Opinion ID: 1450488
Heading Depth: 3
Heading Rank: 2

Heading: The Arkansas Beer Wholesaler's Act

Text: Southeastern alleges that the circuit court erred in dismissing its claim under the Arkansas Beer Wholesaler's Act, found in Ark.Code Ann. § 3-5-1101 through § 3-5-1111 (Repl.1996) (the Wholesaler's Act), because it presented sufficient proof of a violation to submit to a jury. Specifically, Southeastern asserts that Miller violated Ark.Code Ann. § 3-5-1108, which provides in pertinent part: (a) Except as provided for in this subchapter, a supplier that has amended, modified, cancelled, terminated, or refused to renew any agreement; or caused a wholesaler to resign from an agreement; or has interfered with, prevented, or unreasonably delayed, or, where required by this subchapter, has withheld or unreasonably delayed consent to or approval of, any assignment or transfer of a wholesaler's business, shall pay the wholesaler reasonable compensation for the diminished value of the wholesaler's business including any ancillary business which has been negatively affected by the act of the supplier. Id. Southeastern claims that Miller violated this provision, first, by causing Southeastern to resign involuntarily from its Distributor Agreement and, second, by refusing to consider or approve prospective purchasers of its business other than O'Conner. It claims that Miller successfully forced Southeastern to sell and prevented it from obtaining a letter of intent from a qualified purchaser willing to pay fair market value, thereby allowing O'Conner to purchase it for significantly less than fair market value. Southeastern also contends that Miller violated Ark.Code Ann. § 3-5-1110 by refusing to consider or approve transferees who met all nondiscriminatory, material, and reasonable qualifications and standards for similarly situated wholesalers. Miller's response is that this claim fails because Southeastern did not meet the statutory requirements to trigger Miller's obligation to review or approve any potential buyers other than O'Conner. Miller argues that Southeastern does not dispute that it never gave Miller the written notice and other information required by the Wholesaler's Act. Section 3-5-1108(a) specifically states that the statute applies [e]xcept as provided for in this subchapter. Id. The statutes upon which Miller relies provide: A wholesaler shall not do any of the following: . . . (3)(A) Transfer the wholesaler's business without giving the supplier written notice of intent to transfer the wholesaler's business and, where required by this subchapter, receiving the supplier's approval for the proposed transfer. Ark.Code Ann. § 3-5-1109(3) (Repl.1996)(emphasis added). A supplier shall not do the following: . . . (15) Upon written notice of intent to transfer the wholesaler's business other than to a designated member, withhold consent to or approval of, or unreasonably delay, not to exceed thirty (30) days after receipt of all material information reasonably requested, a response to a request by the wholesaler for any transfer of a wholesaler's business if the proposed transferee meets the nondiscriminatory, material, and reasonable qualifications and standards required by the supplier for similarly situated wholesalers[.] Ark.Code Ann. § 3-5-1107(15) (Repl.1996)(emphasis added). The second provision of the Wholesaler's Act Southeastern is claiming that Miller violated is Ark.Code Ann. § 3-5-1110 (Repl.1996). It provides in pertinent part: (a)(1)(A) Upon written notice of intent to transfer the wholesaler's business, any individual owning or deceased individual who owned an interest in a wholesaler may transfer the wholesaler's business to a designated member, or to any other person who meets the nondiscriminatory, material, and reasonable qualifications and standards required by the supplier for similarly situated wholesalers. (B) The consent or approval of the supplier shall not be required of any transfer of the wholesaler's business, including the assignment of the wholesaler's rights under the agreement, to a designated member [or] [4] shall not be withheld or unreasonably delayed to a proposed transferee who meets such nondiscriminatory, material, and reasonable qualifications and standards. Ark.Code Ann. § 3-5-1110(a) (Repl.1996) (emphasis added). Miller argues that these provisions clearly require the wholesaler to notify the supplier in writing in order to trigger the supplier's duty to approve a transfer. Southeastern admits that it submitted nothing in writing to Miller other than O'Conner's letter of intent, which Miller approved. Therefore, Miller claims that, as a matter of law, Southeastern may not pursue a claim under this Act for Miller's failure to approve applications Southeastern never properly submitted. We agree in part with Miller's interpretation of the Act. Miller's obligation under the Act to approve a transfer under both Ark.Code Ann. §§ 3-5-1108 and 1110 is conditioned upon Southeastern's submitting written notice of intent to transfer. Without this written notice, Miller has no duty under the Act to approve a transfer. Because Southeastern provided no written notice  other than the notice to transfer to O'Conner, which Miller approved  it has no claim against Miller for failure to approve a transfer. Accordingly, we affirm the circuit court's order granting summary judgment on Southeastern's claim under Ark.Code Ann. § 3-5-1110 and its claim under Ark.Code Ann. § 3-5-1108(a) regarding Miller's failure to approve prospective purchasers. However, the written-notice requirement does not bar Southeastern's claim under Ark.Code Ann. § 3-5-1108(a) for causing it to resign from the Distributor Agreement. We therefore reverse the circuit court's order granting summary judgment on Southeastern's claim under Ark.Code Ann. § 3-5-1108(a) alleging that Miller caused it to resign from the Distributor Agreement, and we remand for trial on that claim.