Court Opinion

ID: 9497821
Source: CourtListenerOpinion
Date Created: 2023-08-05 17:00:46.765567+00
Date Added: 2024-06-11T17:58:26.179660
License: Public Domain

BYE, Circuit Judge,
concurring in part, dissenting in part.
I join in affirming the district court’s denial of attorney’s fees to GM, but respectfully dissent from the portion of the opinion which holds GM provided valuable consideration for the release.
My dissent is based upon a fundamental disagreement with the majority concerning GM’s contractual obligation under the Dealer Service and Sales Agreement (the “Agreement”) to approve the sale of Stone to Fairground. The majority concludes GM had no obligation to approve the sale because GM retained discretion under the Agreement “to weigh the proposed dealership’s qualifications and analyze its prospects for success.” Admittedly, GM retained discretion under the Agreement to weigh the proposed dealer’s credentials, but I submit this discretion was limited. GM limited its discretion by promising to not arbitrarily refuse approval of the sale to Fairground as long as the sale met GM’s qualifications, the specific nature of which the majority sets out in its opinion. In other words, if the sale met GM’s quali*609fications, GM had a contractual obligation to approve it.
All the evidence before us suggests the sale to Fairground met GM’s qualifications, which should not surprise us since Fairground was already an approved and successful GM franchisee. In addition to the evidence the sale actually went forward and the inferences we may draw from that evidence, GM sent Fairground a letter dated July 8, 1997, which provided conclusive evidence of GM’s satisfaction with the sale, the letter stating in relevant part:
This will confirm the information you were given on July 8, 1997 that your application and proposal to become a Chevrolet dealer in Cuba, MO’ has been approved and Chevrolet is prepared to appoint Fairground Motors, LLC, in Cuba, MO, as an authorized Chevrolet dealer, conditioned upon your providing us with the following information and documentation by July 10,1997:
The letter goes on to list the documentary items Fairground must provide. The items are simple items such as a letter of termination from Virgil Stone, tax identification numbers, copies of articles of incorporation, a blank void check, enrollment in a dealer training program, evidence of a financing plan for new vehicles, and minutes of the Fairground board of directors meeting approving the purchase. These items were mere formalities, rather than anything of meaningful substance. Thus, by their very nature it is apparent GM had already made the decision to approve the sale, as it met the specifications contained in the Agreement.
The majority dismisses the letter as a mere conditional approval. Whether the letter evinces an actual versus a conditional approval is beside the point, as all the evidence before us suggests GM had a duty under the Agreement to actually approve the sale. Nevertheless, temporarily putting ■ aside GM’s duty to approve the sale and assuming the approval was conditional, Fairground and Stone fulfilled the conditions spelled out in the letter by delivering the requested documentation.
At such time as the conditions became fulfilled, the approval was realized, even without an executed release from Stone, because the requirement of a release was not a valid condition for approval of the sale. The other documentation, although requested as mere formality, directly related to the factors for which GM agreed to consider the sale. Noticeably absent from the list of factors GM agreed to consider whs the potential for litigation from 'the terminated franchisee. As such, GM’s approval of the sale did not constitute valuable consideration for the release as GM had already approved the sale and, even if it had not, it had a preexisting contractual obligation to do so in the absence of a release as the sale otherwise met GM’s qualifications. See Zipper v. Health Midwest, 978 S.W.2d 398, 416 (Mo.Ct.App.1998) (“a promise to do that which a party is already legally obligated to do does not constitute valid consideration.”).
The majority alludes to GM’s secondary argument-valuable consideration by way of its decision not to exercise the right of first refusal. GM’s forbearance of the right of first refusal also cannot constitute consideration as Stone would not benefit, nor would GM incur a detriment because of it. Penrod v. Branson R-IV Public Sch. Dist., 916 S.W.2d 866, 867 (Mo.Ct.App.1996) (“consideration is a benefit a party making a promise receives in return for the promise, or a loss or detriment incurred by the party to whom a promise is made.”). GM did not incur a detriment by its forbearance of the right of first refusal because it no longer had such a right. GM expressed no desire I to exercise the right of first *610refusal, thus forfeited the right under section 12.3.1 of the Agreement. Neither can it be successfully argued that Stone bene-fitted from GM’s forbearance of the right of first refusal. The forbearance may have benefitted Fairground, but Stone did-not care which entity purchased the dealership, GM or Fairground, as long as it received fair compensation. GM’s other secondary arguments concerning consideration are similarly unpersuasive.
In the event we should find the release unsupported by consideration, GM asserts the district court entered judgment on an independent ground separate and apart from the release.. The district court, according to GM, found Stone had no admissible damage theory. My review of the transcript leaves me uncertain as to the district court’s ruling on the matter. Because of the uncertainty of the district court’s comments, combined with the confusion surrounding the district court’s decision to cancel trial and enter an oral decision on the record, I would remand to the district court to consider the merits of the good faith claim, including the viability of Stone’s damage theory. In part, I therefore respectfully dissent.