Opinion ID: 660189
Heading Depth: 3
Heading Rank: 2

Heading: Violation of Public Policy

Text: 20 Turning now to their public policy/section 56:10-6 argument, appellants contend that GM's unrestricted RFR violates public policy. Section 56:10-6 provides in pertinent part: 21 It shall be a violation of this act for any franchisee to transfer, assign, or sell a franchise or interest therein to another person unless the franchisee shall first notify the franchisor of such intention by written notice setting forth ... the prospective transferee's name, address, statement of financial qualification and business experience during the previous 5 years. The franchisor shall within 60 days after receipt of such notice either approve in writing to the franchisee such sale ... or by written notice advise the franchisee of the unacceptability of the proposed transferee setting forth material reasons relating to the character, financial ability or business experience of the proposed transferee. If the franchisor does not reply within the specified 60 days, his approval is deemed granted. 22 N.J.Stat.Ann. Sec. 56:10-6 (1989). For support, appellants cite Bayview Buick-GMC Truck, Inc. v. General Motors Corporation, 597 So.2d 887, 890 (Fla.Dist.Ct.App.1992), a case involving a statutory provision analogous to section 56:10-6. The provision in Bayview gave the manufacturer 60 days to inform the dealer in writing either of its approval of the transfer or of the unacceptability of the proposed transferee, supported by material reasons for the rejection. 23 The manufacturer in Bayview failed to inform the dealer of its disapproval; instead, it simply notified the parties involved that it planned to exercise its contractual RFR. Therefore, the anomalous situation arose in which the manufacturer was asserting its RFR in the face of a transfer deemed approved by default. However, the court did not stop at precluding the exercise of the RFR by the franchisor because of its failure to comply with the procedural requirements of the statute. Rather, it concluded additionally as dicta that the RFR was void as against public policy. Presumably, under the court's broad ruling, the manufacturer would have been precluded from exercising its RFR even if it had first complied with the statute. 24 In the present case, however, GM both complied with the statute (at least facially), and exercised its RFR. Therefore, although the contract gives GM an unfettered RFR, GM did not exercise the right in this case in an unfettered manner; rather, it exercised the right in a manner consistent with the FPA. 4 Thus, the issue of the validity of the provision is not properly before the court. We therefore decline to address it. All that is properly before us is whether GM's conduct violated the FPA.