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Rimrock Chrysler, Inc. v. State, Department of Justice

Supreme Court of Montana

February 13, 2018

RIMROCK CHRYSLER, INC., Petitioner and Appellant,
v.
STATE OF MONTANA DEPARTMENT OF JUSTICE, MOTOR VEHICLE DIVISION, and CHRYSLER GROUP, LLC, Franchisor, and LITHIA MOTORS, INC., and its wholly owned subsidiary, LITHIA OF BILLINGS, INC., d/b/a LITHIA CHRYSLER JEEP DODGE OF BILLINGS, Respondents and Appellees.

          Submitted on Briefs: November 1, 2017

         APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DV 14-546 Honorable Ingrid G. Gustafson, Presiding Judge

          For Appellant: Rodd A. Hamman, Calton Hamman & Wolff, PC, Billings, Montana W. Scott Mitchell, Brianne C. McClafferty, Holland & Hart, Billings, Montana (Attorneys for Chrysler Group, LLC)

          For Appellees: Timothy C. Fox, Montana Attorney General, Alan Joscelyn, Chief Assistant Attorney General, A. Peter Funk, Assistant Attorney General, Helena, Montana (Attorneys for State of Montana)

          Robert Y. Weller II, Kristen L. Baiardi, Abbott Nicholson, PC, Detroit,

          Paul N. Tranel, Bohyer, Erickson, Beaudette & Tranel, PC, Missoula, Mont orneys for Lithia Motors, Inc.)

          OPINION

          JAMES JEREMIAH SHEA JUSTICE.

         ¶1 Petitioner Rimrock Chrysler, Inc. ("Rimrock") appeals the April 5, 2017 Order by the Thirteenth Judicial District Court, Yellowstone County, denying Rimrock's petition for judicial review. We address the following issue:

Whether the District Court erred by denying Rimrock's petition for judicial review.

         ¶2 We affirm.

         PROCEDURAL AND FACTUAL BACKGROUND

         ¶3 In 2009, Chrysler, LLC, ("Old Chrysler") filed for bankruptcy and received substantial assistance from the federal government as part of the 2009 Troubled Asset Relief Program ("TARP"). Old Chrysler was required to restructure its business model and, as a condition of TARP assistance, terminated over 700 dealership agreements across the United States. Among the dealership agreements terminated was Rimrock's dealership in Billings, which occurred in May 2009.

         ¶4 Old Chrysler sold most of its assets to Chrysler Group, LLC ("New Chrysler"). In July 2009, New Chrysler awarded its Chrysler-Jeep franchise to Lithia Motors, Inc., and Lithia of Billings, Inc. (collectively "Lithia"), which already held a Dodge franchise in Billings, having acquired it in 2003 when Dodge was a division of Old Chrysler.

         ¶5 Congress enacted Section 747 of the Consolidation Appropriations Act of 2010 to enable terminated dealerships to pursue private arbitration and determine whether they should be offered a letter of intent from New Chrysler to be added to New Chrysler's dealer network. Rimrock successfully arbitrated under Section 747, and was awarded a letter of intent by New Chrysler to establish a Chrysler-Jeep franchise in Billings. New Chrysler and Rimrock's agreement proposed a Chrysler-Jeep franchise location less than a mile from Lithia's existing Chrysler-Jeep dealership.

         ¶6 On February 23, 2011, Lithia protested Rimrock's proposed new dealership pursuant to § 61-4-206, MCA. In April 2012, the Department of Justice Motor Vehicle Division ("Department") held a hearing on the matter. At the hearing, New Chrysler advocated for Rimrock's establishment as a dealer pursuant to its obligation to issue a usual and customary letter of intent following Rimrock's Section 747 arbitration award. However, New Chrysler's witness also testified that Rimrock's proposed dealership was not viable and that its proposed location, within a mile of an existing dealership, was unprecedented. On June 26, 2012, the Hearing Examiner issued her Proposed Order on Findings of Fact and Conclusions of Law, finding good cause did not exist to re-establish Rimrock as a Chrysler-Jeep franchise in Billings as per § 61-4-205(2), MCA. In July 2012, Rimrock and New Chrysler filed exceptions with the Department to the Hearing Examiner's Proposed Order. On March 13, 2014, after performing its own review and analysis of the Hearing Examiner's Proposed Order, the Department entered its Notice of Adoption of Final Decision, and held: "[T]he Hearing Examiner's Proposed Order on Findings of Fact and Conclusions of Law is incorporated herein by reference in its entirety, and is adopted as the Department's Final Decision in this matter."

         ¶7 In April 2014, Rimrock filed a Petition for Judicial Review with the Thirteenth Judicial District Court, Yellowstone County. Lithia moved to dismiss Rimrock's Petition, and the District Court granted Lithia's motion to dismiss. Rimrock appealed and we reversed and remanded to the District Court for adjudication of Rimrock's Petition. Rimrock ...


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