Opinion ID: 203559
Heading Depth: 2
Heading Rank: 1

Heading: Good Cause Under Chapter 93B

Text: The district court analyzed good cause under two different subsections of section 5. Section 5(h) provides: For purposes of this section, good cause may be found if the motor vehicle dealer failed to comply with or observe a provision of the franchise agreement that is material to the franchise relationship, including without limitation ... facility requirements, which were communicated in writing to the motor vehicle dealer within a reasonable period before the effective date of the termination or nonrenewal, such that a reasonable opportunity to cure was afforded. Mass. Gen. Laws ch. 93B, § 5(h). This section allows the court to make the good cause determination on the basis of a material breach concerning facility requirements alone. The district court assigned heavy weight to the breaches under section 5(h). Wagner & Wagner, 539 F.Supp.2d at 470. The district court also held that, alternatively, there was good cause for termination in considering the enumerated factors under section 5(j), which provides: In determining whether good cause has been established for terminating, refusing to extend or renew or changing or modifying the obligations of the motor vehicle dealer as a condition to offering a renewal, replacement or succeeding franchise agreement, the court shall consider all pertinent circumstances, that may include, but shall not be limited to:... the existence and materiality of any breaches, defaults or violations by the affected motor vehicle dealer of the terms or provisions of the existing franchise agreement or of applicable law. Mass. Gen. Laws ch. 93B, § 5(j). [2] Under the terms of the chapter, the burden is on LRNA to establish good cause to terminate the franchise. Id. § 5(m). The district court correctly held that Wagner's failure to meet the interim construction deadlines and the final facility completion deadlines violated the terms of the 2004 LOI, and that Wagner's breach was material. Wagner & Wagner, 539 F.Supp.2d at 470. On the undisputed facts, we agree that LRNA established good cause under both section 5(h) and section 5(j). The court's finding is well-supported in the record. The terms of the 2004 LOI and the TDA made it clear that completion of the Shrewsbury site dealership was a condition precedent to LRNA ultimately granting Wagner a non-temporary Land Rover Dealer Agreement. Id. Wagner never met any of the deadlines in the 2004 LOI after obtaining the TDA. Ron Wagner, the owner of Wagner, conceded that the plaintiff never applied for any of the permits or regulatory approvals necessary to comply with the October 31, 2004 deadline. He also conceded that Wagner failed to supply the required detailed construction drawings in compliance with the 2004 LOI's March 31, 2005 deadline. He admitted that a general contractor was never identified or hired, and conceded that no site work ever even started. That site work was required to be completed by September 30, 2005. Wagner thus failed to meet the September 30, 2005 interim deadline and never opened the permanent facility by February 28, 2006, the completion date stated in the 2004 LOI. On appeal, Wagner argues that its failure to perform is excused by what it alleges was LRNA's failure to approve in writing Wagner's preliminary construction plans and that it could not provide final detailed construction drawings until the preliminary drawings were approved by LRNA. LRNA's alleged failure to meet its obligations in turn prevented Wagner from performing by complying with the later deadlines of September 30, 2005 and February 28, 2006. The argument fails. We bypass the question of whether Wagner preserved this argument in the district court. We are doubtful the issue was preserved because the facts offered by Wagner as disputed went to a different defense-that regardless of the terms of the LOI there was a changed economic landscape of Land Rover and Jaguar sales warranting Wagner's non-compliance. See Boston Beer Co. v. Slesar Bros. Brewing Co., 9 F.3d 175, 180 (1st Cir.1993); 10A Wright, Miller & Kane, Federal Practice & Procedure § 2716, at 282-86 (3d ed.1998). Even taking the argument that LRNA failed to approve the plans as preserved, there is no merit to it. The record shows that whatever Ron Wagner's initial uncertainty at deposition as to whether LRNA responded to Wagner's architectural drawings, Ron Wagner admitted that the drawings did finally come back, but I can't remember the dates. Upon further questioning, Ron Wagner admitted that the reason Wagner did not move ahead with applications for permits in compliance with the 2004 LOI was that he lost focus, rather than because of LRNA's failure to approve the drawings. The record is clear that Wagner received the requisite approval of preliminary plans from LRNA. George Delaney, the LRNA representative who worked with Wagner, testified at his deposition, [w]e approved the preliminary drawings, the size that they submitted. He further testified that after a meeting discussing the preliminary drawings and approving them subject to the Wagners' architect making certain revisions, Delaney advised the Wagners that they had met the first milestone under the LOI. Wagner's argument that LRNA was in breach of its obligations depends on a misrepresentation of the record. Since Wagner was undeniably in breach of its contractual obligations, LRNA had good cause under sections 5(h) and 5(j).