Court Opinion

ID: 9531826
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:14:48.424704+00
Date Added: 2024-06-11T13:28:35.547065
License: Public Domain

SHIRLEY S. ABRAHAMSON, J.
{concurring). While I agree with the majority that this case must be remanded for further proceedings, I do not agree with the majority’s interpretation of the dealership statute. I conclude, as does the Department of Justice in its amicus curiae brief, that the interpretation adopted by the majority opinion ignores the plain language of the statute and subverts the legislative intent and purpose underlying the Wisconsin Fair Dealership Law.
The Wisconsin Fair Dealership Law is a remedial statute, intended to protect dealers whom the legislature recognizes as having an inferior bargaining position in negotiating dealership agreements with grantors (franchisors). Section 135.025 (2) Stats.1 The essence of the law is the provision that the grantor cannot terminate, cancel, fail to renew or substantially change the competitive circumstances of a dealer*324ship agreement without good cause. Section 135.03 (emphasis added).2 The legislature’s definition of good cause is the single most important aspect of the dealership statute. Section 135.02(4) defines good cause to mean that the dealer has failed to carry out an important part of its responsibilities.3
The majority does not clearly state its holding, and therefore the circuit court will, in my opinion, have difficulty applying this decision on remand. The majority opinion apparently redefines good cause to mean that the grantor may, for its own economic reasons, substantially change the competitive circumstances of a dealership agreement by imposing nondiscriminatory, essential and reasonable new requirements on the dealer. Majority at 314, 317. Under the majority’s scheme, the fact-finder determines whether the new requirements imposed by the grantor are nondiscriminatory, essential and reasonable by engaging in a balancing test which the opinion fails to define. Furthermore, according to the majority, if the *325dealer fails to comply with the new requirements, then the grantor has good cause to terminate, cancel or fail to renew the dealership agreement.
I do not join the majority opinion for several reasons.
First, the majority’s interpretation of the good cause requirement focuses on the grantor and therefore contravenes the plain language of sec. 135.02 (4), Stats, which focuses entirely on the conduct of the dealer. See Remus v. Amoco Oil Co., 794 F.2d 1238, 1240 (7th Cir. 1986). As Judge Crabb noted in Kealey Pharmacy & Home Care Serv. v. Walgreen Co., 539 F. Supp. 1357, 1366 (W.D. Wis. 1982), aff'd, 761 F.2d 345 (7th Cir. 1985): "The adverse impact upon a dealer of a unilateral termination of its dealership is not lessened because the grantor is acting in good faith for sound business reasons.”
Second, the majority’s interpretation of the good cause requirement contravenes the legislative purpose: it significantly limits the protection that the legislature intended to provide to Wisconsin dealers. The legislature created the Fair Dealership Law in order to protect dealers from grantors’ inherently superior economic influence and bargaining power. The courts ought to apply the statute with this legislative purpose in mind.4
*326Third, the majority opinion’s undefined balancing test for good cause seems to put the judge and jury smack in the middle of second-guessing business decisions. I cannot believe the legislature intended such a result.
Lastly, the majority opinion apparently creates a new remedy for dealers who will be harmed by the majority’s newly established rule favoring grantors. I am puzzled that the majority appears to conclude that even after the court determines that a grantor is imposing reasonable, essential and nondiscriminatory new requirements designed to protect its economic interest, the court may award a dealer damages for its "reasonably necessary investments.” Without explanation or rationale, the majority opinion states: "The balancing test may be applied by allowing the grantor to avoid continuing heavy losses by the recovery of damages for reasonably necessary investment by the grantee on termination of the agreement." Majority at 318. Furthermore, it is unclear how this new damage rule fits with the statutory damage provisions in secs. 135.045 and 135.06.
The Fair Dealership Law, as I read it, allows the grantor to impose, without the dealer’s consent, essential, reasonable and nondiscriminatory changes that do not terminate, cancel, fail to renew or substantially change the competitive circumstances of a dealership agreement. If the grantor, however, wishes to terminate, cancel, fail to renew or substantially change the competitive circumstances of a dealership agreement for reasons relating to the grantor’s economic self-*327interest, the statute gives the dealer a remedy. The court may enjoin the grantor or the court may award the dealer damages to compensate the dealer for lost profits or lost business value. If the grantor's economic condition is precarious, then of course the dealer’s damages probably would not be substantial. This interpretation of the statute comports with the plain language of the statute and with legislative intent, protects both the grantor and dealer, is easy to apply and makes good business sense.
The majority opinion gives the grantor much greater power than the legislature intended and negates, to a large extent, the protection that the legislature intended to provide dealers by adopting the Wisconsin Fair Dealership Law. Therefore I cannot join the majority in its interpretation of good cause.
I am authorized to state that Chief Justice Nathan S. Heffernan joins in this concurring opinion.

Sec. 135.025(2), Stats. 1985-86, provides:
135.025 Purposes; rules of construction; variation by contract. (1) This chapter shall be liberally construed and applied to promote its underlying remedial purposes and policies.
(2) The underlying purposes and policies of this chapter are:
(a) To promote the compelling interest of the public in fair business relations between dealers and grantors, and in the continuation of dealerships on a fair basis:
(b) To protect dealers against unfair treatment by grantors, who inherently have superior economic power and superior bargaining power in the negotiation of dealerships;
(c) To provide dealers with rights and remedies in addition to those existing by contract or common law;
(d) To govern all dealerships, including any renewals or amendments, to the full extent consistent with the constitutions of this state and the United States.

Section 135.03, Stats. 1985-86, provides:
135.03 Cancellation and alteration of dealerships. No grant- or, directly or through any officer, agent or employee, may terminate, cancel, fail to renew or substantially change the competitive circumstances of a dealership agreement without good cause. The burden of proving good cause is on the grantor.

Section 135.02(4), Stats. 1985-86, provides:
(4) "Good cause” means:
(a) Failure by a dealer to comply substantially with essential and reasonable requirements imposed upon him by the grantor, or sought to be imposed by the grantor, which requirements are not discriminatory as compared with requirements imposed on other similarly situated dealers either by their terms or in the manner of their enforcement; or
(b) Bad faith by the dealer in carrying out the terms of the dealership.

Attorney Michael A. Bowen foresaw the possibility of a court undercutting the legislative purpose by its definition of good cause. He wrote: "Based on what is available, however, and on the fact that Chapter 135 has in general encountered pronounced judicial hostility at the appellate level throughout its existence, albeit with some notable exceptions, there is substantial reason to believe that 'or sought to be imposed’ will turn out to be a loophole of major proportions in the protection that the Legislature thought it was providing to dealers when it adopted the statute.” *326Bowen, "Good Cause,” in ATS-CLE Wisconsin Fair Dealership Law, State Bar of Wisconsin, April 1988. See also Bowen and Butler, The Wisconsin Fair Dealership Law, p. 5 — 43 (State Bar of Wisconsin 1988).