Opinion ID: 598994
Heading Depth: 2
Heading Rank: 2

Heading: Dealership

Text: 26 The Sampsons next argue that they are entitled to recover for Embassy's alleged failure to comply with the notice and cure provisions of the WFDL. The district court disposed of this argument by finding as a matter of law that the Sampsons were not a dealer under Wisconsin law, and therefore not entitled to protection under the WFDL. We review de novo the district court's conclusion of law in granting summary judgment on this issue. Frieburg Farm Equipment, Inc. v. Van Dale, Inc., 978 F.2d 395, 398 (7th Cir.1992). The WFDL defines dealership as follows: 27 (3) Dealership means a contract or agreement, either expressed or implied, whether oral or written, between 2 or more persons, by which a person is granted the right to sell or distribute goods or services, or use a trade name, trademark, service mark, logotype, advertising or other commercial symbol, in which there is a community of interest in the business of offering, selling or distributing goods or services at wholesale, retail, by lease, agreement or otherwise. 28 Wis.Stat.Ann. § 135.02. 29 The district court determined that no dealership existed under the WFDL because it was too early in their relationship for the Sampsons and Embassy to enjoy a sufficient community of interests. The parties have not cited nor have we found any Wisconsin case that addresses at what point in a business relationship a shared interest in some prospective business goal ripens into a community of interest in the offer, sale or distribution of goods or services, such that a dealership is created. Absent clear direction on this issue from the courts of Wisconsin, we interpret the meaning of the statute according to its express terms. See Bob Willow Motors, Inc. v. General Motors Corp., 872 F.2d 788, 793 (7th Cir.1989). 30 We conclude that there can be no community of interest in the offer, sale or distribution of goods or services when there are not yet goods or services to offer, sell or distribute. At the point in their relationship when the Commitment lapsed, the Sampsons and Embassy enjoyed only a community of interest in the planning and construction of a hotel. Whether the hotel ever rented a room was contingent upon the success of the parties in carrying out their respective obligations in building the hotel. The Commitment expressly recognized the contingent nature of this relationship, by providing a timetable for the construction of the hotel and by conditioning the issuing of a license to operate the hotel upon the Sampsons' strict compliance with the timetable. There can be no community of interests in the sale of services not yet in existence, especially when the availability of those services is dependent upon the happening of some uncertain condition--in this case, the building of the hotel. 6 31 The caselaw defining community of interest for the purposes of the WFDL supports this court's position. In Ziegler Co., Inc. v. Rexnord, Inc., 139 Wis.2d 593, 407 N.W.2d 873 (1987), the Supreme Court of Wisconsin discussed extensively the meaning of community of interests as used in the WFDL. The court rejected a rigid mathematical definition, and instead identified two guideposts to determine whether a community of interests exists. First, the court concluded that the statutory framework of the WFDL requires at least that the grantor and dealer possess a continuing financial interest in their business relationship. Id., 407 N.W.2d at 878. This requirement contemplates a shared financial interest in the operation of the dealership or the marketing of the good or service. Id. Second, the court determined that the phrase community of interests requires a likeness or similarity of interest in the common business in which the dealer and the grantor are engaged, a characteristic which the court identifies as interdependence. Id., 407 N.W.2d at 879 (emphasis added). In assessing whether parties have achieved a shared financial interest and interdependence, the court instructs that the following factors should be considered: 32 (H)ow long the parties have dealt with each other; the extent and nature of the obligations imposed on the parties in the contract or agreement between them; what percentage of time or revenue the alleged dealer devotes to the alleged grantor's products or services; what percentage of the gross proceeds or profits of the alleged dealer derives from the alleged grantor's products or services; the extent and nature of the alleged grantor's grant of territory to the alleged dealer; the extent and nature of the alleged dealer's uses of the alleged grantor's proprietary marks (such as trademarks or logos); the extent and nature of the alleged dealer's financial investment in inventory, facilities, and good will of the alleged dealership; the personnel which the alleged dealer devotes to the alleged dealership; how much the alleged dealer spends on advertising or promotional expenditures for the alleged grantor's products or services; the extent and nature of any supplementary services provided by the alleged dealer to consumers of the alleged grantor's products or services. 33 Id., 407 N.W.2d at 879-880. 34 At the time the Commitment lapsed, the Sampsons and Embassy had dealt with each other for about one year. The subject of their relationship during that period was the planning construction of a hotel in Milwaukee. The contract between them contemplated that the license to operate the hotel would issue only after the construction was complete. Although the Sampsons spent time and effort in planning the hotel, they never obtained a license to operate it. Because they never operated a hotel, the Sampsons never devoted time to the business of renting rooms, which was the business of Embassy. They never gained proceeds or profits from the business of Embassy; never assumed a territory; never used Embassy's proprietary marks in the marketing of hotel rooms; never actually invested in a building or other facility; and never contributed to the good will of the business of running an Embassy hotel. There were no hotel employees, no hotel advertising, and no hotel services. In short, although the parties envisioned that their relationship might some day blossom into one of continuing financial interest and interdependence, at the time the Sampsons failed to comply with the timetable set forth in the Commitment, there was neither. 35 At oral argument, counsel for the Sampsons compared his client's relationship with Embassy to that enjoyed by the Florida Marlins and Colorado Rockies with major league baseball. He argued that even though these expansion franchises have not yet played a game, nobody would deny them the status of franchise and therefore dealer in the commodity of the national pastime. Although there is no record evidence relating to the operation of these teams, we note based upon our review of the sports pages that both teams have stadiums, season ticket holders, some players, uniforms, and some structure of management. They are both definitely scheduled to play ball this spring. At the time the Sampsons allowed the Commitment to lapse, there were no such indicia of a dealership--no hotel, no guests, no lobby, no desk clerks. As a matter of law, there was no dealership between the Sampsons and Embassy.