Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—E.D. Mich.: Volvo truck dealer’s tort claim over termination fails, (Nov 23, 2015)

By Linda O’Brien, J.D., LL.M.

In an action by a truck dealer against truck manufacturer Volvo for engaging in a pattern of arbitrary and capricious conduct intended to culminate in the wrongful termination of the dealer’s franchise, the dealer failed to show that the manufacturer’s conduct interfered with any of its business relationships, the federal district court in Detroit has held. Thus, the dealer’s tortious interference claim was dismissed (VIP Truck Center, LLC v. Volvo Trucks North America, Inc., November 20, 2015, Leitman, M.).

VIP Truck Center, LLC entered into a truck dealership sales and service agreement with heavy truck manufacturer Volvo Truck North America, commencing in September 2010 and expiring on August 30, 2015. After Volvo sent VIP a notice of termination of the dealer agreement, in July 2015, VIP filed a five count complaint against Volvo, alleging tortious interference with present and future business and failure to act in good faith and wrongful termination in violation of the Michigan Motor Vehicle Dealer Franchise Act (MVDFA).

Specifically, VIP alleged that Volvo had failed to make a sufficient quantity of new trucks available to VIP in order to enable VIP to meet its market share objectives, and Volvo followed a pattern of conduct intended to terminate VIP’s franchise based on alleged deficient sales performance or not achieving annual “Business Plan” results. Volvo moved to dismiss the tortious interference claim.

The court determined that VIP failed to sufficiently allege that Volvo’s conduct caused the termination of any of its business relationships or expectancies. The elements of a tortious interference with a business relationship are: (1) the existence of a valid business relationship; (2) the defendant’s knowledge of the relationship; (3) intentional interference by the defendant causing a breach of the relationship; and (4) damage to the plaintiff.

VIP’s complaint contained no allegations that any person or entity declined to do business with VIP or terminated a relationship with VIP due to any act or omission by Volvo, according to the court. VIP’s general allegations that Volvo interfered with its relationships and/or expectancies of its employees and customers were mere conclusions.

Furthermore, VIP’s tortious interference claim failed because it was entirely dependent upon the parties’ agreement. Under Michigan law, a tort is a “wrong independent of a contract.” VIP alleged that Volvo wrongfully refused to supply it with certain vehicles, assigned an unfairly large area of responsibility, and failed to fairly apply internal policies. In this case, however, Volvo’s actions would not have been wrongful but for the fact the parties entered into the dealership agreement, the court concluded.

The case is No. 2:15-cv-12381-MFL-MJH.

Attorneys: Michael J. O'Shaughnessy (Colombo & Colombo) for VIP Truck Center, LLC. Cory M. Curtis (Baker & Hostetler) for Volvo Trucks North America, Inc.

Companies: VIP Truck Center, LLC; Volvo Trucks North America, Inc.

Cases: FranchisingDistribution MichiganNews