim in Count III for violation of the good-cause
termination requirement of the Missouri Power Equipment Act.
Accordingly,
IT IS HEREBY ORDERED that defendant Nissan Forklift Corporation, North America’s
motion for summary judgment is GRANTED in part and DENIED in part; the motion is
GRANTED as to the claims for violation of the notice provisions of the Missouri Franchise and
Power Equipment Acts in Counts I and III, and DENIED as to the claim for violation of the goodcause termination requirement of the Missouri Power Equipment Act in Count III. [Doc. 67]
An appropriate partial judgment will accompany this Memorandum and Order.

CHARLES A. SHAW
UNITED STATES DISTRICT JUDGE

Dated this 12th day of June, 2013.

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